Constellis FY15 Audit Investor Deck
2015 AUDITED F/S SUPPLEMENT
Constellis Proprietary Information
April 27, 2016- Business Confidential AUDITED
1
Introduction The following analysis provides a reconciliation of Constellis’ previously reported unaudited earnings to the Audited Financial Statements for the year ended December 31, 2015, together with explanations for variances. Note 2 of the Audited Financial Statements identifies a correction to the treatment of Members’ Capital and Goodwill arising on the initial acquisition of Xe Services in December 2010. This correction has no impact on 2015 earnings, cash flow or liabilities, and does not change the Members’ Capital that was repaid as part of the financing for the Olive Group acquisition in May 2015. As a result of this correction, the opening balance of Members’ Capital and Goodwill were reduced by $30.9 million as at December 2010.
Constellis Proprietary Information
April 27, 2016- Business Confidential UNAUDITED
2
FY 2015 Financial Results Consolidated Income Statement 2015 Reported Total Revenue
2015 Audited
Variance
1,008.3
1,008.8
Total Gross Profit
211.6
212.1
0.5
Total Gross Margin
21.0%
21.0%
0.0%
117.0
118.4
SG&A
Depreciation and Amortization Total Indirect Expense
0.5 Increase due to additional Training revenue pick up
1.4 Increase in SG&A due to subsequent period liability testing Increase in amortization expense due to adoption of private company council accounting alternative to amortize goodwill over 10 years (see 20.7 Notes 3 & 8 of the Audited Financial Statements) 22.0
28.8 145.9
49.5 167.9
Operating Income
65.7
44.2
(21.5)
Interest Expense Loss on Extinguishment of Debt
42.8 7.5
42.3 7.2
(0.5) (0.3)
Income Tax Expense Other (income) expense Net Income (Loss)
12.0 (0.4) 3.9
4.5 (0.4) (9.3)
EBITDA % Margin
98.5 9.8%
97.9 9.7%
59.4 157.9 15.7%
61.2 159.1 15.8%
Total Adjustments Adjusted EBITDA % Margin
Constellis Proprietary Information
Explanation
(7.5) Decrease in income tax due to final provision calculation (0.0) (13.2) (0.6) (116.1%) Adjustment of revenue recognized in 2015 for award fee earned in 1.8 2014, and adjustment for loss of extinguishment of debt 1.2 261.1%
April 27, 2016- Business Confidential AUDITED
3
FY 2015 Financial Results Consolidated Balance Sheet Assets Cash A/R Net Inventory Prepaids & Other Current Total Current Assets
12/31/15 12/31/15 Reported Audited Variance Explanation $39.9 $46.6 $6.7 Adjustment for reconciling items 266.0 279.9 13.9 Reclass between deferred revenue and A/R 8.9 8.7 (0.2) 61.9 47.3 (14.6) Timing differences - prepaids moved to 2016 376.6 382.5 5.9
PPE, Net
109.0
109.0
Intangibles
175.6
103.1
241.2 12.6 $915.1
263.2 15.0 $872.8 $
(0.0) Decrease in customer related intangibles being subsumed into
(72.5) Goodwill Increase related to intangibles being subsumed and Goodwill
Goodwill Deposits & Other Long-Term Total Assets
Liabilities & Equity AP & Other Accrueds Accrued Compensation Current Portion Long-Term Debt Other Current Liabilities Total Current Liabilities
22.0 amortization 2.4 (42.3)
12/31/15 12/31/15 Reported Audited Variance $149.6 $134.2 ($15.4) Decrease due to final income tax provision payable reductions 28.6 28.1 (0.5) 0.2 1.2 179.5
0.2 9.7 172.2
0.0 8.5 Reclass between deferred revenue and A/R (7.3)
Long-Term Debt Other Long-Term Liabilities Total Liabilities
625.7 16.4 821.6
625.7 23.0 820.9
0.0 6.6 Increase due to deferred income tax liability (0.7)
Total Equity Total Liabilities & Equity
93.5 $915.1
51.9 $872.8 $
Equity restatement and retained earnings changes (see Note 2
Constellis Proprietary Information
(41.6) of the Audited Financial Statements) (42.3)
April 27, 2016- Business Confidential AUDITED
4
Constellis Proprietary Information
April 27, 2016- Business Confidential AUDITED
1
Introduction The following analysis provides a reconciliation of Constellis’ previously reported unaudited earnings to the Audited Financial Statements for the year ended December 31, 2015, together with explanations for variances. Note 2 of the Audited Financial Statements identifies a correction to the treatment of Members’ Capital and Goodwill arising on the initial acquisition of Xe Services in December 2010. This correction has no impact on 2015 earnings, cash flow or liabilities, and does not change the Members’ Capital that was repaid as part of the financing for the Olive Group acquisition in May 2015. As a result of this correction, the opening balance of Members’ Capital and Goodwill were reduced by $30.9 million as at December 2010.
