1Q21 Financial Performance Update
Non-GAAP Reconciliations
(in Smillions)
Reconciliation from GAAP Net Income (Loss) to Adjusted EBITDA (Non-GAAP):
GAAP Net Income (Loss)
2017
2018
2019
2020
2021
FY**
FY*
FY*
Q1
Q2
03
Q4
Q1
[1]
Add: Provision (benefit) for income taxes
Add: Other expense (income), net
Add: Restructuring and other related reorganization costs
Add: Impairment of goodwill
($19)
$113
$126
($16)
($153)
($48)
($73)
($80)
129
60
68
(11)
(26)
(10)
(31)
(16)
14
10
(7)
15
12
12
12
1
9
33
(1)
3
Add: Legal reserves and settlements
5
Add: Stock-based compensation expense
96
118
124
26
25
28
29
29
[2]
Add: Depreciation and amortization
111
116
126
32
32
30
31
29
(3)
Adjusted EBITDA (Non-GAAP)
$331
$422
$438
$40
($74)
$15
($33)
($26)
Reconciliation of GAAP Cash Flow from Operating Activities to Non-GAAP Free Cash Flow:
Cash flow provided by (used in) operations
Subtract: Capital expenditures
Free Cash Flow (Non-GAAP) (4)
$238
64
$174
$405
61
$424
$344
83
$341
The Company believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics
used by management in operating and analyzing our business.
(1) Includes an estimated U.S. Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act") of $73 million during the year ended December 31, 2017, primarily related to a transition tax expense.
(2) Depreciation and amortization. Includes internal use software and website development amortization.
(3) Adjusted EBITDA. A non-GAAP measure which is defined as net income (loss) plus: (1) provision (benefit) for income taxes; (2) other income (expense), net; (3) depreciation and amortization; (4) stock-based compensation and other stock-settled obligations; (5) goodwill, intangible asset, and long-lived asset impairments; (6) legal reserves and
settlements; (7) restructuring and other related reorganization costs; and (8) non-recurring expenses and income. These items are excluded from our Adjusted EBITDA measure because these items are non cash in nature, or because the amount is not driven by core operating results and renders comparisons with prior periods less meaningful.
(4) Free Cash Flow. A non-GAAP measure which is defined as net cash provided by operating activities less capital expenditures, which are purchases of property and equipment, including capitalization of internal-use software development costs. We believe this financial measure can provide useful supplemental information to help investors better
understand underlying trends in our business, as it represents the operating cash flow that our operating businesses generate, less capital expenditures but before taking into account other cash movements that are not directly tied to the core operations of our businesses, such as financing activities, foreign exchange or certain investing activities. Free
Cash Flow has certain limitations that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent the residual cash flow for discretionary expenditures. Therefore, it is important to evaluate Free Cash Flow along with the unaudited condensed consolidated statements of cash flows.
* Full-year totals reflect data as reported and may differ from the summation of the quarterly data due to rounding.
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