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© 2012 Graphic Packaging International, Inc. 1
Graphic Packaging International, Inc.
Investor Presentation
June 4th – 5th, 2012
© 2012 Graphic Packaging International, Inc. 2
We Provide Packaging Solutions That Improve the World in Which We Live.
Graphic Packaging Business Overview & Investment Highlights
© 2012 Graphic Packaging International, Inc. 3
Provides innovative packaging solutions
Largest folding carton manufacturer in the U.S.
Vertically integrated, low cost supplier
Global presence for global customers with
facilities in
U.S., Canada, Mexico, Europe, Asia
Pacific and Brazil
Q1’12 TTM Financial Summary
Revenue: $4,273mm (up 4.4%)
Adjusted EBITDA: $599mm (up 4.7%)
Operating Cash Flow: $414mm (up
12.1%)
Q1’12 TTM Segment Revenue Breakdown
Paperboard Packaging: 85%
Flexible Packaging: 15%
Key Products
Food & Consumer
Packaging
Beverage Carrier
Cartons
Household and
Personal Care
Packaging
Microwaveable Products
Multi-wall
Bags
Heat Transfer &
Lithographic
Labels
Packaging Systems &
Machinery
Specialty Plastics
Graphic Packaging at a Glance
A reconciliation of non-GAAP and pro forma financial measures can be found in the appendix of this presentation.
© 2012 Graphic Packaging International, Inc. 4
Centrally Managed and Integrated Global Supply Chain to Our Customers
Q1’12 TTM Revenue $3,619mm (up 3.8%)
Largest U.S. producer of folding cartons
Focused on food & beverage end markets
Acquired Sierra Pacific Packaging to broaden markets and customer base
Vertically integrated network of 33 converting facilities and 7 mills (80+% integrated) making ~ 2.3M tons of paperboard
2 virgin (CUK(1)) mills produced ~1.5 mm tons in FY’11
5 recycled (CRB(2) & URB(3)) mills produced ~0.9 mm tons in FY’11
Industry End Markets Key Facts
Fiber Supply
Packaging Machinery
Carton Converting
Global Innovation & Carton Development
Paperboard Production
Wood
OCC
1) Coated unbleached kraft.
2) Coated-recycled board.
3) Uncoated-recycled board.
Segment Info: Paperboard Packaging Business Overview
© 2012 Graphic Packaging International, Inc. 5
Industry End Markets Key Facts
Agri-Chem
&
Food
41%
Building
Materials
17%
Pet & Pet
Care
11%
Chemicals
10%
Minerals
10%
Other
11%
New Innovative Market Launches to Drive Growth
Woven Poly Prop MWB with FreshLok
and Next Generation Slider
Hybrid Bag
Paper/Plastic
Combination
Q1’12 TTM Revenue $654mm (up 8.1%)
Solid cash flow generation
Combined with Delta Natural Kraft and Mid-America
Packaging for industry consolidation with $20+ mm of
synergies expected by 2013
Leading market share in multi-wall bags
Upside in agriculture, building supply, and other cyclical
end markets
Only integrated company in the space with 1 mill and
16 manufacturing facilities
Growth opportunity in woven polypropylene with a
dedicated plant
Segment Info: Flexible Packaging Business Overview
© 2012 Graphic Packaging International, Inc. 6
Multifaceted Strategy Proven During Difficult Operating Environment
Supply chain optimization and disciplined investments in asset base to gain operational efficiencies
Implement price increases to recover cost inflation
Invest in innovation
Opportunistically evaluate strategic acquisitions
Continue to broaden global reach
Extensive continuous improvement programs to reduce costs
Invest in energy solutions and sustainable packaging
Results in significant cost reductions ($60-$80 million per year)
Optimize our core business
Grow by leveraging our strengths
Build a high performance culture
© 2012 Graphic Packaging International, Inc. 7
U.S. and Canada Central & South America Europe Pac Rim
Major Customers
56 Locations 3 Locations 6 Locations 3 Locations
Major Customers Major Customers Major Customers
Our Customers Are Global Food, Beverage and Consumer Products Companies
We Grow Globally with Our Customers
© 2012 Graphic Packaging International, Inc. 8
Graphic is a Leader in the Consolidated North American Folding Carton Sector
2001 Today a Transformed Industry
Source: Bain competitive analysis document, QSR/Foodservice Market Analysis and Management estimates.
