FIRST CASH FINANCIAL SERVICES, INC. UNAUDITED NON-GAAP FINANCIAL INFORMATION

The Company uses certain financial calculations, such as free cash flow, EBITDA and constant currency results, which are not considered measures of financial performance under U.S. generally accepted accounting principles ("GAAP"). Items excluded from the calculation of free cash flow, EBITDA and constant currency results are significant components in understanding and assessing the Company's financial performance. Since free cash flow, EBITDA and constant currency results are not measures determined in accordance with GAAP and are thus susceptible to varying calculations, free cash flow, EBITDA and constant currency results, as presented, may not be comparable to other similarly titled measures of other companies. Free cash flow, EBITDA and constant currency results should not be considered as alternatives to net income, cash flow provided by or used in operating, investing or financing activities or other financial statement data presented in the Company's consolidated financial statements as indicators of financial performance or liquidity. Non-GAAP measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. 

Earnings Before Interest, Taxes, Depreciation and Amortization

EBITDA is commonly used by investors to assess a company's leverage capacity, liquidity and financial performance. The following table provides a reconciliation of income from continuing operations to EBITDA (in thousands):
  Trailing Twelve Months Ended
  September 30,
  2012 2011
     
Income from continuing operations  $ 74,825  $ 67,018
     
Adjustments:    
Income taxes  38,841   36,260
Depreciation and amortization  12,177  11,107
Interest expense  727  149
Interest income  (204)  (273)
Earnings from continuing operations before interest, taxes, depreciation and amortization  $ 126,366  $ 114,261
     
EBITDA margin calculated as follows:    
Total revenue from continuing operations  $ 562,696  $ 500,335
Earnings from continuing operations before interest, taxes, depreciation and amortization  126,366  114,261
EBITDA as a percentage of revenue 22% 23%

 

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