FY2023 Separation Roadmap
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Use of Non-GAAP financial measures and operating metrics
In this presentation, the Company has included certain non-GAAP financial measures as defined in Regulation G promulgated under the Securities Exchange Act of 1934, as amended. These non-GAAP
measures are described below.
Adjusted Net revenue is calculated excluding pass through revenue of the Company's People & Places Solutions and Divergent Solutions segments from the Company's revenue from continuing operations.
Pass through revenues are amounts we bill to clients on projects where we are procuring subcontract labor or third-party materials and equipment on behalf of the client. These amounts are considered pass
throughs because we receive no or only a minimal mark-up associated with the billed amounts. We have amended our name and convention for revenue, excluding pass-through costs from "net revenue" to
"adjusted net revenue." Note, this is simply a name change intended to make the non-GAAP nature of this measure more prominent and does not impact measurement.
Adjusted operating profit, adjusted earnings from continuing operations before taxes, adjusted income taxes from continuing operations, adjusted net earnings from continuing operations and adjusted EPS
from continuing operations are calculated by:
Excluding items collectively referred to as Restructuring, Transaction and Other Charges, which include:
1.
2.
a.
b.
C.
costs and other charges associated with our Focus 2023 transformation initiatives, including activities associated with the re-scaling and repurposing of physical office space, employee
separations, contractual termination fees and related expenses, referred to as "Focus 2023 Transformation, mainly real estate rescaling efforts";
transaction costs and other charges incurred in connection with the Separation Transaction and the acquisitions of BlackLynx and StreetLight and the strategic investment in PA Consulting,
including advisor fees, change in control payments, and the impact of the quarterly adjustment to the estimated performance based payout of contingent consideration to the sellers in
connection with certain acquisitions; impacts resulting from the EPS numerator adjustment relating to the redeemable noncontrolling interests preference share repurchase and reissuance
activities and similar transaction costs and expenses (collectively referred to as "Transaction Costs"); impacts resulting from the EPS numerator adjustment relating to the redeemable
noncontrolling interests preference share repurchase and reissuance activities and similar transaction costs and expenses (collectively referred to as "Transaction Costs");
recoveries, costs and other charges associated with restructuring activities implemented in connection with the Separation Transaction, including advisor fees, involuntary terminations and
related costs, the acquisitions of CH2M, BlackLynx, and StreetLight, the strategic investment in PA Consulting, the sale of the ECR business and other related cost reduction initiatives, which
included involuntary terminations, costs associated with co-locating offices of acquired companies, separating physical locations of continuing operations, professional services and personnel
costs, amounts relating to certain commitments and contingencies relating to discontinued operations of the CH2M business, including the final settlement charges relating to the Legacy
CH2M Matter, net of previously recorded reserves, third party recoveries recorded as receivables reducing SG&A, and charges associated with the impairment and final closing activities of our
AWE ML joint venture (collectively referred to as "Restructuring, integration, separation and other charges").
Excluding items collectively referred to as Other adjustments, which include:
a.
adding back intangible assets amortization and impairment charges;
b.
impact of certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment;
C. impacts related to tax rate increases in the UK in a prior period.View entire presentation