SOURCE: Interactive Data

Interactive Data

February 12, 2015 17:33 ET

Interactive Data Reports Fourth-Quarter and Full-Year 2014 Results

NEW YORK NY--(Marketwired - Feb 12, 2015) - Interactive Data Corporation today reported its financial results for the fourth quarter and full year ended December 31, 2014. Interactive Data's fourth quarter 2014 revenue was $239.3 million, a 3.1% increase from $232.2 million in the fourth quarter of 2013. Excluding the impact of changes in foreign exchange rates, Interactive Data's organic (non-GAAP) revenue for the fourth quarter of 2014 grew by 4.3% from the same quarter last year. 

Interactive Data's fourth quarter 2014 income from operations was $41.2 million compared to income from operations of $41.8 million in the fourth quarter of 2013. Non-GAAP Adjusted EBITDA (which excludes items that are either not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) for the fourth quarter of 2014 was $98.2 million, compared with $89.4 million in the same period one year ago. 

"Interactive Data finished 2014 with strong operating performance and we are well positioned to generate continued revenue and profit growth in 2015," stated Stephen Daffron, Interactive Data's president and CEO. "Our fourth quarter organic revenue growth of 4.3% was driven by a combination of growth in our Pricing and Reference Data segment and growth in our real-time feeds and 7ticks trading infrastructure businesses. We generated Adjusted EBITDA of $98.2 million during the quarter, reflecting our continued commitment to cost containment and driving operating efficiencies."

Segment Reporting and Related Operating Highlights

Pricing and Reference Data Segment:

  • Interactive Data's Pricing and Reference Data segment reported fourth quarter 2014 revenue of $167.3 million, a 2.7% increase over $162.9 million in the fourth quarter of 2013. Excluding the impact of changes in foreign exchange rates, fourth quarter 2014 organic (non-GAAP) revenue for this segment increased by 3.5% from the same period last year. The segment's performance reflects growth in the Company's evaluated pricing and reference data services across all geographic regions.

Trading Solutions Segment:

  • Interactive Data's Trading Solutions segment generated fourth quarter 2014 revenue of $72.0 million, an increase of 3.9% over $69.3 million in the same period one year ago. Excluding the impact of changes in foreign exchange rates, fourth quarter 2014 organic (non-GAAP) revenue for this segment increased by 6.3% from the same period last year. Organic revenue growth was driven by recognition of both recurring and non-recurring revenue in the Company's 7ticks trading infrastructure services and real-time feeds product areas in connection with large client implementations. This growth was partially offset by declines in the segment's customized hosted web applications and workstations product areas. 

Other Fourth Quarter 2014 Financial and Operating Highlights

Operating Expenses:

  • During the fourth quarter of 2014, the Company recorded $11.0 million of non-cash impairment expense related to previously capitalized development costs, and recorded $10.3 million of severance expense. Partially offsetting these charges was the positive impact of transactional foreign exchange on operating activities of $5.3 million and realized savings from other on-going cost cutting initiatives.

Refinancing Activity; Adjusted EBITDA:

  • As previously announced, in May 2014, Interactive Data refinanced its debt and entered into a new $2.1 billion senior secured credit facility, consisting of a five-year $160 million Revolver (currently unfunded) and a seven year $1.9 billion Term Loan. Additionally, the Company completed the offering of $350 million in aggregate principal amount 5.875% Senior Notes due 2019.

  • To facilitate period over period comparisons, the Company is reporting Adjusted EBITDA for all periods presented, as determined by reference to its May 2014 credit agreement. Accordingly, Adjusted EBITDA amounts reported for 2013 periods differ from previously reported Adjusted EBITDA amounts. Pro Forma Adjusted EBITDA is being reported only for the year ended December 31, 2014.

Balance Sheet Highlights:

  • As of December 31, 2014, Interactive Data had cash and cash equivalents of $319.7 million, compared with $304.6 million last quarter and $360.2 million of cash, cash equivalents and short term investments at the end of 2013. The Company's cash position as of December 31, 2014 reflects the use of approximately $94 million in cash, which together with the net proceeds of the new debt described above, was used to refinance the Company's existing debt, pay related costs and expenses, and fund a $272.9 million cash dividend to Igloo Holdings Corporation, our parent entity, who in turn made a cash distribution to its equity holders. The Company's total debt outstanding as of December 31, 2014 was approximately $2.2 billion compared to approximately $2.0 billion as of the same time last year.

