Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Q3 EARNINGS RELEASE, SUPPLEMENT & SLIDES - KAR Auction Services, Inc. | form8-kxearningsreleasesup.htm |
| EX-99.2 - EXHIBIT 99.2 - Q3 2017 SUPPLEMENTAL FINANCIAL INFORMATION - KAR Auction Services, Inc. | exhibit992-q32017ersupplem.htm |
| EX-99.1 - EXHIBIT 99.1 - Q3 2017 EARNINGS RELEASE - KAR Auction Services, Inc. | exhibit991-q32017earningsr.htm |
Q3 2017 & Year-to-Date Earnings Slides
October 31, 2017
Forward-Looking Statements
This presentation includes forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Such forward
looking statements are subject to certain risks, trends, and uncertainties that
could cause actual results to differ materially from those projected,
expressed or implied by such forward-looking statements. Many of these
risk factors are outside of the company’s control, and as such, they involve
risks which are not currently known to the company that could cause actual
results to differ materially from forecasted results. Factors that could cause
or contribute to such differences include those matters disclosed in the
company’s Securities and Exchange Commission filings. The forward-
looking statements in this document are made as of the date hereof and the
company does not undertake to update its forward-looking statements.
2
Q3 2017 Highlights
3
Revenues Highlights Fundamentals
KAR
• Revenue growth +7%
• Adjusted EBITDA +13%
• Operating Adjusted EPS +14%
• Adjusted EBITDA margin grew to
25% from 23% in prior year
• Diversified and complementary
business services model
• Controlling SG&A
ADESA
• Adjusted EBITDA +9%
• Strong volume growth +8%
• Physical volumes -1%
• Physical auction RPU +$23
• Incremental operating profit 90%
• Off-lease supply driving volume
and physical auction fee growth
• Commercial vehicle mix at
physical auctions increased to
53% from 50% in prior year
IAA
• Revenue +10%
• North American volume growth +9%
• North American inv growth +12%
• Adjusted EBITDA +18%
• Total Loss 18.8% Q3 2017
vs.16.8% Q3 2016 (CCC)
• Scrap pricing -4.9% (American
Recycler, Q3 2017 vs. Q3 2016)
• Miles driven +1.5% (FHWA, YTD
through July 2017 vs. 2016)
AFC
• Adjusted EBITDA +15%
• LTU growth -6%
• Provision for credit losses as a
percent of managed receivables
1.1%
• Conservative portfolio
management
• Increasing gross revenue per
loan transaction excluding
provision for credit losses due to
higher average loan balances
[VAL
UE]
477.1
[VAL
UE]
287.7
71.2 78.2
2016 2017
789.6
843.0
ADE
SA
57%
IAA
34%
AFC
9%
ADE
SA
57%
IAA
34%
AFC
9%
ADE
SA
57%
IAA
34%
AFC
9%
2017 Outlook
4
KAR Auction Services' has updated its previous outlook to reflect the impact of recent acquisitions and a reduction of our
effective tax rate.
