El Paso Corporation (NYSE: EP) is today reporting first quarter 2012
financial and operational results for the company. First quarter 2012
highlights include:
-
$0.20 adjusted diluted earnings per share (EPS) for first quarter 2012
-
Total pipeline throughput increased 10 percent year-over-year,
partially driven by a 15 percent increase on the Tennessee Gas
Pipeline (TGP) system
-
First quarter E&P production volumes rose 11 percent to 908 million
cubic feet equivalent per day (MMcfe/d), including Four Star Oil & Gas
Company (Four Star) unconsolidated affiliate volumes
-
Oil and condensate production rose 66 percent to 23.4 thousand barrels
per day (MBbls/d), including Four Star unconsolidated affiliate volumes
Items Impacting Quarterly Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2012
|
|
|
Before
|
|
|
After
|
|
|
Diluted
|
($ millions, except per share amounts)
|
|
|
Tax
|
|
|
Tax
|
|
|
EPS
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to El Paso
|
|
|
|
|
|
|
|
|
|
Corporation (EPC)
|
|
|
|
|
|
$
|
86
|
|
|
|
$
|
0.11
|
|
Adjustments(1)
|
|
|
|
|
|
|
|
|
|
Impact of E&P financial derivatives(2)
|
|
|
$
|
6
|
|
|
$
|
4
|
|
|
|
$
|
-
|
|
Ceiling test charges - Egypt
|
|
|
|
62
|
|
|
|
62
|
|
|
|
|
0.08
|
|
Change in fair value of legacy
|
|
|
|
|
|
|
|
|
|
indemnification and other legacy items(3)
|
|
|
|
9
|
|
|
|
6
|
|
|
|
|
0.01
|
|
Merger-related costs
|
|
|
|
12
|
|
|
|
8
|
|
|
|
|
0.01
|
|
Impact of estimated annual effective tax
|
|
|
|
|
|
|
|
|
|
rate(4)
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS(5)
|
|
|
|
|
|
|
|
|
$
|
0.20
|
|
|
|
|
(1)
|
|
All individual adjustments, excluding ceiling test charges, assume a
36 percent statutory tax rate, and assume 781 million diluted shares
|
(2)
|
|
Includes $76 million of gains on financial derivatives, adjusted for
$82 million of cash settlement proceeds
|
(3)
|
|
Legacy items consist of the change in fair value of legacy
indemnification and environmental remediation costs
|
(4)
|
|
Reflects the impact on quarterly earnings using the company's
current estimate of its overall annual effective tax rate including
the effects of adjustments
|
(5)
|
|
Reflects fully diluted shares of 781 million
|
Financial Results - First Quarter 2012
For the first quarter 2012, El Paso reported net income attributable to
EPC of $86 million, or $0.11 per diluted share, compared with $62
million, or $0.08 per diluted share, for the first quarter 2011.
Earnings for first quarter 2012 and 2011, after adjusting for impacts of
E&P financial derivatives and other items, were $0.20 and $0.30 per
diluted share, respectively.
El Paso's effective tax rate for reported earnings for the quarter ended
March 31, 2012 was 32 percent. The company's effective tax rate is below
the statutory rate due to income attributable to nontaxable
noncontrolling interests and dividend exclusions on earnings from
unconsolidated affiliates where El Paso anticipates receiving dividends.
Partially offsetting these items was the tax impact of an Egyptian
ceiling test charge without a corresponding tax benefit. In first
quarter 2011, El Paso's effective tax rate for reported earnings was 12
percent, which was favorably impacted by the resolution of several tax
matters and earned state tax credits.
