Investor Presentaiton
Management's Discussion and Analysis
Nine months ended September 30, 2011
Selected financial data
Reconciliation of income/(loss) before tax to Adjusted EBITDA for the twelve months ended:
September 30, 2011
June 30, 2011
December 31, 2010
June 30, 2010
December 31, 2009
Income/(loss) before tax
Depreciation and amortisation
Finance costs, net
425
443
in millions of U.S. dollars
185
(59)
(427)
333
321
301
313
313
346
366
412
414
404
Impairment of assets
3
3
10
47
(Gain)/loss on changes in fair value of derivative financial instrument
(22)
29
12
(32)
11
(29)
(10)
(40)
(14)
(16)
(15)
10
10
4
39
35
32
(18)
3
-
1,119
1,153
942
(1)
597
(2)
328
Foreign exchange loss/(gain), net
(Gain)/Loss on disposal of property, plant and equipment
Movement in allowances and provisions
Other non-cash items
Adjusted EBITDA
We use Adjusted EBITDA, which is NOT a measure to be reported under IFRS, to
analyse our operating performance. Adjusted EBITDA is not a measurement of our
operating performance under IFRS and should not be considered as an alternative
to gross profit, net profit or any other performance measures derived in accordance
with IFRS or as an alternative to cash flow from operating activities or as a
measure of our liquidity. In particular, Adjusted EBITDA should not be considered
to be a measure of discretionary cash available to invest in our growth. Adjusted
EBITDA has limitations as analytical tool, and potential investors should not
consider it in isolation, or as a substitute for analysis of our operating results as
reported under IFRS. Some of these limitations include:
•
Adjusted EBITDA does not reflect the impact of financing or finance costs on
our operating performance, which can be significant and could further increase if
we were to incur more debt;
• Adjusted EBITDA does not reflect the impact of income taxes on our operating
performance;
•
Adjusted EBITDA does not reflect the impact of depreciation and amortisation
on our operating performance. The assets which are being depreciated and/or
amortized will have to be replaced in the future and such depreciation and
amortisation expense may approximate the cost to replace these assets in the
future. By excluding this expense from Adjusted EBITDA, it does not reflect our
future cash requirements for these replacements; and
Adjusted EBITDA does not reflect the impact of other non-cash items on our
operating performance, such as share of profit in associate, foreign exchange
loss/gain, impairment of assets, gain on disposal of available-for-sale investments,
gain on disposal of associate, loss on disposal of property, plant and equipment,
share-based payments, inventory and doubtful debts allowances, and movement in
other provisions.
Other companies in the pipe industry may calculate Adjusted EBITDA differently
or may use it for other purposes, limiting its usefulness as comparative measure.
We compensates for these limitations by relying primarily on its IFRS operating
results and using Adjusted EBITDA only supplementally.
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