UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 20, 2016
WABCO HOLDINGS INC.
(Exact Name of Registrant as Specified in Charter)
Delaware | 1-33332 | 20-8481962 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
Chaussée de la Hulpe 166, 1170 Brussels, Belgium 2770 Research Drive, Rochester Hills, Michigan |
48309-3511 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: 32-2-663-9-800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
On October 20, 2016, WABCO Holdings Inc. (the Company) issued a press release reporting its results for the quarter ended September 30, 2016 and providing certain forward-looking performance estimates for the year ending December 31, 2016. The press release, which is attached as Exhibit 99.1, and the information included in Item 7.01 of this Current Report on Form 8-K are incorporated herein by reference. The projections constituting the performance estimates included in the press release involve risks and uncertainties, the outcome of which cannot be foreseen at this time and, therefore, actual results may vary materially from these forecasts. In this regard, see the information included below under the caption Information Concerning Forward-Looking Statements.
The information in the press release and this Item 2.02 is furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section. Such information may be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended (the Securities Act), only if and to the extent such subsequent filing specifically references such information.
The press release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrants historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations of the non-GAAP financial measures to the most comparable GAAP financial measures set forth in the press release on the reconciliation schedules attached to the press release.
Item 7.01. | Regulation FD Disclosure. |
On October 20, 2016, the Company issued a press release reporting its results for the quarter ended September 30, 2016 and providing certain forward-looking performance estimates for the year ending December 31, 2016. The press release, which is attached as Exhibit 99.1, and the information included in Item 2.02 of this Current Report on Form 8-K are incorporated herein by reference.
The information in the press release and this Item 7.01 is furnished and not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such information may be incorporated by reference in another filing under the Exchange Act or the Securities Act only if and to the extent such subsequent filing specifically references such information.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are furnished as part of this Current Report on Form 8-K to the extent described in Item 2.02 and Item 7.01.
Exhibit No. |
Description of Document | |
99.1 | Press Release dated October 20, 2016 |
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Comments in this Current Report on Form 8-K and in the exhibit attached hereto contain certain forward-looking statements, which are based on managements good faith expectations and beliefs concerning future developments. Actual results may differ materially from these expectations as a result of many factors. These factors include, but are not limited to, the risks and uncertainties described in the Risk Factors and Information Concerning Forward-Looking Statements sections of the Companys Annual Report on Form 10-K, as well as in the Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of OperationsInformation Concerning Forward Looking Statements sections of the Companys Quarterly Reports on Form 10-Q. The Company does not undertake any obligation to update such forward-looking statements. All market and industry data are based on Company estimates.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 20, 2016 | WABCO HOLDINGS INC. | |||||
By: | /s/ LISA BROWN | |||||
Name: | Lisa Brown | |||||
Title: | Chief Legal Officer & Secretary |
Exhibit Index
Exhibit No. |
Description of Document | |
99.1 | Press Release dated October 20, 2016 |
Exhibit 99.1
WABCO Reports Q3 2016 Results; Continues to Solidly Outperform
Commercial Vehicle Market Globally; Tightens EPS Guidance for 2016
| Q3 2016 sales of $675.4 million, up 4.9 percent from a year ago and up 5.2 percent in local currencies |
| Q3 2016 reported operating income of $80.9 million, up from $29.9 million a year ago; and performance Q3 2016 operating income of $88.9 million, up from $81.5 million a year ago |
| Q3 2016 reported operating margin of 12.0 percent, up from 4.6 percent a year ago; and performance Q3 2016 operating margin of 13.2 percent, up from 12.7 percent a year ago |
| In Q3 2016, WABCO continued to strongly convert income into cash, resulting in net cash from operating activities of $80.6 million |
| Q3 2016 reported diluted EPS of $1.76, up from $0.67 a year ago; and performance Q3 2016 diluted EPS of $1.54, up from $1.39 a year ago |
| Updates sales guidance for full year 2016 to now range from $2,800 million to $2,830 million versus previous guidance from $2,780 million to $2,860 million; sales growth to now range from 7.5 to 8.5 percent in local currencies versus previous guidance from 7 to 10 percent |
| Tightens reported diluted EPS guidance for full year 2016 to now range from $4.21 to $4.31 versus previous guidance from $3.73 to $4.03; and performance full year 2016 diluted EPS to now range from $5.75 to $5.85 versus previous guidance from $5.60 to $5.90 |
BRUSSELS, Belgium, October 20, 2016 WABCO Holdings Inc. (NYSE: WBC), a leading global supplier of technologies and services that improve the safety, efficiency and connectivity of commercial vehicles, today reported Q3 2016 results.
U.S. Dollars in millions except EPS or otherwise indicated |
Q3 2016 | Q3 2015 | ||||||
Sales |
$ | 675.4 | $ | 643.6 | ||||
Sales change in U.S. Dollars year on year |
Up 4.9 | % | | |||||
Sales change in local currencies year on year |
Up 5.2 | % | | |||||
Operating Income Reported |
$ | 80.9 | $ | 29.9 | ||||
Operating Income Performance |
$ | 88.9 | $ | 81.5 | ||||
Operating Margin Reported |
12.0 | % | 4.6 | % | ||||
Operating Margin Performance |
13.2 | % | 12.7 | % | ||||
Net Income Attributable to the Company Reported |
$ | 98.1 | $ | 38.8 | ||||
Net Income Attributable to the Company Performance |
$ | 85.6 | $ | 80.5 | ||||
Diluted EPS Reported |
$ | 1.76 | $ | 0.67 | ||||
Diluted EPS Performance |
$ | 1.54 | $ | 1.39 |
In Q3 2016, we continued to show WABCOs consistent ability to generate further sales growth that solidly outperforms the commercial vehicle market relative to global truck and bus production, said Jacques Esculier, WABCO Chairman and Chief Executive Officer. This quarter, once again, we continued to increase levels of WABCO content per vehicle through market share gain and additional adoption of safety and efficiency technologies.
