Tài liệu Nothing But Net 2009 Internet Investment Guide 17 doc

161 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 87: Amazon Annual Income Statement $ in millions FY FY FY FY 2007 2008E 2009E 2010E Net sales 14,835 18,711 21,694 26,165 Cost of sales 11,482 14,564 17,044 20,568 Gross profit 3,354 4,147 4,650 5,597 Gross Margins 22.6% 22.2% 21.4% 21.4% Fulfillment 1,253 1,572 1,817 2,188 Marketing 336 447 513 613 Technology and content 715 859 984 1,151 General and administrative 200 234 271 322 Other operating expense (income) 9 (28) 16 16 Stock-based compensation (1) 185 282 345 383 Amortization of other intangibles - - - - Restructuring-related and other - - - - Total operating expenses 2,697 3,367 3,946 4,672 Total recurring operating expenses 2,512 3,130 3,601 4,289 0 - - Operating Profit (Reported) 655 780 704 925 Operating Profit (Pro Forma) 840 1,017 1,049 1,308 Operating Margin (Reported) 4.4% 4.2% 3.2% 3.5% Operating Margin (Pro Forma) 5.7% 5.4% 4.8% 5.0% EBITDA 1,089 1,398 1,419 1,734 Income (loss) from continuing operations 840 1,017 1,049 1,308 Interest Income 91 87 80 80 Interest Expense (78) (75) (47) (57) Other Income, net (1) 21 - - Total non-operating expenses, net 12 33 33 23 Income (loss) before equity in losses of equity-method investees 852 1,050 1,082 1,331 Income (loss) before change in accounting principle (reported) 852 1,050 1,082 1,331 - - - Cumulative effect of change in accounting principle - - - - GAAP Income before taxes 661 811 737 948 Tax Rate 27.9% 28.4% 29.0% 29.0% Provision (benefit) for taxes 184 231 214 275 Pro Forma Net income (loss) 668 819 868 1,056 Remeasurement of 6.875% PEACS and other (7) (2) - - Other gains (losses), net - (4) - - Total Extraordinary Items (7) (11) - - GAAP Net income (loss) 477 571 523 673 GAAP EPS $1.12 $1.32 $1.20 $1.54 Shares Outstanding 424 432 437 439 % Of Revenue Fulfillment 8.4% 8.4% 8.4% 8.4% Marketing 2.3% 2.4% 2.4% 2.3% Technology and content 4.8% 4.6% 4.5% 4.4% General and administrative 1.3% 1.3% 1.2% 1.2% Y/Y Change Revenue 39% 26% 16% 21% Fulfillment 37% 25% 16% 20% Marketing 30% 33% 15% 19% Technology and content 18% 20% 14% 17% General and administrative 14% 17% 16% 19% PF Operating Income 71% 21% 3% 25% Source: Company reports and J.P. Morgan estimates. 162 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 88: Amazon Quarterly Income Statement $ in millions FY 2007 FY 2008E FY 2009E Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08E Q1-09E Q2-09E Q3-09E Q4-09E Net sales 3,015 2,886 3,262 5,673 4,135 4,063 4,264 6,249 4,597 4,499 4,920 7,678 Cost of sales 2,296 2,185 2,500 4,503 3,179 3,096 3,265 5,024 3,586 3,451 3,788 6,219 Gross profit 719 701 762 1,170 956 967 999 1,225 1,011 1,048 1,132 1,459 Gross Margins 23.8% 24.3% 23.4% 20.6% 23.1% 23.8% 23.4% 19.6% 22.0% 23.3% 23.0% 19.0% Fulfillment 253 248 285 467 343 345 378 506 379 382 433 622 Marketing 71 63 72 131 101 98 104 144 110 108 118 177 Technology and content 167 176 181 190 203 