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- Q4 net sales up 25% (+5% organic, +20% acquisitions)
- Q4 adjusted diluted EPS of
$1.72 (1)- Adjusted excludes Aclara acquisition-related costs
($0.12) - Includes legacy intangible amortization
($0.12)
- Adjusted excludes Aclara acquisition-related costs
- Full year 2018 free cash flow of
$421 million , 117% of net income (3) - FY18 diluted EPS
$6.54 ; adjusted diluted EPS of$7.29 (1)- Includes restructuring & related costs
($0.22) - Includes legacy intangible amortization
($0.48) - Adjusted excludes Aclara intangible amortization
($0.57) and acquisition costs($0.18)
- Includes restructuring & related costs
- FY19 diluted EPS expected range of
$6.80 to $7.20 ; adjusted diluted EPS of$7.80 to $8.20 (1)- Includes restructuring & related costs
(~$0.40) , primarily footprint consolidation - Adjusted excludes ALL intangible amortization
(~$1.00)
- Includes restructuring & related costs
Net sales in the fourth quarter of 2018 were
Net cash provided from operating activities was
Net sales for the full year 2018 were
Net cash provided from operating activities was
OPERATIONS REVIEW
"Continued strength in end markets and improved traction on price realization drove another strong quarter of 5% organic growth," said
"In both Electrical and Power segments, we are achieving continued traction on pricing initiatives, and price realization in the quarter increased on a sequential basis. While higher year over year material costs, including tariffs, were a headwind to our operating margins as expected, the gap between price recovery and these costs improved sequentially. Consistent with our initiative to drive savings and operational efficiencies, we accelerated cost actions into the fourth quarter to actively combat broader inflationary pressures." Mr. Nord continued, "The Aclara acquisition was again accretive in the quarter, although it continued to be unfavorable to Power segment margins, as expected."
Mr. Nord added, "Free cash flow performance was once again a highlight, with full year free cash flow of
SEGMENT REVIEW
The year-over-year comparisons in this segment review are based on fourth quarter results in 2018 and 2017.
Electrical segment net sales in the fourth quarter of 2018 increased 5% to
Power segment net sales in the fourth quarter of 2018 increased 69% to
SUMMARY & OUTLOOK
For the full year 2019, Hubbell expects end market growth of approximately 2% to 3% in the aggregate and approximately 1% growth from acquisitions, driven by Aclara. The end market outlook includes growth of 1 - 3% in non-residential markets, 0 - 2% in residential markets, 3 - 5% in oil and gas markets, 2 - 4% in Electrical T&D markets, and 2 - 4% in industrial markets.
The Company expects 2019 reported diluted earnings per share in the range of
These ranges are based on a tax rate of 23% to 24% and include approximately
Hubbell also expects free cash flow to be ~110% of reported net income in 2019(3).
"Hubbell achieved strong organic growth, earnings growth, and free cash flow in 2018, while also successfully integrating the largest acquisition in the Company's history. Inflationary pressures, including tariffs, were a challenge, but we have exited the year with positive momentum and are committed to offsetting material cost inflation with price in 2019," concluded Mr. Nord. "Looking forward, we are increasing our investment in footprint consolidation to accelerate benefits from operational efficiencies and cost reduction; as a result, we expect to double our restructuring and related investment to approximately
CONFERENCE CALL
Hubbell will conduct an earnings conference call to discuss its fourth quarter and full year 2018 financial results today,
FORWARD-LOOKING STATEMENTS