We also continued to generate further cost efficiency across WABCOs global value chain, which contributes to our robust operating margin, said Esculier. In addition, WABCO delivered very strong earnings per share for the quarter.
In Q3 2016, WABCOs Operating System, the companys globally standardized management environment, delivered $20.9 million of materials and conversion productivity. It generated gross materials productivity of 5.4 percent, a continued strong quarterly gain. It also delivered conversion productivity of 7.1 percent in our factories spanning 4 continents, a near record result.
At the same time, WABCO remains on track to deliver over $15 million in cost savings in operating expenses for full year 2016.
In Q3 2016, WABCO continued to strongly convert income into cash, resulting in net cash from operating activities of $80.6 million.
WABCO Updates Full Year 2016 Guidance
Considering the latest developments in market dynamics and tax environment, WABCO updates its guidance for full year 2016.
Full Year 2016 Guidance
Prior | Updated | |||
Sales in millions |
$2,780 - $2,860 | $2,800 - $2,830 | ||
Sales growth in local currencies |
7% - 10% | 7.5% - 8.5% | ||
Operating Margin Reported |
12.4% - 12.9% | 12.3% - 12.6% | ||
Operating Margin Performance |
13.5% - 14.0% | 13.5% - 13.8% | ||
Diluted EPS Reported |
$3.73 - $4.03 | $4.21 - $4.31 | ||
Diluted EPS Performance |
$5.60 - $5.90 | $5.75 - $5.85 |
WABCOs reported full year 2016 guidance, as previously disclosed, includes a substantial one-time, non-cash tax provision related to the European Commissions January 2016 decision against the Belgian tax authority.
WABCO once again reaffirms its commitment to transform top-line growth into healthy bottom-line results through our three-pillar strategy of technology leadership, globalization and excellence in execution, said Esculier. We also remain fully confident in our ability to continue to deliver outstanding value for WABCOs shareowners.
WABCO Share Buyback Program Update
Since June 2011, WABCO has repurchased 17,686,912 shares for $1,408.5 million in open market transactions as of September 30, 2016, including 595,000 shares bought back for $60.7 million during Q3 2016. WABCO is further authorized to repurchase up to $63.3 million of additional shares through December 31, 2016.
Recent WABCO Highlights
In September 2016, in Hanover, Germany, WABCO showcased its newest suite of industry-leading technologies at IAA Commercial Vehicles 2016, the industrys most global and comprehensive trade show. WABCO presented breakthrough initiatives and solutions that mobilize vehicle intelligence and empower tomorrows fleets, helping to pave the way for autonomous driving:
WABCO and Mobileye N.V. (NYSE: MBLY), a global leader in advanced driver assistance systems (ADAS) and autonomous driving technologies, announced that they are joining forces to develop solutions for commercial vehicles that leverage WABCOs advanced emergency braking systems and Mobileyes Road Experience Management technology. The solutions will combine Mobileyes leading vision system and mapping technology with WABCOs industry-leading portfolio of safety-enabling technologies. Commercial vehicle makers and operators will benefit through capabilities that help to reduce risks of accidents.
WABCO introduced its OnGuardMAX advanced emergency braking system (AEBS) for trucks and buses, with up to full braking from highway speed when confronted with both stationary and moving vehicles ahead. WABCO is the industrys first OEM independent system supplier to offer AEBS. OnGuardMAX marks another advanced technology that further enables automated driving for commercial vehicles and meets regulatory standards globally for AEBS.
WABCO is working with Peloton Technology to advance an innovative solution for truck platooning, integrating commercial vehicle-to-vehicle communication and other automation technologies that further improve safety and fuel efficiency. Based in California, U.S.A., privately held Peloton is an industry-leading provider of connected and automated vehicle solutions. By electronically linking two or more tractor-trailers to form virtual road-trains on highways, platooning increases fuel economy by more than 7%, namely up to 4.5% for the lead truck and up to 10% for following trucks due to improved aerodynamics. A key enabler of the platoon is WABCOs OnGuardACTIVE collision mitigation system.
WABCO has signed a Memorandum of Understanding with a global tier-one automotive industry supplier headquartered in Asia to bring active steering and other technologies to the commercial industry through a new joint venture (JV). It sets a framework to establish a JV agreement for a new business that will develop, manufacture and sell electronically controlled active steering systems for the global truck and bus market. This integration will result in significant innovation for advanced safety-enabling solutions that support automated driving through intelligent control of both the longitudinal and lateral movements of vehicles.
WABCO announced its OnCity Urban Turning Assist system, the companys breakthrough technology to help protect pedestrians and cyclists in city traffic. OnCity is the commercial vehicle industrys first collision avoidance system that uses LiDAR technology for the purpose of object detection. Innovatively engineered for trucks, buses and tractor-trailers, WABCOs OnCity advanced driver assistance system also delivers the industrys widest field-of-view up to 180 degrees using a single sensor for safety monitoring to help protect vulnerable road users located on the vehicles blindside.
WABCO announced the world premiere of OptiFlow AutoTail as part of its industry-leading portfolio of aerodynamics technologies. It represents the next generation of WABCOs OptiFlow Tail, the best performing tail in Europe as validated by fleets. OptiFlow AutoTail delivers fuel savings and reduces CO2 emissions. WABCO also presented its OptiFlow TrailerSkirt for the first time in Europe. OptiFlow TrailerSkirt provides a lightweight aerodynamic system already available to commercial vehicle fleets in the North American market to increase fuel savings.
