Exhibit 99.1
| | | | |
West Corporation | | | | AT THE COMPANY: |
11808 Miracle Hills Drive | | | | David Pleiss |
Omaha, NE 68154 | | | | Investor Relations |
| | | | (402) 963-1500 |
| | | | dmpleiss@west.com |
West Corporation Reports Third Quarter 2015 Results
Company Announces Two Acquisitions; Declares Quarterly Dividend
OMAHA, NE, November 2, 2015 –West Corporation (Nasdaq:WSTC), a leading provider of technology-enabled communication services, today announced its third quarter 2015 results.
Key Quarterly Highlights:
| | | | | | | | | | | | | | | | | | | | | | | | |
| Unaudited, in millions except per share amounts | | Three Months Ended Sept. 30, | | | Nine Months Ended Sept. 30, | |
| | | 2015 | | | 2014 | | | % Change | | | 2015 | | | 2014 | | | % Change | |
Revenue | | $ | 574.4 | | | $ | 568.2 | | | | 1.1 | % | | $ | 1,711.8 | | | $ | 1,655.7 | | | | 3.4 | % |
Adjusted EBITDA from Continuing Operations1 | | | 171.3 | | | | 171.2 | | | | 0.1 | % | | | 511.1 | | | | 494.9 | | | | 3.3 | % |
EBITDA from Continuing Operations1 | | | 165.5 | | | | 166.2 | | | | -0.4 | % | | | 491.3 | | | | 482.2 | | | | 1.9 | % |
Adjusted Operating Income1 | | | 146.6 | | | | 137.7 | | | | 6.5 | % | | | 420.8 | | | | 400.3 | | | | 5.1 | % |
Operating Income | | | 124.4 | | | | 114.9 | | | | 8.2 | % | | | 351.5 | | | | 344.7 | | | | 2.0 | % |
Adjusted Income from Continuing Operations1 | | | 68.1 | | | | 67.0 | | | | 1.6 | % | | | 202.3 | | | | 177.6 | | | | 13.9 | % |
Income from Continuing Operations | | | 50.7 | | | | 13.1 | | | | 287.1 | % | | | 148.6 | | | | 99.7 | | | | 49.0 | % |
Adjusted Earnings per Share from Continuing Operations - Diluted1 | | | 0.80 | | | | 0.78 | | | | 2.6 | % | | | 2.36 | | | | 2.08 | | | | 13.5 | % |
Earnings per Share from Continuing Operations - Diluted | | | 0.60 | | | | 0.15 | | | | 300.0 | % | | | 1.74 | | | | 1.17 | | | | 48.7 | % |
Free Cash Flow from Continuing Operating Activities1,2 | | | 95.4 | | | | 85.7 | | | | 11.2 | % | | | 187.0 | | | | 203.7 | | | | -8.2 | % |
Cash Flows from Continuing Operating Activities | | | 126.7 | | | | 118.3 | | | | 7.1 | % | | | 283.2 | | | | 302.6 | | | | -6.4 | % |
Cash Flows used in Continuing Investing Activities | | | (30.1 | ) | | | (77.1 | ) | | | -61.0 | % | | | (113.8 | ) | | | (485.9 | ) | | | -76.6 | % |
Cash Flows from (used in) Continuing Financing Activities | | | (74.0 | ) | | | (33.9 | ) | | | 118.5 | % | | | (364.8 | ) | | | 110.9 | | | | NM | |
“The Company was once again able to modestly grow its revenue base, successfully overcoming some previously disclosed near-term headwinds,” said Tom Barker, chairman and chief executive officer of West Corporation. “West generated double-digit growth in free cash flow during the quarter and continued to invest in future growth with the acquisitions of ClientTell and Magnetic North.”
“During the quarter, Gartner released its annual Unified Communications-as-a-Services (UCaaS) report and named West as one of three firms positioned in its Leader’s Quadrant. Gartner evaluates providers based on the completeness of their vision and their ability to execute. We are proud to be named a Leader by Gartner for the fourth consecutive year and appreciative of the recognition of our industry-leading solutions,” Barker continued.5
Dividend
The Company today also announced a $0.225 per common share dividend. The dividend is payable November 25, 2015 to shareholders of record as of the close of business on November 16, 2015.
Operating Results Reflect Previous Divestiture
As previously disclosed, on March 3, 2015, the Company completed the sale of several of its agent-based services businesses. The operating results for the businesses that were sold have been reflected as discontinued operations in the Company’s consolidated financial statements for all periods presented. Unless otherwise noted, the Company has presented herein its operating results from continuing operations, which excludes discontinued operations.
Consolidated Operating Results
For the third quarter of 2015, revenue was $574.4 million compared to $568.2 million for the same quarter of the previous year, an increase of 1.1 percent. Adjusted organic revenue growth was 3.9 percent for the quarter. Revenue from acquired entities3 was $5.4 million during the third quarter of 2015, contributing 0.9 percent to the Company’s revenue growth. The Company’s revenue growth rate was partially offset by $21.4 million, or 3.8 percent, from the impact of foreign currency exchange rates and two previously disclosed client losses. Details of the Company’s revenue growth are presented in the statements of operations below.
During the second quarter of 2015, the Company disclosed the loss of a large client in its telecom services line of business. The impact of this client loss to the Company’s third quarter 2015 revenue was $5.0 million. The Company expects its revenue in the fourth quarter to be negatively impacted by approximately $13-$14 million and 2016 revenue to be negatively impacted by approximately $40 million.
Adjusted EBITDA1 for the third quarter of 2015 was $171.3 million compared to $171.2 million for the third quarter of 2014. Adjusted EBITDA margin was 29.8 percent for the third quarter of 2015 compared to 30.1 percent in the same quarter last year. EBITDA1 was $165.5 million in the third quarter of 2015 compared to $166.2 million in the third quarter of 2014. EBITDA margin was 28.8 percent for the third quarter of 2015 compared to 29.3 percent in the same quarter last year.