Business Unit Financial Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBIT
|
|
|
Quarters Ended March 31,
|
($ in millions)
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
Pipeline Group
|
|
|
$
|
434
|
|
|
|
$
|
499
|
|
Exploration and Production
|
|
|
|
60
|
|
|
|
|
(31
|
)
|
Marketing
|
|
|
|
(15
|
)
|
|
|
|
(14
|
)
|
Other
|
|
|
|
(30
|
)
|
|
|
|
(59
|
)
|
Eliminations
|
|
|
|
(4
|
)
|
|
|
|
-
|
|
|
|
|
$
|
445
|
|
|
|
$
|
395
|
|
Pipeline Group
The Pipeline Group's Segment EBIT for the quarter ended March 31, 2012
was $434 million, compared with $499 million for the same period in
2011. First quarter 2012 results decreased due to lower allowance for
equity funds used during construction on expansion projects placed in
service, principally Ruby, and lower revenues from retained fuel volumes
on the TGP system, due to the implementation of a fuel volume tracker
following its rate case settlement. During the same period, El Paso
benefited from higher reservation revenues due to expansion projects
that have gone into service and higher rates on TGP resulting from its
rate case settlement, which became effective June 1, 2011.
Pipeline Group Results
|
|
|
Quarters Ended March 31,
|
($ in millions)
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
$
|
397
|
|
|
$
|
375
|
Other income, net
|
|
|
|
37
|
|
|
|
124
|
|
|
|
|
|
|
|
|
|
Segment EBIT
|
|
|
$
|
434
|
|
|
$
|
499
|
DD&A
|
|
|
$
|
122
|
|
|
$
|
114
|
|
|
|
|
|
|
|
Total throughput (BBtu/d)(1)
|
|
|
|
19,864
|
|
|
|
18,038
|
|
|
|
|
|
|
|
(1) Includes proportionate share of jointly-owned pipelines.
|
|
|
|
|
|
|
|
Exploration and Production
The Exploration and Production segment reported $60 million in Segment
EBIT for the quarter ended March 31, 2012, compared with a $31 million
loss for the same period in 2011. During the first quarter 2012, the
segment recorded a non-cash charge of approximately $62 million as a
result of El Paso's decision to no longer explore or develop the
company's acreage in Egypt. The charge principally relates to
unevaluated costs in that country, but also includes approximately $2
million related to equipment. On April 30, 2012, El Paso entered into a
purchase and sale agreement to sell all interests in Egypt. The sale
will represent an exit from Egyptian exploration activities. Excluding
this charge, Segment EBIT increased by $153 million from the same period
in 2011. The increase was attributable to higher oil, natural gas and
NGL production volumes, higher oil prices and a $185 million increase in
mark-to-market gains, partially offset by lower natural gas and NGL
prices and increased DD&A expense. The per-unit DD&A rate increased to
$2.59 per Mcfe in the first quarter of 2012, up from $1.96 per Mcfe for
the same period in 2011, reflecting a shift to developing oil resources.
First quarter 2012 production volumes averaged 908 MMcfe/d, including 57
MMcfe/d of Four Star unconsolidated affiliate volumes. First quarter
2011 production volumes averaged 821 MMcfe/d, including 63 MMcfe/d of
Four Star unconsolidated affiliate volumes. Total volumes rose 11
percent, largely driven by a 66 percent increase in oil and condensate.
Total per-unit cash operating costs decreased to an average of $1.74 per
Mcfe in the first quarter 2012, down from $1.85 per Mcfe for the same
period in 2011, primarily due to higher production volumes and lower G&A
costs, offset by higher lease operating expenses.
