Our non-IFRS measures herein include adjusted gross profit, adjusted gross margin (adjusted gross profit as a percentage of revenue), adjusted selling, general and administrative expenses (SG&A), adjusted SG&A as a percentage of revenue, operating earnings (adjusted EBIAT), operating margin (adjusted EBIAT as a percentage of revenue), adjusted net earnings, adjusted earnings per share, adjusted return on invested capital (adjusted ROIC), free cash flow and adjusted effective tax rate. Adjusted EBIAT, adjusted ROIC, free cash flow and adjusted effective tax rate are further described in the tables below. In calculating these non-IFRS financial measures, management excludes the following items, where applicable: employee stock-based compensation expense, amortization of intangible assets (excluding computer software), restructuring and other charges, net of recoveries (most significantly restructuring charges), the write-down of goodwill, intangible assets and property, plant and equipment, and gains or losses related to the repurchase of our securities, net of associated tax adjustments, and deferred tax write-offs or recoveries associated with restructuring actions or restructured sites.
We believe the non-IFRS measures we present herein are useful, as they enable investors to evaluate and compare our results from operations and cash resources generated from our business in a more consistent manner (by excluding specific items that we do not consider to be reflective of our ongoing operating results) and provide an analysis of operating results using the same measures our chief operating decision makers use to measure performance. In addition, management believes that the use of a non-IFRS adjusted effective tax rate provides improved insight into the tax effects of our ongoing business operations, and is useful to management and investors for historical comparisons and forecasting. These non-IFRS financial measures result largely from management's determination that the facts and circumstances surrounding the excluded charges or recoveries are not indicative of the ordinary course of the ongoing operation of our business.
Non-IFRS measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other public companies that use IFRS, or who report under U.S. GAAP and use non-U.S. GAAP measures to describe similar operating metrics. Non-IFRS measures are not measures of performance under IFRS and should not be considered in isolation or as a substitute for any standardized measure under IFRS. The most significant limitation to management's use of non-IFRS financial measures is that the charges or credits excluded from the non-IFRS measures are nonetheless charges or credits that are recognized under IFRS and that have an economic impact on the company. Management compensates for these limitations primarily by issuing IFRS results to show a complete picture of the company's performance, and reconciling non-IFRS results back to IFRS results.
The economic substance of these exclusions and management's rationale for excluding them from non-IFRS financial measures is provided below:
Employee stock-based compensation expense, which represents the estimated fair value of stock options, restricted share units and performance share units granted to employees, is excluded because grant activities vary significantly from quarter-to-quarter in both quantity and fair value. In addition, excluding this expense allows us to better compare core operating results with those of our competitors who also generally exclude employee stock-based compensation expense in assessing operating performance, who may have different granting patterns and types of equity awards, and who may use different valuation assumptions than we do, including those competitors who report under U.S. GAAP and use non-U.S. GAAP measures to present similar metrics.
Amortization charges (excluding computer software) consist of non-cash charges against intangible assets that are impacted by the timing and magnitude of acquired businesses. Amortization of intangible assets varies among our competitors, and we believe that excluding these charges permits a better comparison of core operating results with those of our competitors who also generally exclude amortization charges in assessing operating performance.
Restructuring and other charges, net of recoveries, include costs relating to employee severance, lease terminations, site closings and consolidations, write-downs of owned property and equipment which are no longer used and are available for sale, reductions in infrastructure, and acquisition-related transaction costs. We exclude restructuring and other charges, net of recoveries, because we believe that they are not directly related to ongoing operating results and do not reflect expected future operating expenses after completion of these activities. We believe these exclusions permit a better comparison of our core operating results with those of our competitors who also generally exclude these charges, net of recoveries, in assessing operating performance.
Impairment charges, which consist of non-cash charges against goodwill, intangible assets and property, plant and equipment, result primarily when the carrying value of these assets exceeds their recoverable amount. Our competitors may record impairment charges at different times, and we believe that excluding these charges permits a better comparison of our core operating results with those of our competitors who also generally exclude these charges in assessing operating performance.
Gains or losses related to the repurchase of our securities are excluded, as we believe that these gains or losses do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these gains or losses in assessing operating performance.