WABCO unveiled its innovative OnHand electro-pneumatic parking brake control for trucks and buses. It marks the commercial vehicle industrys first stand-alone parking brake control and supplies yet another technological building block toward autonomous driving. Creatively engineered to be the industrys leanest and only solution of its kind that can operate independently of the vehicles air processing unit, OnHand braking technology provides automatic engage and release functionality.
Separately, in Q3 2016, North American joint venture Meritor WABCO received the prestigious 2015 Masters of Quality Supplier Award from Daimler Trucks North America (DTNA), a leading commercial truck manufacturer in North America. The award recognizes outstanding suppliers that have received high scores on their quality, delivery, technology and cost performance. These suppliers represent the top-quality providers of products and services for DTNAs Freightliner® and Western Star truck brands. Meritor WABCO is a preferred standard equipment supplier to DTNA for more than 25 years and together they were the first to bring to the North American market: SmartTrac anti-lock braking systems, OnGuard collision mitigation systems with active braking, SmartTrac stability control systems, and OptiRide intelligent electronically controlled air suspension for tractors.
WABCO Conference Call Today
Jacques Esculier, Chairman and Chief Executive Officer, and Prashanth Mahendra-Rajah, Chief Financial Officer, will discuss WABCOs results and outlook on a conference call at 9:00 a.m. Eastern Time today. It will be webcast at www.wabco-auto.com where the press release and financial information will be available under WABCO Q3 2016 Results.
The call is also accessible by telephone in listen only mode. Dial-in number is +1 408 940 3818 and U.S. toll-free dial-in number is 877 844 0834.
A replay of the call will be available from 12:00 Noon Eastern Time on October 20 until 12:00 Noon Eastern Time on October 27, 2016. Replay dial-in number is +1 404 537 3406 and U.S. toll-free dial-in number is 855 859 2056. Conference ID is 81554517
About WABCO
WABCO (NYSE: WBC) is a leading global supplier of technologies and services that improve the safety, efficiency and connectivity of commercial vehicles. Founded nearly 150 years ago, WABCO continues to pioneer breakthrough innovations for advanced driver assistance, braking, stability control, suspension, transmission automation and aerodynamics. Partnering with the transportation industry as it maps a route toward autonomous driving, WABCO also uniquely connects trucks, trailers, drivers, cargo, and fleet operators through telematics, as well as advanced fleet management and mobile solutions. WABCO is regularly recognized among the best of the best companies. Forbes named WABCO Americas Best-Managed Capital Goods Company. For four consecutive years, Institutional Investor named WABCO among the Top 3 in its sector for Best CEO. WABCO reported sales of $2.6 billion in 2015. Headquartered in Brussels, Belgium, WABCO has 12,000 employees in 39 countries. WABCOs 2015 Annual Report is available at www.ar.wabco-auto.com. For more information, visit www.wabco-auto.com.
Forward-Looking Statements
This document contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 that are based on managements good faith expectations and beliefs concerning future developments. Statements preceded by, followed by or that otherwise include the words believes, expects, anticipates, strategies, prospects, intends, projects, estimates, plans, may increase, may fluctuate, and similar expressions or future or conditional verbs such as will, should, would, may and could are generally forward looking in nature and not historical facts. Actual results may differ materially from these expectations as a result of many factors. These factors include, but are not limited to, the actual level of commercial vehicle production in our end markets, adverse developments in the business of our key customers, pricing changes to our supplies or products, our ability to successfully integrate any acquired businesses or our acquired businesses not performing as planned, the outcome of the appeals against the European
Commissions decision to invalidate Belgiums Excess Profit Ruling Program and the companys ability to avail itself of alternative tax relief in Belgium through the Patent Income Deduction (PID) for years prior to 2015 that are subject to clawback pursuant to the European Commissions decision, and the other risks and uncertainties described in the Risk Factors section and the Information Concerning Forward Looking Statements section of WABCOs Form 10-K, as well as in the Managements Discussion and Analysis of Financial Condition and Results of Operations Information Concerning Forward Looking Statements section of WABCOs Form 10-Q Quarterly Reports. WABCO does not undertake any obligation to update such forward-looking statements. All market and industry data are based on company estimates.
Non-GAAP Financial Measures
To facilitate the understanding of Q3 2016 results, several tables follow this news release. Sales, gross profit, operating expenses, and operating income, which exclude the effects of foreign exchange, as well as EBIT, are non-GAAP financial measures. Additionally, gross profit, operating expenses, operating income, operating margin, EBIT, tax rate, pre-tax income, net income attributable to the company, and net income attributable to the company per diluted share on a performance basis are non-GAAP financial measures that exclude items for separation, streamlining and acquisition, discrete and one-time tax items, and other items that may mask the underlying operating results of the company, as applicable. These measures should be considered in addition to, not as a substitute for, GAAP measures. These measures may not be comparable to similar measures of other companies as not all companies calculate these measures in the same manner. Management believes that presenting these non-GAAP measures is useful to shareholders because it enhances their understanding of how management assesses the operating performance of the companys business. Certain non-GAAP measures may be used, in part, to determine incentive compensation for current employees.
