EXHIBIT 99.1
IDEX CORPORATION REPORTS RECORD RESULTS FOR 2006;
CONTINUED STRONG ORGANIC GROWTH, MARGIN EXPANSION AND CASH FLOW
NORTHBROOK, IL, JANUARY 30 - IDEX CORPORATION (NYSE: IEX) today announced its
financial results for the three- and twelve-month periods ended December 31,
2006. From continuing operations, orders in the fourth quarter were up 25
percent, sales increased 19 percent, and income rose 28 percent to $36.2
million. Diluted earnings per share from continuing operations were 67 cents
versus 53 cents in the year-ago quarter. Fourth quarter 2006 results include
stock option expense of $1.5 million. From continuing operations, full year 2006
orders increased 16 percent, sales rose 14 percent and diluted earnings per
share were $2.48 versus $2.06 in 2005.
FULL YEAR 2006 HIGHLIGHTS (FROM CONTINUING OPERATIONS)
- Orders for 2006 were $1.18 billion, 16 percent higher than a year ago;
excluding foreign currency translation and acquisitions, organic
orders growth was 10 percent.
- Full year sales of $1.15 billion rose 14 percent; excluding foreign
currency translation and acquisitions, organic sales growth was 9
percent.
- Operating margins at 18.8 percent were 90 basis points higher than a
year ago.
- Stock option expense of $7.6 million had a 70 basis point impact on
operating margin during the year.
- Income increased 23 percent to $133.7 million.
- Diluted EPS at $2.48 was 42 cents or 20 percent ahead of last year.
- EBITDA of $248.3 million was 21 percent of sales and covered interest
expense by 15 times.
- Free cash flow was strong at $144.5 million and 1.1 times income.
- Five strategic acquisitions were completed during the year, including
the most recent acquisition, as previously announced, of Toptech
Systems on December 1, 2006.
- Operational and commercial excellence initiatives continue to fuel
product innovation to drive growth.
"In 2006, our businesses again delivered very strong financial results,
highlighted by 10 percent organic orders growth and 9 percent organic sales
growth, coupled with the completion of 5 acquisitions. For the year, organic
sales growth was led by our Health & Science Technologies and Fluid & Metering
Technologies businesses which grew 13 percent and 10 percent, respectively. We
continue to complement our organic growth with strategic acquisitions, such as
recently-acquired Toptech Systems. Toptech is an applied solutions provider
specializing in controls and software for downstream energy applications, as
well as other high-value fluid systems. As we move forward, our businesses are
well positioned in attractive product segments supported by strong underlying
industry fundamentals. We are leveraging operational and commercial excellence,
while continuously innovating to more effectively serve our customers and expand
our market position."
Lawrence D. Kingsley
Chairman and Chief Executive Officer
2006 FINANCIAL HIGHLIGHTS
(Dollars in millions, except per share amounts and percentages)
YEAR ENDED DECEMBER 31
----------------------------
2006 2005 Change
-------- -------- ------
ORDERS WRITTEN $1,184.5 $1,024.7 16%
SALES 1,154.9 1,011.3 14
OPERATING INCOME 217.2 181.0 20
OPERATING MARGIN 18.8% 17.9% 90bp
INCOME FROM CONTINUING OPERATIONS $ 133.7 $ 108.6 23%
NET INCOME 146.7 109.8 34
DILUTED EPS:
INCOME FROM CONTINUING OPERATIONS 2.48 2.06 20
NET INCOME 2.72 2.08 31
OTHER DATA
- Income before Taxes $ 201.9 $ 167.2 21%
- Depreciation and Amortization 30.0 26.3 14
- Interest 16.4 14.4 14
- EBITDA 248.3 207.9 19
- Cash Flow from Operating Activities 159.9 142.9 12
- Capital Expenditures 21.2 22.5 (6)
- Excess Tax Benefit from Stock-Based Compensation 5.8 -- --
- Free Cash Flow 144.5 120.4 20
2006 ORDERS, SALES, INCOME, AND EPS FROM CONTINUING OPERATIONS WELL AHEAD OF
LAST YEAR
New orders for full year 2006 totaled $1.18 billion, 16 percent higher than
2005. Excluding the impact of acquisitions and foreign currency translation,
orders in 2006 were 10 percent higher than in 2005.