Full Year 2014 Results

  • For the full year ended December 31, 2014, Interactive Data reported revenue of $939.2 million, an increase of $34.1 million, or 3.8%, from $905.1 million in the same period last year. Excluding the effects of foreign exchange, organic revenue growth was 3.1% during 2014 due largely to continued expansion throughout the year within the Company's Pricing and Reference Data segment, as well as the Company's 7ticks trading solutions infrastructure services and real-time feeds product areas. 

  • For the full year ended December 31, 2014, Interactive Data reported income from operations of $168.1 million, compared with $176.0 million in 2013. Non-GAAP Adjusted EBITDA (which excludes items that are not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) was $362.4 million in 2014, compared with $351.6 million in 2013. For the year ended December 31, 2014, Pro Forma Adjusted EBITDA (which represents Adjusted EBITDA plus an additional adjustment related to the expected pro forma impact of certain planned cost savings initiatives) was $388.1 million. While this balance includes expected 12 month pro-forma run rate impact of cost savings initiatives currently quantified, additional cost savings initiatives are being actively explored.

Conference Call Information

Interactive Data Corporation will host a conference call to discuss the Company's fourth quarter 2014 results on Friday, February 13, 2015 at 8:30 a.m. ET. The dial-in number for the conference call is (785) 424-1666 and the related access code is IDCQ414. For those who cannot listen to this broadcast, a replay of the call will be available from February 13 at 12:00 p.m. until Friday, February 20, 2015 at 11:59 p.m., and it can be accessed by dialing (402) 220-2671 or (800) 727-6189.

Non-GAAP Information

In addition to presenting our results in accordance with generally accepted accounting principles (GAAP) in this press release, we also disclose the following non-GAAP information:

  • Management includes information regarding organic revenue. Organic revenue excludes the impact of foreign exchange rate fluctuations, as well as, if applicable, the contribution of businesses recently acquired (and related intercompany eliminations). Management believes reporting organic revenue is useful information for stakeholders as it facilitates a fuller understanding of period-to-period changes in revenue and underlying business trends. 

  • Management includes organic revenue for our Pricing and Reference Data and Trading Solutions segments because management believes this additional level of detail provides further insight into underlying performance trends. 

  • Management includes information regarding earnings before interest, other income, income taxes, depreciation and amortization (EBITDA), Adjusted EBITDA and Pro Forma Adjusted EBITDA. Adjusted EBITDA and Pro Forma Adjusted EBITDA are determined by reference to defined terms in the Company's May 2014 Credit Agreement. Adjusted EBITDA is defined as earnings before interest, other income, income taxes, depreciation and amortization, stock-based compensation expense, and other non-cash, non-operational or non-recurring items, in each case as applicable for the underlying periods. Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA plus an additional adjustment related to the expected pro forma impact of certain planned cost savings initiatives. Management considers Adjusted EBITDA to be an important indicator of the Company's operational profitability and cash generation strength. Further, Management also believes reporting Adjusted EBITDA provides transparency into and useful information regarding the Company's operating results, because items that are either not part of the Company's ongoing core operating expenses, do not require a cash outlay, or are not otherwise expected to recur in the ordinary course of business are eliminated. Pro Forma Adjusted EBITDA is a metric that is used as a basis for determining certain leverage ratios under the Company's debt agreements. The leverage ratios are used in various ways, including determining the amount of any required excess cash flow payments. For this reason, management believes it is useful for investors to have information on this metric.

  • Management includes information regarding free cash flow, which we define as Adjusted EBITDA less capital expenditures. Management considers free cash flow to be an important measure of the Company's cash generation strength that supports the Company's ability to repay its debt obligations and invest in future growth through new business development activities or acquisitions.

  • Management uses these non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring the Company's core operating performance and comparing current period performance to that of prior periods, and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making, and for forecasting and planning purposes.

  • The non-GAAP financial measures of the Company's results of operations included in this press release should not be considered in isolation from comparable measures determined in accordance with GAAP. The non-GAAP financial measures should not be considered to be superior to, or a substitute for, the Company's results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the comparable GAAP financial measures are set forth in the accompanying tables. The non-GAAP measures presented may not be comparable to similarly titled measures reported by other companies.

