OMAHA, Neb., Feb. 01, 2017 (GLOBE NEWSWIRE) -- West Corporation (Nasdaq:WSTC), a global provider of communication and network infrastructure services, today announced its fourth quarter and full year 2016 results.
Select Financial Information                      
Unaudited, in millions except per share amounts   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015     % Change     2016       2015     % Change
Revenue $   567.4     $   568.4     -0.2 %   $  2,292.0     $  2,280.3     0.5 %
Operating Income     102.7         105.0     -2.2 %       444.2         456.5     -2.7 %
Income from Continuing Operations     68.3         42.3     61.4 %       193.4         190.9     1.3 %
Earnings per Share from Continuing Operations - Diluted     0.80         0.50     60.0 %       2.29         2.24     2.2 %
Cash Flows from Continuing Operating Activities     126.7         127.5     -0.7 %       428.3         410.8     4.3 %
Cash Flows used in Continuing Investing Activities     (41.2 )       (118.7 )   -65.3 %       (108.3 )       (232.4 )   -53.4 %
Cash Flows used in Continuing Financing Activities     (88.4 )       (23.5 )   276.8 %       (311.9 )       (388.2 )   -19.7 %
                       
Select Non-GAAP Financial Information 1                      
Unaudited, in millions except per share amounts   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015     % Change     2016       2015     % Change
EBITDA from Continuing Operations $   151.8     $   158.0     -4.0 %   $   640.7     $   649.3     -1.3 %
Adjusted EBITDA from Continuing Operations     164.9         165.1     -0.1 %       664.1         676.1     -1.8 %
Adjusted Operating Income     132.3         131.0     1.0 %       534.2         551.8     -3.2 %
Adjusted Income from Continuing Operations     64.5         63.7     1.4 %       256.9         265.9     -3.4 %
Adjusted Earnings per Share from Continuing Operations - Diluted     0.76         0.75     1.3 %       3.04         3.11     -2.3 %
Free Cash Flow from Continuing Operating Activities 2     99.4         86.9     14.4 %       301.7         274.0     10.1 %

Dividend The Company today also announced a $0.225 per common share dividend. The dividend is payable on March 2, 2017 to shareholders of record as of the close of business on February 21, 2017.

Fourth Quarter Operating ResultsFor the fourth quarter of 2016, revenue was $567.4 million, a decrease of 0.2 percent. Adjusted organic revenue growth 5 slowed in the fourth quarter to 0.7 percent, primarily due to a decline in conferencing revenue.

Fourth quarter operating income was $102.7 million, a decrease of 2.2 percent. EBITDA 1 declined 4.0 percent to $151.8 million. Operating income and EBITDA were negatively impacted by an $8.4 million restructuring charge due to a workforce reduction plan implemented in the quarter as part of strategic and cost savings initiatives. Adjusted operating income 1 increased 1.0 percent to $132.2 million and Adjusted EBITDA 1 was nearly flat at $164.9 million.

Income from continuing operations increased 61.4 percent to $68.3 million, primarily due to a decrease in the fourth quarter effective tax rate to negative 1.8 percent. This change resulted from a fourth quarter restructuring of foreign legal entities that lowered income tax expense (primarily deferred) on unremitted foreign earnings. Adjusted income from continuing operations 1 was $64.5 million, an increase of 1.4 percent.

"West Corporation finished the year with a fourth quarter that was stronger than we expected," said Tom Barker, chairman and chief executive officer. "Our consolidated revenue was down slightly primarily due to a decline in conferencing revenue. However, our four growth businesses (UCaaS, Safety Services, Interactive Services and Specialized Agent Services) grew 5.5 percent on an organic basis in the fourth quarter. Additionally, we had double-digit growth in free cash flow in the fourth quarter and full year. During the fourth quarter we also made changes to our cost structure that we expect to positively impact our results in 2017 and further strengthen West for the future."

