Exelis Reports Solid Second-Quarter 2012 Financial Results; Maintains 2012 Full-Year Outlook
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Key Performance Indicators and Non-GAAP Measures
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Management reviews key performance indicators including revenue,
segment operating income and margins, orders growth, and backlog,
among other metrics on a regular basis. In addition, we consider
certain additional measures to be useful to management and investors
evaluating our operating performance for the periods presented, and
provide a tool for evaluating our ongoing operations, liquidity and
management of assets. This information can assist investors in
assessing our financial performance and measures our ability to
generate capital for deployment among competing strategic
alternatives and initiatives, including, but not limited to,
acquisitions, and debt repayment. These metrics, however, are not
measures of financial performance under accounting principles
generally accepted in the United States of America (GAAP) and should
not be considered a substitute for sales, operating income, income
from continuing operations, or net cash from continuing operations
as determined in accordance with GAAP. We consider the following
non-GAAP measures, which may not be comparable to similarly titled
measures reported by other companies, to be key performance
indicators:
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“adjusted net income” defined as net income, adjusted to
exclude items that include, but are not limited to significant
charges or credits that impact current results, but are not related
to our ongoing operations, unusual and infrequent non-operating
items and non-operating tax settlements or adjustments. A
reconciliation of adjusted net income is provided below.
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“segment adjusted operating income” defined as operating
income of our two segments, adjusted to exclude items that include,
but are not limited to significant charges or credits that impact
current results, but are not related to our ongoing operations,
unusual and infrequent non-operating items and non-operating tax
settlements or adjustments. A reconciliation of segment operating
income is provided below.
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“segment adjusted operating margin” defined as segment
adjusted operating income as defined above, divided by revenue. A
reconciliation of segment operating margin is provided below.
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“Free cash flow” defined as GAAP cash flow from operating
activities, less capital expenditures. This metric does not include
dividend payments.
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Exelis Inc.
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Reported v. Adjusted Net Income and Adjusted EPS
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Three Months Ended June 30,
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Six Months Ended June 30,
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($ million, except per share)
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2012
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2011
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2012
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2011
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Net Income
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86
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79
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156
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161
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Separation Costs, net of tax
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1
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7
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15
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9
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Separation Related Tax Items
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-
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-
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4
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-
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Adjusted Net Income
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87
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86
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175
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170
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Net Income per fully diluted share
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$
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0.46
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$
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0.42
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$
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0.83
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$
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0.86
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Adjusted Net Income per fully diluted share
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$
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0.46
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$
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0.46
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$
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0.93
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$
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0.91
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Weighted Average Shares Outstanding, Diluted
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188.5
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187.1
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188.0
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187.1
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