Adjusted income from continuing operations1 was $68.1 million in the third quarter of 2015 compared to $67.0 million for the third quarter of 2014, an increase of 1.6 percent. Income from continuing operations increased 287.1 percent to $50.7 million in the third quarter of 2015 compared to $13.1 million in the same quarter of 2014. This increase was primarily due to $51.7 million of debt call premiums and accelerated amortization of deferred financing costs incurred when the Company repurchased a portion of its senior notes in the third quarter of 2014.
| 1 | See Reconciliation of Non-GAAP Financial Measures below. |
| 2 | Free cash flow is calculated as cash flows from operating activities less cash capital expenditures. |
| 3 | Revenue growth attributable to acquired entities for the third quarter of 2015 includes 911 Enable through September 2, 2015 and full quarter results of SchoolReach and SharpSchool. Revenue growth attributable to acquired entities for the nine months ended September 30, 2015 includes School Messenger through April 21, 2015; Health Advocate through June 13, 2015; 911 Enable through September 2, 2015; SchoolReach for the entire period; and SharpSchool after June 1, 2015. |
| 4 | Based on loan covenants. Covenant leverage ratio is debt net of cash and excludes accounts receivable securitization debt. |
| 5 | To obtain a copy of the Gartner report, visitwestipc.com/gartner_ucaas/ |
NM: Not Meaningful
2
Balance Sheet, Cash Flow and Liquidity
At September 30, 2015, West Corporation had cash and cash equivalents totaling $182.5 million and working capital of $(6.6) million. Working capital was negatively impacted by the Company’s Senior Secured Term Loan Facility balance of $250.0 million becoming current during the third quarter of 2015. The facility is due in July 2016.
Interest expense was $38.4 million during the third quarter of 2015 compared to $47.6 million during the comparable period the prior year. The decrease in interest expense is a result of the Company’s debt refinancing in 2014.
The Company’s net debt to pro forma adjusted EBITDA ratio, as calculated pursuant to the Company’s senior secured term debt facilities4, was 4.66x at September 30, 2015.
Cash flows from continuing operating activities were $126.7 million in the third quarter of 2015 compared to $118.3 million in the same period of 2014. Free cash flow1, 2 increased 11.2 percent to $95.4 million in the third quarter of 2015 compared to $85.7 million in the third quarter of 2014. During the third quarter of 2015, the Company invested $31.3 million, or 5.5 percent of revenue, in capital expenditures primarily for software and computer equipment.
“West’s third quarter 2015 cash flows from continuing operating activities were very strong at $126.7 million. We repaid $57.4 million of our 2016 term debt facility during the quarter and ended the quarter with a cash balance of $182.5 million,” said Jan Madsen, chief financial officer of West Corporation. “We continue to prioritize a balanced approach to capital allocation that includes strategic acquisitions, investing in our core business, reducing our outstanding debt and repurchasing shares.”
Acquisitions
The Company announced it had completed the acquisition of ClientTell, Inc., a provider of automated notifications and lab reporting services to the healthcare industry.ClientTell will become part of the Company’s interactive services line of business. The initial purchase price was approximately $38 million and was funded with cash on hand. Up to an additional $10.5 million in cash will be paid based on achievement of certain financial objectives over the next five years.
The Company also announced the acquisition of Magnetic North, Ltd., a leading U.K.-based provider of proprietary hosted customer contact center and unified communications solutions to enterprises.Magnetic North offers its international client base complete multi-channel, cloud-based solutions via a fully integrated, feature-rich platform. The technology that Magnetic North has developed will be used across West to provide clients with the capability to deliver seamless and contextual multi-channel consumer experiences. The purchase price was approximately $39 million and was funded with cash on hand.
“Both ClientTell and Magnetic North boast double digit revenue growth and Adjusted EBITDA margins exceeding our Company average,” added Barker. “Additionally, these highly strategic acquisitions enhance our solutions in growing markets and demonstrate our commitment to investing in leading technologies.”
3
Conference Call
The Company will hold a conference call to discuss these topics on Tuesday, November 3, 2015 at 11:00 AM Eastern Time (10:00 AM Central Time). Investors may access the call by visiting the Financials section of the West Corporation website at www.west.com and clicking on the Webcast link. A replay of the call will be available on the Company’s website at www.west.com.
About West Corporation
West Corporation (Nasdaq:WSTC) is a global provider of communication and network infrastructure solutions. West helps manage or support essential enterprise communications with services that include unified communication services, public safety services, interactive services such as automated notifications, telecom services and specialty agent services.
For over 25 years, West has provided reliable, high-quality, voice and data services. West serves clients in a variety of industries including telecommunications, retail, financial services, public safety, technology and healthcare. West has a global organization with sales and operations in the United States, Canada, Europe, the Middle East, Asia Pacific and Latin America. For more information on West Corporation, please call 1-800-841-9000 or visit www.west.com.
Forward-Looking Statements
This press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “continue” or similar terminology. These statements reflect only West’s current expectations and are not guarantees of future performance or results. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include, but are not limited to, competition in West’s highly competitive markets; increases in the cost of voice and data services or significant interruptions in these services; West’s ability to keep pace with its clients’ needs for rapid technological change and systems availability; the continued deployment and adoption of emerging technologies; the loss, financial difficulties or bankruptcy of any key clients; security and privacy breaches of the systems West uses to protect personal data; the effects of global economic trends on the businesses of West’s clients; the non-exclusive nature of West’s client contracts and the absence of revenue commitments; the cost of pending and future litigation; the cost of defending against intellectual property infringement claims; the effects of extensive regulation affecting many of West’s businesses; West’s ability to protect its proprietary information or technology; service interruptions to West’s data and operation centers; West’s ability to retain key personnel and attract a sufficient number of qualified employees; increases in labor costs and turnover rates; the political, economic and other conditions in the countries where West operates; changes in foreign exchange rates; West’s ability to complete future acquisitions, integrate or achieve the objectives of its recent and future acquisitions; and future impairments of our substantial goodwill, intangible assets, or other long-lived assets. In addition, West is subject to risks related to its level of indebtedness. Such risks include West’s ability to generate sufficient cash to service its indebtedness and fund its other liquidity needs; West’s ability to comply with covenants contained in its debt instruments; the ability to obtain additional financing; the incurrence of significant additional indebtedness by West and its subsidiaries; and the ability of West’s lenders to fulfill their lending commitments. West is also subject to other risk factors described in documents filed by the Company with the United States Securities and Exchange Commission.
