Fourth-Quarter and Full-Year 2019 Orphan and Rheumatology Segment Results
Note Regarding Use of Non-GAAP Financial Measures
EBITDA, or earnings before interest, taxes, depreciation and amortization, and adjusted EBITDA are used and provided by Horizon as non-GAAP financial measures.
Horizon provides certain other financial measures such as non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP gross profit and gross profit
ratio, non-GAAP operating expenses, non-GAAP operating income, non-GAAP tax rate, non-GAAP operating cash flow, net leverage ratio and net debt, each of
which include adjustments to GAAP figures. These non-GAAP measures are intended to provide additional information on Horizon's performance, operations,
expenses, profitability and cash flows. Adjustments to Horizon's GAAP figures as well as EBITDA exclude acquisition and/or divestiture-related expenses, charges
related to the discontinuation of ACTIMMUNE development for Friedreich's ataxia, gain or loss from sale of assets, upfront, progress and milestone payments
related to license and collaboration agreements, litigation settlements, loss on debt extinguishment, costs of debt refinancing, drug manufacturing harmonization
costs, restructuring and realignment costs, as well as non-cash items such as share-based compensation, depreciation and amortization, non-cash interest expense,
long-lived asset impairment charges and other non-cash adjustments. Certain other special items or substantive events may also be included in the non-GAAP
adjustments periodically when their magnitude is significant within the periods incurred. Horizon maintains an established non-GAAP cost policy that guides the
determination of what costs will be excluded in non-GAAP measures. Horizon believes that these non-GAAP financial measures, when considered together with the
GAAP figures, can enhance an overall understanding of Horizon's financial and operating performance. The non-GAAP financial measures are included with the
intent of providing investors with a more complete understanding of the Company's historical and expected 2020 financial results and trends and to facilitate
comparisons between periods and with respect to projected information. In addition, these non-GAAP financial measures are among the indicators Horizon's
management uses for planning and forecasting purposes and measuring the Company's performance. For example, adjusted EBITDA is used by Horizon as one
measure of management performance under certain incentive compensation arrangements. These non-GAAP financial measures should be considered in addition
to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The non-GAAP financial measures used by the Company may
be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies.
HORIZON
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