Performance Improvement for Healthcare Providers J. P. Morgan Healthcare Conference January 13, 2015 Exhibit 99.1 Confidential. Property of MedAssets. MedAssets® is a registered trademark of MedAssets, Inc. © 2013 MedAssets, Inc. All rights reserved. |
2 Safe Harbor/Non-GAAP Disclosures Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, and include the intent, belief or current expectations of the Company and its management team with respect to the Company’s future business operations that include, but are not limited to: 2014 financial guidance, revenue growth and other financial projections and forecasts. Any forward-looking statements are not guarantees of future performance, involve risks and uncertainties, and actual results may differ materially from those contemplated by such forward- looking statements. Important factors currently known to management that could cause actual results to differ materially from those contemplated by the forward-looking statements in this presentation include, but are not limited to: failure to realize improvements in performance, efficiency and profitability; failure to complete anticipated sales under negotiations; failure to successfully implement revenue backlog; lack of revenue growth; client losses; and adverse developments with respect to the operation or performance of the Company’s business units or the market price of its common stock. Additional factors that could cause actual results to differ materially from those contemplated within this presentation can also be found in the Company’s Risk Factor disclosures in its Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission and available at http://ir.medassets.com. The Company disclaims any responsibility to update any forward-looking statements. Use of Non-GAAP Financial Information In order to provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making, the Company supplements its condensed consolidated financial statements presented on a GAAP basis herein with certain non- GAAP financial information, including: gross fees; gross administrative fees; revenue share obligation; EBITDA; adjusted EBITDA; adjusted EBITDA margin; adjusted net income; diluted adjusted EPS; and free cash flow. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures, where possible, are included in the financial schedules in the Appendix of this presentation, as well as in the Company’s quarterly financial press releases and related Form 8-K filings with the SEC. This information can be accessed for free by visiting www.medassets.com or www.sec.gov. |
3 Insight: Predictive, proprietary data analytics and intelligence Impact: Technology and services to improve provider performance through total cost and revenue management Underpinned by great process: Process improvement and clinical resource utilization solutions Highly recurring revenue model: SaaS technologies and market- leading GPO MedAssets Business Overview Headquarters: Alpharetta, GA (north Atlanta) Clients: • 4,400+ hospitals (Includes 1,500+ organizations serviced by Sg2) • 122,000+ non-acute providers NASDAQ: MDAS Founded: 1999 Unique mix of insight & execution to drive Total Performance for Healthcare Providers Financials: Net revenue* ~$718M Adjusted EBITDA* ~$236M Market cap ~$1.2B Enterprise value ~$2.1B * FY’14 guidance (updated 10.29.14) |
4 Evolving Market Dynamics Offer Opportunities Linking insight and high impact, high ROI execution to deliver sustainable value • Market insight to adapt to competitive, regulatory and reimbursement dynamics • Comprehensive assessment process to target most critical needs • Invest in programmatic support of provider executive agendas • Extending into broader cost, revenue and process opportunity • Evolution to value- based reimbursement • High impact, proven solutions remain relevant in any environment • Unique technology assets • Long track record of sustainable value for clients Rapidly changing client needs Evolving MDAS business model Consistent focus on value creation |
5 Performance Partner Delivering High ROI Results Manages $51 Billion in spend Touches $400+ Billion in patient revenue Delivered $3+ Billion from documented and guaranteed savings # of clients SCM Segment 3,200+ RCM Segment 2,700+ Total Acute Care Hospitals Total Non-Acute Providers 4,400+ 122,000+ Delivers significantly more than $3.5 Billion in annual client value Proven delivery of measurable financial impact across market-leading footprint |