Forward-looking and Cautionary Statements

This press release may contain forward-looking statements. Forward-looking statements include all statements that are not historical statements and include statements discussing the Company's goals, beliefs, strategies, objectives, plans, future financial conditions, future challenges and opportunities. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: (i) the effectiveness of strategies designed to improve revenue and profit results; (ii) the impact of cost-cutting and cost containment pressures across the industries the Company serves; (iii) general worldwide economic conditions and related uncertainties; (iv) consolidation of financial services companies, within and across industries; (v) a decline in activity levels in the securities markets, weak or declining financial performance of market participants or the failure of market participants; (vi) the intensity of competition the Company faces; (vii) a prolonged outage at one of the Company's data centers or other major disruptions of the Company's computer operations or those of the Company's suppliers, including outages or disruptions that result in the failure to timely deliver services or otherwise adversely impact the quality of the Company's services; (viii) the Company's ability to maintain relationships with its key suppliers and providers of market data, including unanticipated costs and expenses that may arise as the result of unfavourable resolution of third party data use audits conducted by such suppliers from time to time; (ix) the Company's ability to maintain relationships with service bureaus and custodian banks; (x) the need to develop new products and services, and to adapt existing services to legal, regulatory, technology or other changes or new competitive offerings; (xi) the Company's cost and operational optimization plans may not yield the expected efficiencies or cost savings or may take longer than anticipated, including the Company's [unified technology platform project]; (xii) risks related to the Company's substantial leverage, including, without limitation, the need to dedicate substantial cash flow to pay interest and principal thereby reducing cash flow available to fund operations, capital expenditures and potential business opportunities and the Company's ability to raise additional capital (if required) to react to unexpected adverse changes in the economy, the Company's industry, or to repay the Company's Senior Notes due 2019; (xiii) risks related to the Sponsor control of the Company, including the power to cause the Company to dividend cash to service the Senior Notes Due 2017 issued by our parent company; (xiv) the Company is subject to regulatory oversight and it provides services to financial institutions who are subject to regulatory oversight, and enforcement actions by regulatory agencies can be time-consuming, costly and could harm the Company's reputation; (xv) the Company's ability to maintain its registered investment adviser status; (xvi) the risks of doing business internationally; (xvii) intellectual property related risks, including any allegations that the Company infringes the intellectual property rights of others; (xviii) the Company's ability to attract and retain qualified management and other key personnel; (xix) the Company's ability to negotiate and enter into any strategic acquisitions or alliances on favorable terms, if at all; and (xx) the Company's ability to realize the anticipated benefits from any strategic acquisitions or alliances that it may be a party to. While the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if current management estimates change or assumptions prove invalid and, therefore, you should not rely on these forward-looking statements as representing the Company's views as of any date subsequent to today.

About Interactive Data Corporation

Interactive Data Corporation is a trusted leader in financial information. Thousands of financial institutions and active traders, as well as hundreds of software and service providers, subscribe to our fixed income evaluations, reference data, real-time market data, trading infrastructure services, fixed income analytics, desktop solutions and web-based solutions. Interactive Data's offerings support clients around the world with mission-critical functions, including portfolio valuation, regulatory compliance, risk management, electronic trading and wealth management. Interactive Data has over 2,500 employees in offices worldwide.

For more information, please visit www.interactivedata.com.

 
 INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands)
                       
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014     2013     2014     2013  
REVENUE $ 239,271     $ 232,169     $ 939,201     $ 905,113  
                               
COSTS AND EXPENSES:                              
  Cost of services   92,903       77,071       336,633       297,423  
  Selling, general and administrative   67,890       74,536       286,489       272,289  
  Depreciation   12,426       10,683       45,924       42,537  
  Amortization   24,894       28,056       102,091       116,876  
Total costs and expenses   198,113       190,346       771,137       729,125  
                               
INCOME FROM OPERATIONS   41,158       41,823       168,064       175,988  
                               
  Interest expense, net   (29,678 )     (34,011 )     (125,849 )     (137,628 )
  Other income, net   961       -       1,633       347  
  Loss on extinguishment of debt   -       -       (82,060 )     (10,213 )
                               
INCOME (LOSS) BEFORE INCOME TAXES   12,441       7,812       (38,212 )     28,494  
                               
  Income tax expense (benefit)   12,468       2,605       (21,227 )     (5,012 )
                               
NET (LOSS) INCOME $ (27 )   $ 5,207     $ (16,985 )   $ 33,506  
                               
                               
                               
INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands)
           