Certain statements contained herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about expectations regarding our financial results and outlook, expectations regarding the potential financial impact of U.S. tax reform including on our ability to repatriate cash from abroad and reduce our core operating tax rate, expectations with respect to the impact of the Aclara acquisition and integration, projected modified earnings per share expectations, outperforming end markets, capital deployment, restructuring actions, anticipations regarding restructuring and related costs, market conditions, foreign exchange rates, shareholder and customer value creation, and other statements that are not strictly historic in nature. In addition, all statements regarding anticipated growth or improvement in operating results, anticipated market conditions, and economic conditions are forward-looking, including those regarding restructuring actions, as well as from a lower U.S. tax rate and higher cash earnings from the Aclara acquisition and expectations regarding the future growth of the Company’s end markets. These statements may be identified by the use of forward-looking words or phrases such as "target", "believe", "continues", "improved", "leading", "improving", "continuing growth", "continued", "ranging", "contributing", "primarily", "plan", "expect", "anticipated", "expected", "expectations", "should result", "uncertain", "goals", "projected", "on track", "likely", "intend" and others. Such forward-looking statements are based on the Company's current expectations and involve numerous assumptions, known and unknown risks, uncertainties and other factors which may cause actual and future performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: achieving sales levels to fulfill revenue expectations; unexpected costs or charges, certain of which may be outside the control of the Company; the effects of tariffs and other trade actions taken by the U.S. and other countries; the impact of U.S. Tax Reform legislation; expected benefits of productivity improvements and cost reduction actions; pension expense; effects of unfavorable foreign currency exchange rates; price and material costs; general economic and business conditions; the impact of and the ability to complete strategic acquisitions and integrate acquired companies, including risks associated with the Aclara acquisition, such as competitive responses to the transaction, the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies, diversion of management’s attention from ongoing business operations and opportunities; the ability to effectively develop and introduce new products, expand into new markets and deploy capital; and other factors described in our
About the Company
Contact: | Dan Innamorato |
Hubbell Incorporated | |
40 Waterview Drive | |
P.O. Box 1000 | |
Shelton, CT 06484 | |
(475) 882-4292 |
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Condensed Consolidated Statement of Income
(unaudited)
(in millions, except per share amounts)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net sales | $ | 1,144.1 | $ | 917.7 | $ | 4,481.7 | $ | 3,668.8 | |||||||
Cost of goods sold | 823.5 | 628.3 | 3,181.3 | 2,513.7 | |||||||||||
Gross profit | 320.6 | 289.4 | 1,300.4 | 1,155.1 | |||||||||||
Selling & administrative expenses | 184.0 | 162.9 | 743.5 | 636.3 | |||||||||||
Operating income | 136.6 | 126.5 | 556.9 | 518.8 | |||||||||||
Operating income as a % of Net sales | 11.9 | % | 13.8 | % | 12.4 | % | 14.1 | % | |||||||
Interest expense, net | (17.8 | ) | (9.7 | ) | (72.3 | ) | (44.0 | ) | |||||||
Loss on extinguishment of debt | — | — | — | (10.1 | ) | ||||||||||
Other income (expense), net | (4.1 | ) | (4.9 | ) | (17.6 | ) | (21.6 | ) | |||||||