4
These forward-looking statements speak only as of the date on which the statements were made. West undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
5
WEST CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | |
| | | 2015 | | | 2014 | | | | | | 2015 | |
| | | Actual | | | Actual | | | % Change | | | Adjusted (1) | |
Revenue | | $ | 574,448 | | | $ | 568,197 | | | | 1.1 | % | | $ | 574,448 | |
Cost of services | | | 246,337 | | | | 243,706 | | | | 1.1 | % | | | 246,337 | |
Selling, general and administrative expenses | | | 203,757 | | | | 209,545 | | | | -2.8 | % | | | 181,473 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 124,354 | | | | 114,946 | | | | 8.2 | % | | | 146,638 | |
Interest expense, net | | | 38,382 | | | | 47,615 | | | | -19.4 | % | | | 33,374 | |
Debt call premium and accelerated amortization of deferred financing costs | | | — | | | | 51,735 | | | | NM | | | | — | |
Other expense (income), net | | | 6,322 | | | | (2,336 | ) | | | NM | | | | 6,322 | |
| | | | | | | | | | | | | | | | |
Income from continuing operations before tax | | | 79,650 | | | | 17,932 | | | | 344.2 | % | | | 106,942 | |
Income tax expense attributed to continuing operations | | | 28,931 | | | | 4,829 | | | | 499.1 | % | | | 38,843 | |
| | | | | | | | | | | | | | | | |
Income from continuing operations | | | 50,719 | | | | 13,103 | | | | 287.1 | % | | | 68,099 | |
Income (loss) from discontinued operations, net of income taxes | | | (1,235 | ) | | | 3,007 | | | | NM | | | | (1,235 | ) |
| | | | | | | | | | | | | | | | |
Net income | | $ | 49,484 | | | $ | 16,110 | | | | 207.2 | % | | $ | 66,864 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 82,931 | | | | 84,090 | | | | | | | | 82,931 | |
Diluted | | | 84,834 | | | | 85,611 | | | | | | | | 84,834 | |
| | | | |
Earnings (loss) per share - Basic: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.61 | | | $ | 0.15 | | | | 306.7 | % | | $ | 0.82 | |
Discontinued operations | | | (0.01 | ) | | | 0.04 | | | | NM | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | |
Total Earnings Per Share - Basic | | $ | 0.60 | | | $ | 0.19 | | | | 215.8 | % | | $ | 0.81 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) per share - Diluted: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.60 | | | $ | 0.15 | | | | 300.0 | % | | $ | 0.80 | |
Discontinued operations | | | (0.01 | ) | | | 0.04 | | | | NM | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | |
Total Earnings Per Share - Diluted** | | $ | 0.58 | | | $ | 0.19 | | | | 205.3 | % | | $ | 0.79 | |
| | | | | | | | | | | | | | | | |
| | | | |
SELECTED FINANCIAL DATA: | | | | | | | | | | | | | | | | |
| | | | |
| | | | | | Contribution | | | | | | | |
| Changes in Revenue - 3Q15 compared to 3Q14: | | | | | to Rev. Growth | | | | | | | |
Revenue for the three months ended Sept. 30, 2014 | | $ | 568,197 | | | | | | | | | | | | | |
Revenue from acquired entities3 | | | 5,376 | | | | 0.9 | % | | | | | | | | |
Revenue from previously disclosed lost conferencing client | | | (6,700 | ) | | | -1.2 | % | | | | | | | | |
Revenue from previously disclosed lost telecom services client | | | (5,000 | ) | | | -0.9 | % | | | | | | | | |
Estimated impact of foreign currency exchange rates | | | (9,706 | ) | | | -1.7 | % | | | | | | | | |
Adjusted organic growth, net | | | 22,281 | | | | 3.9 | % | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenue for the three months ended Sept. 30, 2015 | | $ | 574,448 | | | | 1.1 | % | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| Depreciation and Amortization: | | 3Q15 | | | 3Q14 | | | % Change | | | | |
Depreciation | | $ | 27,737 | | | $ | 27,765 | | | | -0.1 | % | | | | |
Amortization - SG&A | | | 16,513 | | | | 17,817 | | | | -7.3 | % | | | | |
Amortization - COS | | | 3,002 | | | | 3,078 | | | | -2.5 | % | | | | |
Amortization - Deferred financing costs | | | 5,008 | | | | 5,206 | | | | -3.8 | % | | | | |
Amortization - Accelerated deferred financing costs | | | — | | | | 7,748 | | | | NM | | | | | |
| | | | | | | | | | | | | | | | |
Total depreciation and amortization | | $ | 52,260 | | | $ | 61,614 | | | | -15.2 | % | | | | |
| | | | | | | | | | | | | | | | |
| | | | |
Share-based Compensation | | $ | 5,374 | | | $ | 3,908 | | | | 37.5 | % | | | | |
| ** | 3Q15 Earnings Per Share does not foot due to rounding |
6
WEST CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share data)
| | | | | | | | | | | | | | | | |
| | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | | | | 2015 | |
| | | Actual | | | Actual | | | % Change | | | Adjusted (1) | |
Revenue | | $ | 1,711,829 | | | $ | 1,655,656 | | | | 3.4 | % | | $ | 1,711,829 | |
Cost of services | | | 731,304 | | | | 708,912 | | | | 3.2 | % | | | 731,304 | |
Selling, general and administrative expenses | | | 629,045 | | | | 602,047 | | | | 4.5 | % | | | 559,762 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 351,480 | | | | 344,697 | | | | 2.0 | % | | | 420,763 | |
Interest expense, net | | | 115,657 | | | | 144,952 | | | | -20.2 | % | | | 100,640 | |
Debt call premium and accelerated amortization of deferred financing costs | | | — | | | | 51,735 | | | | NM | | | | — | |
Other expense (income), net | | | 2,583 | | | | (5,562 | ) | | | NM | | | | 2,583 | |
| | | | | | | | | | | | | | | | |
Income from continuing operations before tax | | | 233,240 | | | | 153,572 | | | | 51.9 | % | | | 317,540 | |
Income tax expense attributed to continuing operations | | | 84,664 | | | | 53,845 | | | | 57.2 | % | | | 115,265 | |
| | | | | | | | | | | | | | | | |
Income from continuing operations | | | 148,576 | | | | 99,727 | | | | 49.0 | % | | | 202,275 | |
Income from discontinued operations, net of income taxes | | | 30,989 | | | | 10,420 | | | | 197.4 | % | | | 32,225 | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 179,565 | | | $ | 110,147 | | | | 63.0 | % | | $ | 234,500 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 83,479 | | | | 83,950 | | | | | | | | 83,479 | |
Diluted | | | 85,554 | | | | 85,400 | | | | | | | | 85,554 | |
| | | | |
Earnings per share - Basic: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 1.78 | | | $ | 1.19 | | | | 49.6 | % | | $ | 2.42 | |