Sales for 2006 increased 14 percent to $1.15 billion from $1.01 billion a year
earlier. Excluding the impact of acquisitions and foreign currency translation,
organic growth was 9 percent. Sales to international customers represented
approximately 45 percent of total sales for both 2006 and 2005.
Full year 2006 operating margin was 18.8 percent, 90 basis points higher than
the 17.9 percent reported in the prior year. This improvement reflects volume
leverage, along with a 40 basis point improvement in gross margin to 41.3
percent, resulting mainly from strategic sourcing and other operational
excellence initiatives. Selling, general and administrative expenses as a
percent of sales improved 50 basis points from 2005. Higher total SG&A expenses
reflect acquisitions, volume-related expenses, stock option expense and
reinvestment in the business to drive organic growth. Stock option expense
impacted operating margins by 70 basis points in 2006.
Income from continuing operations of $133.7 million increased 23 percent in 2006
compared to 2005. Diluted earnings per share from continuing operations of $2.48
rose 42 cents, or 20 percent, from the $2.06 recorded for 2005.
FOURTH QUARTER FINANCIAL RESULTS
(Dollars in millions, except per share amounts and percentages)
FOR THE QUARTER ENDED
------------------------------------------------
December 31 September 30
--------------- ------------------------------
2006 2005 Change 2006 Change
------ ------ ------ ------------ ------
ORDERS WRITTEN $314.9 $251.1 25% $285.6 10%
SALES 302.1 252.9 19 289.8 4
OPERATING INCOME 59.0 46.8 26 54.4 8
OPERATING MARGIN 19.5% 18.5% 100bp 18.8% 70bp
INCOME FROM CONTINUING OPERATIONS $36.2 $28.3 28% $33.3 9%
NET INCOME 35.6 28.7 24 46.0 (23)
DILUTED EPS:
INCOME FROM CONTINUING OPERATIONS .67 .53 26 .62 8
NET INCOME .66 .54 22 .85 (22)
OTHER DATA
- Income before Taxes $ 53.3 $ 43.7 22% $ 51.5 3%
- Depreciation and Amortization 9.3 6.2 49 6.6 41
- Interest 6.0 3.2 88 3.4 78
- EBITDA 68.6 53.1 29 61.5 11
- Cash Flow from Operating Activities 50.3 42.6 18 40.8 23
- Capital Expenditures 5.2 5.7 (9) 6.3 (17)
- Excess Tax Benefit from Stock-Based
Compensation 0.9 -- -- 0.3 --
- Free Cash Flow 46.0 36.9 25 34.8 32
Q4 ORDERS, SALES, INCOME AND EPS FROM CONTINUING OPERATIONS UP YEAR-OVER-YEAR
New orders in the quarter totaled $314.9 million, 25 percent higher than the
same period in 2005. Excluding the impact of acquisitions and foreign currency
translation, orders were up 12 percent.
Sales in the fourth quarter of $302.1 million increased 19 percent from the
prior-year period. Excluding the impact of acquisitions and foreign currency
translation, organic growth was 7 percent, led by Fluid & Metering Technologies
at 10 percent. Sales to international customers represented approximately 45
percent of total sales for the fourth quarter of 2006 versus 44 percent in the
same period of 2005.
Fourth quarter operating margin was 19.5 percent, 100 basis points higher than
the 18.5 percent reported in the prior-year period. Gross margin of 41.6 percent
was 70 basis points higher than the fourth quarter of 2005. Strategic sourcing
and other operational excellence initiatives drove the gross margin improvement.
Selling, general and administrative expenses as a percent of sales improved 30
basis points to 22.1 percent in the fourth quarter of 2006. Higher total SG&A
expenses reflect acquisitions, volume-related expenses, stock option expense and
reinvestment in the business to drive organic growth. Stock option expense
impacted operating margins by 50 basis points in the fourth quarter of 2006.