218 226 212 225 247 266 246 General and administrative 49 49 47 54 51 61 60 62 60 63 64 84 Other operating expense (income) - 3 3 3 6 (45) 7 4 4 4 4 4 Stock-based compensation (1) 34 46 51 54 54 73 70 85 82 84 87 92 Amortization of other intangibles - - - - - - - - - - - - Restructuring-related and other Total operating expenses 574 585 639 899 758 750 845 1,014 861 889 972 1,225 Total recurring operating expenses 540 539 588 845 704 722 775 929 779 805 885 1,133 0.0136 Operating Profit (Reported) 145 116 123 271 198 217 154 211 151 159 160 234 Operating Profit (Pro Forma) 179 162 174 325 252 245 224 296 233 243 247 326 Operating Margin (Reported) 4.81% 4.0% 3.8% 4.78% 4.79% 5.3% 3.6% 3.38% 3.3% 3.5% 3.3% 3.0% Operating Margin (Pro Forma) 5.94% 5.6% 5.3% 5.73% 6.09% 6.0% 5.3% 4.74% 5.1% 5.4% 5.0% 4.2% EBITDA 241 225 235 388 317 405 300 376 318 333 342 426 Income (loss) from continuing operations 179 162 174 325 252 245 224 296 233 243 247 326 Interest Income 20 20 23 28 26 20 21 20 20 20 20 20 Interest Expense (19) (19) (19) (21) (22) (21) (17) (15) (11) (11) (12) (13) Other Income, net - (1) (1) 1 5 (8) 24 Total non-operating expenses, net 1 - 3 8 9 (9) 28 5 9 9 8 7 Income (loss) before chg in accnting principle (reported) 180 162 177 333 261 236 252 301 242 252 255 333 Cumulative effect of change in accounting principle - - - - - - - - - - - - GAAP Income before taxes 144 112 124 281 205 208 182 216 160 168 168 241 Tax Rate 22.9% 29.6% 35.5% 26.3% 30.2% 22.1% 32.4% 29.5% 29.0% 29.0% 29.0% 29.0% Provision (benefit) for taxes 33 33 44 74 62 46 59 64 46 49 49 70 Pro Forma Net income (loss) 147 129 133 259 199 190 193 237 195 204 206 263 Remeasurement of 6.875% PEACS and other (2) (5) (2) 2 (2) - - - - - - - Other gains (losses), net - - - - - (4) - - - - - - Total Extraordinary Items (2) (5) (2) 2 (2) (4) (5) - - - - - GAAP Net income (loss) 111 79 80 207 143 158 118 152 113 120 119 171 GAAP EPS $0.26 $0.19 $0.19 $0.48 $0.34 $0.37 $0.27 $0.35 $0.26 $0.27 $0.27 $0.39 Shares Outstanding 420 423 425 427 426 430 436 436 436 437 437 437 163 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 88: Amazon Quarterly Income Statement (cont.) % Of Revenue Fulfillment 8.4% 8.6% 8.7% 8.2% 8.3% 8.5% 8.9% 8.1% 8.3% 8.5% 8.8% 8.1% Marketing 2.4% 2.2% 2.2% 2.3% 2.4% 2.4% 2.4% 2.3% 2.4% 2.4% 2.4% 2.3% Technology and content 5.5% 6.1% 5.5% 3.3% 4.9% 5.4% 5.3% 3.4% 4.9% 5.5% 5.4% 3.2% General and administrative 1.6% 1.7% 1.4% 1.0% 1.2% 1.5% 1.4% 1.0% 1.3% 1.4% 1.3% 1.1% Q/Q Change Revenue -24% -4% 13% 74% -27% -2% 5% 47% -26% -2% 9% 56% Fulfillment -24% -2% 15% 64% -27% 1% 10% 34% -25% 1% 13% 44% Marketing -21% -11% 14% 82% -23% -3% 6% 38% -23% -2% 9% 50% Technology and content 3% 5% 3% 5% 7% 7% 4% -6% 6% 10% 7% -8% General and administrative 29% 0% -4% 15% -6% 20% -2% 4% -4% 5% 2% 32% PF Operating Income -21% -9% 7% 87% -22% -3% -9% 32% -21% 5% 1% 32% PF Net Income 15% -12% 3% 95% -23% -5% 2% 23% -18% 4% 1% 28% Y/Y Change Revenue 32% 35% 41% 42% 37% 