  December 31,     December 31,  
  2014     2013  
ASSETS (Unaudited)        
Assets:              
Cash and cash equivalents $ 319,666     $ 356,733  
Short-term investments   -       3,445  
Accounts receivable, net   143,644       133,997  
Prepaid expenses and other current assets   17,809       25,733  
Income tax receivable   -       6,804  
Deferred tax assets   30,856       10,711  
               
Total current assets   511,975       537,423  
               
Property and equipment, net   206,592       185,552  
Goodwill   1,607,690       1,637,202  
Intangible assets, net   1,438,138       1,569,903  
Deferred financing costs, net   25,366       32,737  
Other assets   6,752       5,541  
               
Total Assets $ 3,796,513     $ 3,968,358  
               
LIABILITIES AND EQUITY              
               
Liabilities:              
Accounts payable, trade $ 13,780     $ 20,282  
Accrued liabilities   99,384       105,842  
Borrowings, current   19,000       25,356  
Interest payable   4,713       30,233  
Income taxes payable   5,084       3,057  
Deferred revenue   20,282       19,639  
               
Total current liabilities   162,243       204,409  
               
Income taxes payable   2,477       13,566  
Deferred tax liabilities   561,588       573,780  
Other liabilities   57,464       57,547  
Borrowings, net of current portion and original issue discount   2,194,801       1,940,150  
               
Total Liabilities   2,978,573       2,789,452  
               
Equity:              
Common stock   -       -  
Additional paid-in-capital   959,082       1,237,766  
Accumulated loss   (106,041 )     (89,056 )
Accumulated other comprehensive (loss) income   (35,101 )     30,196  
               
Total Equity   817,940       1,178,906  
               
Total Liabilities and Equity $ 3,796,513     $ 3,968,358  
               
               
               
INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)
           
  Twelve Months Ended
December 31,
 
  2014     2013  
               
Cash flows from operating activities:              
Net (loss) income $ (16,985 )   $ 33,506  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:              
  Depreciation and amortization   148,015       159,413  
  Amortization of deferred financing costs and accretion of debt discounts   11,878       16,059  
  Deferred income taxes   (25,940 )     (17,461 )
  Non-cash stock-based compensation   13,916       3,946  
  Non-cash interest expense   1,130       1,507  
  Provision for doubtful accounts and sales credits   4,743       1,866  
  Asset impairment   14,265       -  
  Loss on dispositions of fixed assets   36       27  
  Loss on extinguishment of debt   82,060       10,213  
  Portion of insurance settlement related to property and equipment   -       (2,485 )
Changes in operating assets and liabilities, net              
  Accounts receivable   (17,000 )     (605 )
  Prepaid expenses and other assets   5,536       (424 )
  Accounts payable, interest payable and income taxes payable and receivable, net   (33,230 )     2,631  
  Accrued liabilities and other liabilities   (1,475 )     17,795  
  Deferred revenue   2,451       244  
NET CASH PROVIDED BY OPERATING ACTIVITIES   189,400       226,232  
               
Cash flows from investing activities:              
  Purchase of property and equipment   (84,152 )     (81,852 )
  Proceeds of insurance settlement related to property and equipment   -       2,485  
  Purchase of short-term investments   -       (3,335 )
  Proceeds from the sales of short-term investments   3,410       22,857  
NET CASH USED IN INVESTING ACTIVITIES   (80,742 )     (59,845 )
               
Cash flows from financing activities:              
  Principal payments on long-term debt   (2,004,715 )     (9,786 )
  Proceeds from issuance of long-term debt, net of issuance costs   2,166,442       -  
  Payment of long-term debt issuance costs, net of proceeds   -       (1,009 )
  Principal payments on capital leases   (499 )     (402 )
  Payment of interest rate cap   (1,247 )     (1,663 )
  Capital contribution resulting from exercise of parent company stock options   2,427       514  
  Capital contribution from parent company   5,482       7,676  
  Return of capital to parent company   (272,895 )     -  
  Dividend to parent company   (28,876 )     (28,715 )
  Capital reduction resulting from cash distribution to option holders   -       (935 )
NET CASH USED IN FINANCING ACTIVITIES   (133,881 )     (34,320 )
               
  Effect of change in exchange rates on cash and cash equivalents   (11,844 )     69  
               
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS   (37,067 )     132,136  
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   356,733       224,597  
               
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 319,666     $ 356,733  
               
               
               
RECONCILIATION OF NON-GAAP MEASURES
 
Total Organic (Non-GAAP) Revenue
(Revenue before Effects of Foreign Exchange)
 (In thousands)
                             
