Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Multi Packaging Solutions International Ltd | d13397d8k.htm |
| EX-99.2 - EX-99.2 - Multi Packaging Solutions International Ltd | d13397dex992.htm |
Exhibit 99.1
Multi Packaging Solutions Announces Record Net Income in Fiscal 1Q 2016
New York, NY, November 12, 2015 – Multi Packaging Solutions International Limited (NYSE: MPSX), (“MPS”; “the Company”), a global leader in value-added print and packaging solutions for the branded consumer, healthcare, and multi-media markets, today announced results for 1Q 2016.
First Fiscal Quarter 2016 Highlights:
| • | Net sales increased $65.0 million, or 16.5%, to $459.1 million vs. 1Q 2015 |
| • | Net income attributable to MPS increased $6.0 million, or 85.6%, to $13.0 million vs. 1Q 2015 |
| • | Earnings per share on a fully diluted basis increased to $0.21 per share vs. $0.11 per share for 1Q 2015 |
| • | Adjusted EBITDA increased $16.0 million, or 26.2%, to $77.2 million vs. $61.2 million for 1Q 2015 |
| • | Achieved Adjusted EBITDA margin of 16.8% vs. 15.5% for 1Q 2015 |
| • | Completed acquisition of BP Media Ltd. on July 1, 2015 |
| • | Made voluntary early repayments of $25.0 million on outstanding term loan on October 7, 2015 |
| • | Completed initial public offering (“IPO”) on October 27, 2015, using net proceeds to prepay $182.4 million of outstanding term loans on October 29, 2015 |
Marc Shore, Chief Executive Officer, commented, “We are pleased with our first quarter results. Adjusted EBITDA shows the strength of our strategy to operate consistently at the highest level within our global footprint. We strive for excellence in all areas, whether it’s serving our customers, operating our factories, streamlining supply chain, providing unique packaging solutions or investing in new technology. These attributes, and the commitment of our employees, have contributed to our record first quarter. While the IPO was a significant event, our focus remains on operating the business and delivering long term shareholder value.”
First Quarter Fiscal 2016 Results
During 1Q 2016, MPS reported net sales of $459.1 million, up $65.0 million, or 16.5%, vs. $394.1 million for 1Q 2015. This increase was due primarily to acquisitions made in fiscal 2015. On a constant currency basis, sales for 1Q 2016 would have been $493.5 million.
Adjusted for acquisitions in fiscal 2015, net sales for 1Q 2016 were down $62.2 million vs. 1Q 2015. This decrease was due to several factors: the impact of unfavorable foreign exchange rates of $34.4 million, an anticipated decline in multi-media sales and a delay in certain consumer product launches.
Gross margin for 1Q 2016 was 21.6%, up 70 basis points, vs. 20.9% for 1Q 2015. This increase reflects the Company’s facility improvement programs and $4.6 million of realized synergies from acquisitions, partially offset by restructuring charges for the announced Melrose Park closure. The Company expects to realize an additional $7.4 million in synergies related to acquisitions in the next three quarters.
Net income attributable to MPS for 1Q 2016 was $13.0 million, or $0.21 per diluted share, vs. $7.0 million, or $0.11 per diluted share, for 1Q 2015. During the quarter, the Company recorded restructuring charges of $2.8 million due primarily to the announced closure of the Company’s Melrose Park facility, as well as unrealized foreign exchange losses of $2.9 million.
Adjusted EBITDA for 1Q 2016 was $77.2 million, up $16.0 million, or 26.2%, vs. $61.2 million in 1Q 2015. Adjusted EBITDA margin of 16.8% was driven by the Company’s capital programs, plant improvement initiatives, purchasing and cost savings programs. On a pro forma basis, adjusted EBITDA increased $6.8 million, or 9.6%, vs. $70.4 million in 1Q 2015. This increase includes a $6.4 million negative impact from foreign exchange rates.
Cash balances as of September 30, 2015 were $75.3 million. There were no amounts outstanding under our revolving credit facility. Total debt net of cash was $1,104.7 million including deferred debt discount of $19.1 million. In October 2015 the Company used $182.4 million of the net proceeds from the IPO and $25.0 from existing cash balances to prepay a portion of its term loans. This reduced total debt, net of cash, to $922.3 million including deferred debt discount of $19.1 million.
Plant Reorganizations
The Company announced the closure of Melrose Park on September 1, 2015, with an anticipated completion date of February 2016. The Company recorded restructuring expenses of approximately $2.8 million in the quarter ending September 30, 2015, due primarily to the announced closure. The underlying facility is leased on a month-to-month basis.