41% 31% 10% 11% 11% 15% 23% Fulfillment 33% 36% 36% 41% 36% 39% 33% 8% 11% 11% 15% 23% Marketing 31% 21% 14% 46% 42% 56% 44% 10% 9% 10% 14% 23% Technology and content 21% 17% 16% 17% 22% 24% 25% 12% 11% 14% 18% 16% General and administrative 9% 11% -4% 42% 4% 24% 28% 16% 17% 3% 7% 35% PF Operating Income 53% 110% 149% 43% 41% 51% 29% -9% -8% -1% 10% 10% Source: Company reports and J.P. Morgan estimates 164 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 89: Amazon Annual Balance Sheet $ in millions FY-07 FY-08E FY-09E FY-10E ASSETS: Cash/Equivalents 2539.1 2417.5 3456.0 4929.0 ST Investments 573.0 674.0 674.0 674.0 Inventories 1200.0 1499.8 1928.6 2394.3 A/R, net and other current 852.0 874.9 1199.9 1481.9 Total Current Assets 5164.1 5466.2 7258.5 9479.2 Equipment, Net 543.0 746.0 751.0 838.0 Other LT Assets 296.0 722.0 722.0 722.0 L.T. Investments 260.0 278.0 278.0 278.0 Goodwill/Intang. 0.0 0.0 0.0 0.0 Goodwill 222.0 405.0 405.0 405.0 Total Other Assets 1321.0 2151.0 2156.0 2243.0 Total Assets 6485.1 7617.2 9414.5 11722.2 LIABILITIES: Accounts Payable 2795.0 2999.6 3708.0 4470.1 Accrued Expense 902.0 999.9 1352.4 1670.3 Unearned Revenue 0.0 0.0 0.0 0.0 Oth. Curr. Liab. 0.0 0.0 0.0 0.0 Curr.Port.LT Debt 17.0 0.0 0.0 0.0 Advertising 0.0 0.0 0.0 Total Current Liabs 3714.0 3999.4 5060.3 6140.5 Long Term Debt 1574.0 895.0 895.0 895.0 Capital Leases 0.0 0.0 0.0 Total Long Term Debt 1574.0 895.0 895.0 895.0 Total Liabilities 5288.0 4894.4 5955.3 7035.5 SHAREHOLDER EQUITY: Total Equity 1197.1 2722.8 3459.2 4686.7 Liabilities + Equity 6485.1 7617.2 9414.5 11722.2 Source: Company reports and J.P. Morgan estimates. 165 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 90: Amazon Annual Cash Flow Statement $ in millions FY-07 FY-08E FY-09E FY-10E OPERATING CASH FLOWS Net Income 476.5 571.3 523.4 673.3 Depreciation and amortization 246.0 291.0 370.0 426.0 Stock-Based Amort. 185.0 282.0 345.0 383.0 Other operating expense (31.0) - - Excess tax benefit on stock awards - Equity in Loss - - - - Amort. Intangibles 3.0 - - - Merger/Acquisition - - - - Mrktbl.Secs. - (3.0) - - Remeasurement and other 10.0 (16.0) - - Investment Inc/Loss - - - - Interest Expense - - - - Accounting Change - - - - Deferred Taxes (99.0) (46.0) - - Changes current assets 835.0 105.2 150.0 460.7 Inventories (303.0) (314.8) (299.8) (428.8) Prepaid Exp./Other (254.0) (57.5) 147.3 (171.4) Accounts Payable 928.0 232.6 204.6 708.4 Accrued Expense 430.0 177.9 97.9 352.5 Other Operating 200.0 67.0 - - Non-Cash Items (166.0) - - - Interest Payable - - - - Cash From Operations 1406.5 993.4 1388.4 1943.0 FCF 1183.5 661.4 1038.4 1473.0 Y/Y Growth 143.9% -44.1% 57.0% 41.8% INVESTING CASH FLOWS Mat./ST Investments 1,269.6 1,034.0 - - Purch./ST Investment (930.0) (1,229.0) - - Capital Expenditures (223.0) (332.0) (350.0) (470.0) Sale of Subsidiary - - - - Invst. in Affiliates - - - - Acquisitions (76.0) (407.0) - - Cash From Investing 40.6 (934.0) (350.0) (470.0) FINANCING CASH