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014   2013   Change     2014     2013   Change  
                                     
Total revenue $ 239,271   $ 232,169   3.1 %   $ 939,201     $ 905,113   3.8 %
  Total effects of foreign exchange   2,993     -   -       (6,017 )     -   -  
Total organic (non-GAAP) revenue $ 242,264   $ 232,169   4.3 %   $ 933,184     $ 905,113   3.1 %
                                     
                                     
                                     
Interactive Data Pricing and Reference Data Segment
Organic (Non-GAAP) Revenue
(Revenue before Effects of Foreign Exchange)
(In thousands)
                             
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014   2013   Change     2014     2013   Change  
Pricing and Reference Data revenue $ 167,269   $ 162,894   2.7 %   $ 662,904     $ 639,631   3.6 %
  Effects of foreign exchange   1,331     -   -       (3,679 )     -   -  
Total organic (non-GAAP) revenue $ 168,600   $ 162,894   3.5 %   $ 659,225     $ 639,631   3.1 %
                                     
                                     
                                     
Interactive Data Trading Solutions Segment
Organic (Non-GAAP) Revenue
(Revenue before Effects of Foreign Exchange)
(In thousands)
                             
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014   2013   Change     2014     2013   Change  
Trading Solutions revenue                                    
  Real-Time Feeds and Trading Infrastructure Services $ 35,227   $ 30,751   14.6 %   $ 127,825     $ 112,843   13.3 %
  Hosted Web Applications and Workstations   36,775     38,524   -4.5 %     148,472       152,639   -2.7 %
Total Trading Solutions revenue $ 72,002   $ 69,275   3.9 %   $ 276,297     $ 265,482   4.1 %
  Effects of foreign exchange   1,662     -   -       (2,340 )     -   -  
Total organic (non-GAAP) revenue $ 73,664   $ 69,275   6.3 %   $ 273,957     $ 265,482   3.2 %
                                     
                                     
                                     
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)
 
Non-GAAP Adjusted EBITDA and Pro Forma Adjusted EBITDA 1
(In thousands, except margin data)
                       
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014     2013     2014     2013  
Net (Loss) Income $ (27 )   $ 5,207     $ (16,985 )   $ 33,506  
  Interest expense, net   29,678       34,011       125,849       137,628  
  Other income, net   (961 )     -       (1,633 )     (347 )
  Income tax expense (benefit)   12,468       2,605       (21,227 )     (5,012 )
  Depreciation and amortization   37,320       38,739       148,015       159,413  
EBITDA $ 78,478     $ 80,562     $ 234,019     $ 325,188  
                               
Adjustments:                              
  Non-cash stock-based compensation   4,768       1,153       13,916       3,946  
  Other non-recurring charges2   9,140       649       101,899       13,670  
  Other charges3   5,848       7,073       12,534       8,746  
    Total Adjustments   19,756       8,875       128,349       26,362  
                               
Adjusted EBITDA $ 98,234     $ 89,437     $ 362,368     $ 351,550  
                               
Adjusted EBITDA Margin4   41.1 %     38.5 %     38.6 %     38.8 %
                               
Other Adjustments                              
  Pro forma cost savings                   25,772          
Pro Forma Adjusted EBITDA                 $ 388,140          
                               
Pro Forma Adjusted EBITDA Margin4                   41.3 %        
                               
                               
1 Our presentation of Non-GAAP Adjusted EBITDA and Pro Forma Adjusted EBITDA has been determined by reference to certain defined terms in our credit agreement entered into in May 2014 (the "May 2014 Credit Agreement"), which terms differ from similar defined terms in our prior credit agreement. Consequently, Adjusted EBITDA for the three and twelve months ended December 31, 2013 differ from previously reported amounts. Adjusted EBITDA and Pro Forma Adjusted EBITDA reflects adjustments permitted under the May 2014 Credit Agreement and excludes items that are either not part of our ongoing core operations, do not require a cash outlay or are not otherwise expected to recur in the ordinary course. Pro Forma Adjusted EBITDA reflects an additional adjustment related to the expected pro forma impact of certain planned cost savings initiatives. Please note that the sum of certain amounts may not equal the total due to rounding.  
                               