Previous Guidance Current Guidance
2017 Low 2017 High 2017 Low 2017 High
Net income $218.4 $232.4 $231.4 $246.0
Add back:
Income taxes $128.2 $136.4 $119.2 $126.8
Interest expense, net of interest income $170.0 $170.0 $170.0 $170.0
Depreciation and amortization $278.0 $278.0 $274.0 $274.0
EBITDA $794.6 $816.8 $794.6 $816.8
Total addbacks $30.4 $33.2 $30.4 $33.2
Adjusted EBITDA $825.0 $850.0 $825.0 $850.0
Capital expenditures $145.0 $145.0 $150.0 $150.0
Cash taxes related to calendar year $145.0 $145.0 $140.0 $140.0
Cash interest expense on corporate debt $120.0 $120.0 $120.0 $120.0
Free cash flow $415.0 $440.0 $415.0 $440.0
Effective tax rate 37% 37% 34% 34%
Net income per share - diluted $1.57 $1.67 $1.68 $1.78
Operating adjusted net income per share -
diluted
$2.15 $2.25 $2.30 $2.40
Weighted average diluted shares 139 139 138 138
Key Operating Metrics
5
3Q17 3Q16
ADESA
Total Vehicles Sold Growth
Physical Vehicles Sold Growth1
8%
-4%
17%
1%
Online Only Vehicles Sold Growth 34% 23%
Physical RPU Growth 3% 8%
IAA
Vehicles Sold Growth (includes HBC) 9% 5%
Inventory Growth (excludes HBC) 12% 22%
RPU Growth (includes HBC) 1% 1%
AFC
LTU Growth -6% 5%
Provision for Credit Losses 1.1% 1.8%
Revenue per loan transaction
excluding “Other service revenue”
$174 $148
Revenue per loan transaction before
provision for credit losses
$186 $167
1 Excluding acquisitions
Capital Allocation Framework
6
Priorities
Historically ~18% - 20% of
Adjusted EBITDA, plus
strategic investments
Technology ~50%
Physical ~50%
45% - 50% of FCF
Highlights consistency &
strength of free cash flow
Acquisitions that leverage
wholecar auction cyclical
recovery (indep auctions)
Complementary technology
New geographies
Tool for managing cash and
leverage
2015 $135M Spent $152M Paid $118M Acquisitions $228M Repurchased
2015
Technology $63M
Physical $56M
Chicago Greenfield $16M
$1.08 per share paid
Pittsburgh (Indep Auction)
DataScan (Veh Inspections)
Autoniq (Price Guide
Aggregator)
MobileTrac (Veh History)
HBC (UK Salvage)
$300M two year
authorization approved in
October 2014
6.2M shares repurchased
2016 $155M Spent $157M Paid $432M Acquisitions $80M Repurchased
2016
Technology $77M
Physical $51M
Chicago Greenfield $27M
$1.14 per share paid Brashers (8 Ind Auctions)
Orlando (Indep Auction)
GRS (UK Online Auctions)
Flint (Indep Auction)
$500M three year
authorization approved in
October 2016
1.9M shares repurchased
2017 $150M Estimated $175M Paid Q1 – Q4 $97M Acquisitions $100M Repurchased
2017
$150M Annual Estimate $0.32 per share paid
January, April, July, &
October
$0.35 per share announced
for January 2018 payment
DRIVIN (Data Analytics)
(April 2017)
DAS (Transportation)
(May 2017)
TradeRev (Online Sales)
(October 2017)
2.2M shares repurchased
$320M Authorization
Remaining
Capex Dividends
Strategic
Investments
Share
Repurchases
TradeRev
7
TradeRev is an innovative digital mobile app
that facilitates automotive exchanges
between used car dealers
• Headquartered in Toronto, Ontario and
Carmel, Indiana
• 200 employees across the U.S., Canada
and United Kingdom
• Thousands of registered dealers
KAR Q3 2017 Highlights
8
($ in millions, except per share amounts)
KAR Q3 2017 Q3 2016 Highlights*
Total operating revenues $843.0 $789.6
Gross profit** $363.8 $330.1
SG&A $155.7 $146.3 +$3.6M acquired SG&A
EBITDA $207.4 $182.8
Adjusted EBITDA $209.3 $184.8
Net Income $62.8 $54.4
Net income per share - diluted $0.46 $0.39
Operating adjusted net income per share - diluted $0.57 $0.50
Weighted average diluted shares 137.7 139.7
Dividends declared per common share $0.32 $0.29
Effective tax rate 37.5% 36.9%
Capital expenditures $34.7 $43.0
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the three months ended September 30, 2017.
** Exclusive of depreciation and amortization
ADESA Q3 2017 Highlights
9
($ in millions, except RPU)
ADESA Q3 2017 Q3 2016 Highlights*
Revenue $477.1 $457.4 +$12.9M acquisitions
Gross profit** $204.5 $187.9
% of revenue 42.9% 41.1%
SG&A $87.6 $80.6 +$3.6M acquired SG&A
EBITDA $113.6 $104.3
Adjusted EBITDA $122.0 $111.6
% of revenue 25.6% 24.4%
Vehicles sold 788,000 732,000 8% growth; 5% excluding acquisitions
Physical vehicles sold 547,000 552,000 -1% growth; -4% excluding acquisitions
Online only volume 241,000 180,000
Dealer consignment mix % (physical only) 47% 50%
Conversion rate (N.A. physical) 61.3% 57.2%
Physical RPU $781 $758 Excludes purchased vehicles
Online only RPU $112 $108 Excludes ADESA Assurance
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the three months ended September 30, 2017.