Total other expense, net | (21.9 | ) | (14.6 | ) | (89.9 | ) | (75.7 | ) | |||||||
Income before income taxes | 114.7 | 111.9 | 467.0 | 443.1 | |||||||||||
Provision for income taxes | 25.5 | 89.5 | 100.9 | 193.2 | |||||||||||
Net income | 89.2 | 22.4 | 366.1 | 249.9 | |||||||||||
Less: Net income attributable to noncontrolling interest | 1.2 | 2.0 | 5.9 | 6.8 | |||||||||||
Net income attributable to Hubbell | $ | 88.0 | $ | 20.4 | $ | 360.2 | $ | 243.1 | |||||||
Earnings Per Share: | |||||||||||||||
Basic | $ | 1.61 | $ | 0.37 | $ | 6.57 | $ | 4.42 | |||||||
Diluted | $ | 1.60 | $ | 0.37 | $ | 6.54 | $ | 4.39 | |||||||
Cash dividends per common share | $ | 0.84 | $ | 0.77 | $ | 3.15 | $ | 2.87 |
Condensed Consolidated Balance Sheet
(unaudited)
(in millions)
December 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 189.0 | $ | 375.0 | |||
Short-term investments | 9.2 | 14.5 | |||||
Accounts receivable, net | 725.4 | 540.3 | |||||
Inventories, net | 651.0 | 634.7 | |||||
Other current assets | 69.1 | 39.6 | |||||
TOTAL CURRENT ASSETS | 1,643.7 | 1,604.1 | |||||
Property, plant and equipment, net | 502.1 | 458.3 | |||||
Investments | 56.3 | 57.7 | |||||
Goodwill | 1,784.4 | 1,089.0 | |||||
Intangible assets, net | 819.5 | 460.4 | |||||
Other long-term assets | 66.1 | 51.1 | |||||
TOTAL ASSETS | $ | 4,872.1 | $ | 3,720.6 | |||
LIABILITIES AND EQUITY | |||||||
Short-term debt | $ | 56.1 | $ | 68.1 | |||
Accounts payable | 393.7 | 326.5 | |||||
Accrued salaries, wages and employee benefits | 101.6 | 76.6 | |||||
Accrued insurance | 61.3 | 60.0 | |||||
Other accrued liabilities | 226.6 | 174.9 | |||||
TOTAL CURRENT LIABILITIES | 839.3 | 706.1 | |||||
Long-term debt | 1,737.1 | 987.1 | |||||
Other non-current liabilities | 496.8 | 379.5 | |||||
TOTAL LIABILITIES | 3,073.2 | 2,072.7 | |||||
Hubbell shareholders’ equity | 1,780.6 | 1,634.2 | |||||
Noncontrolling interest | 18.3 | 13.7 | |||||
TOTAL EQUITY | 1,798.9 | 1,647.9 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 4,872.1 | $ | 3,720.6 |
Condensed Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Twelve Months Ended December 31, | |||||||
2018 | 2017 | ||||||
Cash Flows From Operating Activities | |||||||
Net income attributable to Hubbell | $ | 360.2 | $ | 243.1 | |||
Depreciation and amortization | 148.4 | 98.2 | |||||
Stock-based compensation expense | 24.2 | 22.3 | |||||
Deferred income taxes | 49.0 | (14.3 | ) | ||||
Loss on extinguishment of debt | — | 10.1 | |||||
Accounts receivable, net | (75.4 | ) | 3.9 | ||||
Inventories, net | 34.2 | (90.3 | ) | ||||
Accounts payable | 21.5 | 25.0 | |||||
Current liabilities | (5.9 | ) | 32.4 | ||||
Contributions to defined benefit pension plans | (27.9 | ) | (1.7 | ) | |||
Other, net | (11.2 | ) | 50.3 | ||||
Net cash provided by operating activities | 517.1 | 379.0 | |||||
Cash Flows From Investing Activities | |||||||
Capital expenditures | (96.2 | ) | (79.7 | ) | |||
Acquisition of businesses, net of cash acquired | (1,118.0 | ) | (184.1 | ) | |||
Net change in investments | 3.9 | (3.5 | ) | ||||
Other, net | 8.9 | 21.7 | |||||
Net cash used in investing activities | (1,201.4 | ) | (245.6 | ) | |||
Cash Flows From Financing Activities | |||||||
Long-term debt issuance, net | 778.7 | (2.4 | ) | ||||
Short-term debt borrowings, net | (37.2 | ) | 64.6 | ||||
Payment of dividends | (172.3 | ) | (157.6 | ) | |||
Repurchase of common shares | (40.0 | ) | (92.5 | ) | |||
Make whole payment for the extinguishment of long term debt | — | (9.9 | ) | ||||
Other, net | (22.7 | ) | (16.5 | ) | |||
Net cash (used) provided by financing activities | 506.5 | (214.3 | ) | ||||
Effect of foreign exchange rate changes on cash and cash equivalents | (8.2 | ) | 18.3 | ||||
Increase (decrease) in cash and cash equivalents | (186.0 | ) | (62.6 | ) | |||