|
|
|
|
|
|
|
Exploration and Production Results
|
|
|
Quarters Ended March 31,
|
($ in millions, except price and unit cost amounts)
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
Physical sales -- oil, condensate, natural gas,
|
|
|
|
|
|
|
and NGL revenue
|
|
|
$
|
408
|
|
|
|
$
|
358
|
|
Realized and unrealized gains (losses) on
|
|
|
|
|
|
|
financial derivatives
|
|
|
|
76
|
|
|
|
|
(109
|
)
|
Other revenues
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
$
|
484
|
|
|
|
$
|
250
|
|
Operating expenses(1)
|
|
|
|
(422
|
)
|
|
|
|
(280
|
)
|
Other income (expense), net
|
|
|
|
(2
|
)
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBIT
|
|
|
$
|
60
|
|
|
|
$
|
(31
|
)
|
DD&A
|
|
|
$
|
201
|
|
|
|
$
|
134
|
|
Consolidated volumes:
|
|
|
|
|
|
|
Natural gas sales volumes (MMcf/d)
|
|
|
|
688
|
|
|
|
|
659
|
|
Oil and condensate sales volumes (MBbls/d)
|
|
|
|
22.6
|
|
|
|
|
13.2
|
|
NGL sales volumes (MBbls/d)
|
|
|
|
4.6
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
Total consolidated equivalent sales volumes
|
|
|
|
|
|
|
(MMcfe/d)
|
|
|
|
851
|
|
|
|
|
758
|
|
Four Star total equivalent sales volumes
|
|
|
|
|
|
|
(MMcfe/d)(2)
|
|
|
|
57
|
|
|
|
|
63
|
|
Total combined
|
|
|
|
908
|
|
|
|
|
821
|
|
|
|
|
|
|
|
|
Weighted average realized price on physical sales
|
|
|
|
|
|
|
Natural gas ($/Mcf)
|
|
|
$
|
2.90
|
|
|
|
$
|
4.06
|
|
Oil and condensate ($/Bbl)
|
|
|
$
|
101.81
|
|
|
|
$
|
86.27
|
|
NGL ($/Bbl)
|
|
|
$
|
40.96
|
|
|
|
$
|
50.37
|
|
|
|
|
|
|
|
|
Weighted average realized price, including
|
|
|
|
|
|
|
financial derivatives
|
|
|
|
|
|
|
Natural gas ($/Mcf)
|
|
|
$
|
4.27
|
|
|
|
$
|
5.44
|
|
Oil and condensate ($/Bbl)
|
|
|
$
|
100.16
|
|
|
|
$
|
85.69
|
|
|
|
|
|
|
|
|
Transportation costs
|
|
|
|
|
|
|
Natural gas ($/Mcf)
|
|
|
$
|
0.33
|
|
|
|
$
|
0.31
|
|
Oil and condensate ($/Bbl)
|
|
|
$
|
1.11
|
|
|
|
$
|
0.06
|
|
NGL ($/Bbl)
|
|
|
$
|
5.47
|
|
|
|
$
|
5.01
|
|
|
|
|
|
|
|
|
Per-unit costs ($/Mcfe)
|
|
|
|
|
|
|
DD&A
|
|
|
$
|
2.59
|
|
|
|
$
|
1.96
|
|
Cash operating costs(3)
|
|
|
$
|
1.74
|
|
|
|
$
|
1.85
|
|
|
|
|
|
|
|
|
(1) 2012 includes $62 million of non-cash ceiling test charges
|
(2) Four Star is an equity investment; volumes disclosed represent
the company's proportionate share
|
(3) Includes direct lifting costs, production taxes, G&A expenses,
and taxes other than production and income
|
|
|
|
|
|
|
|
Hedge Positions
The company actively manages its exposure to commodity prices using
various hedging strategies. Further information on the company's hedging
activities is available in El Paso's Financial and Operational Reporting
Package for First Quarter 2012, which can be found in the Investors
section of El Paso's website or in El Paso's 2012 Form 10-Q.
Marketing
Marketing reported a Segment EBIT loss of $15 million for the quarter
ended March 31, 2012, compared with a Segment EBIT loss of $14 million
for the same period in 2011. The first quarter 2012 results were
primarily driven by increased demand charges due to an increase in
transportation tariff rates on existing contracts and changes in natural
gas prices. The first quarter 2011 results include a $15 million loss
related to settlements on an affiliated fuel supply agreement.