Coated
Recycled
Board
Coated
Unbleached
Kraft
Other
Riverwood
Rock-Tenn
IP
Smurfit Stone
MeadWestvaco
Graphic
Packaging
13% 9%
8%
7%
7%
5%
51%
Resulting in Leading
Market Share
MWV
GPK55%
45%
GPK
35%
RKT
26%
Paperworks
11%
Other
28%
© 2012 Graphic Packaging International, Inc.
Source: Bain Consulting.
GPK Converting Facility
GPK Paperboard Mill
Industry Average
Ca
sh
Co
st
Example: Cereal Customers
West Coast Region /Private Label
• Craft Beer
• Facial tissue
• Raisins
• Frozen Foods
• Soap & Detergent
Midwest Region / Private Label
• Meat
• Facial tissue
• Frozen Foods
• Dairy/Ice Cream
East Region / Private Label
• Confectionary
• Bakery
• Meat
• QSR/Food Service
Centrally Managed Support Functions
• Overall Demand / Capacity Balance
• Raw Material Planning & Procurement
• Graphics / Prepress Support
Locally Managed Support Functions
• Customer Service
• Sales
• Manufacturing
• Field Technical Service
National Accounts Regional Accounts Low Cost Mills
Combined Operations Yield Board from Low Cost Mills in the U.S. to Low Cost Converting Plants
Continue to Optimize Supply Chain
9
© 2012 Graphic Packaging International, Inc. 10
$64$70
$46$47
$101
$76$60-$80
2006 2007 2008 2009 2010 2011
(Prelim)
2012
(Target)
Key project savings over next 3 years
Energy reduction/sourcing
• Biomass boiler
• Heat recovery
Productivity investments
• Higher pressure drying cans
• Automated threading systems
• New top felt run
Waste reduction
Productivity Investments
• Make ready improvement
• Decrease in press conversion times
Plant consolidation
Plant consolidation
Vertical Integration
Mills
Converting
Flexible
Strong Backlog of Cost Reduction Projects
SG&A
Cost reduction projects that will deliver $60-$80 million annual benefit over next several years have been planned and/or in process
Dedicated continuous improvement resources to drive execution
Capex approved for major projects
Continuous Improvement Cost Reduction
($ in millions)
© 2012 Graphic Packaging International, Inc. 11
- 12.1%
- 8.0%
- 3.4%
- 0.6%
+ 0.6%
Total Retail & Food. Services
Auto
Furnishings
Electronics,
Appliances
Clothing
Sporting
Goods,
Hobbies,
Books &
Music
General
Merchandise
Food
Services &
Drinking
Grocery &
Liquor
Source: A.C. Nielsen and US Bureau of Labor Statistics.
- 6.2%
- 11.1%
- 0.3%
+ 0.3%
2009 Recession + 0.6%
Relatively Stable Consumer End-Markets in Difficult Times
Overall, GPK weathered the recession relatively well due to its end market exposures
© 2012 Graphic Packaging International, Inc.
Virgin mills use 100% locally grown pine
as fiber source
CRB is made from 100% recycled fibers
Since 2008, our mills have reduced their
carbon footprint by 6%
Reduced water usage by 2% on a per
ton basis
15% less packaging than original box
Saves enough packaging in one year to
wrap the world in a ring of new boxes
Made from renewable material (pine
trees)
Still recyclable
Renew
Recycle
Regenerate
Our Products Address Global Concerns Regarding Sustainability
Compost
New CUK Carton to Replace Litho-Lam
Graphic Packaging Mills
12
© 2012 Graphic Packaging International, Inc. 13
Focus on Innovation
Growth from New Product Innovation
Consumer Convenience
Brand Building
Value and Cost Reduction
Sustainability
Benefits to End Consumers Benefits to GPI Benefits to Customers
Easier to open & dispense
More choice at retail due to additional “facings”
Sustainability
15% less packaging than original corrugated box
Extra retail “facings”
Material and transport savings
75k tons annually of new business
Corrugated moved to paperboard
Improved sustainability measures: energy & water usage, emissions
RECENT WIN:
Drink pouch packaging
© 2012 Graphic Packaging International, Inc.