6 Broad Capabilities to Deliver Total Performance Unique set of capabilities to support financial, operational and clinical success DELIVER MARKET-LEADING INSIGHT ASSESS, BENCHMARK AND INVEST SUPPORTED BY HIGH-IMPACT STRATEGIC AND OPERATIONAL ANALYTICS |
7 Two Primary Business Segments Aligned to drive effective market choices for healthcare providers supported by operational rigor to win Spend & Clinical Resource Management (SCM) Revenue Cycle Management (RCM) Advisory Solutions spans both • Strategy, cost management and process improvement solutions • Best pricing in strategic sourcing to reduce supply expenses by 3-10% • Clinical resource management, workforce and lean consulting • Data analytics to transform strategic, clinical and operational performance • Full suite of SaaS applications and service expertise to optimize revenue capture & accelerate cash • Low upfront cost (opex vs capex) and fast, measurable ROI • Innovative solutions to manage value-based reimbursement, improve transparency & compliance |
8 5 3 3 24 2 4 4 3 Delivering Total Performance Management Opportunity Execution Sample Total Performance Management assessment - Year 1 financial impact ($ millions) Salaries and wages Purchased services Revenue capture from RCM fixes Revenue gains through process improvement PPI and clinical resource management One-time revenue cycle opportunities Process improvement (non-RCM) Long-term engagement with provider leadership to tackle critical business issues • Clients looking for partners with breadth of offerings • Complete solution to deliver clinical and financial performance, often multi-year in scope with recurring, programmatic engagements • Enterprise, consultative sales approach to deliver strategy and performance improvement solutions grounded in data-driven approach • Smooth process integration of SaaS tools, expert advisory & consulting services |
9 2014 Operational Update • Solid performance in RCM segment across technology & services • SCM segment revenue toward lower end of expectations • Stronger second-half results for GPO, partially offsetting first-half volume weakness • Continued strength in advisory solutions and services • Performance-related fees generally on target and on schedule • 4Q’14 bookings led by RCM Services, GPO and Advisory Solutions • Enterprise sales momentum building • Additional investments in sales & marketing • Stronger gross administrative fee (GAF) growth in 4Q & 2H’14 (preliminary: 2H’14 ~5.6% vs +4.1% in 1H’14) highlights ongoing value delivery of GPO contracts • Working to ensure client value and MDAS revenue capture are better aligned Second half administrative fee recovery and client momentum in RCM Q4 revenue in line with expectations FY’14 bookings slightly lower than internal expectations Early successes driving new GPO expansion • Aligned SCM organization to better focus leadership, resources and tools on accountability, compliance and pricing differentiation |
10 Focused on Consistent, Long-Term Growth Align powerful assets to maintain client momentum & grow new businesses in 2015 • Powerful link between operational and strategic analytics (including Sg2) and advisory capability • Deliver expanded SaaS platform and unique, valuable research • Grow proven, high-value consultative offerings • Maintain momentum in same store execution • Better client value creation (i.e., gross admin fees) with client contracting and MDAS revenue capture (i.e., net admin fees) • Drive more predictable, more consistent baseline growth in non-acute • Invest in sales capacity and execution to translate customer service successes to more rapid growth • Scale RCS in line with successful implementation models • Enhance market impact of high-value solutions that are relevant in any environment • Continue investment in value-based transition for technology - e.g., product value analysis, episodic care and digital supply chain Grow Analytics and Advisory Strengthen GPO Value Capture Maintain RCM Momentum Adapt to New Market Drivers |