Constellis Proprietary Information
April 27, 2016- Business Confidential UNAUDITED
2
FY 2015 Financial Results Consolidated Income Statement 2015 Reported Total Revenue
2015 Audited
Variance
1,008.3
1,008.8
Total Gross Profit
211.6
212.1
0.5
Total Gross Margin
21.0%
21.0%
0.0%
117.0
118.4
SG&A
Depreciation and Amortization Total Indirect Expense
0.5 Increase due to additional Training revenue pick up
1.4 Increase in SG&A due to subsequent period liability testing Increase in amortization expense due to adoption of private company council accounting alternative to amortize goodwill over 10 years (see 20.7 Notes 3 & 8 of the Audited Financial Statements) 22.0
28.8 145.9
49.5 167.9
Operating Income
65.7
44.2
(21.5)
Interest Expense Loss on Extinguishment of Debt
42.8 7.5
42.3 7.2
(0.5) (0.3)
Income Tax Expense Other (income) expense Net Income (Loss)
12.0 (0.4) 3.9
4.5 (0.4) (9.3)
EBITDA % Margin
98.5 9.8%
97.9 9.7%
59.4 157.9 15.7%
61.2 159.1 15.8%
Total Adjustments Adjusted EBITDA % Margin
Constellis Proprietary Information
Explanation
(7.5) Decrease in income tax due to final provision calculation (0.0) (13.2) (0.6) (116.1%) Adjustment of revenue recognized in 2015 for award fee earned in 1.8 2014, and adjustment for loss of extinguishment of debt 1.2 261.1%
April 27, 2016- Business Confidential AUDITED
3
FY 2015 Financial Results Consolidated Balance Sheet Assets Cash A/R Net Inventory Prepaids & Other Current Total Current Assets
12/31/15 12/31/15 Reported Audited Variance Explanation $39.9 $46.6 $6.7 Adjustment for reconciling items 266.0 279.9 13.9 Reclass between deferred revenue and A/R 8.9 8.7 (0.2) 61.9 47.3 (14.6) Timing differences - prepaids moved to 2016 376.6 382.5 5.9
PPE, Net
109.0
109.0
Intangibles
175.6
103.1
241.2 12.6 $915.1
263.2 15.0 $872.8 $
(0.0) Decrease in customer related intangibles being subsumed into
(72.5) Goodwill Increase related to intangibles being subsumed and Goodwill
Goodwill Deposits & Other Long-Term Total Assets
Liabilities & Equity AP & Other Accrueds Accrued Compensation Current Portion Long-Term Debt Other Current Liabilities Total Current Liabilities
22.0 amortization 2.4 (42.3)
12/31/15 12/31/15 Reported Audited Variance $149.6 $134.2 ($15.4) Decrease due to final income tax provision payable reductions 28.6 28.1 (0.5) 0.2 1.2 179.5
0.2 9.7 172.2
0.0 8.5 Reclass between deferred revenue and A/R (7.3)
Long-Term Debt Other Long-Term Liabilities Total Liabilities
625.7 16.4 821.6
625.7 23.0 820.9
0.0 6.6 Increase due to deferred income tax liability (0.7)
Total Equity Total Liabilities & Equity
93.5 $915.1
51.9 $872.8 $
Equity restatement and retained earnings changes (see Note 2
Constellis Proprietary Information
(41.6) of the Audited Financial Statements) (42.3)
April 27, 2016- Business Confidential AUDITED
4