Initial Public Offering
On October 27, 2015, the Company completed an IPO of 16,500,000 shares of common stock at a price of $13.00 per share. In connection with the offering, certain of the selling shareholders sold 1,000,000 common shares. In addition, the underwriters exercised their right to purchase an additional 2,475,000 common shares from certain of the selling shareholders at the public offering price. The Company did not receive any of the proceeds from the underwriters’ exercise of this option.
First Quarter Earnings Conference Call and Webcast
The Company will host a conference call on November 12, 2015 at 5:00pm ET, which can be accessed by dialing 877-705-6003 (domestic) or 201-493-6725 (international).
Supplemental materials for today’s call can also be found on the investor relations portion of the Company’s website
The company will also host a live webcast of its conference call which may be accessed on the Investor Relations section of the Company’s website at multipkg.com.
A replay will be available approximately three hours after the call, through November 19, 2015, accessible by dialing 877-870-5176 (domestic), or 858-384-5517 (international). The passcode for the replay is 13624625.
Non-GAAP Financial Measures
The historical financial information included in this presentation includes financial information that is not presented in accordance with generally accepted accounting principles in the United States (“GAAP”), including constant currency net sales growth and Adjusted EBITDA. Management uses these non-GAAP financial measures in the analysis of financial and operating performance because they assist in the evaluation of underlying trends in our business. Our use of the terms constant currency net sales growth and Adjusted EBITDA may differ from that of others in our industry. Constant currency net sales growth and Adjusted EBITDA should not be considered as alternatives to net sales, net income (loss), income (loss) before operations or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows or as measures of liquidity. Constant currency net sales growth and Adjusted EBITDA have important limitations as analytical tools and should be considered in conjunction with, and not as substitutes for, our results as reported under GAAP. This presentation includes a reconciliation of certain non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP.
About Multi Packaging Solutions
Multi Packaging Solutions is a leading global provider of value-added packaging
solutions to a diverse customer base across the healthcare, consumer and multi-media markets. MPS provides its customers with an extensive array of print-based specialty packaging solutions, including premium folding cartons, inserts, labels and rigid packaging across a variety of substrates and finishes. MPS has manufacturing locations across North America, Europe and Asia.
Cautionary Statement Concerning Forward-Looking Statements
This release contains certain forward-looking statements regarding MPS and its subsidiaries. All of these statements are based on management’s expectations as well as estimates and assumptions prepared by management that, although they believe to be reasonable, are inherently uncertain. These statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of MPS’ control that may cause its business, industry, strategy, financing activities or actual results to differ materially. MPS undertakes no obligation to update or revise any of the forward looking statements contained herein, whether as a result of new information, future events or otherwise.
Contact:
Richard Zubek
Investor Relations
(646) 885-0165
ir@multipkg.com
Source: Multi Packaging Solutions
MPSX-IR
Multi Packaging Solutions International Limited And Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
| September 30, 2015 |
June 30, 2015 |
|||||||
| (unaudited) | ||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 75,279 | $ | 55,675 | ||||
| Accounts receivable, net |
273,214 | 240,110 | ||||||
| Inventories |
167,905 | 171,836 | ||||||
| Prepaid expenses and other current assets |
28,544 | 26,892 | ||||||
| Deferred income taxes |
6,642 | 8,454 | ||||||
|
|
|
|
|
|||||
| Total current assets |
551,584 | 502,967 | ||||||
|
|
|
|
|
|||||
| Property, plant and equipment |
||||||||
| Land |
56,441 | 58,316 | ||||||
| Buildings and improvements |
59,035 | 58,368 | ||||||
| Machinery and equipment |
363,455 | 373,639 | ||||||
| Furniture and fixtures |
14,209 | 13,056 | ||||||
| Construction in progress |
22,770 | 12,255 | ||||||
|
|
|
|
|
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| Total |
515,910 | 515,634 | ||||||
| Less: Accumulated depreciation |
(99,098 | ) | (86,691 | ) | ||||
|
|
|
|
|
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| Total property, plant and equipment, net |
416,812 | 428,943 | ||||||
|
|
|
|
|
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| Other assets |
||||||||
| Intangible assets, net |
404,909 | 419,733 | ||||||
| Goodwill |
471,934 | 474,901 | ||||||
| Deferred financing costs, net |
4,095 | 4,311 | ||||||
| Deferred income taxes |
14,568 | 14,568 | ||||||
| Other assets |
37,801 | 36,702 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 1,901,703 | $ | 1,882,125 | ||||
|
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|
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|
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| Current liabilities |