Fourth quarter results by segment were as follows:

  • Unified Communications Services revenue decreased 5 percent; adjusted organic growth 5 was negative 2.8 percent due to price compression and fewer minutes in conferencing, partially offset by low double-digit growth in the UCaaS business. Operating income decreased 20.7 percent due to the revenue decline and a restructuring charge incurred to better align expenses with expected revenue. Adjusted operating income 1 decreased 14.5 percent. 
  • Safety Services revenue increased 3.9 percent; excluding acquisitions, revenue increased 3.5 percent, primarily due to growth from clients adopting new technologies, partially offset by lower equipment sales in the quarter. Operating income increased $11.0 million to $16.7 million due to revenue growth and cost savings initiatives, partially offset by a restructuring charge incurred as part of a strategic realignment of resources around growth initiatives. Adjusted operating income 1 increased $11.6 million to $23.7 million.  
  • Interactive Services revenue increased 11.2 percent; excluding acquisitions, revenue increased 8.0 percent due to increased volumes from new and existing clients. Operating income increased 37.0 percent to $9.1 million and adjusted operating income 1 increased 21.2 percent to $15.0 million primarily due to revenue growth. 
  • Specialized Agent Services revenue increased 3.1 percent primarily due to growth in healthcare advocacy services partially offset by slower than historical recoveries in cost management services. Operating income declined $1.6 million to $4.6 million and adjusted operating income 1 declined $2.1 million primarily due to revenue mix and higher labor costs.

Full Year Operating Result Highlights For the year ended December 31, 2016, revenue was $2,292.0 million, an increase of 0.5 percent. Adjusted organic revenue growth 5 for 2016 was 2.3 percent.

Operating income in 2016 was $444.2 million, a decrease of 2.7 percent. EBITDA 1 was $640.7 million, a decrease of 1.3 percent. Adjusted operating income 1 was $534.2 million, a decrease of 3.2 percent.

Full year 2016 revenue results by segment were as follows:
  • Unified Communications Services revenue decreased 2.9 percent; adjusted organic growth 5 was 1.0 percent. 
  • Safety Services revenue increased 5.3 percent; excluding acquisitions, revenue increase 5.2 percent. 
  • Interactive Services revenue increased 13.2 percent; excluding acquisitions, revenue increased 6.9 percent. 
  • Specialized Agent Services revenue increased 1.6 percent.

Balance Sheet, Cash Flow and Liquidity - 2016 Highlights
  • Cash flow from operations were $428.3 million, an increase of 4.3 percent, primarily due to lower cash tax payments. 
  • Free cash flow 1,2 increased 10.1 percent to $301.7 million due to the increase in cash flows from operations and lower capital expenditures. The Company invested $126.6 million, or 5.5 percent of revenue, in capital expenditures. 
  • 4.45x net leverage (net debt to pro forma adjusted EBITDA ratio, as calculated pursuant to the Company's senior secured term debt facilities 4) down from 4.68x at December 31, 2015.  
  • Repaid $191.1 million in debt; cash balance of $183.1 million at December 31, 2016.

"In 2016, West generated record operating cash flow. We deployed this cash toward repaying $191 million of our long-term debt, making two acquisitions for approximately $20 million and returning nearly $100 million to our shareholders in the form of dividends and stock repurchases," said Jan Madsen, chief financial officer. "We also took steps to refinance our debt, ending the year with a more attractive maturity profile and decreased leverage ratio. We believe each of these steps is consistent with our focus on driving shareholder value and enhancing West's financial flexibility."

2017 GuidanceFor 2017, the Company expects the results presented in the table below. This guidance assumes no acquisitions or changes in the current operating environment, capital structure or exchange rates. The two most significant exchange rates used for 2017 guidance are the British Pound Sterling at 1.25 and the Euro at 1.06. These foreign currency exchange rates, reflected in the guidance below, would negatively impact 2017 revenue by approximately $14 million and 2017 adjusted diluted earnings per share by $0.02 compared to 2016 rates.

