SLIDE 3 Forward-Looking Statements & Non-IFRS Financial Information
3
Notices
- This presentation contains certain non-IFRS financing information, including Adjusted EBITDA. Adjusted EBITDA means earnings before finance
costs and interest income, income taxes, depreciation and amortization and other unusual or non-recurring items. The Company believes that Adjusted EBITDA can be useful for, and is frequently used by, securities analysts, investors and other interested parties to perform comparisons
- f its operating performance between periods and with other companies in its industry and across different industries. In particular, Adjusted
EBITDA is useful because it excludes the effect of:
– depreciation, which represents non-cash charges to earnings. Companies differ in the age and method of acquisition of productive assets, and thus the relative costs of those assets, as well as in the depreciation method (straight-line, accelerated, units of production), which can result in considerable variability in depreciation expense between companies; – interest, which is significantly affected by external factors, including interest rates and inflation rates. Interest expense is dependent on the capital structure and credit rating of a company, while debt levels, credit ratings and, therefore, the impact of interest expense on earnings vary in significance between companies; and – income tax expense. The tax positions of individual companies can vary because of their differing abilities to take advantage of tax benefits and the differing jurisdictions in which they transact business, with the result that their effective tax rates and tax expense can vary considerably.
- However, there are material limitations associated with making the adjustments to calculate Adjusted EBITDA and using it as a performance
measure as compared to the most directly comparable IFRS financial measure. For instance, Adjusted EBITDA does not:
– include interest expense, and because the Company has borrowed money to finance its operations, interest expense is a necessary element of its cash requirements and costs and ability to generate revenue; – include depreciation expense, and because the assets being depreciated will often have to be replaced in the future, Adjusted EBITDA does not reflect any cash requirements for such replacements; or – include tax expense, and because the payment of taxes is part of the Company’s operations, tax expense is a necessary element of the Company’s cash requirements and costs and ability to generate revenue.
- Accordingly, Adjusted EBITDA should not be considered in isolation or construed as an alternative to earnings or other measures as determined
in accordance with IFRS as an indication of the Company’s operating performance. In addition, other companies in its industry or across different industries may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.
- The Company also utilizes IFRS measures to review its performance. These IFRS measures include, but are not limited to, earnings. These
important IFRS measures allow management to, among other things, compare the Company’s operations with competitors on a consistent basis and understand the revenues and expenses matched to each other for the applicable reporting period. The Company believes that the use of these IFRS measures, supplemented by the use of Adjusted EBITDA, allows the Company to have a greater understanding of its performance and allows it to adapt to changing trends and business opportunities.
- Investors or potential investors are urged to review the limitations associated with the use of Adjusted EBITDA as a performance measure
described above. A reconciliation of Adjusted EBITDA to the nearest comparable IFRS measure can be found in the appendix to this presentation.