Discontinued operations | | | 0.37 | | | | 0.12 | | | | 208.3 | % | | | 0.38 | |
| | | | | | | | | | | | | | | | |
Total Earnings Per Share - Basic | | $ | 2.15 | | | $ | 1.31 | | | | 64.1 | % | | $ | 2.80 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings per share - Diluted: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 1.74 | | | $ | 1.17 | | | | 48.7 | % | | $ | 2.36 | |
Discontinued operations | | | 0.36 | | | | 0.12 | | | | 200.0 | % | | $ | 0.38 | |
| | | | | | | | | | | | | | | | |
Total Earnings Per Share - Diluted | | $ | 2.10 | | | $ | 1.29 | | | | 62.8 | % | | $ | 2.74 | |
| | | | | | | | | | | | | | | | |
| | | | |
SELECTED FINANCIAL DATA: | | | | | | | | | | | | | | | | |
| | | | |
| | | | | | Contribution | | | | | | | |
| Changes in Revenue - YTD 3Q15 compared to YTD 3Q14: | | | | | to Rev. Growth | | | | | | | |
Revenue for the nine months ended Sept. 30, 2014 | | $ | 1,655,656 | | | | | | | | | | | | | |
Revenue from acquired entities3 | | | 66,742 | | | | 4.0 | % | | | | | | | | |
Revenue from previously disclosed lost conferencing client | | | (26,200 | ) | | | -1.6 | % | | | | | | | | |
Revenue from previously disclosed lost telecom services client | | | (5,000 | ) | | | -0.3 | % | | | | | | | | |
Estimated impact of foreign currency exchange rates | | | (30,040 | ) | | | -1.8 | % | | | | | | | | |
Adjusted organic growth, net | | | 50,671 | | | | 3.1 | % | | | | | | | | |
| | | | | | | | | | | | | | | | |
Revenue for the nine months ended Sept. 30, 2014 | | $ | 1,711,829 | | | | 3.4 | % | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | |
| Depreciation and Amortization: | | 3Q15 YTD | | | 3Q14 YTD | | | % Change | | | | |
Depreciation | | $ | 81,931 | | | $ | 79,116 | | | | 3.6 | % | | | | |
Amortization - SG&A | | | 49,480 | | | | 42,978 | | | | 15.1 | % | | | | |
Amortization - COS | | | 9,504 | | | | 8,995 | | | | 5.7 | % | | | | |
Amortization - Deferred financing costs | | | 15,017 | | | | 14,960 | | | | 0.4 | % | | | | |
Amortization - Accelerated deferred financing costs | | | — | | | | 7,748 | | | | NM | | | | | |
| | | | | | | | | | | | | | | | |
Total depreciation and amortization | | $ | 155,932 | | | $ | 153,797 | | | | 1.4 | % | | | | |
| | | | | | | | | | | | | | | | |
| | | | |
Share-based Compensation | | $ | 16,785 | | | $ | 10,055 | | | | 66.9 | % | | | | |
7
WEST CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
| | | | | | | | | | | | |
| | | September 30, | | | December 31, | | | % | |
| | | 2015 | | | 2014 | | | Change | |
Assets: | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 182,538 | | | $ | 115,061 | | | | 58.6 | % |
Trust and restricted cash | | | 18,878 | | | | 18,573 | | | | 1.6 | % |
Accounts receivable, net | | | 387,639 | | | | 355,625 | | | | 9.0 | % |
Prepaid assets | | | 44,580 | | | | 45,242 | | | | -1.5 | % |
Deferred expenses | | | 68,952 | | | | 65,317 | | | | 5.6 | % |
Other current assets | | | 25,919 | | | | 30,575 | | | | -15.2 | % |
Assets held for sale | | | 17,541 | | | | 304,605 | | | | -94.2 | % |
| | | | | | | | | | | | |
Total current assets | | | 746,047 | | | | 934,998 | | | | -20.2 | % |
Property and Equipment: | | | | | | | | | | | | |
Property and equipment | | | 1,025,279 | | | | 1,045,769 | | | | -2.0 | % |
Accumulated depreciation and amortization | | | (695,604 | ) | | | (695,739 | ) | | | 0.0 | % |
| | | | | | | | | | | | |
Net property and equipment | | | 329,675 | | | | 350,030 | | | | -5.8 | % |
Goodwill | | | 1,880,662 | | | | 1,884,920 | | | | -0.2 | % |
Intangible assets | | | 346,483 | | | | 388,166 | | | | -10.7 | % |
Other assets | | | 254,074 | | | | 259,961 | | | | -2.3 | % |
| | | | | | | | | | | | |
Total assets | | $ | 3,556,941 | | | $ | 3,818,075 | | | | -6.8 | % |
| | | | | | | | | | | | |
Liabilities and Stockholders’ Deficit: | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Accounts payable | | $ | 87,933 | | | $ | 91,353 | | | | -3.7 | % |
Deferred revenue | | | 157,688 | | | | 144,413 | | | | 9.2 | % |
Accrued expenses | | | 241,734 | | | | 228,424 | | | | 5.8 | % |
Current maturities of long-term debt | | | 265,313 | | | | 16,246 | | | | 1533.1 | % |
Liabilities held for sale | | | — | | | | 84,788 | | | | NM | |
| | | | | | | | | | | | |
Total current liabilities | | | 752,668 | | | | 565,224 | | | | 33.2 | % |
Long-term obligations | | | 3,134,812 | | | | 3,642,540 | | | | -13.9 | % |
Deferred income taxes | | | 90,343 | | | | 96,632 | | | | -6.5 | % |
Other long-term liabilities | | | 174,622 | | | | 173,320 | | | | 0.8 | % |
| | | | | | | | | | | | |
Total liabilities | | | 4,152,445 | | | | 4,477,716 | | | | -7.3 | % |
| | | |
Stockholders’ Deficit: | | | | | | | | | | | | |
Common stock | | | 85 | | | | 84 | | | | 1.2 | % |
Additional paid-in capital | | | 2,187,197 | | | | 2,155,864 | | | | 1.5 | % |
Retained deficit | | | (2,650,579 | ) | | | (2,772,775 | ) | | | -4.4 | % |
Accumulated other comprehensive loss | | | (66,942 | ) | | | (37,506 | ) | | | 78.5 | % |
Treasury stock at cost | | | (65,265 | ) | | | (5,308 | ) | | | NM | |
| | | | | | | | | | | | |
Total stockholders’ deficit | | | (595,504 | ) | | | (659,641 | ) | | | -9.7 | % |
| | | | | | | | | | | | |
Total liabilities and stockholders’ deficit | | $ | 3,556,941 | | | $ | 3,818,075 | | | | -6.8 | % |
| | | | | | | | | | | | |
8
Reconciliation of Non-GAAP Financial Measures
Adjusted Operating Income Reconciliation
Adjusted operating income is not a measure of financial performance under generally accepted accounting principles (“GAAP”). The Company believes adjusted operating income provides a relevant measure of operating profitability and a useful basis for evaluating the ongoing operations of the Company. Adjusted operating income is used by the Company to assess operating income before the impact of acquisitions and acquisition-related costs and certain non-cash items. Adjusted operating income should not be considered in isolation or as a substitute for operating income or other profitability data prepared in accordance with GAAP. Adjusted operating income, as presented, may not be comparable to similarly titled measures of other companies. Set forth below is a reconciliation of adjusted operating income from operating income.