FLOWS Options Exercised 91.0 10.0 - - Tax benefit of stock awards 160.0 - - Issuance of Common - - - - Options/Common Issue - - - - Proceeds/LT Debt 36.0 53.0 - - Repay. LTD (69.4) (26.0) - - Repayment of Debt (17.0) (331.0) - - Financing Costs - - - - Purch./Sale of Stock (248.0) - - - Long Term Debt - - - - Cash From Financing 49.6 (134.0) - - Foreign Exch Effects 20.0 (47.0) - - Net Change In Cash 1,516.7 (121.6) 1,038.4 1,473.0 Beginning Cash 1,022.4 2,539.1 2,417.5 3,456.0 Ending Cash 2,539.1 2,417.5 3,456.0 4,929.0 Source: Company reports and J.P. Morgan estimates. 166 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Blue Nile, Inc., Underweight, ($23.67) We expect luxury goods spending to be negatively impacted by deteriorating market conditions in 2009, and, as such, are forecasting a 5.6% Y/Y revenue decline in F’09. Additionally, we think operating margins will contract due to SG&A deleverage. Blue Nile trades at 12.9x our F’09 EBITDA estimate of $25.8M. Given our expectation for negative EBITDA growth, we believe this premium is undeserved and thus maintain our Underweight rating. We are introducing a $20 December 2009 price target. • We expect revenue to decline in 2009 as discretionary spending continues to slow. With the tightening of the credit markets and further macroeconomic weakness, we think consumers will continue to cut back on discretionary spending, especially high-ticket items such as jewelry. We believe Blue Nile will see both order volume and AOV declines in 1H’09 as consumers purchase less and trade down to lower price points. • We expect EBITDA margins to decline in F’09. We think roughly 35-50% of Blue Nile’s SG&A expenses are fixed. As such, with revenue expected to decline in 2009, we are also forecasting a 50bps Y/Y decline in F'09 EBITDA margins. In addition, we are concerned with the company’s online advertising costs, as keyword pricing remains up on a Y/Y basis. • We expect international growth to continue to slow in 2009. We think Blue Nile's international growth will continue to be pressured by FX headwinds as well as global economic deterioration. However, we believe once the economy starts to recover, NILE will benefit from further international expansion. • 2009 drivers. In our view, the following factors will drive NILE shares in 2009: (1) more limited access to credit for luxury purchases, (2) less discretionary spend, and (3) operating expense deleverage. • Maintaing 4Q’08 estimates. We are maintaining our 4Q’08 revenue, EBITDA, and GAAP EPS estimates of $100.9M, $11.3M, and $0.42, respectively. Our current and newly introduced 2010 estimates are in the table below: Table 91: Blue Nile Financial Snapshot $ in millions, except per share data NILE 4Q’08E F’08E F’09E F’10E F’08E Y/Y F’09E Y/Y F’10E Y/Y J.P. Morgan Revenue 100.9 310.4 293.0 322.9 -3% -6% 10% EBITDA 11.3 28.7 25.8 33.7 -4% -10% 30% EPS $0.42 $0.94 $0.76 $0.95 -10% -19% 25% Consensus Revenue 101.7 310.8 320.0 362.7 -3% 3% 