Cash and cash equivalents | |||||||
Beginning of period | 375.0 | 437.6 | |||||
End of period | $ | 189.0 | $ | 375.0 |
Earnings Per Share and Adjusted Earnings Per Share
(unaudited)
(in millions, except per share amounts)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Net income attributable to Hubbell (GAAP measure) | $ | 88.0 | $ | 20.4 | 331 | % | $ | 360.2 | $ | 243.1 | 48 | % | |||||||||
Income tax expense associated with U.S. Tax Reform | — | 56.5 | — | 56.5 | |||||||||||||||||
Loss on extinguishment of debt, net of tax | — | — | — | 6.3 | |||||||||||||||||
Aclara acquisition-related and transaction costs, net of tax | 6.2 | 6.0 | 41.5 | 6.0 | |||||||||||||||||
Adjusted Net Income (1) | $ | 94.2 | $ | 82.9 | 14 | % | $ | 401.7 | $ | 311.9 | 29 | % | |||||||||
Numerator: | |||||||||||||||||||||
Net income attributable to Hubbell (GAAP measure) | $ | 88.0 | $ | 20.4 | $ | 360.2 | $ | 243.1 | |||||||||||||
Less: Earnings allocated to participating securities | (0.3 | ) | (0.1 | ) | (1.3 | ) | (0.8 | ) | |||||||||||||
Net income available to common shareholders (GAAP measure) [a] | $ | 87.7 | $ | 20.3 | 332 | % | $ | 358.9 | $ | 242.3 | 48 | % | |||||||||
Adjusted Net Income (1) | $ | 94.2 | $ | 82.9 | $ | 401.7 | $ | 311.9 | |||||||||||||
Less: Earnings allocated to participating securities | (0.3 | ) | (0.3 | ) | (1.4 | ) | (1.1 | ) | |||||||||||||
Adjusted net income available to common shareholders [b] | $ | 93.9 | $ | 82.6 | 14 | % | $ | 400.3 | $ | 310.8 | 29 | % | |||||||||
Denominator: | |||||||||||||||||||||
Average number of common shares outstanding [c] | 54.5 | 54.6 | 54.6 | 54.8 | |||||||||||||||||
Potential dilutive shares | 0.2 | 0.4 | 0.3 | 0.3 | |||||||||||||||||
Average number of diluted shares outstanding [d] | 54.7 | 55.0 | 54.9 | 55.1 | |||||||||||||||||
Earnings per share (GAAP measure): | |||||||||||||||||||||
Basic [a] / [c] | $ | 1.61 | $ | 0.37 | $ | 6.57 | $ | 4.42 | |||||||||||||
Diluted [a] / [d] | $ | 1.60 | $ | 0.37 | 332 | % | $ | 6.54 | $ | 4.39 | 49 | % | |||||||||
Adjusted earnings per diluted share (1) [b] / [d] | $ | 1.72 | $ | 1.50 | 15 | % | $ | 7.29 | $ | 5.64 | 29 | % |
Segment Information
(unaudited)
(in millions)
Hubbell Incorporated | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Net Sales [a] | $ | 1,144.1 | $ | 917.7 | 25 | % | $ | 4,481.7 | $ | 3,668.8 | 22 | % | |||||||||
Operating Income | |||||||||||||||||||||
GAAP measure [b] | $ | 136.6 | $ | 126.5 | 8 | % | $ | 556.9 | $ | 518.8 | 7 | % | |||||||||
Aclara acquisition-related and transaction costs | 7.6 | 6.7 | 50.3 | 6.7 | |||||||||||||||||
Adjusted operating income (1) [c] | $ | 144.2 | $ | 133.2 | 8 | % | $ | 607.2 | $ | 525.5 | 16 | % | |||||||||
Operating margin | |||||||||||||||||||||
GAAP measure [b] / [a] | 11.9 | % | 13.8 | % | -190 bps | 12.4 | % | 14.1 | % | -170 bps | |||||||||||
Adjusted operating margin (1) [c] / [a] | 12.6 | % | 14.5 | % | -190 bps | 13.5 | % | 14.3 | % | -80 bps |
Electrical segment | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Net Sales [a] | $ | 666.6 | $ | 634.9 | 5 | % | $ | 2,660.6 | $ | 2,532.8 | 5 | % | |||||||||
Operating Income | |||||||||||||||||||||
GAAP measure [b] | $ | 74.3 | $ | 78.8 | (6 | )% | $ | 320.8 | $ | 294.0 | 9 | % | |||||||||
Acquisition-related and transaction costs | — | — | — | — | |||||||||||||||||
Adjusted operating income (1) [c] | $ | 74.3 | $ | 78.8 | (6 | )% | $ | 320.8 | $ | 294.0 | 9 | % | |||||||||
Operating margin | |||||||||||||||||||||
GAAP measure [b] / [a] | 11.1 | % | 12.4 | % | -130 bps | 12.1 | % | 11.6 | % | +50 bps | |||||||||||
Adjusted operating margin (1) [c] / [a] | 11.1 | % | 12.4 | % | -130 bps | 12.1 | % | 11.6 | % | +50 bps |