** Exclusive of depreciation and amortization
Used Vehicle Value Indices
10
YoY Index Change Age 1Q17 2Q17 3Q17 YTD17
Industry All +4.1% +3.7% +1.9% +3.2%
NADA 0-8 yrs -7.0% -7.3% -5.7% -6.7%
Black Book 2-6 yrs -5.9% -5.1% -3.5% -4.8%
RVI 2-5 yrs -6.1% -5.6% -2.7% -4.5%
Increased industry (commercial) volumes are driving average industry
transaction wholesale prices higher (ADESA)
Revenue per unit sold has increased as a result of increased commercial
mix (ADESA)
Declining used car values increase likelihood of total losses (IAA)
IAA Q3 2017 Highlights
11
($ in millions)
IAA Q3 2017 Q3 2016 Highlights*
Revenue $287.7 $261.0 +9% volume
Gross profit** $102.9 $92.5
% of revenue 35.8% 35.4%
SG&A $26.5 $26.7
EBITDA $76.5 $65.8
Adjusted EBITDA $77.8 $66.2
% of revenue 27.0% 25.4%
Vehicles sold 562,000 516,000
Inventory growth (N.A.) 12% 22% +3% excluding catastrophe vehicles
% Purchased contract vehiclces 5% 7%
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the three months ended September 30, 2017.
** Exclusive of depreciation and amortization
IAA Q3 2017 Gross Profit
12
($ in millions)
IAA HBC Total IAA HBC Total
Revenue $280.4 $7.3 $287.7 $248.7 $12.3 $261.0
Cost of Services** 178.5 6.3 184.8 157.7 10.8 168.5
Gross Profit** $101.9 $1.0 $102.9 $91.0 $1.5 $92.5
% of Revenue 36.3% 13.7% 35.8% 36.6% 12.2% 35.4%
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial
information and Form 10-Q, both for the three months ended September 30, 2017.
** Exclusive of depreciation and amortization
Three Months Ended
September 30, 2017
Three Months Ended
September 30, 2016
AFC Q3 2017 Highlights
13
($ in millions, except for revenue per loan transaction)
AFC Q3 2017 Q3 2016 Highlights*
Interest and fee income $71.8 $68.4
Other revenue $3.0 $2.7
Provision for credit losses ($5.0) ($8.0)
Other service revenue $8.4 $8.1
Total AFC revenue $78.2 $71.2 +18% revenue per LTU
Gross profit** $56.4 $49.7
% of revenue 72.1% 69.8%
SG&A $7.2 $7.1
EBITDA $49.3 $42.6
Adjusted EBITDA $41.3 $35.9
Loan transactions 402,000 426,000
Revenue per loan transaction unit (LTU)*** $174 $148
Provision for credit losses % of finance receivables 1.1% 1.8%
Managed receivables $1,809.2 $1,785.4
Obl gations collateralized by finance receivables $1,259.3 $1,275.1
*** Excludes "Other service revenue"
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the three months ended September 30, 2017.
** Exclusive of depreciation and amortization
AFC Provision for Credit Losses
14
3Q17 2Q17 1Q17 4Q16 3Q16 2Q16 1Q16 4Q15 3Q15
Ending
Managed
Receivables
$1,809.2 $1,736.5 $1,760.7 $1,792.2 $1,785.4 $1,738.6 $1,705.5 $1,641.0 $1,529.6
Average
Managed
Receivables
$1,772.9 $1,748.6 $1,776.5 $1,788.8 $1,762.0 $1,722.1 $1,673.3 $1,585.3 $1,503.3
Provision for
Credit Losses
$5.0 $11.4 $11.1 $11.7 $8.0 $5.5 $5.5 $5.5 $2.7
% of Managed
Receivables
1.1% 2.6% 2.5% 2.6% 1.8% 1.3% 1.3% 1.4% 0.7%
Year-to-Date Slides
KAR Nine Months Ended September 30, 2017
Highlights
16
($ in millions, except per share amounts)
KAR YTD 2017 YTD 2016 Highlights*
Total operating revenues $2,567.6 $2,336.4
Gross profit** $1,105.5 $997.3
SG&A $467.7 $434.3 +$16.8M acquired SG&A
EBITDA $610.9 $559.5
Adjusted EBITDA $643.4 $571.4
Net Income $189.2 $176.9
Net income per share - diluted $1.37 $1.27
Operating adjusted net income per share - diluted $1.85 $1.61
Weighted average diluted shares 138.3 139.4
Dividends declared per common share $0.96 $0.87
Effective tax rate 35.8% 37.5%
Capital expenditures $110.1 $118.5
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the nine months ended September 30, 2017.
