14
NOTES TO NON-GAAP FINANCIAL MEASURES
For additional details, please see today’s press release and Safe Harbor Statement.
These slides use non-GAAP financial measures. West believes that these non-GAAP measures of financial results provide
useful information to management and investors regarding certain business trends relating to West’s financial condition, results
of operations and the Company’s overall performance. Our executive management team uses adjusted operating profit and
adjusted diluted EPS to evaluate the performance of the Company in terms of profitability and to compare operating results to
prior periods. Adjusted operating profit is also used to evaluate changes in the operating results of each segment and to allocate
resources to our segments. The Company believes that the use of these non-GAAP financial measures provides an additional
tool for investors to use in evaluating ongoing operating results and trends in comparing its financial measures with other
companies.
Our executive management does not consider such non-GAAP measures in isolation or as an alternative to such measures
determined in accordance with GAAP. The principal limitation of such non-GAAP financial measures is that they exclude
significant expenses and income that are required by GAAP to be recorded. In addition, they are subject to inherent limitations
as they reflect the exercise of judgment by management about which items are excluded from the non-GAAP financial
measures. In order to compensate for these limitations, our executive management presents its non-GAAP financial measures
in connection with its GAAP results. We urge investors and potential investors to review the reconciliation of our non-GAAP
financial measures to the comparable GAAP financial measures, and not rely on any single financial measure to evaluate the
Company’s business.
In calculating adjusted operating profit and adjusted diluted EPS, we exclude the impact of items that are not considered
representative of ongoing operations. Such items include restructuring and related costs, certain asset impairments, other
specifically identified gains or losses, and discrete income tax items. Reconciliations of these adjusted non-GAAP measures to
the comparable GAAP financial measures are included in the preceding (current and prior-year periods) and succeeding (2011
Guidance) slides.
The following is a description of the items excluded from adjusted operating profit and adjusted diluted EPS:
Restructuring and related charges: During the first quarter of 2011, we recognized restructuring and related charges totaling
$1.9 million. The majority of these charges were for employee severance and benefits incurred as part of the restructuring
program launched in December of 2010.
For the quarter ended March 31, 2010, we incurred restructuring and related charges of $0.6 million as part of the restructuring
plan announced in the fourth quarter of 2009.
Discrete tax items: During the first quarter of 2011, we recognized a discrete tax charge of $0.2 million resulting from the
impact on deferred tax balances of changes in tax laws in certain foreign tax jurisdictions.
(continued on following slide)