Power segment | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Net Sales [a] | $ | 477.5 | $ | 282.8 | 69 | % | $ | 1,821.1 | $ | 1,136.0 | 60 | % | |||||||||
Operating Income | |||||||||||||||||||||
GAAP measure [b] | $ | 62.3 | $ | 47.7 | 31 | % | $ | 236.1 | $ | 224.8 | 5 | % | |||||||||
Acquisition-related and transaction costs |
7.6 | 6.7 | 50.3 | 6.7 | |||||||||||||||||
Adjusted operating income (1) [c] | $ | 69.9 | $ | 54.4 | 28 | % | $ | 286.4 | $ | 231.5 | 24 | % | |||||||||
Operating margin | |||||||||||||||||||||
GAAP measure [b] / [a] | 13.0 | % | 16.9 | % | -390 bps | 13.0 | % | 19.8 | % | -680 bps | |||||||||||
Adjusted operating margin (1) [c] / [a] | 14.6 | % | 19.2 | % | -460 bps | 15.7 | % | 20.4 | % | -470 bps |
Adjusted EBITDA
(unaudited)
(in millions)
Three Months Ended December 31, | ||||||||||
2018 | 2017 | Change | ||||||||
Net income | $ | 89.2 | $ | 22.4 | 298 | % | ||||
Provision for income taxes | 25.5 | 89.5 | ||||||||
Interest expense, net | 17.8 | 9.7 | ||||||||
Other expense, net | 4.1 | 4.9 | ||||||||
Depreciation and amortization | 35.6 | 23.5 | ||||||||
Aclara transaction costs in Operating income | 0.2 | 6.7 | ||||||||
Loss on extinguishment of debt | — | — | ||||||||
Subtotal | 83.2 | 134.3 | ||||||||
Adjusted EBITDA (1) | $ | 172.4 | $ | 156.7 | 10 | % |
Twelve Months Ended December 31, | ||||||||||
2018 | 2017 | Change | ||||||||
Net income | $ | 366.1 | $ | 249.9 | 46 | % | ||||
Provision for income taxes | 100.9 | 193.2 | ||||||||
Interest expense, net | 72.3 | 44.0 | ||||||||
Other expense, net | 17.6 | 21.6 | ||||||||
Depreciation and amortization | 148.4 | 98.2 | ||||||||
Aclara transaction costs in Operating income | 9.5 | 6.7 | ||||||||
Loss on extinguishment of debt | — | 10.1 | ||||||||
Subtotal | 348.7 | 373.8 | ||||||||
Adjusted EBITDA (1) | $ | 714.8 | $ | 623.7 | 15 | % |
Non-GAAP Financial Measures
(unaudited)
(in millions)
Ratios of Total Debt to Total Capital and Net Debt to Total Capital
December 31, 2018 | December 31, 2017 | ||||||
Total Debt | $ | 1,793.2 | $ | 1,055.2 | |||
Total Hubbell Shareholders’ Equity | 1,780.6 | 1,634.2 | |||||
Total Capital | $ | 3,573.8 | $ | 2,689.4 | |||
Total Debt to Total Capital | 50 | % | 39 | % | |||
Total Debt | $ | 1,793.2 | $ | 1,055.2 | |||
Less: Cash and investments | 254.5 | 447.2 | |||||
Net Debt (2) | $ | 1,538.7 | $ | 608.0 | |||
Net Debt to Total Capital (2) | 43 | % | 23 | % |
Free Cash Flow Reconciliation
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net cash provided by operating activities | $ | 177.9 | $ | 150.4 | $ | 517.1 | $ | 379.0 | |||||||
Less: Capital Expenditures | (25.5 | ) | (26.5 | ) | (96.2 | ) | (79.7 | ) | |||||||
Free cash flow (3) | $ | 152.4 | $ | 123.9 | $ | 420.9 | $ | 299.3 |
Supplementary Earnings Information
(unaudited)
(in millions, except per share amounts)
Three Months Ended | |||||||||||||||||||
12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||||||
Pre-tax | |||||||||||||||||||
Aclara acquisition-related and transaction costs (a) | $ | 8.1 | $ | 11.4 | $ | 10.6 | $ | 23.5 | $ | 7.0 | |||||||||
After-tax | |||||||||||||||||||
Aclara acquisition-related and transaction costs | $ | 6.2 | $ | 8.7 | $ | 8.1 | $ | 18.6 | $ | 6.0 | |||||||||
Income tax expense associated with U.S. tax reform | $ | (1.4 | ) | $ | (4.0 | ) | $ | — | $ | — | $ | 56.5 | |||||||
Weighted average diluted shares | 54.7 | 54.9 | 54.9 | 55.1 | 55.0 | ||||||||||||||
Per-share amounts | |||||||||||||||||||
Aclara acquisition-related and transaction costs | $ | 0.12 | $ | 0.16 | $ | 0.15 | $ | 0.34 | $ | 0.11 | |||||||||
Income tax expense associated with U.S. tax reform | $ | (0.03 | ) | $ | (0.07 | ) | $ | — | $ | — | $ | 1.02 | |||||||
Depreciation and amortization | |||||||||||||||||||
Legacy - Depreciation | $ | 16.3 | $ | 14.5 | $ | 14.4 | $ | 14.2 | $ | 13.7 | |||||||||