|
| Reconciliation of Adjusted Operating Income from Operating Income |
|
| Unaudited, in thousands |
| | | | | | | | | | | | |
| | | Three Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Operating income | | $ | 124,354 | | | $ | 114,946 | | | | 8.2 | % |
Amortization of acquired intangible assets | | | 16,513 | | | | 17,817 | | | | | |
Share-based compensation | | | 5,374 | | | | 3,908 | | | | | |
M&A and acquisition-related costs | | | 397 | | | | 1,044 | | | | | |
| | | | | | | | | | | | |
Adjusted operating income | | $ | 146,638 | | | $ | 137,715 | | | | 6.5 | % |
| | | | | | | | | | | | |
| |
| | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Operating income | | $ | 351,480 | | | $ | 344,697 | | | | 2.0 | % |
Amortization of acquired intangible assets | | | 49,480 | | | | 42,978 | | | | | |
Share-based compensation | | | 16,785 | | | | 10,055 | | | | | |
Secondary equity offering expense | | | 1,041 | | | | — | | | | | |
M&A and acquisition-related costs | | | 1,977 | | | | 2,558 | | | | | |
| | | | | | | | | | | | |
Adjusted operating income | | $ | 420,763 | | | $ | 400,288 | | | | 5.1 | % |
| | | | | | | | | | | | |
Adjusted Net Income and Adjusted Earnings per Share Reconciliation
Adjusted net income and adjusted earnings per share (EPS) are non-GAAP measures. The Company believes these measures provide a useful indication of profitability and basis for assessing the operations of the Company without the impact of bond redemption premiums, acquisitions and acquisition-related costs and certain non-cash items. Adjusted net income should not be considered in isolation or as a substitute for net income or other profitability metrics prepared in accordance with GAAP. Adjusted net income, as presented, may not be comparable to similarly titled measures of other companies. Set forth below is a reconciliation of adjusted net income from net income.
9
|
| Reconciliation of Adjusted Net Income from Net Income |
|
| Unaudited, in thousands except per share data |
| | | | | | | | | | | | |
| CONTINUING OPERATIONS | | Three Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Income from continuing operations | | $ | 50,719 | | | $ | 13,103 | | | | 287.1 | % |
| | | |
Amortization of acquired intangible assets | | | 16,513 | | | | 17,817 | | | | | |
Amortization of deferred financing costs | | | 5,008 | | | | 5,206 | | | | | |
Accelerated amortization of deferred financing costs | | | — | | | | 7,748 | | | | | |
Share-based compensation | | | 5,374 | | | | 3,908 | | | | | |
Debt call premiums | | | — | | | | 43,987 | | | | | |
M&A and acquisition-related costs | | | 397 | | | | 1,044 | | | | | |
| | | | | | | | | | | | |
Pre-tax total | | | 27,292 | | | | 79,710 | | | | | |
Income tax expense on adjustments | | | 9,912 | | | | 25,803 | | | | | |
| | | | | | | | | | | | |
Adjusted net income from continuing operations | | $ | 68,099 | | | $ | 67,010 | | | | 1.6 | % |
| | | | | | | | | | | | |
| | | |
Diluted shares outstanding | | | 84,834 | | | | 85,611 | | | | | |
Adjusted EPS from continuing operations - diluted | | $ | 0.80 | | | $ | 0.78 | | | | 2.6 | % |
| |
| DISCONTINUED OPERATIONS | | Three Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Income (loss) from discontinued operations | | $ | (1,235 | ) | | $ | 3,007 | | | | NM | |
Amortization of acquired intangible assets | | | — | | | | 495 | | | | | |
Share-based compensation | | | — | | | | 67 | | | | | |
M&A and acquisition-related costs | | | — | | | | 440 | | | | | |
| | | | | | | | | | | | |
Pre-tax total | | | — | | | | 1,002 | | | | | |
Income tax expense on adjustments | | | — | | | | 501 | | | | | |
| | | | | | | | | | | | |
Adjusted net income (loss) from discontinued operations | | $ | (1,235 | ) | | $ | 3,508 | | | | NM | |
| | | | | | | | | | | | |
| | | |
Diluted shares outstanding | | | 84,834 | | | | 85,611 | | | | | |
Adjusted earnings (loss) per share from discontinued operations - diluted | | $ | (0.01 | ) | | $ | 0.04 | | | | NM | |
| |
| CONSOLIDATED | | Three Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Net income | | $ | 49,484 | | | $ | 16,110 | | | | 207.2 | % |
| | | |
Amortization of acquired intangible assets | | | 16,513 | | | | 18,312 | | | | | |
Amortization of deferred financing costs | | | 5,008 | | | | 5,206 | | | | | |
Accelerated amortization of deferred financing costs | | | — | | | | 7,748 | | | | | |
Share-based compensation | | | 5,374 | | | | 3,975 | | | | | |
Debt call premiums | | | — | | | | 43,987 | | | | | |