In millions except per share amounts and leverage ratio    
  2016 Actual   2017 Guidance
Revenue $   2,292.0    $2,286 - $2,362 
Operating Income     444.2    $413 - $446 
Net Income     193.4    $175 - $196 
Earnings per Share - Diluted     2.29    $2.07 - $2.31 
Cash Flows from Operating Activities     428.3    $380 - $420 
Capital Expenditures     126.6    $100 - $130 
       
Non-GAAP Metrics 1      
In millions except per share amounts      
  2016 Actual   2017 Guidance
Adjusted EBITDA $   664.1   $639 - $672
Adjusted Operating Income     534.2   $500 - $532
Adjusted Net Income     256.9   $234 - $255
Adjusted Earnings per Share - Diluted     3.04   $2.76 - $3.00

"For 2017, including the negative impact of foreign currency exchange rates, we expect revenue in our conferencing and collaboration business to decrease 3-5 percent and revenue in our non-conferencing businesses to have mid- to high-single-digit growth. We expect double-digit growth in our UCaaS business; high-single-digit growth in Safety Services and Telecom Services; and mid- to high-single-digit growth in Interactive Services and Specialized Agent Services. Included across segments, we expect our healthcare practice to have high-single-digit growth," said Tom Barker.

Conference CallThe Company will hold a conference call to discuss these topics on February 2, 2017 at 11:00 AM Eastern Time (10:00 AM Central Time). Investors may access the call by visiting the Financials section of the West Corporation website at www.west.com and clicking on the Webcast link. A replay of the call will be available on the Company's website at www.west.com.

About West CorporationWest Corporation (Nasdaq:WSTC) is a global provider of communication and network infrastructure services. West helps its clients more effectively communicate, collaborate and connect with their audiences through a diverse portfolio of solutions that include unified communications services, safety services, interactive services such as automated notifications, telecom services and specialized agent services.

For 30 years, West has provided reliable, high-quality voice and data services. West has sales and operations in the United States, Canada, Europe, the Middle East, Asia Pacific and Latin America. For more information, please call 1-800-841-9000 or visit www.west.com.

Forward-Looking Statements This press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continue" or similar terminology. These statements reflect only West's current expectations and are not guarantees of future performance or results. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include, but are not limited to, the strategic alternatives available to the Company and the ability to execute on strategic alternatives; competition in West's highly competitive markets; increases in the cost of voice and data services or significant interruptions in these services; West's ability to keep pace with its clients' needs for rapid technological change and systems availability; the continued deployment and adoption of emerging technologies; the loss, financial difficulties or bankruptcy of any key clients; security and privacy breaches of the systems West uses to protect personal data; the effects of global economic trends on the businesses of West's clients; the non-exclusive nature of West's client contracts and the absence of revenue commitments; the cost of pending and future litigation; the cost of defending against intellectual property infringement claims; the effects of extensive regulation affecting many of West's businesses; West's ability to protect its proprietary information or technology; service interruptions to West's data and operation centers; West's ability to retain key personnel and attract a sufficient number of qualified employees; increases in labor costs and turnover rates; the political, economic and other conditions in the countries where West operates; changes in foreign exchange rates; West's ability to complete future acquisitions, integrate or achieve the objectives of its recent and future acquisitions; and future impairments of our substantial goodwill, intangible assets, or other long-lived assets. In addition, West is subject to risks related to its level of indebtedness. Such risks include West's ability to generate sufficient cash to service its indebtedness and fund its other liquidity needs; West's ability to comply with covenants contained in its debt instruments; West's ability to obtain additional financing; the incurrence of significant additional indebtedness by West and its subsidiaries; and the ability of West's lenders to fulfill their lending commitments. West is also subject to other risk factors described in documents filed by the Company with the United States Securities and Exchange Commission. 

