Reconciliation of GAAP Income from Operations to
Non-GAAP Adjusted Income from Operations
The Company discloses in this
presentation the non-GAAP financial measures of adjusted income from operations and Non-GAAP adjusted operating margin. Each of these
non-GAAP financial measures provide supplementary information about the impacts of acquisition, divestiture and integration related expenses, foreign-exchange impacts on inter-company loans reorganizational
and impairment charges. Over the past four years, we have completed seven acquisitions, two of which were transformative for the Company, and sold two of our businesses. The costs we incurred in completing such acquisitions, including the
amortization of intangibles and deferred financing costs, and these divestitures have been excluded from these measures because their size and inconsistent frequency are unrelated to our commercial performance during the period, and which we believe
are not indicative of our ongoing operating costs. We exclude the impact of currency translation from these measures because foreign exchange rates are not under managements control and are subject to volatility. Other non-operating charges such as, the write-off of our interest rate swap, are excluded as the charges on not indicative of our ongoing operating cost. We believe the
presentation of adjusted income from operations and adjusted operating margin provide useful information in assessing our underlying business trends and facilitates comparison of our long-term performance over given periods.
The non-GAAP financial measures provided herein may not provide information that is directly comparable to that
provided by other companies in the Companys industry, as other companies may calculate such financial results differently. The Companys non-GAAP financial measures are not measurements of financial
performance under GAAP, and should not be considered as alternatives to actual income growth derived from income amounts presented in accordance with GAAP. The Company does not consider these non-GAAP
financial measures to be a substitute for, or superior to, the information provided by GAAP financial results.
Non-GAAP Adjusted income from operations, represents GAAP income from operations, adjusted to exclude the effects of restructuring and integration expense,
non-operational charges related to acquisition, divestiture and restructuring and integration costs, intangible amortization costs for fair value step-up in values
related to acquisitions, and when applicable, our share of income from joint venture operations. We believe this presentation is commonly used by investors and professional research analysts in the valuation, comparison, rating and investment
recommendations of companies in the industrial industry. We use this information for comparative purposes within the industry. Non-GAAP adjusted income from operations, is not a measure of financial
performance under GAAP and should not be considered as a measure of liquidity or as an alternative to GAAP income from operations.