2 Other non-recurring charges include, as applicable, the loss on extinguishment of debt ($82.1 million in the twelve months ended December 31, 2014 and $10.2 million in the twelve months ended December 31, 2013), asset impairment charges, facility consolidation costs, retention expenses, certain professional fees, and certain other non-recurring charges that are permitted as adjustments under the terms of the May 2014 Credit Agreement.  
                               
3 Other charges include, as applicable, severance, management fees, non-cash foreign currency gain/loss, certain non-income taxes, and certain other adjustments permitted under the terms of the May 2014 Credit Agreement.  
                               
4 Adjusted EBITDA margin and Pro Forma Adjusted EBITDA margin are calculated by dividing each EBITDA measure by total revenue.  
   
   
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)
 
Non-GAAP Adjusted EBITDA and Pro Forma Adjusted EBITDA 1
(In thousands, except margin data)
                        Trailing Twelve  
  Three Months Ended     Months Ended  
  March 31,     June 30,     September 30,   December 31,     December 31,  
  2014     2014     2014   2014     2014  
Net Income $ 15,089     $ (53,748 )   $ 21,701   $ (27 )   $ (16,985 )
  Interest expense, net   33,583       32,470       30,118     29,678       125,849  
  Other income, net   (640 )     (14 )     (18 )   (961 )     (1,633 )
  Income tax expense (benefit)   (7,135 )     (32,849 )     6,289     12,468       (21,227 )
  Depreciation and amortization   36,638       36,951       37,106     37,320       148,015  
EBITDA $ 77,535     $ (17,190 )   $ 95,196   $ 78,478     $ 234,019  
                                     
Adjustments:                                    
  Non-cash stock-based compensation   1,142       7,325       681     4,768       13,916  
  Other non-recurring charges2   530       90,513       1,716     9,140       101,899  
  Other (income) charges3   2,856       7,925       (4,095 )   5,848       12,534  
    Total Adjustments   4,528       105,762       (1,698 )   19,756       128,349  
                                     
Adjusted EBITDA $ 82,063     $ 88,572     $ 93,498   $ 98,234     $ 362,368  
                                     
Adjusted EBITDA Margin4   35.0 %     38.2 %     40.1 %   41.1 %     38.6 %
                                     
Other Adjustments                                    
  Pro forma cost savings                                 25,772  
Pro Forma Adjusted EBITDA                               $ 388,140  
                                     
Pro Forma Adjusted EBITDA Margin4                                 41.3 %
                                     
1 Our presentation of Non-GAAP Adjusted EBITDA and Pro Forma Adjusted EBITDA has been determined by reference to certain defined terms in our credit agreement entered into in May 2014 (the "May 2014 Credit Agreement"), which terms differ from similar defined terms in our prior credit agreement. Consequently, Adjusted EBITDA for the three months ended March 31, and June 30, 2014 differ from previously reported amounts. Adjusted EBITDA and Pro Forma Adjusted EBITDA reflects adjustments permitted under the May 2014 Credit Agreement and excludes items that are either not part of our ongoing core operations, do not require a cash outlay or are not otherwise expected to recur in the ordinary course. Pro Forma Adjusted EBITDA reflects an additional adjustment related to the expected pro forma impact of certain planned cost savings initiatives. Please note that the sum of certain amounts may not equal the total due to rounding.  
                                     
2 Other non-recurring charges include, as applicable, the loss on extinguishment of debt ($82.1 million in the twelve months ended December 31, 2014), asset impairment charges, facility consolidation costs, retention expenses, certain professional fees, and certain other non-recurring charges that are permitted as adjustments under the terms of the May 2014 Credit Agreement.  
                                     
3 Other charges include, as applicable, severance, management fees, non-cash foreign currency gain/loss, certain non-income taxes, and certain other adjustments permitted under the terms of the May 2014 Credit Agreement.  
                                     
4 Adjusted EBITDA margin and Pro Forma Adjusted EBITDA margin are calculated by dividing each EBITDA measure by total revenue.  
                                     
                                     
                                     
Non-GAAP Free Cash Flow
(In thousands)
                           
                           
  Three Months Ended     Twelve Months Ended  
  December 31,     December 31,  
  2014   2013   Change     2014   2013   Change  
Adjusted EBITDA $ 98,234   $ 89,437   9.8 %   $ 362,368   $ 351,550   3.1 %
  Capital Expenditures   19,498     27,796   -29.9 %     84,152     81,852   2.8 %
Free Cash Flow $ 78,736   $ 61,641   27.7 %   $ 278,216   $ 269,698   3.2 %
                                   

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