These forward-looking statements speak only as of the date on which the statements were made. West undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
  WEST CORPORATION    
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME    
 (Unaudited, in thousands except per share data)   
             
    Three Months Ended Dec. 31,    
      2016           2015       % Change  
Revenue $   567,380     $   568,430     -0.2 %  
Cost of services     243,533         239,389     1.7 %  
Selling, general and administrative expenses     221,157         224,071     -1.3 %  
Operating income     102,690         104,970     -2.2 %  
Interest expense, net     35,290         38,411     -8.1 %  
Accelerated amortization of deferred financing costs     63         2,304     NM      
Other expense (income), net     210         (1,178 )   NM      
Income from continuing operations before tax     67,127         65,433     2.6 %  
Income tax (benefit) expense attributed to continuing operations     (1,193 )       23,093     NM      
Income from continuing operations     68,320         42,340     61.4 %  
Income from discontinued operations, net of income taxes     -          19,935     NM      
Net income $   68,320     $   62,275     9.7 %  
             
Weighted average shares outstanding:            
  Basic     83,254         83,243        
  Diluted     84,967         84,809        
             
Earnings per share - Basic:            
  Continuing operations $   0.82     $   0.51     60.8 %  
  Discontinued operations     -          0.24     NM      
    Total Earnings Per Share - Basic $   0.82     $   0.75     9.3 %  
             
Earnings per share - Diluted:            
  Continuing operations $   0.80     $   0.50     60.0 %  
  Discontinued operations     -          0.24     NM      
    Total Earnings Per Share - Diluted $   0.80     $   0.74     8.1 %  

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SELECTED SEGMENT FINANCIAL DATA:            
    Three Months Ended Dec. 31,    
      2016           2015       % Change  
Revenue:            
  Unified Communications Services $   340,033     $   357,780     -5.0 %  
  Safety Services     75,672         72,863     3.9 %  
  Interactive Services     79,339         71,332     11.2 %  
  Specialized Agent Services     75,414         73,143     3.1 %  
  Intersegment eliminations     (3,078 )       (6,688 )   NM    
    Total $   567,380     $   568,430     -0.2 %  
             
Depreciation:            
  Unified Communications Services $   17,128     $   17,713     -3.3 %  
  Safety Services     4,424         5,027     -12.0 %  
  Interactive Services     4,360         3,978     9.6 %  
  Specialized Agent Services     3,222         2,566     25.6 %  
    Total $   29,134     $   29,284     -0.5 %  
             
Amortization:            
  Unified Communications Services - SG&A $   2,910     $   3,618     -19.6 %  
  Safety Services - SG&A     3,625         5,436     -33.3 %  
  Safety Services - COS     3,365         3,088     9.0 %  
  Interactive Services - SG&A     5,306         4,512     17.6 %  
  Specialized Agent Services - SG&A     4,605         5,411     -14.9 %  
  Deferred financing costs     1,834         6,928     -73.5 %  
    Total $   21,645     $   28,993     -25.3 %  
             
Share-based compensation:            
  Unified Communications Services $   3,074     $   3,399     -9.6 %  
  Safety Services     865         973     -11.1 %  
  Interactive Services     538         611     -11.9 %  
  Specialized Agent Services     982         1,157     -15.1 %  
    Total $   5,459     $   6,140     -11.1 %  
             
Cost of services:            
  Unified Communications Services $   162,720     $   163,296     -0.4 %  
  Safety Services     24,379         27,441     -11.2 %  
  Interactive Services     18,440         15,926     15.8 %  
  Specialized Agent Services     39,603         37,400     5.9 %  
  Intersegment eliminations     (1,609 )       (4,674 )   NM    
    Total $   243,533     $   239,389     1.7 %  
             
Selling, general and administrative expenses:            
  Unified Communications Services $   107,354     $   106,302     1.0 %  
  Safety Services     34,582         39,718     -12.9 %  
  Interactive Services     51,831         48,786     6.2 %  
  Specialized Agent Services     31,169         29,544     5.5 %  
  Corporate Other     (2,310 )       1,735     NM    
  Intersegment eliminations     (1,469 )       (2,014 )   NM    
    Total $   221,157     $   224,071     -1.3 %  
             
Operating income:            
  Unified Communications Services $   69,959     $   88,182     -20.7 %  
  Safety Services     16,711         5,704     193.0 %  
  Interactive Services     9,068         6,620     37.0 %  
  Specialized Agent Services     4,642         6,199     -25.1 %  
  Corporate Other     2,310         (1,735 )   NM    
    Total $   102,690     $   104,970     -2.2 %  
             