WABCO Financial Attachment
| Condensed Consolidated Statements of Operations |
| Condensed Consolidated Balance Sheets |
| Condensed Consolidated Statements of Cash Flows |
| Three Months Ended September 30, 2016 Data Supplement Sheet |
| Nine Months Ended September 30, 2016 Data Supplement Sheet |
| Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year 2016 Guidance |
WABCO media, investors and analysts contact
Christian Fife, +1 248 270 9290, christian.fife@wabco-auto.com
WABCO HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
(Amounts in millions, except share and per share data) |
2016 | 2015 | 2016 | 2015 | ||||||||||||
Sales |
$ | 675.4 | $ | 643.6 | $ | 2,096.3 | $ | 1,956.9 | ||||||||
Cost of sales |
462.7 | 479.0 | 1,440.1 | 1,371.2 | ||||||||||||
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Gross profit |
212.7 | 164.6 | 656.2 | 585.7 | ||||||||||||
Operating expenses: |
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Selling and administrative expenses |
95.2 | 99.3 | 284.5 | 277.6 | ||||||||||||
Product engineering expenses |
35.0 | 33.7 | 102.5 | 108.3 | ||||||||||||
Other operating expense, net |
1.6 | 1.7 | 4.4 | 3.8 | ||||||||||||
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Operating income |
80.9 | 29.9 | 264.8 | 196.0 | ||||||||||||
Equity income of unconsolidated joint ventures, net |
6.4 | 9.5 | 18.9 | 24.0 | ||||||||||||
Other non-operating (expense)/income, net |
(0.3 | ) | (0.4 | ) | (0.1 | ) | 0.7 | |||||||||
Interest expense, net |
(3.1 | ) | (2.9 | ) | (9.1 | ) | (4.5 | ) | ||||||||
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Income before income taxes |
83.9 | 36.1 | 274.5 | 216.2 | ||||||||||||
Income tax (benefit)/expense |
(16.4 | ) | (5.2 | ) | 105.1 | 31.8 | ||||||||||
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Net income including noncontrolling interests |
100.3 | 41.3 | 169.4 | 184.4 | ||||||||||||
Less: Net income attributable to noncontrolling interests |
2.2 | 2.5 | 9.5 | 7.9 | ||||||||||||
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Net income attributable to Company |
$ | 98.1 | $ | 38.8 | $ | 159.9 | $ | 176.5 | ||||||||
Net income per common share: |
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Basic |
$ | 1.77 | $ | 0.67 | $ | 2.86 | $ | 3.04 | ||||||||
Diluted |
$ | 1.76 | $ | 0.67 | $ | 2.84 | $ | 3.02 | ||||||||
Cash dividend per share of common stock |
$ | | $ | | $ | | $ | | ||||||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic |
55,398,475 | 57,606,846 | 55,983,768 | 57,973,356 | ||||||||||||
Diluted |
55,644,614 | 57,959,285 | 56,230,031 | 58,450,857 |
WABCO HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in millions) | September 30, 2016 |
December 31, 2015 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 710.1 | $ | 515.2 | ||||
Short-term investments |
| 43.8 | ||||||
Accounts receivable, less allowance for doubtful accounts: $6.3 in 2016; $5.9 in 2015 |
509.7 | 444.0 | ||||||
Inventories: |
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Finished products |
122.9 | 95.7 | ||||||
Products in process |
14.4 | 7.8 | ||||||
Raw materials |
124.0 | 109.2 | ||||||
Taxes receivable on income |
0.8 | 13.2 | ||||||
Guaranteed notes receivable |
48.3 | 53.9 | ||||||
Other current assets |
225.9 | 103.6 | ||||||
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Total Current Assets |
1,756.1 | 1,386.4 | ||||||
Property, plant and equipment, less accumulated depreciation |
421.4 | 398.0 | ||||||
Goodwill |
423.3 | 377.7 | ||||||
Deferred tax assets |
205.4 | 280.8 | ||||||
Investments in unconsolidated joint ventures |
19.6 | 24.7 | ||||||
Intangible assets, net |
86.6 | 62.8 | ||||||
Other Assets |
67.5 | 59.5 | ||||||
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Total Assets |
$ | 2,979.9 | $ | 2,589.9 | ||||
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Loans payable to banks |
$ | 1.6 | $ | 5.0 | ||||
Accounts payable |
184.2 | 159.7 | ||||||
Accrued payroll |
114.3 | 105.2 | ||||||
Current portion of warranties |
45.3 | 23.1 | ||||||
Accrued expenses |
64.2 | 61.9 | ||||||
Other accrued liabilities |
172.4 | 109.9 | ||||||
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Total Current Liabilities |
582.0 | 464.8 | ||||||
Long-term debt |
759.8 | 498.7 | ||||||
Post-retirement benefits |
575.0 | 552.7 | ||||||
Deferred tax liabilities |
138.2 | 137.1 | ||||||
Long-term income tax liabilities |
2.8 | 16.3 | ||||||
Other liabilities |
72.9 | 84.0 | ||||||
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Total Liabilities |
2,130.7 | 1,753.6 | ||||||
Shareholders equity: |
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Preferred stock, 4,000,000 shares authorized; none issued and outstanding |
| | ||||||
Common stock, $.01 par value, 400,000,000 shares authorized; shares issued: 78,688,184 in 2016; 78,500,084 in 2015; and shares outstanding: 55,086,103 in 2016; 56,759,566 in 2015 |
0.8 | 0.8 | ||||||
Capital surplus |
858.0 | 852.6 | ||||||
Treasury stock, at cost: 23,602,081 shares in 2016; 21,740,518 shares in 2015 |
(1,681.9 | ) | (1,497.3 | ) | ||||
Retained earnings |
2,098.0 | 1,938.5 | ||||||
Accumulated other comprehensive loss |
(481.5 | ) | (507.9 | ) | ||||
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Total shareholders equity |
793.4 | 786.7 | ||||||
Noncontrolling interests |
55.8 | 49.6 | ||||||
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Total Equity |
849.2 | 836.3 | ||||||
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Total Liabilities and Equity |
$ | 2,979.9 | $ | 2,589.9 | ||||
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WABCO HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