M&A and acquisition-related costs | | | 397 | | | | 1,484 | | | | | |
| | | | | | | | | | | | |
Pre-tax total | | | 27,292 | | | | 80,712 | | | | | |
Income tax expense on adjustments | | | 9,912 | | | | 26,304 | | | | | |
| | | �� | | | | | | | | | |
Adjusted net income | | $ | 66,864 | | | $ | 70,518 | | | | -5.2 | % |
| | | | | | | | | | | | |
| | | |
Diluted shares outstanding | | | 84,834 | | | | 85,611 | | | | | |
Adjusted EPS - diluted | | $ | 0.79 | | | $ | 0.82 | | | | -4.9 | % |
10
Reconciliation of Adjusted Net Income from Net Income
Unaudited, in thousands except per share data
| | | | | | | | | | | | |
| CONTINUING OPERATIONS | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Income from continuing operations | | $ | 148,576 | | | $ | 99,727 | | | | 49.0 | % |
| | | |
Amortization of acquired intangible assets | | | 49,480 | | | | 42,978 | | | | | |
Amortization of deferred financing costs | | | 15,017 | | | | 14,960 | | | | | |
Accelerated amortization of deferred financing costs | | | — | | | | 7,748 | | | | | |
Share-based compensation | | | 16,785 | | | | 10,055 | | | | | |
Debt call premiums | | | — | | | | 43,987 | | | | | |
Secondary equity offering expense | | | 1,041 | | | | — | | | | | |
M&A and acquisition-related costs | | | 1,977 | | | | 2,558 | | | | | |
| | | | | | | | | | | | |
Pre-tax total | | | 84,300 | | | | 122,286 | | | | | |
Income tax expense on adjustments | | | 30,601 | | | | 44,368 | | | | | |
| | | | | | | | | | | | |
Adjusted net income from continuing operations | | $ | 202,275 | | | $ | 177,645 | | | | 13.9 | % |
| | | | | | | | | | | | |
| | | |
Diluted shares outstanding | | | 85,554 | | | | 85,400 | | | | | |
Adjusted EPS from continuing operations - diluted | | $ | 2.36 | | | $ | 2.08 | | | | 13.5 | % |
| |
| DISCONTINUED OPERATIONS | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Income from discontinued operations | | $ | 30,989 | | | $ | 10,420 | | | | 197.4 | % |
| | | |
Amortization of acquired intangible assets | | | 41 | | | | 1,509 | | | | | |
Share-based compensation | | | 1,576 | | | | 124 | | | | | |
M&A and acquisition-related costs | | | 386 | | | | 648 | | | | | |
| | | | | | | | | | | | |
Pre-tax total | | | 2,003 | | | | 2,281 | | | | | |
Income tax expense on adjustments | | | 767 | | | | 1,099 | | | | | |
| | | | | | | | | | | | |
Adjusted net income from discontinued operations | | $ | 32,225 | | | $ | 11,602 | | | | 177.8 | % |
| | | | | | | | | | | | |
| | | |
Diluted shares outstanding | | | 85,554 | | | | 85,400 | | | | | |
Adjusted EPS from discontinued operations - diluted | | $ | 0.38 | | | $ | 0.14 | | | | 171.4 | % |
| |
| CONSOLIDATED | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | |
Net income | | $ | 179,565 | | | $ | 110,147 | | | | 63.0 | % |
| | | |
Amortization of acquired intangible assets | | | 49,521 | | | | 44,487 | | | | | |
Amortization of deferred financing costs | | | 15,017 | | | | 14,960 | | | | | |
Accelerated amortization of deferred financing costs | | | — | | | | 7,748 | | | | | |
Share-based compensation | | | 18,361 | | | | 10,179 | | | | | |
Debt call premiums | | | — | | | | 43,987 | | | | | |
Secondary equity offering expense | | | 1,041 | | | | — | | | | | |
M&A and acquisition-related costs | | | 2,363 | | | | 3,206 | | | | | |
| | | | | | | | | | | | |
Pre-tax total | | | 86,303 | | | | 124,567 | | | | | |
Income tax expense on adjustments | | | 31,368 | | | | 45,467 | | | | | |
| | | | | | | | | | | | |
Adjusted net income | | $ | 234,500 | | | $ | 189,247 | | | | 23.9 | % |
| | | | | | | | | | | | |
| | | |
Diluted shares outstanding | | | 85,554 | | | | 85,400 | | | | | |
Adjusted EPS - diluted | | $ | 2.74 | | | $ | 2.22 | | | | 23.4 | % |
11
Free Cash Flow Reconciliation
The Company believes free cash flow provides a relevant measure of liquidity and a useful basis for assessing the Company’s ability to fund its activities, including the financing of acquisitions, debt service, stock repurchases and distribution of earnings to shareholders. Free cash flow is calculated as cash flows from operating activities less cash capital expenditures. Free cash flow is not a measure of financial performance under GAAP. Free cash flow should not be considered in isolation or as a substitute for cash flows from operating activities or other liquidity measures prepared in accordance with GAAP. Free cash flow, as presented, may not be comparable to similarly titled measures of other companies. Set forth below is a reconciliation of free cash flow from cash flows from operating activities.