Operating margin:            
  Unified Communications Services   20.6 %     24.6 %      
  Safety Services   22.1 %     7.8 %      
  Interactive Services   11.4 %     9.3 %      
  Specialized Agent Services   6.2 %     8.5 %      
    Total   18.1 %     18.5 %      
             
             
SELECTED FINANCIAL DATA:            
             
        Contribution        
Changes in Revenue - 4Q16 compared to 4Q15:       to Rev. Growth        
Revenue for the three months ended Dec. 31, 2015 $   568,430            
  Revenue from acquired entities 3     3,244       0.6 %      
  Revenue from previously disclosed lost client     (1,200 )     -0.2 %      
  Estimated impact of foreign currency exchange rates     (7,122 )     -1.3 %      
  Adjusted organic growth, net 5     4,028       0.7 %      
Revenue for the three months ended Dec. 31, 2016 $   567,380       -0.2 %      
             

  WEST CORPORATION    
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME    
 (Unaudited, in thousands except per share data)   
             
    Year Ended Dec. 31,    
      2016           2015       % Change  
Revenue $   2,291,963     $   2,280,259     0.5 %  
Cost of services     981,788         970,693     1.1 %  
Selling, general and administrative expenses     865,961         853,116     1.5 %  
Operating income     444,214         456,450     -2.7 %  
Interest expense, net     148,279         154,068     -3.8 %  
Accelerated amortization of deferred financing costs     36,532         2,304     NM    
Other expense (income), net     (409 )       1,405     NM    
Income from continuing operations before tax     259,812         298,673     -13.0 %  
Income tax expense attributed to continuing operations     66,423         107,757     -38.4 %  
Income from continuing operations     193,389         190,916     1.3 %  
Income from discontinued operations, net of income taxes     -          50,924     NM    
Net income $   193,389     $   241,840     -20.0 %  
             
Weighted average shares outstanding:            
  Basic     82,969         83,420        
  Diluted     84,599         85,394        
             
Earnings per share - Basic:            
  Continuing operations $   2.33     $   2.29     1.7 %  
  Discontinued operations     -          0.61     NM    
    Total Earnings Per Share - Basic $   2.33     $   2.90     -19.7 %  
             
Earnings per share - Diluted:            
  Continuing operations $   2.29     $   2.24     2.2 %  
  Discontinued operations     -          0.59     NM    
    Total Earnings Per Share - Diluted $   2.29     $   2.83     -19.1 %  
             
             
SELECTED SEGMENT FINANCIAL DATA:            
    Year Ended Dec. 31,    
      2016           2015       % Change  
Revenue:            
  Unified Communications Services $   1,425,281     $   1,467,711     -2.9 %  
  Safety Services     296,320         281,391     5.3 %  
  Interactive Services     300,739         265,664     13.2 %  
  Specialized Agent Services     281,542         276,983     1.6 %  
  Intersegment eliminations     (11,919 )       (11,490 )   NM    
    Total $   2,291,963     $   2,280,259     0.5 %  
             
Depreciation:            
  Unified Communications Services $   69,371     $   69,769     -0.6 %  
  Safety Services     17,481         18,847     -7.2 %  
  Interactive Services     16,390         14,385     13.9 %  
  Specialized Agent Services     11,861         8,213     44.4 %  
    Total $   115,103     $   111,214     3.5 %  
             
Amortization:            
  Unified Communications Services - SG&A $   13,000     $   13,414     -3.1 %  
  Safety Services - SG&A     14,139         19,055     -25.8 %  
  Safety Services - COS     13,048         12,592     3.6 %  
  Interactive Services - SG&A     21,005         16,210     29.6 %  
  Specialized Agent Services - SG&A     18,387         19,779     -7.0 %  
  Deferred financing costs     48,342         21,945     120.3 %  
    Total $   127,921     $   102,995     24.2 %  
             