Income from continuing operations of $36.2 million increased 28 percent over the
fourth quarter of 2005. Diluted earnings per share from continuing operations of
67 cents improved 14 cents, or 26 percent, from the fourth quarter of 2005. The
effective tax rate in the fourth quarter of 2006 was favorably impacted by the
December renewal of the U.S. Federal Research and Development Tax Credit.
SEGMENT RESULTS
Fluid & Metering Technologies orders in the fourth quarter of $124.1 million
reflected 14 percent organic growth, while sales in the fourth quarter of $119.5
million reflected 10 percent organic growth. Operating margin of 21.4 percent
represented a 160 basis point improvement compared with the fourth quarter of
2005.
Health & Science Technologies orders in the fourth quarter of $78.5 million
reflected 10 percent organic growth, while sales in the fourth quarter of $79.3
million reflected 7 percent organic growth. Operating margin of 21.4 percent
represented a 150 basis point improvement compared with the fourth quarter of
2005.
Dispensing Equipment orders in the fourth quarter of $39.8 million reflected 5
percent organic growth. Sales of $36.0 million in the fourth quarter reflected
flat year-over-year organic growth due primarily to the timing of deliveries
related to project-based orders in North America. Operating margin of 21.0
percent represented a 30 basis point improvement compared with the fourth
quarter of 2005.
Fire & Safety/Diversified Products orders in the fourth quarter of $74.3 million
reflected 16 percent organic growth, while sales of $69.1 million in the fourth
quarter reflected 6 percent organic growth. Operating margin of 24.5 percent
represented a 120 basis point decline compared with the fourth quarter of 2005,
due in part to start up costs in the company's new China production facility.
For the full year 2006, Fluid & Metering Technologies contributed 38 percent of
sales and 36 percent operating income; Health & Science Technologies accounted
for 26 percent of sales and 24 percent of operating income; Dispensing Equipment
accounted for 14 percent of sales and 15 percent of operating income; and Fire &
Safety/Diversified Products represented 22 percent of sales and 25 percent of
operating income.
DISCONTINUED OPERATIONS
During the fourth quarter, the company recognized a $0.5 million loss from
discontinued operations resulting primarily from the company's decision to sell
its Halox product line.
STRONG FINANCIAL POSITION
IDEX ended the year with total assets of $1.67 billion and working capital of
$239 million. Total borrowings were $362 million at December 31, 2006. Free cash
flow (cash flow from operating activities less capital expenditures plus the
excess tax benefit from stock-based compensation) for 2006 was $144 million.
Full year 2006 EBITDA (earnings before interest, taxes, depreciation and
amortization) totaled $248 million (21 percent of sales) and covered interest
expense by more than 15 times. Debt-to-total capitalization at year-end was 27
percent.
PROGRESS CONTINUES ON GROWTH INITIATIVES: OPERATIONAL AND COMMERCIAL EXCELLENCE
"IDEX's broad-based growth stems from our ability to expand our served
application base through operational and commercial excellence," Kingsley said.
"We continue to reinvest in product innovation, incorporating stretch thinking
to completely understand our customers' application and the final use and
requirements of their products, as well as goal deployment to ensure we execute.
Our focus on fluidics solutions and other carefully targeted engineered product
segments is enabling organic growth opportunities in all four business segments.
Our businesses are doing a terrific job of bringing new products to market,
faster, to enable us to effectively serve new industry applications.
"Our operating mindset, which centers on Mixed Model Lean, similarly enables us
to flexibly respond to new market and new customer product requirements, as well
as changing customer needs," Kingsley continued. "We continue to reduce plant
cycle times and total lead times, so that our customers remain competitive. Our
other operational excellence and strategic sourcing initiatives continue to
improve our total operating efficiency and allow us to further leverage our
plant investment.
"We're also pleased with our progress toward applying an expanded operational
and commercial excellence toolset," Kingsley continued. "Our customer metrics
and margin expansion are evidence that our strategy is working. The fourth
quarter operating margin improved to 19.5 percent, 100 basis points ahead of the
year-ago quarter. Excluding the impact of stock option expense, the improvement
was 150 basis points."