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(Amounts in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating Activities |
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Net income including noncontrolling interest |
100.3 | 41.3 | 169.4 | 184.4 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
19.6 | 20.1 | 54.9 | 57.0 | ||||||||||||
Amortization of intangibles |
6.1 | 5.1 | 17.1 | 15.0 | ||||||||||||
Equity in earnings of unconsolidated joint ventures, net of dividends received |
1.4 | (3.2 | ) | 5.1 | (5.3 | ) | ||||||||||
Non-cash stock compensation |
2.8 | 3.7 | 10.6 | 10.7 | ||||||||||||
Non-cash interest expense and debt issuance cost amortization |
3.8 | 3.9 | 11.6 | 3.9 | ||||||||||||
Deferred income tax (benefit)/expense |
(2.1 | ) | (0.4 | ) | 73.4 | (0.7 | ) | |||||||||
Post-retirement benefit expense |
11.1 | 10.7 | 31.8 | 31.6 | ||||||||||||
Loss/(gain) on sale of facilities |
| 0.1 | (0.3 | ) | 0.3 | |||||||||||
Gain on sale of investments |
(0.1 | ) | | (0.1 | ) | | ||||||||||
Changes in assets and liabilities: |
||||||||||||||||
Accounts receivable, net |
| 15.8 | (49.7 | ) | (53.0 | ) | ||||||||||
Inventories |
(15.6 | ) | (23.5 | ) | (28.3 | ) | (45.0 | ) | ||||||||
Accounts payable |
(1.3 | ) | 4.7 | 24.1 | 50.1 | |||||||||||
Other accrued liabilities and taxes |
46.5 | 5.5 | 77.5 | 37.5 | ||||||||||||
Other current and long-term assets |
(74.4 | ) | (0.2 | ) | (61.1 | ) | (21.3 | ) | ||||||||
Other long-term liabilities |
(12.7 | ) | 35.0 | (31.7 | ) | 33.4 | ||||||||||
Post-retirement benefit payments |
(4.8 | ) | (5.2 | ) | (15.7 | ) | (15.2 | ) | ||||||||
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Net cash provided by operating activities: |
$ | 80.6 | $ | 113.4 | $ | 288.6 | $ | 283.4 | ||||||||
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|||||||||
Investing Activities |
||||||||||||||||
Purchases of property, plant and equipment |
(20.7 | ) | (22.2 | ) | (67.6 | ) | (59.9 | ) | ||||||||
Investments in capitalized software |
(2.5 | ) | (1.9 | ) | (7.5 | ) | (7.7 | ) | ||||||||
Purchases of short-term investments, net |
44.3 | 38.5 | (1.6 | ) | (44.0 | ) | ||||||||||
Cost of preferred stock investment |
(0.9 | ) | | (0.9 | ) | (20.0 | ) | |||||||||
Acquisition of businesses, net |
(0.1 | ) | | (93.0 | ) | | ||||||||||
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|||||||||
Net cash provided/(used) by investing activities: |
$ | 20.1 | $ | 14.4 | $ | (170.6 | ) | $ | (131.6 | ) | ||||||
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|||||||||
Financing Activities |
||||||||||||||||
Borrowings of long-term debt and revolving credit facilities |
78.0 | | 261.0 | 577.0 | ||||||||||||
Repayments of long-term debt and revolving credit facilities |
| (0.8 | ) | | (385.0 | ) | ||||||||||
Net repayments of short-term debt |
(0.5 | ) | | (3.4 | ) | (4.8 | ) | |||||||||
Purchases of treasury stock |
(71.9 | ) | (66.3 | ) | (187.5 | ) | (186.8 | ) | ||||||||
Taxes withheld and paid on employee stock award vestings |
(0.1 | ) | | (6.0 | ) | (5.0 | ) | |||||||||
Dividends to noncontrolling interest holders |
(1.2 | ) | (3.4 | ) | (3.3 | ) | (4.9 | ) | ||||||||
Proceeds from exercise of stock options |
0.5 | 0.9 | 3.2 | 16.8 | ||||||||||||
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|||||||||
Net cash provided/(used) by financing activities: |
$ | 4.8 | $ | (69.6 | ) | $ | 64.0 | $ | 7.3 | |||||||
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|
|||||||||
Effect of exchange rate changes on cash and cash equivalents |
5.4 | (2.7 | ) | 12.9 | (26.7 | ) | ||||||||||
Net increase in cash and cash equivalents |
110.9 | 55.5 | 194.9 | 132.4 | ||||||||||||
Cash and Equivalents at Beginning of Period |
599.2 | 488.6 | 515.2 | 411.7 | ||||||||||||
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Cash and Equivalents at End of Period |
$ | 710.1 | $ | 544.1 | $ | 710.1 | $ | 544.1 | ||||||||
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|
WABCO HOLDINGS INC. AND SUBSIDIARIES
Three Months Ended September 30, 2016 Data Supplement Sheet (Unaudited)
Three Months Ended September 30, | ||||||||||||||||||||||||
(Amounts in millions, except per share data) | 2016 | % of Sales/ Adj Sales |
2015 | % of Sales/ Adj Sales |
Chg vs. 2015 | % Chg vs. 2015 |
||||||||||||||||||
Sales | ||||||||||||||||||||||||
Reported |
$ | 675.4 | $ | 643.6 | $ | 31.8 | 4.9 | % | ||||||||||||||||
Foreign exchange translational effects |
1.8 | | 1.8 | |||||||||||||||||||||
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|
|||||||||||||||||||
Adjusted Sales |
$ | 677.2 | $ | 643.6 | $ | 33.6 | 5.2 | % | ||||||||||||||||
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|||||||||||||||||||
Gross Profit | ||||||||||||||||||||||||
Reported |
$ | 212.7 | 31.5 | % | $ | 164.6 | 25.6 | % | $ | 48.1 | 29.2 | % | ||||||||||||
Streamlining costs |
1.1 | 34.4 | (33.3 | ) | ||||||||||||||||||||
Separation costs |
0.3 | 0.2 | 0.1 | |||||||||||||||||||||
Acquisition related costs |
| | | |||||||||||||||||||||
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|
|||||||||||||||||||
Performance Gross Profit |
$ | 214.1 | 31.7 | % | $ | 199.2 | 31.0 | % | $ | 14.9 | 7.5 | % | ||||||||||||
Foreign exchange translational effects |
1.0 | | 1.0 | |||||||||||||||||||||
|
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|
|||||||||||||||||||
Adjusted Gross Profit |
$ | 215.1 | 31.8 | % | $ | 199.2 | 31.0 | % | $ | 15.9 | 8.0 | % | ||||||||||||
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|
|||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||
Reported |
