SYNIVERSE HOLDINGS INC - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - SYNIVERSE HOLDINGS INC	d312092dex991.htm
8-K - 8-K - SYNIVERSE HOLDINGS INC	d312092d8k.htm

Exhibit 99.2

Summary SFHC Historical Consolidated Financial Data

The following table sets forth certain summary historical financial data as of and for the periods indicated for Syniverse Foreign Holdings Corporation (“SFHC”). The summary historical consolidated financial data as of and for the fiscal years ended December 31, 2015, 2014 and 2013, and as of and for the nine months ended September 30, 2016 and 2015, contain all adjustments, consisting of normal recurring adjustments, that management considers necessary for a fair presentation of SFHC’s financial position and results of operations for the periods presented. The results of operations for the nine months ended September 30, 2016 are not necessarily indicative of the operating results to be expected for the fiscal year ending December 31, 2016.


	Fiscal Year Ended						Nine Months Ended				Twelve Months Ended
	December 31, 2015		December 31, 2014		December 31, 2013		September 30, 2016		September 30, 2015		September 30, 2016
(dollars in thousands)	(unaudited)
Statement of operations data:
Revenues	$	184,791	$	218,431	$	173,049	$	122,950	$	141,605	$	166,136
Operating income		33,341		19,582		36,516		18,961		22,197		30,105
Balance sheet data (at period end):
Cash and cash equivalents (1)	$	79,711	$	43,421	$	93,261	$	52,541	$	82,146
Property and equipment, net		24,683		26,817		17,875		23,692		21,340
Total assets		774,003		848,607		971,110		650,129		812,946
Total debt		—		—		—		—		—
Other financial and operating data:
Capital expenditures	$	14,318					$	7,901
SFHC Adjusted EBITDA (2)	$	78,004	$	88,281	$	72,772	$	53,704	$	58,428	$	73,280

(1)

The amount shown as of September 30, 2016 includes $35 million that we intend to repatriate in December 2016 via intercompany transfers in the ordinary course of business from SFHC and its subsidiaries to Syniverse Holdings, Inc. (“Syniverse”) or a subsidiary guarantor of the New Notes, in compliance with the agreements that govern our existing indebtedness.

(2)	SFHC Adjusted EBITDA is not a presentation made in accordance with U.S. GAAP. SFHC Adjusted EBITDA should not be considered as an alternative to operating income, revenues or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or liquidity.

In addition, this non-GAAP measure may not be comparable to other similarly titled measures of other companies in our industry or otherwise. Because of these limitations, SFHC Adjusted EBITDA should not be considered as a measure of discretionary cash available to SFHC to invest in the growth of its business.

SFHC Adjusted EBITDA has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP, including the information shown in the “Subsidiary non-Guarantors” column set forth under “Supplemental Consolidating Financial Information” contained in Note 20 to the audited consolidated financial statements included in Syniverse’s annual report on Form 10-K for the year ended December 31, 2015 and Note 13 to the unaudited consolidated financial statements included in Syniverse’s quarterly report on Form 10-Q for the period ended September 30, 2016. For example, some of the limitations of SFHC Adjusted EBITDA are as follows:

•

excludes certain tax payments or the cash requirements necessary to service interest or principal payments on our debt that may represent a reduction in cash available to us;

•

does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;

•

does not reflect cash outlays for future contractual commitments;

•

does not reflect changes in, or cash requirements for, our working capital needs; and

•

does not reflect the significant interest expense on our debt.

SFHC Adjusted EBITDA is determined by adding the following items to non-guarantor operating income: depreciation, restructuring and other expenses, non-cash stock-based compensation, business development, integration and other one-time expenses, and subtracting operating income from foreign subsidiaries not owned by SFHC. SFHC Adjusted EBITDA is a measure used under the indenture that will govern the New Notes.

A reconciliation of non-guarantor operating income to SFHC Adjusted EBITDA is presented in the following table:


	Year Ended									Nine Months Ended						Twelve Months Ended
	December 31, 2015			December 31, 2014			December 31, 2013			September 30, 2016			September 30, 2015			September 30, 2016
(dollars in thousands)	(unaudited)
Reconciliation to SFHC Adjusted EBITDA
Non-guarantor operating income	$	38,628		$	24,329		$	41,702		$	23,977		$	25,960		$	36,645
Equity income in investees		36			35			422			91			(1	)		128
Depreciation and amortization		42,163			48,553			30,317			28,165			34,832			35,496
Employee termination benefits (a)		365			3,220			1,872			49			307			107
Restructuring (b)		(1,016	)		12,728			483			4,746			(573	)		4,303
Non-cash stock based compensation (c)		1,612			1,118			1,988			1,035			1,082			1,565
Business development, integration and other expenses (d)		2,514			4,130			1,294			1,469			1,394			2,589

Non-guarantor adjusted EBITDA	$	84,302		$	94,113		$	78,078		$	59,532		$	63,001		$	80,833
Foreign subsidiaries not owned by SFHC:
Revenue (e)		(6,594	)		(6,703	)		(6,908	)		(5,951	)		(4,650	)		(7,895	)
Expenses (e)		13,877			9,558			7,412			11,204			10,294			14,787
Intercompany transactions (f)		(13,581	)		(8,687	)		(5,810	)		(11,081	)		(10,217	)		(14,445	)

SFHC Adjusted EBITDA (g)	$	78,004		$	88,281		$	72,772		$	53,704		$	58,428		$	73,280

(a)

Reflects employee termination benefits expense which represents severance and other employee related costs that are unrelated to a restructuring plan.

(b)

Reflects restructuring expense which represents costs related to certain exit activities such as involuntary termination costs and contract termination costs associated with a restructuring plan.

(c)

Reflects non-cash expenses related to equity compensation awards.

(d)

Reflects items associated with business development activities; integration activities, such as incremental contractor, travel and marketing costs; CEO transition costs; and other expenses such as certain advisory services, employee retention, and certain data center migration costs.

(e)

Reflects revenues and expenses associated with foreign subsidiaries not owned by SFHC.

(f)

Reflects service income associated with foreign subsidiaries not owned by SFHC.

(g)

Under the credit agreement governing our Senior Credit Facilities and the indenture governing our Existing Notes, we may make certain additional adjustments to Adjusted EBITDA, such as projected cost savings, unusual or non-recurring charges, and pro forma EBITDA and anticipated synergies from acquisitions, which are not reflected in the SFHC Adjusted EBITDA data presented herein. These additional adjustments totaled approximately $32 million, $6 million and $6 million for the years ended December 31, 2013, 2014 and 2015, respectively, approximately $9 million and $5 million for the nine months ended September 30, 2015 and 2016, respectively, and approximately $5 million for the twelve months ended September 30, 2016.

SYNIVERSE HOLDINGS INC - FORM 8-K - EX-99.2 - December 9, 2016

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