GPI’s efforts in China are focused on the fast growing
dairy and beverage segments
Large dairy market unveiled for multipack and world’s largest beer consumption with over 5% growth
Urbanization and brand competition leads the multipack potential: increasing income and growing middle class have triggered the demand for premium products in soft drinks, beer and dairy
Trends of switching from manual to automated packaging machines to drive labor-cost-savings and higher production efficiency
Aseptic Pkgs Can Solutions JC Wraps
Broaden Global Reach Right Products for Right Geographies
14
© 2012 Graphic Packaging International, Inc. 15
Strategic Tuck-Under Acquisitions & Combinations
Purchase price of $51.9 million:
~5x EBITDA (including synergies)
Expect ~$4 million of annualized synergies
Converting and mill optimization
Strategic Motivation
Expands West Coast market share with low cost Northern CA converting business
Increases integration of Santa Clara mill
Attractive new markets
– Micro and Craft Brewery and Wine box
Joint Venture (GPI owns 87%)
Neither party received cash consideration
Expect ~$20+ million of annualized synergies
Vertical integration
Facility/overhead optimization
Strategic Motivation
Further strengthens GPI’s #1 position in multi-wall bag packaging
Creates North America’s only vertically integrated multi-wall bag business
Delta Natural Kraft/Mid-America Packaging: Q4 2011
Sierra Pacific Packaging: Q2 2011
© 2012 Graphic Packaging International, Inc. 16
Seasoned and Committed Management Team
160+ Years of Combined Experience in the Paper & Packaging Industry
Experience (Years)
Name Title GPK Industry
David W. Scheible President and Chief Executive Officer 13 26
Daniel J. Blount Senior Vice President and Chief Financial Officer 14 14
Michael P. Doss Executive Vice President, Commercial Operations 22 22
Kristopher L. Dover Senior Vice President, Flexible Group 18 23
Alan R. Nichols Senior Vice President, Mills Division 22 22
Stephen R. Scherger Senior Vice President, Consumer Packaging Division 0 26
Michael R. Schmal Senior Vice President, Beverage Packaging Division 31 36
Joseph P. Yost Senior Vice President, Supply Chain 22 22
© 2012 Graphic Packaging International, Inc. 17
Financial Overview
© 2012 Graphic Packaging International, Inc. 18
Financial Performance Trends Demonstrate Strong Execution of Our Strategy
Adjusted EBITDA & Margin
Cash Flow from Operations Net Leverage
Revenue
A reconciliation of non-GAAP and pro forma financial measures can be found in the appendix of this presentation.
¹ Shown on a pro forma basis: GAAP based ratio was 6.3x.
© 2012 Graphic Packaging International, Inc. 19
Q1’12 Earnings: Financial Improvement Continues
$ millions
Revenues up by 6.7%
Adjusted EBITDA up 5.1%
Adjusted Net Income up 35.0%
Graphic Flexible Packaging
– Soft agro-feed business demand
– Investing for higher levels of integration such as
in-sourcing of kraft paper
– Integration ahead of plan
A reconciliation of non-GAAP and pro forma financial measures can be found in the appendix of this presentation.
Q1'12 Q1'11 Var
TTM
Q1'12
TTM
Q1'11 Var
Revenues $1,067.2 $1,000.6 $66.6 $4,272.9 $4,091.5 $181.4
Adjusted EBITDA $150.0 $142.7 $7.3 $598.6 $571.8 $26.8
Adj. N.I. (normalized tax rate) $24.7 $18.3 $6.4 $105.1 $67.0 $38.1
Adj. EPS (normalized tax rate) $0.06 $0.05 $0.01 $0.27 $0.19 $0.08
EBITDA Margin
Segment Q1’12 Q1’11
Paperboard 17.3% 17.2%
Flexible 3.9% 6.3%
Total 14.1% 14.3%
© 2012 Graphic Packaging International, Inc. 20
Poised to Continue Performance Improvement A
dj.
EB
ITD
A i
n $
mil
lio
ns
Primed for Continued Improvement
$572
~$105
~($9)
~($116)
~$72 ~$6 $599
~$(31)
200
300
400
500
600
700
$800
Q1'11 TTM Price Volume/Mix* Commodity Inflation
Labor, Benefit & Other Inflation
Performance FX/Other Q1'12 TTM
Continued investment in product innovation to expand addressable market
Vertical integration drives production optimization
Contractual inflation recovery and “net purchaser of paperboard” position
$60-$80 million annual cost reduction
Strong infrastructure for creating value with “tuck-under” acquisitions
*Includes market related downtime.