$ | 131.8 | 19.5 | % | $ | 134.7 | 20.9 | % | $ | (2.9 | ) | -2.2 | % | |||||||||||
Streamlining costs |
(2.3 | ) | (13.5 | ) | 11.2 | |||||||||||||||||||
Separation costs |
(0.8 | ) | (1.3 | ) | 0.5 | |||||||||||||||||||
Acquisition related costs |
(3.5 | ) | (2.2 | ) | (1.3 | ) | ||||||||||||||||||
|
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|
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|
|||||||||||||||||||
Performance Operating Expenses |
$ | 125.2 | 18.5 | % | $ | 117.7 | 18.3 | % | $ | 7.5 | 6.4 | % | ||||||||||||
Foreign exchange translational effects |
0.3 | | 0.3 | |||||||||||||||||||||
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|
|
|
|
|||||||||||||||||||
Adjusted Operating Expenses |
$ | 125.5 | 18.5 | % | $ | 117.7 | 18.3 | % | $ | 7.8 | 6.6 | % | ||||||||||||
|
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|
|||||||||||||||||||
Operating Income | ||||||||||||||||||||||||
Reported |
$ | 80.9 | 12.0 | % | $ | 29.9 | 4.6 | % | $ | 51.0 | 170.6 | % | ||||||||||||
Streamlining costs |
3.4 | 47.9 | (44.5 | ) | ||||||||||||||||||||
Separation costs |
1.1 | 1.5 | (0.4 | ) | ||||||||||||||||||||
Acquisition related costs |
3.5 | 2.2 | 1.3 | |||||||||||||||||||||
|
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|
|
|
|
|||||||||||||||||||
Performance Operating Income |
$ | 88.9 | 13.2 | % | $ | 81.5 | 12.7 | % | $ | 7.4 | 9.1 | % | ||||||||||||
Foreign exchange translational effects |
0.7 | | 0.7 | |||||||||||||||||||||
|
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|
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|
|||||||||||||||||||
Adjusted Operating Income |
$ | 89.6 | 13.2 | % | $ | 81.5 | 12.7 | % | $ | 8.1 | 9.9 | % | ||||||||||||
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|
|||||||||||||||||||
EBIT (Earnings Before Interest and Taxes) | ||||||||||||||||||||||||
Reported Net Income Attributable to Company |
$ | 98.1 | $ | 38.8 | $ | 59.3 | 152.8 | % | ||||||||||||||||
Income tax benefit |
(16.4 | ) | (5.2 | ) | (11.2 | ) | ||||||||||||||||||
Interest expense, net |
3.1 | 2.9 | 0.2 | |||||||||||||||||||||
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|
|||||||||||||||||||
EBIT |
$ | 84.8 | 12.6 | % | $ | 36.5 | 5.7 | % | $ | 48.3 | 132.3 | % | ||||||||||||
Streamlining costs |
3.4 | 47.9 | (44.5 | ) | ||||||||||||||||||||
Separation costs |
1.2 | 1.8 | (0.6 | ) | ||||||||||||||||||||
Acquisition related costs |
3.5 | 2.2 | 1.3 | |||||||||||||||||||||
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|
|
|
|||||||||||||||||||
Performance EBIT (Earnings Before Interest and Taxes) |
$ | 92.9 | 13.8 | % | $ | 88.4 | 13.7 | % | $ | 4.5 | 5.1 | % | ||||||||||||
Pre-Tax Income | ||||||||||||||||||||||||
Reported Net Income Attributable to Company |
$ | 98.1 | $ | 38.8 | $ | 59.3 | ||||||||||||||||||
Income tax benefit |
(16.4 | ) | (5.2 | ) | (11.2 | ) | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Pre-Tax Income Attributable to Company |
$ | 81.7 | $ | 33.6 | $ | 48.1 | ||||||||||||||||||
Streamlining costs |
3.4 | 47.9 | (44.5 | ) | ||||||||||||||||||||
Separation costs |
1.2 | 1.8 | (0.6 | ) | ||||||||||||||||||||
Acquisition related costs |
3.5 | 2.2 | 1.3 | |||||||||||||||||||||
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|
|
|
|||||||||||||||||||
Performance Pre-Tax Income Attributable to Company |
$ | 89.8 | $ | 85.5 | $ | 4.3 | ||||||||||||||||||
Tax rate on a reported basis |
-19.5 | % | -14.4 | % | ||||||||||||||||||||
Tax rate on a performance basis |
4.7 | % | 5.8 | % | ||||||||||||||||||||
Net Income Attributable to Company | ||||||||||||||||||||||||
Reported Net Income Attributable to Company |
$ | 98.1 | $ | 38.8 | $ | 59.3 | ||||||||||||||||||
Streamlining cost |
3.4 | 47.9 | (44.5 | ) | ||||||||||||||||||||
Separation costs |
1.2 | 1.8 | (0.6 | ) | ||||||||||||||||||||
Acquisition related costs |
3.5 | 2.2 | 1.3 | |||||||||||||||||||||
Tax items (1) |
(20.6 | ) | (10.2 | ) | (10.4 | ) | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Performance Net Income Attributable to Company |
$ | 85.6 | $ | 80.5 | $ | 5.1 | ||||||||||||||||||
|
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|
|||||||||||||||||||
Net Income Attributable to Company per Diluted Common Share |
$ | 1.76 | $ | 0.67 | ||||||||||||||||||||
Performance Net Income Attributable to Company per Diluted Common Share |
$ | 1.54 | $ | 1.39 | ||||||||||||||||||||
Common Shares Outstanding Diluted |
55.6 | 58.0 | ||||||||||||||||||||||
Incremental Gross Profit and Operating Income Margin |
Gross Profit | Operating Income | ||||||||||||||||||||||
Increase in adjusted sales from 15 |
33.6 | 33.6 | ||||||||||||||||||||||
Increase in adjusted income from 15 |
15.9 | 8.1 | ||||||||||||||||||||||
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|
|
|
|||||||||||||||||||||
Incremental Income as a % of Sales |
47.3 | % | 24.1 | % | ||||||||||||||||||||
Less: YoY Transactional Foreign Exchange (FX) Impact |
(5.2 | ) | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Increase in adjusted income from 15 excluding transactional FX impact |
2.9 | |||||||||||||||||||||||
Incremental income excluding transactional FX as a % of Sales |
8.6 | % |
(1) | The tax impacts calculated are based on the statutory tax rate applicable to the item being adjusted for the jurisdiction from which the adjustment arises. |
Note: The presentation of the performance measures above are not in conformity with generally accepted accounting principles (GAAP). These measures may not be comparable to similar measures of other companies as not all companies calculate these measures in the same manner.