13% EBITDA 10.5 26.2 26.4 33.9 -13% 1% 28% EPS $0.39 $0.90 $0.93 $1.20 -13% 3% 29% Source: J.P. Morgan estimates, Company data, and Bloomberg 167 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Our Estimates and Outlook for 2009 We are now modeling F’09 revenue, EBITDA, and GAAP EPS estimates of $293.0M, $25.8M, and $0.76, representing Y/Y declines of 5.6%, 10.2%, and 18.9%, respectively. We think macroeconomic weakness will continue to negatively impact consumer discretionary spending in 2009, causing both order volume and AOV to decline. As such, we are forecasting a 5% Y/Y decrease in F’09 order volume, as well as a 2% decrease in F’09 AOV. Our Estimates and Outlook for 2010 We are introducing F’10 revenue, EBITDA, and GAAP EPS estimates of $322.9M, $33.7M, and $0.95, representing Y/Y growth rates of 10.2%, 30.5%, and 25.4%, respectively. We support our estimates with the assumption that the U.S. macro economy will recover in 2010, thus increasing consumer discretionary spending. As such, we think increases in order volume and AOV will drive revenue growth in 2010 and are forecasting 7% Y/Y growth in F’10 order volume and 3% growth in F'10 AOV. In addition, we expect Blue Nile to benefit from further international expansion in 2010, with possible entrance into new markets outside Canada and the U.K. Operating margins will likely recover. We Are Introducing a Price Target of $20 In introducing price targets for our coverage, we have derived multiples based on 5- year forward EBIT CAGRs. We believe the historical record does not provide a meaningful guide to valuation as (a) the majority of the companies in our coverage did not have a track record as public companies through the previous recession and (b) even the public companies were still in their early-growth (and, for some, rapid growth) stage during the last economic downturn. As such, given our projection for Blue Nile of a ~20% F’09 - F’14 EBIT CAGR, and our view of the beginning of a possible economic turnaround in 2H’09, we believe the stock should be trading closer to a 20x EV/EBIT multiple to our F’09 EBIT estimate (reflecting a more cautious sales outlook than the current valuation of 24x our F’09 estimate) and thus arrive at our December 2009 price target of $20. The parameters of our EV/EBIT multiple analysis are in the table below: Table 92: Key Valuation Assumptions 5 yr forward EBIT CAGR 20% 1x EBIT Growth 20 2009 EBIT $13.6 Implied Enterprise Value $272.3 + Cash $26.6 - Debt $- Market Value $298.9 Share count 15.2 2009 Price Target $19.67 Source: Company reports and J.P. Morgan estimates. 