Reconciliation of Free Cash Flow from Operating Cash Flow
Unaudited, in thousands
| | | | | | | | | | | | | | | | | | | | | | | | |
| CONTINUING OPERATIONS | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | | | 2015 | | | 2014 | | | % Change | |
Cash flows from operating activities | | $ | 126,697 | | | $ | 118,302 | | | | 7.1 | % | | $ | 283,221 | | | $ | 302,592 | | | | -6.4 | % |
Cash capital expenditures | | | 31,319 | | | | 32,557 | | | | -3.8 | % | | | 96,182 | | | | 98,886 | | | | -2.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Free cash flow | | $ | 95,378 | | | $ | 85,745 | | | | 11.2 | % | | $ | 187,039 | | | $ | 203,706 | | | | -8.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| DISCONTINUED OPERATIONS | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | | | | 2015 | | | 2014 | | | | |
Cash flows from (used in) operating activities | | $ | (1,235 | ) | | $ | 10,120 | | | | | | | $ | (8,197 | ) | | $ | 27,658 | | | | | |
Cash capital expenditures | | | — | | | | 5,691 | | | | | | | | 1,930 | | | | 14,796 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Free cash flow | | $ | (1,235 | ) | | $ | 4,429 | | | | | | | $ | (10,127 | ) | | $ | 12,862 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| CONSOLIDATED | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | % Change | | | 2015 | | | 2014 | | | % Change | |
Cash flows from operating activities | | $ | 125,462 | | | $ | 128,422 | | | | -2.3 | % | | $ | 275,024 | | | $ | 330,250 | | | | -16.7 | % |
Cash capital expenditures | | | 31,319 | | | | 38,248 | | | | -18.1 | % | | | 98,112 | | | | 113,682 | | | | -13.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Free cash flow | | $ | 94,143 | | | $ | 90,174 | | | | 4.4 | % | | $ | 176,912 | | | $ | 216,568 | | | | -18.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
12
EBITDA and Adjusted EBITDA Reconciliation
The common definition of EBITDA is “Earnings Before Interest Expense, Taxes, Depreciation and Amortization.” In evaluating liquidity and performance, the Company uses “Adjusted EBITDA.” The Company defines Adjusted EBITDA as earnings before interest expense, share-based compensation, taxes, depreciation and amortization and transaction costs. EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under GAAP. Although the Company uses Adjusted EBITDA as a measure of its liquidity, the use of Adjusted EBITDA is limited because it does not include certain material costs, such as depreciation, amortization and interest, necessary to operate the business. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flow from operating activities or other income or cash flow data prepared in accordance with GAAP. Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is presented here as the Company understands investors use it as a measure of its historical ability to service debt and compliance with covenants in its senior credit facilities. Further, Adjusted EBITDA is presented here as the Company uses it to measure its performance and to conduct and evaluate its business during its regular review of operating results for the periods presented. The Company utilizes this non-GAAP measure to make decisions about the use of resources, analyze performance and measure management’s performance with stated objectives. Set forth below is a reconciliation of EBITDA and Adjusted EBITDA from cash flow from operating activities and net income.
13
|
| Reconciliation of EBITDA and Adjusted EBITDA from Operating Cash Flow |
|
| Unaudited, in thousands |
| | | | | | | | | | | | | | | | |
| CONTINUING OPERATIONS | | Three Months Ended Sept. 30, | | | Nine Months Ended Sept. 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Cash flows from operating activities | | $ | 126,697 | | | $ | 118,302 | | | $ | 283,221 | | | $ | 302,592 | |
Income tax expense | | | 28,931 | | | | 4,829 | | | | 84,664 | | | | 53,845 | |
Deferred income tax benefit | | | 8,160 | | | | 17,915 | | | | 5,958 | | | | 27,684 | |
Interest expense and other financing charges | | | 38,642 | | | | 99,644 | | | | 117,120 | | | | 197,579 | |
Provision for share-based compensation | | | (5,374 | ) | | | (3,908 | ) | | | (16,785 | ) | | | (10,055 | ) |
Amortization of deferred financing costs | | | (5,008 | ) | | | (5,206 | ) | | | (15,017 | ) | | | (14,960 | ) |
Accelerated amortization of deferred financing costs | | | — | | | | (7,748 | ) | | | — | | | | (7,748 | ) |
Other | | | (4 | ) | | | — | | | | (224 | ) | | | (6 | ) |
Changes in operating assets and liabilities, net of business acquisitions | | | (26,500 | ) | | | (57,591 | ) | | | 32,338 | | | | (66,690 | ) |
| | | | | | | | | | | | | | | | |
EBITDA | | | 165,544 | | | | 166,237 | | | | 491,275 | | | | 482,241 | |
Provision for share-based compensation | | | 5,374 | | | | 3,908 | | | | 16,785 | | | | 10,055 | |
Secondary equity offering expense | | | — | | | | — | | | | 1,041 | | | | — | |
M&A and acquisition-related costs | | | 397 | | | | 1,044 | | | | 1,977 | | | | 2,558 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 171,315 | | | $ | 171,189 | | | $ | 511,078 | | | $ | 494,854 | |
| | | | | | | | | | | | | | | | |
| | | | |
Cash flows from operating activities | | $ | 126,697 | | | $ | 118,302 | | | $ | 283,221 | | | $ | 302,592 | |
Cash flows used in investing activities | | $ | (30,061 | ) | | $ | (77,111 | ) | | $ | (113,782 | ) | | $ | (485,938 | ) |
Cash flows from (used in) financing activities | | $ | (74,048 | ) | | $ | (33,882 | ) | | $ | (364,790 | ) | | $ | 110,855 | |
| | |
| DISCONTINUED OPERATIONS | | Three Months Ended Sept. 30, | | | Nine Months Ended Sept. 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Cash flows from (used in) operating activities | | $ | (1,235 | ) | | $ | 10,120 | | | $ | (8,197 | ) | | $ | 27,658 | |
Income tax expense | | | (665 | ) | | | 2,959 | | | | 19,345 | | | | 9,467 | |
Deferred income tax expense | | | — | | | | (2,837 | ) | | | (2,293 | ) | | | (3,057 | ) |
Provision for share-based compensation | | | — | | | | (67 | ) | | | (1,576 | ) | | | (124 | ) |
Other | | | — | | | | (2 | ) | | | 29,596 | | | | (2 | ) |
Changes in operating assets and liabilities, net of business acquisitions | | | — | | | | (3 | ) | | | 13,500 | | | | (1,170 | ) |