© 2012 Graphic Packaging International, Inc. 21
Actively Manage Risk of Input Cost Inflation and Paperboard Demand
• Energy
– Hedging strategy on natural gas
– New investments in bio-mass
• Secondary Fiber – Midwest mills with cost advantage
– Internal consumption of mill and converting scrap
programs
• Wood – Virgin fiber mills located in prime wood baskets
• ~85% of paperboard packaging business under
multiyear contract
• Contracts contain “look back” inflation recovery calculation – average 9 month look back period
• Over 200,000 tons purchased
• Optimize mill production – throughput, waste, trim – driving margins and cash generation
• Maintain “sold out” position of mills – mitigate market demand risk
Converting
Folding Carton Cost Breakdown
Secondary Fiber
14.4%
Energy
12.4%
Freight/Packaging
5.9%
Virgin Wood
15.2% Labor &
Overhead
33.7%
Chemicals
18.5%
Variable
Costs
21.1%
Fixed Costs
24.4%
Board
54.5% 80+%
Vertically
Integrated
Paperboard Production
Proven Strategy to Minimize Input Volatility
Customer Contracts w/ Inflation Recovery Provisions
Convert More Paperboard than Mills Produce
© 2012 Graphic Packaging International, Inc.
Debt Profile and Liquidity
1) Since March 2008
Debt Profile Refinancing • New $2 billion secured loan facilities
– Lowered rate to LIBOR +2.25% (pricing grid based)
– Provides operating flexibility
• Enhanced baskets for cash dividend, share
repurchases and other investments
• Potential 2013 refinancing of 9.5% Notes due
in 2017
Domestic Liquidity • Significant liquidity of ~$512 million (at 3/12)
Cumulative Net Debt Reduction Since 2008¹
22
$119
$482
$692
$1,039 $1,010
2008¹ 2009 2010 2011 Q1'12
Q1'12 Amount
($ millions)
Cash & Cash in Equivalents 30$
$1B Revolver (Matures in 2017) 465
Term Loan A (Matures in 2017) 1000
9.500% Notes (Matures in 2017) 425
7.785% Notes (Matures in 2018) 250
Other 12
Net Debt 2,122$
0.8x
x Q1'12 TTM
EBITDA
3.2x
3.5x
3.6x
2.4x
3.6x
© 2012 Graphic Packaging International, Inc. 23
• Expect ~$200 million net debt reduction
– Impacted by one time items:
• Biomass Boiler Capital Expenditures
• Refinance Costs
• Delta Natural Kraft Integration Costs
• Normalized Cash “run rate” ~$260 million
• End year entering top-end of leverage target
Debt
Story
to
Equity
Play
• $1.1 billion NOL will continue to benefit
Free Cash Flow Yield
• Potential cash deployment
• Dividend
• Tuck-under acquisitions
-3.6%
-1.2%
2.5%
5.7% 5.8%
8.3%
11.8% 13.4%
7.0x
7.8x
6.7x 6.7x
8.1x
5.8x 6.3x 6.4x
0.0x
2.5x
5.0x
7.5x
10.0x
-5.0%
-1.0%
3.0%
7.0%
11.0%
15.0%
MWV CCK PKG SON BLL RKT IP GPK
---
Co
ns
en
su
s 2
01
2 E
st.
E
V/E
BIT
DA
*
TT
M F
CF
Yie
ld %
*
Peer Group Valuations & FCF Yield
Strong Cash Generation, Attractive Free Cash Flow Yield and Valuation Considerations
* Data pulled from Bloomberg as of 5/31/2012.
2013 2012
GPK Valuation Considerations
• GPK has hybrid paper/packaging
characteristics
– ~95% of revenues from packaging
– Net purchaser of paperboard
• More stable revenue base – Food &
Beverage end markets
• NOL value may not be fully
recognized by market
• Strong cash flow yield indicates
market may under value GPK
© 2012 Graphic Packaging International, Inc.
Attractive Diluted Adj. EPS Growth
Summary Value Proposition
Current Profile
Created a highly integrated business model with
stable end markets
Lowering operational and financial costs to
generate cash and earnings
Positioned to utilize GPK’s $1.1 billion NOL
Transitioning from a Debt Story to an Equity Play
– Enter target net leverage range end of 2012
Unique Investment Thesis
24 1) Presented on pro forma basis.