WABCO HOLDINGS INC. AND SUBSIDIARIES
Nine Months Ended September 30, 2016 Data Supplement Sheet (Unaudited)
Nine Months Ended September 30, | ||||||||||||||||||||||||
(Amounts in millions, except per share data) | 2016 | % of Sales/ Adj Sales |
2015 | % of Sales/ Adj Sales |
Chg vs. 2015 | % Chg vs. 2015 |
||||||||||||||||||
Sales | ||||||||||||||||||||||||
Reported |
$ | 2,096.3 | $ | 1,956.9 | $ | 139.4 | 7.1 | % | ||||||||||||||||
Foreign exchange translational effects |
33.0 | | 33.0 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Adjusted Sales |
$ | 2,129.3 | $ | 1,956.9 | $ | 172.4 | 8.8 | % | ||||||||||||||||
|
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|
|
|
|
|||||||||||||||||||
Gross Profit | ||||||||||||||||||||||||
Reported |
$ | 656.2 | 31.3 | % | $ | 585.7 | 29.9 | % | $ | 70.5 | 12.0 | % | ||||||||||||
Streamlining costs |
5.0 | 37.3 | (32.3 | ) | ||||||||||||||||||||
Separation costs |
0.8 | 0.6 | 0.2 | |||||||||||||||||||||
Acquisition related costs |
1.0 | | 1.0 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Performance Gross Profit |
$ | 663.0 | 31.6 | % | $ | 623.6 | 31.9 | % | $ | 39.4 | 6.3 | % | ||||||||||||
Foreign exchange translational effects |
8.8 | | 8.8 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Adjusted Gross Profit |
$ | 671.8 | 31.6 | % | $ | 623.6 | 31.9 | % | $ | 48.2 | 7.7 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||
Reported |
$ | 391.4 | 18.7 | % | $ | 389.7 | 19.9 | % | $ | 1.7 | 0.4 | % | ||||||||||||
Streamlining costs |
(5.5 | ) | (20.0 | ) | 14.5 | |||||||||||||||||||
Separation costs |
(2.5 | ) | (3.0 | ) | 0.5 | |||||||||||||||||||
Indirect tax related costs |
| (2.8 | ) | 2.8 | ||||||||||||||||||||
Acquisition related costs |
(9.6 | ) | (6.9 | ) | (2.7 | ) | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Performance Operating Expenses |
$ | 373.8 | 17.8 | % | $ | 357.0 | 18.2 | % | $ | 16.8 | 4.7 | % | ||||||||||||
Foreign exchange translational effects |
4.3 | | 4.3 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Adjusted Operating Expenses |
$ | 378.1 | 17.8 | % | $ | 357.0 | 18.2 | % | $ | 21.1 | 5.9 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Operating Income | ||||||||||||||||||||||||
Reported |
$ | 264.8 | 12.6 | % | $ | 196.0 | 10.0 | % | $ | 68.8 | 35.1 | % | ||||||||||||
Streamlining costs |
10.5 | 57.3 | (46.8 | ) | ||||||||||||||||||||
Separation costs |
3.3 | 3.6 | (0.3 | ) | ||||||||||||||||||||
Indirect tax related costs |
| 2.8 | (2.8 | ) | ||||||||||||||||||||
Acquisition related costs |
10.6 | 6.9 | 3.7 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Performance Operating Income |
$ | 289.2 | 13.8 | % | $ | 266.6 | 13.6 | % | $ | 22.6 | 8.5 | % | ||||||||||||
Foreign exchange translational effects |
4.5 | | 4.5 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Adjusted Operating Income |
$ | 293.7 | 13.8 | % | $ | 266.6 | 13.6 | % | $ | 27.1 | 10.2 | % | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
EBIT (Earnings Before Interest and Taxes) | ||||||||||||||||||||||||
Reported Net Income Attributable to Company |
$ | 159.9 | $ | 176.5 | $ | (16.6 | ) | -9.4 | % | |||||||||||||||
Income tax expense |
105.1 | 31.8 | 73.3 | |||||||||||||||||||||
Interest expense, net |
9.1 | 4.5 | 4.6 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
EBIT |
$ | 274.1 | 13.1 | % | $ | 212.8 | 10.9 | % | $ | 61.3 | 28.8 | % | ||||||||||||
Streamlining costs |
10.5 | 57.3 | (46.8 | ) | ||||||||||||||||||||
Separation costs |
3.3 | 2.9 | 0.4 | |||||||||||||||||||||
Indirect tax related costs |
| 2.8 | (2.8 | ) | ||||||||||||||||||||
Acquisition related costs |
10.6 | 6.9 | 3.7 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Performance EBIT (Earnings Before Interest and Taxes) |
$ | 298.5 | 14.2 | % | $ | 282.7 | 14.4 | % | $ | 15.8 | 5.6 | % | ||||||||||||
Pre-Tax Income | ||||||||||||||||||||||||
Reported Net Income Attributable to Company |
$ | 159.9 | $ | 176.5 | $ | (16.6 | ) | |||||||||||||||||
Income tax expense |
105.1 | 31.8 | 73.3 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Pre-Tax Income Attributable to Company |
$ | 265.0 | $ | 208.3 | $ | 56.7 | ||||||||||||||||||
Streamlining costs |