11 Sg2: Predictive Market Analytics, Expert-led Intelligence • SaaS-based EDGE ® intelligence & analytics platform provides valuable lens into national, regional and local market dynamics across the care continuum 1,500+ hospital, health system, pharmaceutical & medical device clients Sg2’s FY’14 net revenue to be ~$40 million (excluding any purchase accounting adjustments) Recurring subscription fees from SaaS analytics tools comprise ~75% of revenue |
12 Sg2 System of CARE™ - Assess, Build, Grow, Manage CARE = Clinical Alignment and Resource Effectiveness WHAT SERVICE LINES SHOULD YOU FOCUS ON FOR LONG-TERM GROWTH? HOW SHOULD YOU DIFFERENTIATE YOUR SERVICE LINES ACROSS THE SYSTEM OF CARE? |
13 Sg2 Analytics Highlight Growth Opportunities Across the Care Continuum Note: The analysis excludes 0–17 age group. Other includes nonhospital locations such as OP rehab facilities, psychiatric centers, hospice centers, federally qualified health centers and assisted living facilities. ASC = ambulatory surgery center; E&M = evaluation and management; SNF = skilled nursing facility. Sources: Impact of Change ® v14.0; NIS; PharMetrics; CMS; Sg2 Analysis, 2014. |
14 Utilization Shifts Redefine Growth Opportunities Note: Forecast excludes 0–17 age group. IP = inpatient; OP = outpatient. Sources: Impact of Change ® v14.0; NIS; PharMetrics; CMS; Sg2 Analysis, 2014. Sg2 IP Forecast Population-Based Forecast Sg2 OP Forecast |
15 Impact of Industry Trends Varies Across Service Lines Note: All service lines exclude 0–17 age group except for Pediatrics, which excludes 18+ age group. Cardiovascular includes cardiology and vascular. Medicine/Surgery includes allergy and immunology, burns, dermatology, endocrinology, ENT, gastroenterology, medicine and surgery, infectious diseases, nephrology, ophthalmology, pulmonology, rheumatology, and urology. Neurosciences includes brain/CNS cancer CARE Family. OP Pediatrics excludes psychiatry, gynecology and obstetrics; IP Pediatrics additionally excludes normal newborns and neonatology. CNS = central nervous system; ENT = ear, nose and throat; IP = inpatient; OP = outpatient. Sources: Impact of Change ® v14.0; NIS; PharMetrics; CMS; Sg2 Analysis, 2014. |
16 Market Analytics and Intelligence Evidence-based Technology Operational and Implementation Excellence Market Insight + Rapid Execution = Tomorrow’s Success Powerful combination of market insight for growth with total performance management capabilities for financial, clinical and operational success Assess & Optimize Care Continuum Opportunities Reduce Total Cost of Care Enhance Operational Efficiency Align Clinical Delivery Improve Revenue Performance Total Performance Management Plan and Develop your System Assets Build Growth and Performance Strategies Analyze Market Dynamics Prepare and Model New Payments SaaS-Based Analytics Market Intelligence Expert Advisory Implementation & Delivery Sustainable Results |
Financial Review & Update |
18 Financial Snapshot (updated 10.29.14) (In millions) Adj EBITDA margin % 31.5 % 32.4 % 32.5 % 32.9 % (In millions) 1 Pro Forma for Broadlane acquisition in 2010 2 Corporate expense allocated to segments based on percentage of revenue; using 2013 Adj EBITDA mix by segment to illustrate potential 2014 mix $585 $640 $680 $718 $400 $500 $600 $700 2012 2013 2014 est. Total Net Revenue $184 $207 $221 $236 $100 $150 $200 $250 2012 2013 Adjusted EBITDA 2011 1 2014 est. $0.99 $1.13 $1.32 $1.36 $0.40 $0.80 $1.20 $1.60 2012 2013 2014 est. Adjusted EPS 2011 1 2011 1 |
19 Capital Structure (as of 9.30.14) • Net leverage of ~4.0x LTM adjusted EBITDA - Target leverage ratio of ~3.6x at YE’14, and 2.5-3.5x long term • Current S&P/Moody’s credit ratings: BB-/B1 (Corporate), BB+/Ba3 (Term Loans) (Unaudited; $ In Millions) Interest Rate% 9/30/14 Cash and Cash Equivalents Debt Term Loan A (LIBOR +2.25% w/ No LIBOR Floor, Due 2017) Term Loan B (LIBOR +2.75% w/1.25% LIBOR Floor, Due 2019) $300M Revolving Credit Facility (LIBOR +2.25%) 8% Senior Notes, Due 2018 Total Bank and Bond Debt, Including Current Portion (net of cash) $ 13.9 228.1 179.7 167.0 325.0 $ 886.0 Column amounts may not add to total due to rounding 2.5% 4.0 2.5 8.0 4.8% * Cash provided by operating activities less capital expenditures, which includes purchases of property, equipment and software & capitalized software development costs Blended Interest Rate |
