2023 INVESTOR DAY
Statement Regarding Non-GAAP Measures
Each of the non-GAAP measures included in this presentation should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure,
and may not be comparable to similarly titled measures reported by other companies. Management believes that these measures provide useful information to investors by
offering additional ways of viewing Veralto's results that, when reconciled to the corresponding GAAP measure, help our investors to (1) understand the long-term profitability
trends of our business and compare our profitability to prior and future periods and to our peers, and (2) identify underlying growth trends in our business and compare our
revenue performance with prior and future periods and to our peers.
The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons:
■ We exclude the amortization of acquisition-related intangible assets from the calculation of non-GAAP profitability measures because the amount and timing of such charges
are significantly impacted by the timing, size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not
acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and related amortization term are unique to each
acquisition and can vary significantly from acquisition to acquisition. Exclusion of this amortization expense facilitates more consistent comparisons of operating results over
time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. We believe however that it is important for
investors to understand that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future
periods until such intangible assets have been fully amortized.
■ With respect to the other items excluded from non-GAAP adjusted operating profit, adjusted operating margin and adjusted EBITDA, we exclude these items because they are
of a nature and/or size that occur with inconsistent frequency, occur for reasons that may be unrelated to Veralto's commercial performance during the period and/or we
believe that such items may obscure underlying business trends and make comparisons of long-term performance difficult.
■ With respect to core revenue-related measures, (1) we exclude the impact of currency translation because it is not under management's control, is subject to volatility and can
obscure underlying business trends, and (2) we exclude the effect of acquisitions and divested product lines because the timing, size, number and nature of such transactions
can vary significantly from period-to-period and between us and our peers, which we believe may obscure underlying business trends and make comparisons of long-term
performance difficult.
■ With respect to the FCF Measure, we exclude payments for additions to property, plant and equipment (net of the proceeds from capital disposals) to demonstrate the amount
of operating cash flow for the period that remains after accounting for the Company's capital expenditure requirements.
Veralto
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