ACQUISITION OF TOPTECH SYSTEMS
As previously announced, on December 1, 2006, IDEX completed the acquisition of
Toptech Systems, Inc., a leading provider of terminal automation systems used in
the custody transfer and control of high-value fluids and gases. Based in
Longwood, Florida, with revenues of approximately $22 million, Toptech's
products include terminal automation hardware and software used by customers in
the oil, gas and refined fuels markets to control and manage inventories, as
well as transactional data and invoicing. Toptech is now operated as part of the
company's Liquid Controls business within its Fluid & Metering Technologies
segment.
"Toptech's expertise in terminal automation and management is highly
complementary to our precision metering capability and growth within the oil,
gas and alternative fuels markets," Kingsley said. "With the addition of
Toptech, IDEX now offers a robust platform of controls complementing our
market-leading products which enable our customers to move, measure, and
dispense high-value fluids anywhere in the world."
2007 OUTLOOK
"This continues to be an exciting time for IDEX," Kingsley concluded. "As we
enter 2007, our business fundamentals are very strong. We are as focused as ever
on generating organic growth and reinvesting in new products, markets and
acquisitions that complement our existing businesses. Our health and science
segment now represents 26 percent of our total revenue base and continues to
expand rapidly. Our fluid and metering business is meeting both existing and
emerging industrial infrastructure needs which are growing worldwide. We
continue to enjoy an excellent market position and strong cash generation within
our dispensing, fire and safety, and engineered band clamping businesses. Across
the company, we are using operational and commercial excellence to better serve
our customers, leverage our growth and further enable the success of our niche
market strategy."
CONFERENCE CALL TO BE BROADCAST OVER THE INTERNET
IDEX will broadcast its fourth quarter earnings conference call over the
Internet on Tuesday, January 30, 2007 at 1:30 p.m. CST. Chairman and Chief
Executive Officer Larry Kingsley and Vice President and Chief Financial Officer
Dominic Romeo will discuss the company's recent financial performance and
respond to questions from the financial analyst community. IDEX invites
interested investors to listen to the call and view the accompanying slide
presentation, which will be carried live on its website at www.idexcorp.com.
Those who wish to participate should log on several minutes before the
discussion begins. After clicking on the presentation icon, investors should
follow the instructions to ensure their systems are set up to hear the event and
view the presentation slides, or download the correct applications at no charge.
Investors also will be able to hear a replay of the call by dialing 800.642.1687
or 706.645.9291 and using conference ID #5707350.
A NOTE ON EBITDA AND FREE CASH FLOW
EBITDA means earnings before interest, income taxes, depreciation and
amortization, while free cash flow means cash flow from operating activities
less capital expenditures plus the excess tax benefit from stock-based
compensation. Management uses these non-GAAP financial measures as internal
operating metrics and for enterprise valuation purposes. Management believes
these measures are useful as analytical indicators of leverage capacity and debt
servicing ability, and uses them to measure financial performance as well as for
planning purposes. However, they should not be considered as alternatives to net
income, cash flow from operating activities or any other items calculated in
accordance with U.S. GAAP, or as an indicator of operating performance. The
definitions of EBITDA and free cash flow used here may differ from those used by
other companies.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act of 1934, as amended. These statements may relate to, among other
things, capital expenditures, cost reductions, cash flow, and operating
improvements and are indicated by words or phrases such as "anticipate,"
"estimate," "plans," "expects," "projects," "should," "will," "management
believes," "the company believes," "the company intends," and similar words or
phrases. These statements are subject to inherent uncertainties and risks that
could cause actual results to differ materially from those anticipated at the
date of this news release. The risks and uncertainties include, but are not
limited to, the following: economic and political consequences resulting from
terrorist attacks and wars; levels of industrial activity and economic
conditions in the U.S. and other countries around the world; pricing pressures
and other competitive factors, and levels of capital spending in certain
industries - all of which could have a material impact on order rates and IDEX's
results, particularly in light of the low levels of order backlogs it typically
maintains; its ability to make acquisitions and to integrate and operate
acquired businesses on a profitable basis; the relationship of the U.S. dollar
to other currencies and its impact on pricing and cost competitiveness;
political and economic conditions in foreign countries in which the company
operates; interest rates; capacity utilization and the effect this has on costs;
labor markets; market conditions and material costs; and developments with
respect to contingencies, such as litigation and environmental matters. The
forward-looking statements included here are only made as of the date of this
news release, and management undertakes no obligation to publicly update them to
reflect subsequent events or circumstances. Investors are cautioned not to rely
unduly on forward-looking statements when evaluating the information presented
here.