168 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Our EV/EBIT valuation is based on the following projections for revenue and operating income growth Table 3: 5-Year Growth Outlook $ in millions 2009E 2010E 2011E 2012E 2013E 2014E Revenues 293.0 322.9 387.5 457.2 525.8 604.6 Y/Y change 10.2% 20% 18% 15% 15% Less: Operating Expenses 279.4 305.3 366.1 432.1 496.9 571.4 As % of total revenues 95.4% 94.6% 94.5% 94.5% 94.5% 94.5% Operating Income (Loss) 13.6 17.6 21.3 25.1 28.9 33.3 Operating margin 4.6% 5.4% 5.5% 5.5% 5.5% 5.5% Source: Company reports and J.P. Morgan estimates. Valuation and Rating Analysis On an EV/EBITDA basis, NILE trades at 12.9x our F’09 EBITDA estimate of $25.8M vs. its e-commerce peers, which trade at 6.5x F’09 estimates. We think this premium is undeserved given our expectation for negative EBITDA growth and are thus maintaining our Underweight rating. Risks to Our Rating Blue Nile is highly dependent on its diamond and jewelry suppliers, and it would be difficult for the company’s business model to tolerate large price fluctuations in the price to acquire diamonds and jewelry. Blue Nile faces competition from both offline and online competitors, which operate in different spaces in the jewelry market. Online competitors include: diamond.com, amazon.com, walmart.com, mondera.com, and Ashford. If the company successfully executes its international business strategy or gains market share in the US from traditional retailers, our estimates could prove to be too conservative. Further, if the economy and consumer spending turn around more quickly than we expect, the stock could outperform. 169 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 93: NILE Annual Income Statement $ in millions, except per share data 2007 2008E 2009E 2010E Total Revenue 319.3 310.4 293.0 322.9 Cost of Revenue 254.1 246.4 232.4 256.1 Pro forma FAS123R adjustment Pro forma Cost of Revs 254.1 246.4 232.4 256.1 Gross Profit (Rpt) 65.2 64.0 60.6 66.7 Gross Profit (Pforma) 65.2 64.0 60.6 66.7 Gross Margin (Rpt) 20.4% 20.6% 20.7% 20.7% Gross Margins (PF) 20.4% 20.6% 20.7% 20.7% SG&A 42.8 44.7 46.9 49.2 Restructuring - FAS 123R Stock based compensation 5.8 7.2 8.1 9.2 Total Expenses 42.8 44.7 46.9 49.2 Total Recurring Expenses 37.0 37.5 38.8 40.0 Operating Profit (Reported) 22.4 19.3 13.6 17.6 Operating Profit (Pro Forma) 28.2 26.5 21.7 26.8 Operating Margin (Reported) 7.0% 6.2% 4.6% 5.4% Operating Margin (Pro Forma) 8.8% 8.5% 7.4% 8.3% EBITDA 30.0 28.7 25.8 33.7 EBITDA Margin 9.4% 9.3% 8.8% 10.4% Y/Y EBITDA Growth 33.7% -4.1% -10.2% 30.5% Other Income (Expense) 4.2 2.7 3.6 4.0 Total Other 4.2 2.7 3.6 4.0 Income Before Taxes (Reported) 26.6 22.0 17.2 21.6 Income Before Taxes (Pro Forma) 32.4 29.2 25.3 30.8 Income Taxes (Rpt) 9.1 7.7 6.1 7.6 Income Taxes (Pforma) 11.1 10.2 8.9 10.8 Tax Rate 34.6% 34.8% 35.2% 35.2% Pforma Tax Rate Inc From Ops After Taxes (Rpt) 17.5 14.3 11.2 14.0 Inc From Ops After Taxes (PF) 21.2 19.0 16.4 20.0 Extraordinary Item - Reported Net Income 17.5 14.3 11.2 14.0 Pro Forma Net Income 21.2 19.0 16.4 20.0 Reported EPS 1.04 0.94 0.76 0.95 Pro Forma EPS 1.27 1.23 1.12 1.36 Diluted Shares 16.7 15.5 14.7 14.7 % of Total Revenue Cost of Revenue 79.6% 79.4% 79.3% 79.3% Gross Profit 20.4% 20.6% 20.7% 20.7% SG&A 13.4% 14.4% 16.0% 15.2% Y/Y Change Total Revenue 26.9% -2.8% -5.6% 10.2% Cost of Revenue 26.6% -3.0% -5.7% 10.2% SG&A 24.8% 4.3% 5.1% 4.7% Source: Company reports and J.P. Morgan estimates. 