||||||||
| Accounts payable |
$ | 196,178 | $ | 176,431 | ||||
| Payroll and benefits |
50,975 | 51,606 | ||||||
| Other current liabilities |
46,487 | 46,097 | ||||||
| Short-term foreign borrowings |
4,732 | 3,488 | ||||||
| Current portion of long-term debt |
36,097 | 11,740 | ||||||
| Income taxes payable |
10,016 | 6,022 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
344,485 | 295,384 | ||||||
| Long-term debt, less current portion |
1,139,160 | 1,173,161 | ||||||
| Deferred income taxes |
91,061 | 93,061 | ||||||
| Other long-term liabilities |
34,554 | 31,829 | ||||||
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|
|
|
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| Total liabilities |
1,609,260 | 1,593,435 | ||||||
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|
|
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| Commitments and Contingencies |
||||||||
| Shareholders’ equity |
||||||||
| Contributed Capital, $1.00 par value, 1,000,000,000 shares authorized, 61,939,432 issued and outstanding at September 30, 2015 and June 30, 2015 |
61,939 | 61,939 | ||||||
| Paid in capital |
278,281 | 278,695 | ||||||
| Accumulated deficit |
(32,358 | ) | (45,365 | ) | ||||
| Accumulated other comprehensive loss |
(22,145 | ) | (13,287 | ) | ||||
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|
|
|
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| Total Multi Packaging Solutions International Limited shareholders’ equity |
285,717 | 281,982 | ||||||
| Noncontrolling interest |
6,726 | 6,708 | ||||||
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|
|
|
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| Total shareholders’ equity |
292,443 | 288,690 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 1,901,703 | $ | 1,882,125 | ||||
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Multi Packaging Solutions International Limited And Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except share and per share amounts)
(unaudited)
| Three months ended September 30, |
||||||||
| 2015 | 2014 | |||||||
| Net sales |
$ | 459,051 | $ | 394,082 | ||||
| Cost of goods sold |
359,710 | 311,699 | ||||||
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|
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| Gross margin |
99,341 | 82,383 | ||||||
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| Selling, general and administrative expenses |
||||||||
| Selling, general and administrative expenses |
58,312 | 55,459 | ||||||
| Transaction related expenses |
350 | 721 | ||||||
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|
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| Total selling, general and administrative expenses |
58,662 | 56,180 | ||||||
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| Operating income |
40,679 | 26,203 | ||||||
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|
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| Other income (expense) |
||||||||
| Other (expense) income, net |
(3,635 | ) | 3,319 | |||||
| Interest expense |
(18,729 | ) | (18,540 | ) | ||||
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|
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| Total other expense, net |
(22,364 | ) | (15,221 | ) | ||||
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|
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| Income before income taxes |
18,315 | 10,982 | ||||||
| Income tax expense |
5,231 | 3,694 | ||||||
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|
|
|
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| Net income |
13,084 | 7,288 | ||||||
|
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|
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|
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| Less : Net income attributable to noncontrolling interest |
77 | 281 | ||||||
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|
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| Net income attributable to Multi Packaging Solutions International Limited |
13,007 | 7,007 | ||||||
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| Earnings per share |
||||||||
| Basic |
$ | 0.21 | $ | 0.11 | ||||
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| Diluted |
$ | 0.21 | $ | 0.11 | ||||
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| Weighted-average number of common shares outstanding: |
||||||||
| Basic |
||||||||
| Diluted |
61,939,432 | 61,939,432 | ||||||
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|
|
|
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| 61,939,432 | 61,939,432 | |||||||
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|
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| Other comprehensive income (loss) |
||||||||
| Cumulative foreign currency translation adjustment |
$ | (9,692 | ) | $ | (18,195 | ) | ||
| Adjustment on available-for-sale securities |
(17 | ) | 19 | |||||
| Pension adjustments |
792 | (339 | ) | |||||
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|
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| Total other comprehensive loss |
$ | (8,917 | ) | $ | (18,515 | ) | ||
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|
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| Comprehensive income (loss) |
$ | 4,090 | $ | (11,508 | ) | |||
| Less: Comprehensive income attributable to non-controlling interests |
12 | 83 | ||||||