| | | | | | | | | | | | | | | | |
EBITDA | | | (1,900 | ) | | | 10,170 | | | | 50,375 | | | | 32,772 | |
Provision for share-based compensation | | | — | | | | 67 | | | | 1,576 | | | | 124 | |
M&A and acquisition-related costs | | | — | | | | 440 | | | | 386 | | | | 648 | |
(Gain) loss on sale of business | | | 1,900 | | | | — | | | | (46,656 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | — | | | $ | 10,677 | | | $ | 5,681 | | | $ | 33,544 | |
| | | | | | | | | | | | | | | | |
| | | | |
Cash flows from (used in) operating activities | | $ | (1,235 | ) | | $ | 10,120 | | | $ | (8,197 | ) | | $ | 27,658 | |
Cash flows from (used in) investing activities | | $ | 6,275 | | | $ | (5,792 | ) | | $ | 275,815 | | | $ | (15,194 | ) |
Cash flows used in financing activities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
14
|
| Reconciliation of EBITDA and Adjusted EBITDA from Operating Cash Flow, continued |
| | | | | | | | | | | | | | | | |
| CONSOLIDATED | | Three Months Ended Sept. 30, | | | Nine Months Ended Sept. 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Cash flows from operating activities | | $ | 125,462 | | | $ | 128,422 | | | $ | 275,024 | | | $ | 330,250 | |
Income tax expense | | | 28,266 | | | | 7,788 | | | | 104,009 | | | | 63,312 | |
Deferred income tax benefit | | | 8,160 | | | | 15,078 | | | | 3,665 | | | | 24,627 | |
Interest expense and other financing charges | | | 38,642 | | | | 99,644 | | | | 117,120 | | | | 197,579 | |
Provision for share-based compensation | | | (5,374 | ) | | | (3,975 | ) | | | (18,361 | ) | | | (10,179 | ) |
Amortization of deferred financing costs | | | (5,008 | ) | | | (5,206 | ) | | | (15,017 | ) | | | (14,960 | ) |
Accelerated amortization of deferred financing costs | | | — | | | | (7,748 | ) | | | — | | | | (7,748 | ) |
Other | | | (4 | ) | | | (2 | ) | | | 29,372 | | | | (8 | ) |
Changes in operating assets and liabilities, net of business acquisitions | | | (26,500 | ) | | | (57,594 | ) | | | 45,838 | | | | (67,860 | ) |
| | | | | | | | | | | | | | | | |
EBITDA | | | 163,644 | | | | 176,407 | | | | 541,650 | | | | 515,013 | |
Provision for share-based compensation | | | 5,374 | | | | 3,975 | | | | 18,361 | | | | 10,179 | |
Secondary equity offering expense | | | — | | | | — | | | | 1,041 | | | | — | |
M&A and acquisition-related costs | | | 397 | | | | 1,484 | | | | 2,363 | | | | 3,206 | |
(Gain) loss on sale of business | | | 1,900 | | | | — | | | | (46,656 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 171,315 | | | $ | 181,866 | | | $ | 516,759 | | | $ | 528,398 | |
| | | | | | | | | | | | | | | | |
| | | | |
CONSOLIDATED | | | | | | | | | | | | | | | | |
Cash flows from operating activities | | $ | 125,462 | | | $ | 128,422 | | | $ | 275,024 | | | $ | 330,250 | |
Cash flows from (used in) investing activities | | $ | (23,786 | ) | | $ | (82,903 | ) | | $ | 162,033 | | | $ | (501,132 | ) |
Cash flows from (used in) financing activities | | $ | (74,048 | ) | | $ | (33,882 | ) | | $ | (364,790 | ) | | $ | 110,855 | |
15
|
| Reconciliation of EBITDA and Adjusted EBITDA from Net Income |
|
| Unaudited, in thousands |
| | | | | | | | | | | | | | | | |
| CONTINUING OPERATIONS | | Three Months Ended Sept. 30, | | | Nine Months Ended Sept. 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Income from continuing operations | | $ | 50,719 | | | $ | 13,103 | | | $ | 148,576 | | | $ | 99,727 | |
Interest expense and other financing charges | | | 38,642 | | | | 99,644 | | | | 117,120 | | | | 197,579 | |
Depreciation and amortization | | | 47,252 | | | | 48,661 | | | | 140,915 | | | | 131,090 | |
Income tax expense | | | 28,931 | | | | 4,829 | | | | 84,664 | | | | 53,845 | |
| | | | | | | | | | | | | | | | |
EBITDA | | | 165,544 | | | | 166,237 | | | | 491,275 | | | | 482,241 | |
Provision for share-based compensation | | | 5,374 | | | | 3,908 | | | | 16,785 | | | | 10,055 | |
Secondary equity offering expense | | | — | | | | — | | | | 1,041 | | | | — | |
M&A and acquisition-related costs | | | 397 | | | | 1,044 | | | | 1,977 | | | | 2,558 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 171,315 | | | $ | 171,189 | | | $ | 511,078 | | | $ | 494,854 | |
| | | | | | | | | | | | | | | | |
| | |
| DISCONTINUED OPERATIONS | | Three Months Ended Sept. 30, | | | Nine Months Ended Sept. 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Income from discontinued operations | | $ | (1,235 | ) | | $ | 3,007 | | | $ | 30,989 | | | $ | 10,420 | |
Depreciation and amortization | | | — | | | | 4,204 | | | | 41 | | | | 12,885 | |
Income tax expense | | | (665 | ) | | | 2,959 | | | | 19,345 | | | | 9,467 | |
| | | | | | | | | | | | | | | | |
EBITDA | | | (1,900 | ) | | | 10,170 | | | | 50,375 | | | | 32,772 | |
Provision for share-based compensation | | | — | | | | 67 | | | | 1,576 | | | | 124 | |
M&A and acquisition-related costs | | | — | | | | 440 | | | | 386 | | | | 648 | |
(Gain) loss on sale of business | | | 1,900 | | | | — | | | | (46,656 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | — | | | $ | 10,677 | | | $ | 5,681 | | | $ | 33,544 | |
| | | | | | | | | | | | | | | | |
| | |
| CONSOLIDATED | | Three Months Ended Sept. 30, | | | Nine Months Ended Sept. 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Net income | | $ | 49,484 | | | $ | 16,110 | | | $ | 179,565 | | | $ | 110,147 | |
Interest expense and other financing charges | | | 38,642 | | | | 99,644 | | | | 117,120 | | | | 197,579 | |
Depreciation and amortization | | | 47,252 | | | | 52,865 | | | | 140,956 | | | | 143,975 | |
Income tax expense | | | 28,266 | | | | 7,788 | | | | 104,009 | | | | 63,312 | |
| | | | | | | | | | | | | | | | |
EBITDA | | | 163,644 | | | | 176,407 | | | | 541,650 | | | | 515,013 | |
Provision for share-based compensation | | | 5,374 | | | | 3,975 | | | | 18,361 | | | | 10,179 | |
Secondary equity offering expense | | | — | | | | — | | | | 1,041 | | | | — | |
M&A and acquisition-related costs | | | 397 | | | | 1,484 | | | | 2,363 | | | | 3,206 | |
(Gain) loss on sale of business | | | 1,900 | | | | — | | | | (46,656 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 171,315 | | | $ | 181,866 | | | $ | 516,759 | | | $ | 528,398 | |
| | | | | | | | | | | | | | | | |
###
16
