In addition to the results reported in accordance with accounting principles generally accepted in the United States (“GAAP”) included
throughout this presentation, the Company has provided information regarding “income before interest, other (income) expense and income
taxes,” “income before interest, other (income) expense, income taxes, restructuring costs and other special items” (core operating
earnings), “pretax income before restructuring costs and other special items” and “free cash flow” (each, a non-GAAP financial measure).
Free cash flow represents net cash provided by operating activities before the net change in sold accounts receivable, less capital
expenditures. The Company believes it is appropriate to exclude the net change in sold accounts receivable in the calculation of free cash
flow since the sale of receivables may be viewed as a substitute for borrowing activity.
Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their
analysis of the Company’s financial position and results of operations. In particular, management believes that income before interest, other
(income) expense and income taxes, core operating earnings and pretax income before restructuring costs and other special items are
useful measures in assessing the Company’s financial performance by excluding certain items that are not indicative of the Company's core
operating earnings or that may obscure trends useful in evaluating the Company’s continuing operating activities. Management also
believes that these measures are useful to both management and investors in their analysis of the Company's results of operations and
provide improved comparability between fiscal periods. Management believes that free cash flow is useful to both management and
investors in their analysis of the Company’s ability to service and repay its debt. Further, management uses these non-GAAP financial
measures for planning and forecasting in future periods.
Income before interest, other (income) expense and income taxes, core operating earnings, pretax income before restructuring costs and
other special items and free cash flow should not be considered in isolation or as a substitute for pretax income, net income, cash provided
by (used in) operating activities or other income statement or cash flow statement data prepared in accordance with GAAP or as a measure
of profitability or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt and therefore, does not
reflect funds available for investment or other discretionary uses. Also, these non-GAAP financial measures, as determined and presented
by the Company, may not be comparable to related or similarly titled measures reported by other companies.
Set forth on the following slides are reconciliations of these non-GAAP financial measures to the most directly comparable financial
measures calculated and presented in accordance with GAAP. Given the inherent uncertainty regarding special items and the net change
in sold accounts receivable in any future period, a reconciliation of forward-looking financial measures is not feasible. The magnitude of
these items, however, may be significant.
Non-GAAP Financial Information
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