** Exclusive of depreciation and amortization
ADESA Nine Months Ended September 30, 2017
Highlights
17
($ in millions, except RPU)
ADESA YTD 2017 YTD 2016 Highlights*
Revenue $1,464.3 $1,323.0 +$79.6M acquisitions
Gross profit** $622.1 $555.9
% of revenue 42.5% 42.0%
SG&A $260.1 $237.8 +$16.8M acquired SG&A
EBITDA $353.6 $310.6
Adjusted EBITDA $377.6 $331.5
% of revenue 25.8% 25.1%
Vehicles sold 2,436,000 2,185,000 11% growth; 5% excluding acquisitions
Physical vehicles sold 1,735,000 1,619,000 7% growth; -1% excluding acquisitions
Online only volume 701,000 566,000
Dealer consignment mix % (physical only) 46% 48%
Conversion rate (N.A. physical) 61.4% 59.0%
Physical RPU $761 $746 Excludes purchased vehicles
Online only RPU $109 $109 Excludes ADESA Assurance
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the nine months ended September 30, 2017.
** Exclusive of depreciation and amortization
IAA Nine Months Ended September 30, 2017
Highlights
18
($ in millions)
IAA YTD 2017 YTD 2016 Highlights*
Revenue $883.8 $795.4 +10% volume
Gross profit** $328.4 $286.1
% of revenue 37.2% 36.0%
SG&A $79.9 $78.9
EBITDA $249.5 $207.3
Adjusted EBITDA $252.1 $208.7
% of revenue 28.5% 26.2%
Vehicles sold 1,733,000 1,573,000
Inventory growth (N.A.) 12% 22% +3% excluding catastrophe vehicles
% Purchased contract vehiclces 5% 7%
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the nine months ended September 30, 2017.
** Exclusive of depreciation and amortization
IAA Nine Months Ended September 30, 2017
Gross Profit
19
($ in millions)
IAA HBC Total IAA HBC Total
Revenue $853.5 $30.3 $883.8 $755.8 $39.6 $795.4
Cost of Services** 529.3 26.1 555.4 473.6 35.7 509.3
Gross Profit** $324.2 $4.2 $328.4 $282.2 $3.9 $286.1
% of Revenue 38.0% 13.9% 37.2% 37.3% 9.8% 36.0%
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial
information and Form 10-Q, both for the nine months ended September 30, 2017.
** Exclusive of depreciation and amortization
Nine Months Ended
September 30, 2017
Nine Months Ended
September 30, 2016
AFC Nine Months Ended September 30, 2017
Highlights
20
($ in millions, except for revenue per loan transaction)
AFC YTD 2017 YTD 2016 Highlights*
Interest and fee income $213.1 $205.5
Other revenue $8.9 $7.7
Provision for credit losses ($27.5) ($19.0)
Other service revenue $25.0 $23.8
Total AFC revenue $219.5 $218.0 +3% revenue per LTU
Gross profit** $155.0 $155.3
% of revenue 70.6% 71.2%
SG&A $22.4 $21.9
EBITDA $132.7 $133.4
Adjusted EBITDA $109.6 $114.6
Loan transactions 1,274,000 1,301,000
Revenue per loan transaction unit (LTU)*** $153 $149
Provision for credit losses % of finance receivables 2.1% 1.5%
Managed receivables $1,809.2 $1,785.4
Obligations collateralized by finance receivables $1,259.3 $1,275.1
*** Excludes "Other service revenue"
* For a more complete explanation of these changes, see the MD&A in the company's supplemental financial information
and Form 10-Q, both for the nine months ended September 30, 2017.