20 NOTE: FY’14 Current Estimate for SCM segment net revenue and Consolidated net revenue includes $10.5-$11.0 million in additional revenue as a result of the acquisition of Sg2 on September 22, 2014 * Column amounts may not add to total due to rounding FY’14 Financial Guidance (updated 10.29.14) Preliminary Commentary (Subject to Change) • Expect consolidated net revenue at midpoint of range – RCM at high end – SCM below midpoint • Expect adjusted EBITDA near low end of range, and adjusted EPS near midpoint of range – Revenue mix – Healthcare benefit costs (incurred but not reported - IBNR) – IT and other investments • Expect to report final 4Q and FY’14 financial results on 2.25.15 after market close |
21 Recap of FY’15 Considerations and Preliminary Views Revenue Addition of full year of Sg2 net revenue (FY’14 pro forma ~$40M) and growing ~$28M in net revenue recognized in FY’14 will not recur in FY’15 due to conclusion of Barnabas RCM outsourcing agreement on 12.31.14 Expected revenue mix to include faster growth from advisory, analytics and services capabilities (lower relative margin rates than GPO) Depreciation expense to be approximately $60M Higher incentive compensation expense in FY’15 as performance in SCM segment in FY’14 reduced incentive compensation expense by ~$10M Adjusted EBITDA and Adjusted EPS |
22 Transparent, High ROI Performance Improvement Enhanced focus on commercial execution and innovation Significant client base with deep relationships and opportunity to expand use of MedAssets solutions High-quality financial model with: 80-85% recurring revenue ~30+% adjusted EBITDA margins Robust free cash flow generation Breadth of predictive, price, process and payment solutions for healthcare organizations MedAssets (NASDAQ: MDAS) |
23 Reconciliation of GAAP Net Income to Non-GAAP EBITDA In 000s 2014 2013 2014 2013 Net income 7,740 $ 6,902 $ 22,014 $ 19,690 $ Depreciation 11,845 10,926 35,247 29,979 Depreciation (included in cost of revenue) 1,094 571 2,166 1,740 Amortization of intangibles 13,936 15,341 41,989 47,957 Interest expense, net 11,338 11,813 33,625 35,544 Income tax expense 5,712 3,983 16,293 12,141 Non-GAAP EBITDA 51,665 $ 49,536 $ 151,334 $ 147,051 $ Share-based compensation 4,809 4,361 14,703 11,783 Rental income from capitalized building lease (110) (109) (329) (328) Purchase accounting adjustments 94 - 94 - Restructuring, acquisition and integration-related expenses 3,010 111 4,707 9,576 Non-GAAP Adjusted EBITDA 59,468 $ 53,899 $ 170,509 $ 168,082 $ Three Months Ended September 30, Nine Months Ended September 30, SUPPLEMENTAL REPORTING OF ADJUSTED EBITDA RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES (UNAUDITED) |
24 Reconciliation of GAAP to Non-GAAP EPS In 000s, except per share data 2014 2013 2014 2013 Net income 7,740 $ 6,902 $ 22,014 $ 19,690 $ Pre-tax non-cash, acquisition-related intangible amortization and depreciation 13,936 15,814 41,989 49,378 Pre-tax non-cash, share-based compensation 4,809 4,361 14,703 11,783 Pre-tax restructuring, acquisition and integration-related expenses 3,010 111 4,707 9,576 Pre-tax purchase accounting adjustment 94 - 94 - Tax effect on pre-tax adjustments (8,739) (8,115) (24,596) (28,295) Non-GAAP adjusted net income 20,850 $ 19,073 $ 58,911 $ 62,132 $ Income Per Share (EPS) - diluted 0.13 $ 0.11 $ 0.36 $ 0.32 $ Pre-tax non-cash, acquisition-related intangible amortization and depreciation 0.23 0.26 0.69 0.81 Pre-tax non-cash, share-based compensation 0.07 0.07 0.23 0.19 Pre-tax restructuring, acquisition and integration-related expenses 0.05 - 0.08 0.16 Pre-tax purchase accounting adjustment - - - - Tax effect on pre-tax adjustments (0.14) (0.13) (0.40) (0.46) Non-GAAP adjusted EPS - diluted 0.34 $ 0.31 $ 0.96 $ 1.02 $ Weighted average shares - diluted (in 000s) 60,662 61,476 61,269 60,912 (c) The Company used a tax rate of 40.0% for the three and nine months ended September 30, 2014 and 2013 to calculate the tax effect of each adjustment since it believes 40.0% will be the Company's normalized long-term tax rate. Three Months Ended September 30, Nine Months Ended September 30, SUPPLEMENTAL NET INCOME AND EARNINGS PER SHARE REPORTING RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES (UNAUDITED) c c |