Other Operations
During the first quarter of 2012, Segment EBIT from Other Operations was
a loss of $30 million, compared with a loss of $59 million for the same
period in 2011. El Paso's midstream operations contributed $8 million in
earnings during the first quarter of 2012, benefitting from Eagle Ford
area gathering systems that were placed in-service during October 2011
and February 2012. First quarter 2012 results were impacted by $12
million of costs associated with the anticipated merger with Kinder
Morgan, Inc. (NYSE: KMI). First quarter 2011 results include a $41
million loss associated with the repurchase of approximately $148
million of debt. Also impacting first quarter 2012 and 2011 results were
$16 million and $11 million, respectively, of unfavorable changes to
legal, environmental and other reserves.
El Paso's financial statements are available in the Investors section of
its web site at www.elpaso.com.
El Paso's First Quarter Form 10-Q will be filed with the Securities and
Exchange Commission (SEC) and will be available on our website. Copies
of all documents filed with the SEC, including the company's financial
statements, are also available, free of charge, by calling (877)
357-2766.
El Paso Corporation provides natural gas and related energy products in
a safe, efficient, and dependable manner. The company owns North
America's largest interstate natural gas pipeline system, one of North
America's largest independent exploration & production companies and an
emerging midstream business. El Paso owns a 42 percent limited partner
interest, and the 2 percent general partner interest in El Paso Pipeline
Partners, L.P. On October 16, 2011, El Paso Corporation announced that
it has entered into a definitive agreement whereby Kinder Morgan, Inc.
will acquire all of the outstanding shares of El Paso Corporation. For
more information, visit www.elpaso.com.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
Kinder Morgan, Inc. ("KMI") has filed with the SEC a Registration
Statement on Form S-4 in connection with the proposed transactions
contemplated by the Merger Agreement, including a definitive Information
Statement/Prospectus of KMI and a definitive Proxy Statement of El Paso
Corporation ("EP"). The Registration Statement was declared effective by
the SEC on January 30, 2012. Post-effective amendments to the
Registration Statement were filed on February 27, 2012 and on March 1,
2012 and have been declared effective. KMI and EP mailed the definitive
Information Statement/Prospectus of KMI and definitive Proxy Statement
of EP on or about January 31, 2012. INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE REGISTRATION STATEMENT AND THE DEFINITIVE INFORMATION
STATEMENT/PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS
FILED OR TO BE FILED BY KMI OR EP, BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders are able to obtain
free copies of the Registration Statement and the definitive Information
Statement/Proxy Statement/Prospectus and other documents filed with the
SEC by KMI and EP through the web site maintained by the SEC at www.sec.gov
or by phone, e-mail or written request by contacting the investor
relations department of KMI or EP at the following:
|
|
|
|
|
|
|
|
|
|
Kinder Morgan, Inc.