** Exclusive of depreciation and amortization
Appendix
Non-GAAP Financial Measures
22
EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit),
depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and
expected incremental revenue and cost savings as described in the company's senior secured credit agreement
covenant calculations. Free cash flow is defined as Adjusted EBITDA less cash interest expense on corporate debt
(Credit Facility), capital expenditures and cash taxes related to the calendar year. Management believes that the
inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA is appropriate to provide
additional information to investors about one of the principal measures of performance used by the company’s creditors.
In addition, management uses EBITDA, Adjusted EBITDA and free cash flow to evaluate the company’s performance.
Depreciation expense for property and equipment and amortization expense of capitalized internally developed
software costs relate to ongoing capital expenditures; however, amortization expense associated with acquired
intangible assets, such as customer relationships, software, tradenames and noncompete agreements are not
representative of ongoing capital expenditures, but have a continuing effect on our reported results. Non-GAAP
financial measures of operating adjusted net income and operating adjusted net income per share, in the opinion of the
company, provide comparability to other companies that may not have incurred these types of non-cash expenses or
that report a similar measure. In addition, net income and net income per share have been adjusted for certain other
charges, as seen in the following reconciliation.
EBITDA, Adjusted EBITDA, free cash flow, operating adjusted net income and operating adjusted net income per share
have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of the
results as reported under GAAP. These measures may not be comparable to similarly titled measures reported by other
companies.
Q3 2017 Adjusted EBITDA Reconciliation
23
($ in millions)
Three Months ended September 30, 2017
ADESA IAA AFC Corporate Consolidated
Net income (loss) $47.0 $28.0 $20.4 ($32.6) $62.8
Add back:
Income taxes 29.6 15.9 11.6 (19.4) 37.7
Interest expense, net of interest income (0.4) – 11.0 30.1 40.7
Depreciation and amortization 28.5 23.1 7.9 6.7 66.2
Intercompany interest 8.9 9.5 (1.6) (16.8) –
EBITDA $113.6 $76.5 $49.3 ($32.0) $207.4
Intercompany charges 2.5 – – (2.5) –
Non-cash stock-based compensation 1.9 1.0 0.7 2.5 6.1
Acquisition related costs 1.3 – – 0.2 1.5
Securitization interest – – (8.7) – (8.7)
Minority interest 1.6 – – – 1.6
Other 1.1 0.3 – – 1.4
Total Addbacks 8.4 1.3 (8.0) 0.2 1.9
Adjusted EBITDA $122.0 $77.8 $41.3 ($31.8) $209.3
Revenue $477.1 $287.7 $78.2 – $843.0
Adjusted EBITDA % margin 25.6% 27.0% 52.8% 24.8%
Q3 2016 Adjusted EBITDA Reconciliation
24
($ in millions)
Three Months ended September 30, 2016
ADESA IAA AFC Corporate Consolidated
Net income (loss) $43.5 $22.0 $21.6 ($32.7) $54.4
Add back:
Income taxes 26.3 12.5 13.2 (20.2) 31.8
Interest expense, net of interest income (0.2) – 8.7 27.6 36.1
Depreciation and amortization 25.3 21.9 7.8 5.5 60.5
Intercompany interest 9.4 9.4 (8.7) (10.1) –
EBITDA $104.3 $65.8 $42.6 ($29.9) $182.8
Intercompany charges 2.3 – – (2.3) –
Non-cash stock-based compensation 1.1 0.6 0.5 2.5 4.7
Acquisition related costs 1.2 0.1 – – 1.3
Securitization interest – – (7.2) – (7.2)
Minority interest 1.1 – – – 1.1
(Gain)/Loss on asset sales 0.4 0.1 – 0.8 1.3