25 Reconciliation of GAAP to Non-GAAP EBITDA Guidance In 000s (Low) (High) Net Income 30,000 $ 32,400 $ Depreciation 48,000 48,000 Depreciation (included in cost of revenue) 3,200 3,200 Amortization of intangibles 57,600 57,600 Interest expense, net 45,700 45,700 Income tax expense 20,900 22,500 Non-GAAP EBITDA 205,400 209,400 Share-based compensation 20,100 20,100 Restructuring, acquisition and integration-related expenses 7,900 7,900 Purchase accounting adjustments 1,000 1,000 Rental income from capitalized building lease (400) (400) Non-GAAP adjusted EBITDA 234,000 $ 238,000 $ RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES (UNAUDITED) December 31, 2014 Guidance Range for Twelve Months Ending SUPPLEMENTAL 2014 ADJUSTED EBITDA GUIDANCE |
26 Reconciliation of GAAP to Non-GAAP EPS Guidance (d) The Company used a tax rate of 40.0% for the full year ending December 31, 2014 to calculate the tax effect of each adjustment since it believes 40.0% will be the Company's normalized long-term tax rate. (e) Column amounts may not add to total due to rounding. In 000s, except per share data (Low) (High) Net Income 30,000 $ 32,400 $ EPS - diluted 0.49 0.53 0.94 0.94 Pre-tax non-cash, share-based compensation 0.33 0.33 0.13 0.13 0.02 0.02 Tax effect on pre-tax adjustments d (0.57) (0.56) Non-GAAP adjusted EPS - diluted e 1.34 $ 1.38 $ Fully diluted weighted average shares outstanding 61,200 61,200 Guidance Range for Twelve Months Ending Pre-tax purchase accounting adjustments Pre-tax restructuring, acquisition and integration-related expenses SUPPLEMENTAL 2014 EARNINGS PER SHARE GUIDANCE RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES (UNAUDITED) December 31, 2014 Pre-tax non-cash, acquisition-related intangible amortization and depreciation |
27 Reconciliation of GAAP to Non-GAAP Cash Flow (In 000s) 2011 2012 2013 2014 est. Cash Provided by Operating Activities 124,196 $ 157,873 $ 152,902 $ 152,500 $ Capital Expenditures (includes Purchases of Property, Equipment and Software, as well as (48,973) (66,426) (58,818) (60,000) Capitalized Software Development Costs) Non-GAAP Free Cash Flow (FCF) 75,223 $ 91,447 $ 94,084 $ 92,500 $ SUPPLEMENTAL REPORTING OF FREE CASH FLOW RECONCILIATION OF SELECTED NON-GAAP TO GAAP MEASURES (UNAUDITED) |
28 Reconciliation of Gross Fees to Net Revenue In 000s 2014 2013 % Change Non-GAAP gross administrative fees $ 121,729 $ 115,478 5.4% Other service fees 104,917 96,945 8.2% Non-GAAP gross fees 226,646 RSO % 212,423 RSO % 6.7% Non-GAAP revenue share obligation (RSO) (50,941) 41.8% (46,052) 39.9% 10.6% Net revenue $ 175,705 $ 166,371 5.6% In 000s 2014 2013 % Change Non-GAAP gross administrative fees $ 367,496 $ 351,602 4.5% Other service fees 304,862 293,503 3.9% Non-GAAP gross fees 672,358 RSO % 645,105 RSO % 4.2% Non-GAAP RSO (150,371) 40.9% (135,155) 38.4% 11.3% Net revenue $ 521,987 $ 509,950 2.4% SUPPLEMENTAL REVENUE REPORTING RECONCILIATION OF GROSS FEES (A NON-GAAP MEASURE) TO NET REVENUE (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, |
29 Use of Non-GAAP Financial Measures In order to provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management and the board of directors in their financial and operational decision-making, the Company supplements its condensed consolidated financial statements presented on a GAAP basis herein with the following non-GAAP financial information: gross fees; gross administrative fees; revenue share obligation; EBITDA; adjusted EBITDA; adjusted EBITDA margin; adjusted net income; diluted adjusted EPS; and free cash flow. These non-GAAP financial measures may have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company compensates for such limitations by relying primarily on the Company’s GAAP results and using non-GAAP financial measures only supplementally. Where possible, the Company provides reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures. Investors are encouraged to carefully review those reconciliations. In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by the Company, may differ from and may not be comparable to similarly titled measures used by other companies. Gross fees include gross administrative fees the Company receives pursuant to its vendor contracts and all other fees the Company receives from clients. The Company's revenue share obligation represents the portion of the gross administrative fees the Company is contractually obligated to share