$(0.18)$(0.19)
$0.03
$0.22
$0.26
2007¹ 2008¹ 2009 2010 2011
Future Profile
• Attractive earnings growth
• Valuation upside potential given strong free cash
flow yield (~13%)
• Cash usage to benefit shareholders (dividend
and/or business investment)
© 2012 Graphic Packaging International, Inc. 25
Investment Highlights
Leading Market
Position
Success with Tuck-
Under Acquisitions
Low Cost Producer
with Optimized
Supply Chain
Product Innovation
and Sustainability
Seasoned and
Committed
Management Team
Long-Term
Relationships with
Blue-Chip Customers
Consistent Demand
from Stable End-
Markets
Strong Backlog of
Cost Reduction
Initiatives
© 2012 Graphic Packaging International, Inc. 26
Appendix
© 2012 Graphic Packaging International, Inc. 27
Reconciliation of Q1’12 TTM/2011/2010/2009/2008 Non - GAAP and Pro forma Results
TTM March 31
In millions 2012 2011 2010 2009 2008 1
Net Sales 4,272.9$ 4,206.3$ 4,095.0$ 4,095.8$ 4,079.4$
Altivity Net Sales - - - - 335.6
Consolidated Net Sales 4,272.9$ 4,206.3$ 4,095.0$ 4,095.8$ 4,415.0$
Net Income Attributable to Graphic Packaging Holding Company 267.4$ 276.9$ 10.7$ 56.4$ (99.7)$
Add (Subtract):
Net Loss Attributable to Noncontrolling Interests (1.6) (1.7) - - -
Income Tax Expense (219.7) (229.8) 27.5 24.1 34.4
Equity Income of Unconsolidated Entities (2.1) (2.1) (1.6) (1.3) (1.1)
Interest Expense, Net 137.7 144.9 174.5 196.4 215.4
Depreciation and Amortization 293.7 292.3 299.3 326.8 269.2
EBITDA 475.4 480.5 510.4 602.4 418.2
Charges Associated with Business Combinations 3.4 2.4 55.1 71.7 17.7
Asset Impairment and Other Special Charges 12.5 10.0 - 13.0 15.5
Goodwill Impairment Charge 96.3 96.3 - - -
Inventory Step Up Related to Altivity - - - - 24.4
Loss on Modification or Extinguishment of Debt 11.0 2.1 8.4 7.1 -
Alternative Fuel Tax Credits Net of Expenses - - - (137.8) -
Adjusted EBITDA 598.6 591.3 573.9 556.4 475.8
Altivity Adjusted EBITDA - - - - 26.2
Consolidated Adjusted EBITDA 598.6$ 591.3$ 573.9$ 556.4$ 502.0$
Net Income Attributable to Graphic Packaging Holding Company 267.4$ 276.9$ 10.7$ 56.4$ (99.7)$
Altivity Net Loss - - - (24.5)
Charges Associated with Business Combinations (Net of Tax) ** 1.5 1.5 55.1 71.7 17.7
Asset Impairment and Other Special Charges (Net of Tax) ** 8.3 6.2 - 13.0 15.5
Goodwill Impairment Charge (Net of Tax) ** 80.0 80.0 - - -
Inventory Step Up Related to Altivity - - - - 24.4
Loss on Modification or Extinguishment of Debt (Net of Tax) ** 6.7 1.3 8.4 7.1 -
Alternative Fuel Tax Credits Net of Expenses - - - (137.8) -
Tax Benefit Associated with Release of Tax Valuation Allowance (265.2) (265.2) - - -
Adjusted Net Income (Loss) 98.7$ 100.7$ 74.2$ 10.4$ (66.6)$
Per Share - Basic
Net Income (Loss) Attributable to Graphic Packaging Holding Company 0.69$ 0.74$ 0.03$ 0.15$ (0.26)$
Altivity Net Loss - - - - (0.07)$
Charges Associated with Business Combinations 0.00 0.00 0.15 0.19 0.05
Asset Impairment and Other Special Charges 0.02 0.02 - 0.03 0.04
Goodwill Impairment Charge 0.21 0.21 - - -
Inventory Step Up Related to Altivity - - - - 0.06
Loss on Modification or Extinguishment of Debt 0.02 0.00 0.02 0.02 -
Alternative Fuel Tax Credits Net of Expenses - - - (0.37) -
Tax Benefit Associated with Release of Tax Valuation Allowance (0.68) (0.70) - - -
Adjusted Net Income (Loss) Per Share * 0.25$ 0.27$ 0.22$ 0.03$ (0.19)$
Per Share - Diluted
Net Income (Loss) Attributable to Graphic Packaging Holding Company 0.68$ 0.73$ 0.03$ 0.15$ (0.26)$
Altivity Net Loss - - - - (0.06)$
Charges Associated with Business Combinations 0.00 0.00 0.14 0.19 0.05
Asset Impairment and Other Special Charges 0.02 0.02 - 0.03 0.04
Goodwill Impairment Charge 0.20 0.21 - - -
Inventory Step Up Related to Altivity - - - - 0.06
Loss on Modification or Extinguishment of Debt 0.02 0.00 0.02 0.02 -