10.5 | 57.3 | (46.8 | ) | ||||||||||||||||||||
Separation costs |
3.3 | 2.9 | 0.4 | |||||||||||||||||||||
Indirect tax related costs |
| 2.8 | (2.8 | ) | ||||||||||||||||||||
Acquisition related costs |
10.6 | 6.9 | 3.7 | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Performance Pre-Tax Income |
$ | 289.4 | $ | 278.2 | $ | 11.2 | ||||||||||||||||||
Tax rate on a reported basis |
38.3 | % | 14.7 | % | ||||||||||||||||||||
Tax rate on a performance basis |
15.8 | % | 11.8 | % | ||||||||||||||||||||
Net Income Attributable to Company | ||||||||||||||||||||||||
Reported Net Income Attributable to Company |
$ | 159.9 | $ | 176.5 | $ | (16.6 | ) | |||||||||||||||||
Streamlining cost |
10.5 | 57.3 | (46.8 | ) | ||||||||||||||||||||
Separation costs |
3.3 | 2.9 | 0.4 | |||||||||||||||||||||
Indirect tax related costs |
| 2.8 | (2.8 | ) | ||||||||||||||||||||
Acquisition related costs |
10.6 | 6.9 | 3.7 | |||||||||||||||||||||
Tax items (1) |
59.3 | (1.1 | ) | 60.4 | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Performance Net Income Attributable to Company |
$ | 243.6 | $ | 245.3 | $ | (1.7 | ) | |||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Net Income Attributable to Company per Diluted Common Share |
$ | 2.84 | $ | 3.02 | ||||||||||||||||||||
Performance Net Income Attributable to Company per Diluted Common Share |
$ | 4.33 | $ | 4.20 | ||||||||||||||||||||
Common Shares Outstanding Diluted |
56.2 | 58.5 | ||||||||||||||||||||||
Incremental Gross Profit and Operating Income Margin |
Gross Profit | Operating Income | ||||||||||||||||||||||
Increase in adjusted sales from 15 |
172.4 | 172.4 | ||||||||||||||||||||||
Increase in adjusted income from 15 |
48.2 | 27.1 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Incremental Income as a % of Sales |
28.0 | % | 15.7 | % | ||||||||||||||||||||
Less: YoY Transactional Foreign Exchange (FX) Impact |
(5.1 | ) | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Increase in adjusted income from 15 excluding transactional FX impact |
22.0 | |||||||||||||||||||||||
Incremental income excluding transactional FX as a % of Sales |
12.8 | % |
(1) | The tax impacts calculated are based on the statutory tax rate applicable to the item being adjusted for the jurisdiction from which the adjustment arises. |
Note: The presentation of the performance measures above are not in conformity with generally accepted accounting principles (GAAP). These measures may not be comparable to similar measures of other companies as not all companies calculate these measures in the same manner.
WABCO HOLDINGS INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year 2016 Guidance
(Unaudited)
(Amounts in millions, except per share data) | Full Year 2016 Guidance | |||
Sales | ||||
Reported Sales |
$2,800.0 - $2,830.0 | |||
(1 Euro = 1.11 USD) | ||||
Operating Income |
||||
Reported Operating Income Margin |
12.3% - 12.6% | |||
Streamlining cost, impact to margin |
0.5% | |||
Separation costs, impact to margin |
0.2% | |||
Acquisition related items, impact to margin |
0.5% | |||
|
|
|||
Performance Operating Income Margin |
13.5% - 13.8% | |||
|
|
|||
Net Income Attributable to Company | ||||
Reported Net Income Attributable to Company |
$235.5 - $241.1 | |||
Streamlining cost |
14.0 | |||
Separation costs |
4.5 | |||
Acquisition related items |
13.0 | |||
Tax items, including one-time non-cash tax provision for EC decision (1) |
55.0 | |||
|
|
|||
Performance Net Income Attributable to Company |
$322.0 - $327.6 | |||
|
|
|||
Reported Net Income Attributable to Company per Diluted Common Share |
$4.21 - $4.31 | |||
Performance Net Income Attributable to Company per Diluted Common Share |
$5.75 - $5.85 | |||
Diluted common shares outstanding |
~ 56 |
(1) | Includes the tax impacts of the above items, calculated based on the statutory tax rates applicable to each adjustment for the jurisdiction from which the adjustment arises. |
Note: The presentation of performance net income and performance net income per diluted common share is not in conformity with generally accepted accounting principles (GAAP). These measures may not be comparable to similar measures of other companies as not all companies calculate these measures in the same manner.