Legacy - Amortization of identifiable intangibles | 8.4 | 8.7 | 8.8 | 9.2 | 8.6 | ||||||||||||||
Legacy - Other Amortization | 1.7 | 1.6 | 0.9 | 2.2 | 1.2 | ||||||||||||||
Aclara - Depreciation | 1.8 | 1.8 | 1.9 | 1.2 | — | ||||||||||||||
Aclara - Amortization of identifiable intangibles | 7.4 | 9.9 | 10.3 | 13.2 | — | ||||||||||||||
Total depreciation and amortization | $ | 35.6 | $ | 36.5 | $ | 36.3 | $ | 40.0 | $ | 23.5 |
(a) Includes the amortization of identified intangible assets, inventory step-up amortization expense and professional services and other fees that are recognized in Operating income as well as costs associated with financing for the Aclara transaction that are recognized in interest expense.
Supplementary Earnings Information
(unaudited)
(in millions)
In
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2017 | |||||||||||||||
Cost of goods sold | $ | (0.9 | ) | $ | (0.8 | ) | $ | (0.8 | ) | $ | (0.8 | ) | $ | (3.3 | ) | ||||
Selling & administrative expenses | (2.9 | ) | (3.0 | ) | (3.0 | ) | (2.9 | ) | (11.8 | ) | |||||||||
Total operating expenses | (3.8 | ) | (3.8 | ) | (3.8 | ) | (3.7 | ) | (15.1 | ) | |||||||||
Operating income | 3.8 | 3.8 | 3.8 | 3.7 | 15.1 | ||||||||||||||
Total other expense | (3.8 | ) | (3.8 | ) | (3.8 | ) | (3.7 | ) | (15.1 | ) | |||||||||
Net income | $ | — | $ | — | $ | — | $ | — | $ | — |
Footnotes
Non-GAAP Information
(1) References to "adjusted" operating measures exclude the impact of certain costs. Management believes these adjusted operating measures provide useful information regarding our underlying performance from period to period and an understanding of our results of operations without regard to items we do not consider a component of our core operating performance. Adjusted operating measures include adjusted operating income, adjusted operating margins, adjusted net income, adjusted net income available to common shareholders, adjusted earnings per diluted share, and adjusted EBITDA. Our adjusted operating measures for the three and twelve months ended
◦ Aclara acquisition-related and transaction costs, which includes the amortization of identified intangible assets and inventory step-up amortization expense and professional services and other fees that were incurred in connection with the acquisition of Aclara,
◦ Income tax effects associated with U.S. Tax Reform recognized in the fourth quarter of 2017,
◦ The loss on early extinguishment of long-term debt recognized in the third quarter of 2017 from the redemption of all of our
◦ Adjusted EBITDA also excludes the Other expense, net caption and interest income.
Effective with results of operations reported in the first quarter of 2019, "adjusted" operating measures will exclude the amortization of identified intangible assets of all of the company's acquisitions.
Each of these adjusted operating measures are non-GAAP measures. Management uses the adjusted measures when assessing the performance of the business. Reconciliations of each of these non-GAAP measures to the most directly comparable GAAP measure can be found in the tables within this press release.
(2) Net debt (defined as total debt less cash and investments) to total capital is a non-GAAP measure that we believe is a useful measure for evaluating the Company's financial leverage and the ability to meet its funding needs.
(3) Free cash flow is a non-GAAP measure that we believe provides useful information regarding the Company's ability to generate cash without reliance on external financing. In addition, management uses free cash flow to evaluate the resources available for investments in the business, strategic acquisitions and further strengthening the balance sheet.
Source: Hubbell Inc.