Alternative Fuel Tax Credits Net of Expenses - - - (0.36) -
Tax Benefit Associated with Release of Tax Valuation Allowance (0.68) (0.69) - - -
Adjusted Net Income (Loss) Per Share * 0.25$ 0.26$ 0.22$ 0.03$ (0.19)$
Weighted Average Number of Shares Outstanding - Basic 388.2 376.3 343.8 343.1 341.6
Weighted Average Number of Shares Outstanding - Diluted 392.0 381.7 347.4 344.6 341.6
The following pro forma results for 2008, give effect to Graphic Packaging Corporation's combination with Altivity Packaging, LLC as if it had occurred on January 1, 2008 and
exclude the 2008 results for the two coated-recycled board mills divested in September 2008. The Company's management believes that the pro forma presentation provides
useful information to investors in light of the Company's combination with Altivity Packaging, LLC. The pro forma information is not necessarily indicative of what the combined
companies' results of operations actually would have been if the transaction had been completed on the date indicated.
Reconciliation of Non-GAAP Financial Measures
Year Ended December 31,
* May not foot due to rounding
** The tax impact is for 2011 and 2012
1) Presented on a pro forma basis.
© 2012 Graphic Packaging International, Inc. 28
Reconciliation of Q1’12 TTM/Q1’11 TTM/Q1’11 Normalized Earnings Results
TTM March 31 TTM March 31 March 31,
2012 2011 2011
Income before Income Taxes and Equity Income of Unconsolidated Entities 44.0$ 51.3$ 29.3$
Charges Associated with Business Combination 3.4 46.6
Asset Impairment and Other Special Charges 12.5 - -
Goodwill Impairment Charge 96.3 - -
Loss on Modification or Extinguishment of Debt 11.0 8.4 -
Adjusted Pre-Tax Income 167.2 106.3 29.3
Income Tax Expense at Normalized Tax Rate of 38.5% prior to Q1'12 (65.8) (40.9) (11.3)
Income before Equity Income of Unconsolidated Entities 101.4 65.4 18.0
Equity Income of Unconsolidated Entities 2.1 1.6 0.3
Income Attributable to Noncontrolling Interests 1.6
Adjusted Net Income with Normalized Tax Rate 105.1$ 67.0$ 18.3$
Weighted Average Number of Shares Outstanding - Diluted 392.0 347.4 349.8
Adjusted Net Income with Normalized Tax Rate Per Diluted Share 0.27$ 0.19$ 0.05$
© 2012 Graphic Packaging International, Inc. 29
Reconciliation Non-GAAP Financial Measures
March 31, December 31, December 31, December 31, December 31,
Calculation of Net Debt: 2012 2011 2010 2009 2008 1
Short-Term Debt and Current Portion of Long-Term Debt 49.8 30.1 26.0$ 17.6$ 18.6$
Long-Term Debt 2,102.7 2,335.7 2,553.1 2,782.6 3,165.2
Less:
Cash and Cash Equivalents (30.2) (271.8) (138.7) (149.8) (170.1)
Total Net Debt 2,122.3$ 2,094.0$ 2,440.4$ 2,650.4$ 3,013.7$
Adjusted EBITDA 598.6 591.3 573.9$ 556.4 502.0
Net Leverage Ratio 3.5 3.5 4.3 4.8 6.0
1) Presented on a pro forma basis.
Reconciliation of Non-GAAP Financial Measures
The table below sets forth the calculation of the Company's Total Net Debt and Net Leverage Ratio. The Company's management believes that the presentation
of Total Net Debt and Net Debt Leverage provides useful information to investors because these measures are regularly used by management in assessing the
Company's performance. Total Net Debt is a financial measure not calculated in accordance with generally accepted accounting principles in the United States
("GAAP"). Total Net Debt and Net Leverage Ratio should be considered in addition to results prepared in accordance with GAAP, but should not be considered
superior to GAAP results. In addition, our Total Net Debt and Net Leverage Ratio may not be comparable to similarly titled measures utilized by other
companies since other companies may not calculate such a measure in the same manner as we do.
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