Other 1.2 (0.4) – – 0.8
Total Addbacks 7.3 0.4 (6.7) 1.0 2.0
Adjusted EBITDA $111.6 $66.2 $35.9 ($28.9) $184.8
Revenue $457.4 $261.0 $71.2 – $789.6
Adjusted EBITDA % margin 24.4% 25.4% 50.4% 23.4%
YTD 2017 Adjusted EBITDA Reconciliation
25
($ in millions)
Nine Months ended September 30, 2017
ADESA IAA AFC Corporate Consolidated
Net income (loss) $152.0 $97.5 $61.6 ($121.9) $189.2
Add back:
Income taxes 92.4 54.5 35.9 (77.1) 105.7
Interest expense, net of interest income (0.4) – 31.8 89.4 120.8
Depreciation and amortization 82.5 69.2 23.5 20.0 195.2
Intercompany interest 27.1 28.3 (20.1) (35.3) –
EBITDA $353.6 $249.5 $132.7 ($124.9) $610.9
Intercompany charges 7.6 – – (7.6) –
Non-cash stock-based compensation 5.1 2.8 1.8 7.8 17.5
Loss on extinguishment of debt – – – 27.5 27.5
Acquisition related costs 3.8 – – 1.3 5.1
Securitization interest – – (25.0) – (25.0)
Minority interest 4.3 – – – 4.3
Other 3.2 (0.2) 0.1 – 3.1
Total Addbacks 24.0 2.6 (23.1) 29.0 32.5
Adjusted EBITDA $377.6 $252.1 $109.6 ($95.9) $643.4
Revenue $1,464.3 $883.8 $219.5 – $2,567.6
Adjusted EBITDA % margin 25.8% 28.5% 49.9% 25.1%
YTD 2016 Adjusted EBITDA Reconciliation
26
($ in millions)
Nine Months ended September 30, 2016
ADESA IAA AFC Corporate Consolidated
Net income (loss) $129.0 $72.1 $68.6 ($92.8) $176.9
Add back:
Income taxes 76.7 42.5 41.8 (54.8) 106.2
Interest expense, net of interest income (0.1) – 24.7 75.9 100.5
Depreciation and amortization 72.6 64.4 23.4 15.5 175.9
Intercompany interest 32.4 28.3 (25.1) (35.6) –
EBITDA $310.6 $207.3 $133.4 ($91.8) $559.5
Intercompany charges 7.8 0.3 – (8.1) –
Non-cash stock-based compensation 3.4 1.9 1.4 8.4 15.1
Loss on extinguishment of debt – – – 4.0 4.0
Acquisition related costs 3.6 0.2 0.1 3.3 7.2
Securitization interest – – (20.3) – (20.3)
Minority interest 2.7 – – – 2.7
(Gain)/Loss on asset sales 1.1 0.2 – 0.8 2.1
Other 2.3 (1.2) – – 1.1
Total Addbacks 20.9 1.4 (18.8) 8.4 11.9
Adjusted EBITDA $331.5 $208.7 $114.6 ($83.4) $571.4
Revenue $1,323.0 $795.4 $218.0 – $2,336.4
Adjusted EBITDA % margin 25.1% 26.2% 52.6% 24.5%
Operating Adjusted Net Income
per Share Reconciliation
27
($ in millions, except per share amounts), (unaudited)
2017 2016 2017 2016
Net income $62.8 $54.4 $189.2 $176.9
Acquired amortization expense
(1) 25.8 24.7 76.7 71.3
Loss on extinguishment of debt
(2) – – 27.5 4.0
Income taxes
(3) (9.7) (9.1) (37.3) (28.2)
Operating adjusted net income $78.9 $70.0 $256.1 $224.0
Net income per share − diluted $0.46 $0.39 $1.37 $1.27
Acquired amortization expense 0.19 0.18 0.55 0.51
Loss on extinguishment of debt – – 0.20 0.03
Income taxes (0.08) (0.07) (0.27) (0.20)
Operating adjusted net income per share −
diluted
$0.57 $0.50 $1.85 $1.61
Weighted average diluted shares 137.7 139.7 138.3 139.4
Three Months ended
September 30,
Nine Months ended
September 30,
(1)Acquired amortization expense was $25.8 million ($16.1 million net of tax) and $24.7 million ($15.6 million net of tax) for the three
months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, acquired
amortization expense was $76.7 million ($49.2 million net of tax) and $71.3 million ($44.6 million net of tax), respectively.
(2)For the nine months ended September 30, 2017 and 2016 we incurred a loss on the extinguishment of debt totaling $27.5 million
($17.7 million net of tax) and $4.0 million ($2.5 million net of tax), respectively.
(3)The effective tax rate at the end of each period presented was used to determine the amount of income tax on the adjustments to net
income.