ABOUT IDEX
IDEX Corporation is an applied solutions company specializing in fluid and
metering technologies, health and science technologies, dispensing equipment,
and fire, safety and other diversified products built to its customers' exacting
specifications. Its products are sold in niche markets to a wide range of
industries throughout the world. IDEX shares are traded on the New York Stock
Exchange and Chicago Stock Exchange under the symbol "IEX".
IDEX CORPORATION
ADD -6-
IDEX CORPORATION
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------- -----------------------
2006 2005 2006 2005
-------- -------- ---------- ----------
NET SALES $302,131 $252,866 $1,154,940 $1,011,253
COST OF SALES 176,543 149,338 677,533 597,286
-------- -------- ---------- ----------
GROSS PROFIT 125,588 103,528 477,407 413,967
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 66,557 56,760 260,201 232,935
-------- -------- ---------- ----------
OPERATING INCOME 59,031 46,768 217,206 181,032
OTHER INCOME - NET 270 78 1,040 557
INTEREST EXPENSE 5,985 3,176 16,353 14,370
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 53,316 43,670 201,893 167,219
PROVISION FOR INCOME TAXES 17,127 15,343 68,171 58,644
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 36,189 28,327 133,722 108,575
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX (234) 383 294 1,228
NET GAIN (LOSS) ON SALE OF DISCONTINUED OPERATIONS, NET OF TAX (314) -- 12,655 --
-------- -------- ---------- ----------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX (548) 383 12,949 1,228
-------- -------- ---------- ----------
NET INCOME $ 35,641 $ 28,710 $ 146,671 $ 109,803
======== ======== ========== ==========
BASIC EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS $ 0.68 $ 0.54 $ 2.52 $ 2.11
DISCONTINUED OPERATIONS (0.01) 0.01 0.25 0.03
-------- -------- ---------- ----------
NET INCOME $ 0.67 $ 0.55 $ 2.77 $ 2.14
======== ======== ========== ==========
DILUTED EARNINGS PER COMMON SHARE:
CONTINUING OPERATIONS $ 0.67 $ 0.53 $ 2.48 $ 2.06
DISCONTINUED OPERATIONS (0.01) 0.01 0.24 0.02
-------- -------- ---------- ----------
NET INCOME $ 0.66 $ 0.54 $ 2.72 $ 2.08
======== ======== ========== ==========
SHARE DATA:
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 53,293 52,306 53,018 51,392
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 54,186 53,492 53,984 52,720
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, ECEMBER 31,
2006 2005
------------ -----------
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 77,941 $ 77,201
RECEIVABLES - NET 166,485 129,428
INVENTORIES 160,687 123,281
ASSETS HELD FOR SALE 829 10,099
OTHER CURRENT ASSETS 15,292 10,962
---------- ----------
TOTAL CURRENT ASSETS 421,234 350,971
PROPERTY, PLANT AND EQUIPMENT - NET 165,949 142,485
GOODWILL AND INTANGIBLE ASSETS 1,083,963 720,014