|
|
|
El Paso Corporation
|
Address:
|
|
|
500 Dallas Street, Suite 1000
|
|
|
1001 Louisiana Street
|
|
|
|
Houston, Texas 77002
|
|
|
Houston, Texas 77002
|
|
|
|
Attention: Investor Relations
|
|
|
Attention: Investor Relations
|
Phone:
|
|
|
(713) 369-9490
|
|
|
(713) 420-5855
|
Email:
|
|
|
kmp_ir@kindermorgan.com
|
|
|
investorrelations@elpaso.com
|
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Statements in this document regarding the proposed transaction between
KMI and EP, the expected timetable for completing the proposed
transactions, future financial and operating results, benefits and
synergies of the proposed transaction, future opportunities for the
combined company, the expected timetable for completing the sale of EP's
exploration and production assets, the possible drop-down of assets and
any other statements about KMI or EP managements' future expectations,
beliefs, goals, plans or prospects constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. Any statements that are not statements of historical fact
(including statements containing the words "believes," "plans,"
"anticipates," "expects," "estimates" and similar expressions) should
also be considered to be forward-looking statements. There are a number
of important factors that could cause actual results or events to differ
materially from those indicated by such forward-looking statements,
including: the ability to consummate the proposed merger of EP with KMI;
the ability to obtain the requisite regulatory approvals and the
satisfaction of other conditions to consummation of the transaction; the
possibility that financing might not be available on the terms agreed
to; the ability to consummate contemplated asset sales; the ability of
KMI to successfully integrate EP's operations and employees; the ability
to realize anticipated synergies and cost savings; the potential impact
of announcement of the transaction or consummation of the transaction on
relationships, including with employees, suppliers, customers and
competitors; the ability to achieve revenue growth; national,
international, regional and local economic, competitive and regulatory
conditions and developments; technological developments; capital and
credit markets conditions; inflation rates; interest rates; the
political and economic stability of oil producing nations; energy
markets, including changes in the price of certain commodities; weather
conditions; environmental conditions; business and regulatory or legal
decisions; the pace of deregulation of retail natural gas and
electricity and certain agricultural products; the timing and success of
business development efforts; terrorism; and the other factors described
in KMI's and EP's Annual Reports on Form 10-K for the year ended
December 31, 2011 and their most recent Exchange Act reports filed with
the SEC. Except as required by law, KMI and EP disclaim any intention or
obligation to update any forward-looking statements as a result of
developments occurring after the date of this document.
Appendix to El Paso Corporation May 3, 2012 Earnings Press Release
Items Impacting Quarterly Results
First Quarter 2011
|
|
|
Before
|
|
|
After
|
|
|
Diluted
|
($ millions, except per share amounts)
|
|
|
Tax
|
|
|
Tax
|
|
|
EPS
|
Net income attributable to EPC
|
|
|
|
|
|
$
|
62
|
|
|
$
|
0.08
|
Adjustments(1)
|
|
|
|
|
|
|
|
|
|
Impact of E&P financial derivatives(2)
|
|
|
$
|
190
|
|
|
$
|
122
|
|
|
$
|
0.16
|
Loss on debt extinguishment
|
|
|
|
41
|
|
|
|
26
|
|
|
|
0.04
|
Impact of estimated annual effective tax
|
|
|
|
|
|
|
|
|
|
rate(3)
|
|
|
|
-
|
|
|
|
17
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS(4)
|
|
|
|
|
|
|
|
|
$
|
0.30
|
(1)
|
|
All individual adjustments assume a 36 percent statutory tax rate
and assume 768 million diluted shares
|
(2)
|
|
Includes $109 million of losses on financial derivatives, adjusted
for $81 million of cash settlement proceeds. Cash proceeds on
settlements do not reflect approximately $6 million, or less than
$0.01 per share, of option premiums paid in 2009 and 2010 for
financial derivatives settled during the first quarter 2011
|
(3)
|
|
Reflects the impact on quarterly earnings using the company's
current estimate of its overall annual effective tax rate including
the effects of adjustments
|
(4)
|
|
Reflects fully diluted shares of 768 million
|
Reconciliation of Segment EBIT to Net Income
|
|
|
Quarters Ended March 31,
|
($ in millions, unaudited)
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
Segment EBIT
|
|
|
$
|
445
|
|
|
|
$
|
395
|
|
Interest and debt expense
|
|
|
|
(226
|
)
|
|
|
|
(240
|
)
|
Income tax expense