Deferred tax write-offs or recoveries associated with restructuring actions or restructured sites are excluded, as we believe that these write-offs or recoveries do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these charges or recoveries in assessing operating performance.
The following table sets forth, for the periods indicated, the various non-IFRS measures discussed above, and a reconciliation of IFRS to non-IFRS measures (in millions, except percentages and per share amounts):
Three months ended December
31 Year ended December 31
----------------------------- -----------------------------
2015 2016 2015 2016
-------------- -------------- -------------- --------------
% of % of % of % of
reve- reve- reve- reve-
nue nue nue nue
-------------- -------------- -------------- --------------
IFRS revenue $1,514.9 $1,623.7 $5,639.2 $6,016.5
IFRS gross
profit $ 101.3 6.7% $ 111.9 6.9% $ 391.1 6.9% $ 427.6 7.1%
Employee
stock-based
compensation
expense 4.3 4.6 16.3 15.0
--------- --------- --------- ---------
Non-IFRS
adjusted gross
profit $ 105.6 7.0% $ 116.5 7.2% $ 407.4 7.2% $ 442.6 7.4%
========= ========= ========= =========
IFRS SG&A $ 51.8 3.4% $ 53.2 3.3% $ 207.5 3.7% $ 211.1 3.5%
Employee
stock-based
compensation
expense (6.5) (5.8) (21.3) (18.0)
--------- --------- --------- ---------
Non-IFRS
adjusted SG&A $ 45.3 3.0% $ 47.4 2.9% $ 186.2 3.3% $ 193.1 3.2%
========= ========= ========= =========
IFRS earnings
before income
taxes $ 23.8 1.6% $ 29.3 1.8% $ 109.1 1.9% $ 161.0 2.7%
Finance costs 2.6 2.7 6.3 10.0
Refund
interest
income - (8.3) - (14.3)
Employee
stock-based
compensation
expense 10.8 10.4 37.6 33.0
Amortization
of intangible
assets
(excluding
computer
software) 1.5 1.5 6.0 6.0
Net
restructuring,
Impairment
and other
charges 14.3 25.8 35.8 25.5
--------- --------- --------- ---------
Non-IFRS
operating
earnings
(adjusted
EBIAT) (1) $ 53.0 3.5% $ 61.4 3.8% $ 194.8 3.5% $ 221.2 3.7%
========= ========= ========= =========
IFRS net
earnings $ 12.1 0.8% $ 20.9 1.3% $ 66.9 1.2% $ 136.3 2.3%
Employee
stock-based
compensation
expense 10.8 10.4 37.6 33.0
Amortization
of intangible
assets
(excluding
computer
software) 1.5 1.5 6.0 6.0
Net
restructuring,
Impairment
and other
charges 14.3 25.8 35.8 25.5
Adjustments
for taxes (2) 0.2 0.9 (1.3) 0.1
--------- --------- --------- ---------
Non-IFRS
adjusted net
earnings $ 38.9 $ 59.5 $ 145.0 $ 200.9
========= ========= ========= =========
Diluted EPS
Weighted
average # of
shares (in
millions)* 145.2 143.4 157.9 143.9
IFRS earnings
per share $ 0.08 $ 0.15 $ 0.42 $ 0.95
Non-IFRS
adjusted
earnings per
share $ 0.27 $ 0.41 $ 0.92 $ 1.40
# of shares
outstanding at
period end (in
millions) 143.5 140.9 143.5 140.9
IFRS cash
provided by
operations $ 92.0 $ 87.5 $ 196.3 $ 173.3
Purchase of
property,
plant and
equipment,
net of sales
proceeds (15.4) (17.8) (60.0) (63.1)
Deposit on
anticipated
sale of real
property - - 11.2 -
Finance lease
payments - (1.0) - (4.5)
Repayments
from
(advances to)
Solar
Supplier 1.8 3.0 (26.5) 14.0
Finance costs
paid (2.4) (2.4) (7.8) (9.5)
--------- --------- --------- ---------
Non-IFRS free
cash flow (3) $ 76.0 $ 69.3 $ 113.2 $ 110.2
========= ========= ========= =========
IFRS ROIC % (4) 9.6% 10.8% 11.1% 15.2%
Non-IFRS
adjusted ROIC %
(4) 21.4% 22.7% 19.8% 20.8%