OTHER NONCURRENT ASSETS 2,625 30,710
---------- ----------
TOTAL ASSETS $1,673,771 $1,244,180
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
TRADE ACCOUNTS PAYABLE $ 75,444 $ 66,859
ACCRUED EXPENSES 90,328 72,180
SHORT-TERM BORROWINGS 8,210 3,144
LIABILITIES HELD FOR SALE 373 4,792
DIVIDENDS PAYABLE 8,055 6,321
---------- ----------
TOTAL CURRENT LIABILITIES 182,410 153,296
LONG-TERM BORROWINGS 353,770 156,899
OTHER NONCURRENT LIABILITIES 158,319 110,975
---------- ----------
TOTAL LIABILITIES 694,499 421,170
SHAREHOLDERS' EQUITY 979,272 823,010
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,673,771 $1,244,180
========== ==========
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IDEX CORPORATION
ADD -7-
IDEX CORPORATION
COMPANY AND BUSINESS GROUP FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------- -----------------------
2006 (A) (2005) 2006 (A) (2005)
-------- --------- ---------- ----------
FLUID & METERING TECHNOLOGIES
NET SALES $119,522 $ 94,475 $ 435,532 $ 383,163
OPERATING INCOME (B) 25,538 18,684 89,899 72,596
OPERATING MARGIN 21.4% 19.8% 20.6% 18.9%
DEPRECIATION AND AMORTIZATION $ 3,642 $ 2,274 $ 10,524 $ 9,824
CAPITAL EXPENDITURES 1,972 1,742 5,487 8,204
HEALTH & SCIENCE TECHNOLOGIES
NET SALES $ 79,320 $ 62,520 $ 304,892 $ 235,499
OPERATING INCOME (B) 16,948 12,440 58,229 43,133
OPERATING MARGIN 21.4% 19.9% 19.1% 18.3%
DEPRECIATION AND AMORTIZATION $ 2,740 $ 1,432 $ 9,043 $ 5,917
CAPITAL EXPENDITURES 1,318 1,230 4,726 5,525
DISPENSING EQUIPMENT
NET SALES $ 36,015 $ 34,309 $ 159,794 $ 158,111
OPERATING INCOME (B) 7,577 7,102 38,021 37,772
OPERATING MARGIN 21.0% 20.7% 23.8% 23.9%
DEPRECIATION AND AMORTIZATION $ 1,252 $ 1,151 $ 3,861 $ 4,376
CAPITAL EXPENDITURES 378 853 2,362 3,383
FIRE & SAFETY/DIVERSIFIED PRODUCTS
NET SALES $ 69,079 $ 62,833 $ 260,080 $ 238,992
OPERATING INCOME (B) 16,898 16,143 62,664 56,593
OPERATING MARGIN 24.5% 25.7% 24.1% 23.7%
DEPRECIATION AND AMORTIZATION $ 1,583 $ 1,352 $ 6,086 $ 5,712
CAPITAL EXPENDITURES 962 1,719 6,060 4,365
COMPANY
NET SALES $302,131 $252,866 $1,154,940 $1,011,253
OPERATING INCOME 59,031 46,768 217,206 181,032
OPERATING MARGIN 19.5% 18.5% 18.8% 17.9%
DEPRECIATION AND AMORTIZATION (C) $ 9,269 $ 6,226 $ 29,956 $ 26,254
CAPITAL EXPENDITURES 5,213 5,742 21,198 22,532
- ----------
(A) FOURTH QUARTER AND TWELVE MONTH DATA INCLUDES ACQUISITION OF BANJO (OCTOBER
2006) AND TOPTECH (DECEMBER 2006) IN THE FLUID & METERING TECHNOLOGIES
GROUP, WHILE TWELVE MONTH DATA ALSO INCLUDES JUN-AIR (FEBRUARY 2006) AND
EPI (MAY 2006) IN THE HEALTH & SCIENCE TECHNOLOGIES GROUP AND AIRSHORE
(JANUARY 2006) IN THE FIRE & SAFETY/DIVERSIFIED PRODUCTS GROUP FROM THE
DATES OF ACQUISITION.
(B) GROUP OPERATING INCOME EXCLUDES UNALLOCATED CORPORATE OPERATING EXPENSES.
(C) EXCLUDES AMORTIZATION OF DEBT ISSUANCE EXPENSES AND UNEARNED COMPENSATION.