170 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 94: NILE Quarterly Income Statement $ in millions, except per share data FY 2007 FY 2008E FY 2009E Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08E Q1-09E Q2-09E Q3-09E Q4-09E Total Revenue 67.9 72.1 67.4 111.9 70.5 73.7 65.4 100.9 59.5 65.1 63.4 104.9 Cost of Revenue 54.7 57.2 54.0 88.3 56.5 58.6 52.1 79.2 47.7 51.8 50.5 82.4 Pro forma FAS123R adjustment Pro forma Cost of Revs 54.7 57.2 54.0 88.3 56.5 58.6 52.1 79.2 47.7 51.8 50.5 82.4 Gross Profit (Rpt) 13.2 14.9 13.4 23.7 13.9 15.1 13.3 21.7 11.8 13.3 12.9 22.6 Gross Profit (Pforma) 13.2 14.9 13.4 23.7 13.9 15.1 13.3 21.7 11.8 13.3 12.9 22.6 Gross Margin (Rpt) 19.5% 20.7% 19.8% 21.1% 19.8% 20.5% 20.3% 21.5% 19.8% 20.5% 20.3% 21.5% Gross Margins (PF) 19.5% 20.7% 19.8% 21.1% 19.8% 20.5% 20.3% 21.5% 19.8% 20.5% 20.3% 21.5% SG&A 9.6 9.9 9.7 13.6 10.9 10.8 10.0 13.0 11.2 11.1 10.2 14.5 Restructuring FAS 123R Stock based compensation 1.3 1.4 1.4 1.7 1.8 1.9 1.6 1.9 2.0 2.1 1.9 2.1 Total Expenses 9.6 9.9 9.7 13.6 10.9 10.8 10.0 13.0 11.2 11.1 10.2 14.5 Total Recurring Expenses 8.3 8.5 8.3 11.9 9.1 8.9 8.4 11.1 9.2 9.0 8.3 12.4 Operating Profit (Reported) 3.7 5.0 3.6 10.1 3.0 4.4 3.3 8.7 0.6 2.3 2.7 8.1 Operating Profit (Pro Forma) 5.0 6.4 5.0 11.8 4.8 6.3 4.9 10.6 2.6 4.4 4.6 10.2 Operating Margin (Reported) 5.4% 7.0% 5.4% 9.0% 4.3% 5.9% 5.0% 8.6% 1.0% 3.5% 4.2% 7.7% Operating Margin (Pro Forma) 7.3% 8.9% 7.4% 10.5% 6.8% 8.5% 7.5% 10.5% 4.4% 6.7% 7.2% 9.7% EBITDA 5.4 6.8 5.4 12.4 5.2 6.8 5.4 11.3 2.6 6.3 6.3 10.6 EBITDA Margin 7.9% 9.5% 8.0% 11.0% 7.4% 9.2% 8.3% 11.2% 4.4% 9.7% 10.0% 10.1% Y/Y EBITDA Growth 36.9% 37.4% 41.9% 27.3% -3.0% -0.2% 0.4% -8.7% -50.3% -7.4% 16.2% -6.1% Other Income (Expense) 1.2 0.8 1.0 1.2 0.9 0.6 0.3 0.9 1.0 0.8 0.8 1.0 Total Other 1.2 0.8 1.0 1.2 0.9 0.6 0.3 0.9 1.0 0.8 0.8 1.0 Income Before Taxes (Reported) 4.9 5.8 4.6 11.3 4.0 4.9 3.6 9.6 1.6 3.1 3.5 9.1 Income Before Taxes (Pro Forma) 6.2 7.2 6.0 13.0 5.7 6.8 5.2 11.5 3.6 5.2 5.4 11.2 Income Taxes (Rpt) 1.7 2.1 1.6 3.8 1.4 1.7 1.2 3.4 0.6 1.1 1.2 3.2 Income Taxes (Pforma) 2.2 2.6 2.1 4.3 2.0 2.4 1.8 4.0 1.3 1.8 1.9 3.9 Tax Rate 34.9% 35.4% 35.0% 33.3% 34.9% 35.0% 34.4% 35.0% 35.2% 35.2% 35.2% 35.2% Pforma Tax Rate 34.9% 35.4% 35.0% 33.3% 34.9% 35.0% 35.0% 35.0% 35.2% 35.2% 35.2% 35.2% Inc From Ops After Taxes (Rpt) 3.2 3.8 3.0 7.5 2.6 3.2 2.3 6.2 1.0 2.0 2.2 5.9 Inc From Ops After Taxes (PF) 4.0 4.7 3.9 8.7 3.7 4.4 3.4 7.5 2.3 3.4 3.5 7.2 Extraordinary Item Reported Net Income 3.2 3.8 3.0 7.5 2.6 3.2 2.3 6.2 1.0 2.0 2.2 5.9 . 17. 5 14.3 11.2 14.0 Inc From Ops After Taxes (PF) 21.2 19.0 16.4 20.0 Extraordinary Item - Reported Net Income 17. 5 14.3 11.2 14.0 Pro Forma Net. Operating Profit (Reported) 145 116 123 271 198 217 154 211 151 159 160 234 Operating Profit (Pro Forma) 179 162 174 325 252 245 224 296 233 243 247 326 Operating