|
|
|
|
(70
|
)
|
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
149
|
|
|
|
$
|
136
|
|
Net income attributable to noncontrolling interest
|
|
|
|
(63
|
)
|
|
|
|
(74
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to EPC
|
|
|
$
|
86
|
|
|
|
$
|
62
|
|
Reconciliation of Cash Operating
|
|
|
Quarter Ended
|
|
|
Quarter Ended
|
Costs
|
|
|
March 31, 2012
|
|
|
March 31, 2011
|
|
|
|
Total
|
|
|
Per Unit
|
|
|
Total
|
|
|
Per Unit
|
(unaudited)
|
|
|
($ MM)
|
|
|
($/Mcfe)
|
|
|
($ MM)
|
|
|
($/Mcfe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
$
|
422
|
|
|
|
$
|
5.45
|
|
|
|
$
|
280
|
|
|
|
$
|
4.11
|
|
Depreciation, depletion, and
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization
|
|
|
|
(201
|
)
|
|
|
|
(2.59
|
)
|
|
|
|
(134
|
)
|
|
|
|
(1.96
|
)
|
Transportation costs
|
|
|
|
(25
|
)
|
|
|
|
(0.32
|
)
|
|
|
|
(20
|
)
|
|
|
|
(0.30
|
)
|
Ceiling test charges
|
|
|
|
(62
|
)
|
|
|
|
(0.80
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
Total cash operating costs and per
|
|
|
|
|
|
|
|
|
|
|
|
|
unit cash costs(1)
|
|
|
$
|
134
|
|
|
|
$
|
1.74
|
|
|
|
$
|
126
|
|
|
|
$
|
1.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equivalent volumes (MMcfe)(1)
|
|
|
|
|
|
|
77,465
|
|
|
|
|
|
|
|
68,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes volumes and costs associated with equity investment
in Four Star
|
Disclosure of Non-GAAP Financial Measures
This release includes non-GAAP financial measures. The presentations and
reconciliations related to such non-GAAP financial measures required by
the Securities and Exchange Commission's (SEC) Regulation G are attached
or included in the body of this release. Additional detail regarding
non-GAAP financial measures can be reviewed in El Paso's Financial and
Operational Reporting Package, which will be posted at www.elpaso.com
in the Investors section.
El Paso uses the non-GAAP financial measure "segment earnings before
interest expense and income taxes" or "Segment EBIT" to assess the
operating results and effectiveness of the company and its business
segments. The company believes that Segment EBIT is useful to its
investors because it allows them to use the same performance measure
analyzed internally by our management to evaluate the performance of our
businesses and investments without regard to the manner in which they
are financed or the company's capital structure. The company defines
Segment EBIT as net income (loss) adjusted for interest and debt expense
and income taxes. Segment EBIT does not reflect a reduction for any
amounts attributable to noncontrolling interests. Adjusted EPS is
defined as diluted earnings per share adjusted for certain items that
the company considers to be significant to understanding our underlying
performance for a given period. Adjusted EPS is useful in analyzing the
company's on-going earnings potential and understanding certain
significant items impacting the comparability of El Paso Corporation's
results. For 2012, Adjusted EPS is earnings per share attributable to El
Paso Corporation adjusting for the impact of E&P financial derivatives,
ceiling test charges, changes in fair value of legacy indemnification
and other legacy items, merger-related costs, and the impact of the
estimated annual effective tax rate. For 2011, Adjusted EPS is earnings
per share attributable to El Paso Corporation adjusted for the impact of
E&P financial derivatives, a loss on debt extinguishment and the impact
of the estimated annual effective tax rate.
Exploration and Production per-unit total cash operating costs is a
non-GAAP measure calculated on a per Mcfe basis equal to total operating
expenses less DD&A, transportation costs, costs of products, and ceiling
test and other impairment charges, divided by total consolidated
equivalent production. It is a valuable measure used by oil and gas
companies and analysts to evaluate operating performance and efficiency.
El Paso believes that the non-GAAP financial measures described above
are also useful to investors because these measurements are used by many
companies in the industry as a measurement of operating and financial
performance and are commonly employed by financial analysts and others
to evaluate the operating and financial performance of the company and
its business segments and to compare it with the performance of other
companies within the industry. These non-GAAP financial measures may not
be comparable to similarly titled measures used by other companies and
should not be used as a substitute for net income, earnings per share or
other measures of financial performance presented in accordance with
GAAP.