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|
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| Comprehensive income attributable to Multi Packaging Solutions International Limited |
$ | 4,078 | $ | (11,591 | ) | |||
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Multi Packaging Solutions International Limited And Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Three months ended September 30, |
||||||||
| 2015 | 2014 | |||||||
| Operating Activities |
||||||||
| Net income |
$ | 13,084 | $ | 7,288 | ||||
| Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: |
||||||||
| Depreciation expense |
19,247 | 19,415 | ||||||
| Amortization expense |
15,285 | 14,428 | ||||||
| Deferred income taxes |
(697 | ) | (1,513 | ) | ||||
| Stock compensation |
(414 | ) | 291 | |||||
| Equity in earnings of unconsolidated subsidiary |
— | (39 | ) | |||||
| Unrealized foreign currency loss (gain) |
1,183 | (4,787 | ) | |||||
| Other |
1,255 | 1,638 | ||||||
| Change in assets and liabilities: |
||||||||
| Accounts receivable |
(29,546 | ) | (45,801 | ) | ||||
| Inventories |
933 | 2,295 | ||||||
| Prepaid expenses and other current assets |
(859 | ) | (936 | ) | ||||
| Other assets |
(4,496 | ) | (753 | ) | ||||
| Accounts payable |
15,724 | (167 | ) | |||||
| Payroll and benefits |
(348 | ) | (3,498 | ) | ||||
| Other current liabilities |
(101 | ) | 10,106 | |||||
| Income taxes payable |
3,957 | 4,695 | ||||||
| Other long-term liabilities |
(1,188 | ) | (814 | ) | ||||
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|
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| Net cash and cash equivalents provided by operating activities |
33,019 | 1,848 | ||||||
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| Investing Activities |
||||||||
| Additions to property, plant and equipment |
(12,321 | ) | (10,486 | ) | ||||
| Additions to intangible assets |
(28 | ) | (67 | ) | ||||
| Proceeds from sale of assets |
325 | 660 | ||||||
| Acquisitions of businesses, net of cash acquired |
(2,749 | ) | (8,621 | ) | ||||
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| Net cash and cash equivalents used in investing activities |
$ | (14,773 | ) | $ | (18,514 | ) | ||
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| Financing Activities |
||||||||
| Proceeds from issuance of long-term debt |
$ | — | $ | 1,951 | ||||
| Proceeds from short-term borrowings |
26,483 | 54,104 | ||||||
| Payments on short-term borrowings |
(24,965 | ) | (46,376 | ) | ||||
| Payments on long-term debt |
(4,094 | ) | (4,054 | ) | ||||
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| Net cash and cash equivalents (used in) provided by financing activities |
(2,576 | ) | 5,625 | |||||
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|
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| Effect of exchange rate changes on cash and cash equivalents |
3,934 | 495 | ||||||
|
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|
|
|
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| Increase (decrease) in cash and cash equivalents |
19,604 | (10,546 | ) | |||||
| Cash and cash equivalents—beginning |
55,675 | 27,533 | ||||||
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| Cash and cash equivalents—ending |
$ | 75,279 | $ | 16,987 | ||||
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Multi Packaging Solutions International Limited And Subsidiaries
Reconciliation of Non-GAAP Results
(in thousands)
| MPS GAAP Adjusted EBITDA Reconciliation |
||||||||||||
| Successor | Successor | |||||||||||
| (Dollars in thousands) | Notes | 1Q 2016 | 1Q 2015 | |||||||||
| Adjusted EBITDA |
$ | 77,196 | $ | 61,170 | ||||||||
| Transaction costs |
(1 | ) | (350 | ) | (721 | ) | ||||||
| Stock based and deferred compensation |
(2 | ) | 272 | (431 | ) | |||||||
| Purchase accounting adjustments |
(3 | ) | (331 | ) | (476 | ) | ||||||
| Restructuring charges |
(4 | ) | (2,826 | ) | (704 | ) | ||||||
| Gain (Loss) on sale of fixed assets |
(5 | ) | (194 | ) | 64 | |||||||
| Impairment charges |
(6 | ) | (245 | ) | — | |||||||
| Other Adjustments |
(7 | ) | (3,167 | ) | 3,667 | |||||||
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|||||||||
| EBITDA |
70,355 | 62,569 | ||||||||||
| Depreciation and Amortization |
(8 | ) | 33,311 | 33,047 | ||||||||
| Interest Expense |
18,729 | 18,540 | ||||||||||
| Income Taxes |
5,231 | 3,694 | ||||||||||
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| Net Income (loss) |
$ | 13,084 | $ | 7,288 | ||||||||
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Notes:
| (1) | Costs related to change in equity ownership, mergers and acquisitions. |
| (2) | Expense related to equity compensation, and deferred compensation agreements from certain acquisitions. |
| (3) | Amortization of purchase price/inventory adjustments in connection with purchase accounting fair valuation, amortization of deferred revenue related to government grants and fair value lease amortization as of the applicable acquisition date balance sheet. |
| (4) | Costs related to reorganization and plant closures. |
| (5) | Gains or losses incurred due to the sale for fixed assets. |
| (6) | Impairment losses on decommissioned and non saleable fixed assets. |
| (7) | Currency gains or (losses), gains or (losses) on derivatives, other interest costs and contract amortization. |
| (8) | Does not include deferred finance costs included in interest expense. |