Share-based compensation:            
  Unified Communications Services $   14,330     $   13,119     9.2 %  
  Safety Services     4,061         3,697     9.8 %  
  Interactive Services     2,533         2,328     8.8 %  
  Specialized Agent Services     4,464         3,781     18.1 %  
    Total $   25,388     $   22,925     10.7 %  
             
Cost of services:            
  Unified Communications Services $   673,735     $   673,475     0.0 %  
  Safety Services     103,304         108,742     -5.0 %  
  Interactive Services     68,348         59,125     15.6 %  
  Specialized Agent Services     142,880         135,672     5.3 %  
  Intersegment eliminations     (6,479 )       (6,321 )   NM    
    Total $   981,788     $   970,693     1.1 %  
             
Selling, general and administrative expenses:            
  Unified Communications Services $   424,351     $   416,386     1.9 %  
  Safety Services     138,313         150,241     -7.9 %  
  Interactive Services     201,760         181,495     11.2 %  
  Specialized Agent Services     122,224         110,843     10.3 %  
  Corporate Other     (15,247 )       (680 )   NM    
  Intersegment eliminations     (5,440 )       (5,169 )   NM    
    Total $   865,961     $   853,116     1.5 %  
             
Operating income:            
  Unified Communications Services $   327,195     $   377,850     -13.4 %  
  Safety Services     54,703         22,408     144.1 %  
  Interactive Services     30,631         25,044     22.3 %  
  Specialized Agent Services     16,438         30,468     -46.0 %  
  Corporate Other     15,247         680     NM    
    Total $   444,214     $   456,450     -2.7 %  
             
Operating margin:            
  Unified Communications Services   23.0 %     25.7 %      
  Safety Services   18.5 %     8.0 %      
  Interactive Services   10.2 %     9.4 %      
  Specialized Agent Services   5.8 %     11.0 %      
    Total   19.4 %     20.0 %      
             
             
SELECTED FINANCIAL DATA:            
             
        Contribution        
Changes in Revenue - 2016 compared to 2015:       to Rev. Growth        
Revenue for the year 2015 $   2,280,259            
  Revenue from acquired entities 3     24,194       1.1 %      
  Revenue from two previously disclosed lost clients     (45,700 )     -2.0 %      
  Estimated impact of foreign currency exchange rates     (18,546 )     -0.8 %      
  Adjusted organic growth, net 5     51,756       2.3 %      
Revenue for the year 2016 $   2,291,963       0.5 %      
             

WEST CORPORATION
  CONDENSED CONSOLIDATED BALANCE SHEETS  
 (Unaudited, in thousands) 
           
    December 31,       December 31,     %
      2016           2015       Change
Assets:          
Current assets:          
  Cash and cash equivalents $   183,059     $   182,338     0.4 %
  Trust and restricted cash     20,141         19,829     1.6 %
  Accounts receivable, net     369,068         373,087     -1.1 %
  Income taxes receivable     4,366         19,332     -77.4 %
  Prepaid assets     40,886         43,093     -5.1 %
  Deferred expenses     44,886         65,781     -31.8 %
  Other current assets     31,889         22,040     44.7 %
  Assets held for sale     -          17,672     NM  
    Total current assets     694,295         743,172     -6.6 %
Property and Equipment:          
  Property and equipment     1,088,205         1,053,678     3.3 %
  Accumulated depreciation and amortization     (755,754 )       (718,834 )   5.1 %
    Net property and equipment     332,451         334,844     -0.7 %
Goodwill     1,916,192         1,915,690     0.0 %
Intangible assets, net     315,474         370,021     -14.7 %
Other assets     182,426         191,490     -4.7 %
    Total assets $   3,440,838     $   3,555,217     -3.2 %
Liabilities and Stockholders' Deficit:          
Current Liabilities:          
  Accounts payable $   78,881     $   92,935     -15.1 %
  Deferred revenue     151,148         161,828     -6.6 %
  Accrued expenses     224,871         219,234     2.6 %
  Current maturities of long-term debt     39,709         24,375     62.9 %
    Total current liabilities     494,609         498,372     -0.8 %
Long-term obligations     3,129,963         3,318,688     -5.7 %
Deferred income taxes     88,864         104,222     -14.7 %
Other long-term liabilities     169,251         186,073     -9.0 %
    Total liabilities     3,882,687         4,107,355     -5.5 %
           