with certain of its GPO clients. Net administrative fees (a GAAP measure) are the Company's gross administrative fees net of its revenue share obligation. Total net revenue (a GAAP measure) reflects the Company's gross fees net of its revenue share obligation. These non-GAAP measures assist management and the board of directors and may be helpful to investors in analyzing the Company's growth in its Spend and Clinical Resource Management segment given that administrative fees constitute a material portion of the Company's revenue and are paid to the Company by approximately 1,150 suppliers and other vendors contracted by its GPO, and that the Company's revenue share obligation constitutes a significant outlay to certain of its GPO clients. The Company defines: EBITDA as net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization; and adjusted EBITDA as net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization and other non-recurring, non-cash or non-operating items. EBITDA and adjusted EBITDA are used by the Company to facilitate a comparison of its operating performance on a consistent basis from period to period and provides for a more complete understanding of factors and trends affecting our business. These measures assist management and the board of directors and may be useful to investors in comparing the Company's operating performance consistently over time as it removes the impact of its capital structure (primarily interest charges and amortization of debt issuance costs), asset base (primarily depreciation and amortization) and items outside the control of the management team (taxes), as well as other non-cash (purchase accounting adjustments and imputed rental income) and non-recurring items, from the Company’s operational results. Adjusted EBITDA also removes the impact of non- cash share-based compensation expense and certain restructuring, acquisition and integration-related charges. EBITDA and adjusted EBITDA are not measures of liquidity under GAAP, or otherwise, and are not alternatives to cash flow from continuing operating activities. The Company defines adjusted net income as earnings excluding non-cash acquisition-related intangible amortization and non-recurring expense items on a tax-adjusted basis, non-cash tax-adjusted shared-based compensation expense, certain restructuring, acquisition and integration-related expenses on a tax-adjusted basis, purchase accounting adjustments on a tax-adjusted basis and diluted adjusted EPS as earnings per share excluding non-cash acquisition-related intangible amortization, depreciation and non-recurring expense items on a tax-adjusted basis, non-cash tax-adjusted shared-based compensation expense and certain restructuring, acquisition and integration- related expenses on a tax-adjusted basis. Adjusted net income and diluted adjusted EPS are not measures of liquidity under GAAP, or otherwise, and are not alternatives to cash flow from continuing operating activities. Use of this measure for this purpose allows management and the board of directors to analyze the Company’s operating performance on a consistent basis by removing the impact of certain non-cash and non-recurring items from our operations, and by rewarding organic growth and accretive business transactions. As a significant portion of senior management’s incentive based compensation has historically been based on the achievement of certain diluted adjusted EPS growth over time, investors may find such information useful. The Company defines free cash flow as cash provided by operating activities less purchases of property, equipment and software and capitalized software development costs. Management believes free cash flow is an important measure because it represents the cash that the Company is able to generate after spending capital on infrastructure to maintain its business and investing in new and upgraded products and services to support future growth. Free cash flow is important because it allows the Company to pursue opportunities that are intended to enhance shareholder value, which could include debt reduction, share repurchases, partnerships, alliances and acquisitions, and/or dividend payments. The Company's definition of free cash flow does not consider non-discretionary cash payments, such as debt. |