Stockholders' Deficit:          
  Common stock     86         85     1.2 %
  Additional paid-in capital     2,223,379         2,193,193     1.4 %
  Retained deficit     (2,490,455 )       (2,607,415 )   -4.5 %
  Accumulated other comprehensive loss     (87,633 )       (72,736 )   20.5 %
  Treasury stock at cost     (87,226 )       (65,265 )   33.6 %
    Total stockholders' deficit     (441,849 )       (552,138 )   -20.0 %
           
  Total liabilities and stockholders' deficit $   3,440,838     $   3,555,217     -3.2 %
           

Reconciliation of Non-GAAP Financial Measures

Adjusted Operating Income ReconciliationAdjusted operating income is not a measure of financial performance under generally accepted accounting principles ("GAAP"). The Company believes adjusted operating income provides a relevant measure of operating profitability and a useful basis for evaluating the ongoing operations of the Company. Adjusted operating income is used by the Company to assess operating income before the impact of acquisitions and acquisition-related costs and certain non-cash items. Adjusted operating income is used by the Company as a benchmark for performance and compensation by certain executives. Adjusted operating income should not be considered in isolation or as a substitute for operating income or other profitability data prepared in accordance with GAAP. Adjusted operating income, as presented, may not be comparable to similarly titled measures of other companies. Set forth below is a reconciliation of adjusted operating income from operating income. 

Please note: Adjustments were made to third quarter 2016 M&A and acquisition-related costs for the Safety Services and Specialized Agent Services segments. On a consolidated basis, these adjustments totaled $0.1 million. Full year results shown in the tables below reflect these adjustments.
           
  Reconciliation of Adjusted Operating Income from Operating Income  
Unaudited, in thousands            
    Three Months Ended Dec. 31,  
Consolidated:   2016       2015     % Change
Operating income $   102,690     $   104,970     -2.2 %
Amortization of acquired intangible assets     16,446         18,977     -13.3 %
Share-based compensation     5,459         6,140     -11.1 %
Secondary equity offering expense     -          (186 )    NM  
Significant restructuring     8,423         -       NM  
Gain on sale of real estate     (1,101 )       -       NM  
M&A and acquisition-related costs     375         1,097     -65.8 %
Adjusted operating income $   132,292     $   130,998     1.0 %
Adjusted operating income margin   23.3 %     23.0 %    
           
Unified Communications Services:          
Operating income $   69,959     $   88,182     -20.7 %
Amortization of acquired intangible assets     2,910         3,618     -19.6 %
Share-based compensation     3,074         3,399     -9.6 %
Secondary equity offering expense     -          (94 )    NM  
Significant restructuring     5,482         -       NM  
M&A and acquisition-related costs     347         483     -28.2 %
Adjusted operating income $   81,772     $   95,588     -14.5 %
Adjusted operating income margin   24.0 %     26.7 %    
           
Safety Services:          
Operating income $   16,711     $   5,704     193.0 %
Amortization of acquired intangible assets     3,625         5,436     -33.3 %
Share-based compensation     865         973     -11.1 %
Secondary equity offering expense     -          (59 )    NM  
Significant restructuring     2,373         -       NM  
M&A and acquisition-related costs     80         -       NM  
Adjusted operating income $   23,654     $   12,054     96.2 %
Adjusted operating income margin   31.3 %     16.5 %    
           
Interactive Services:          
Operating income $   9,068     $   6,620     37.0 %
Amortization of acquired intangible assets     5,306         4,512     17.6 %
Share-based compensation     538         611     -11.9 %
Secondary equity offering expense     -          (13 )    NM  
Significant restructuring     97         -       NM  
M&A and acquisition-related costs     (52 )       612      NM  
Adjusted operating income $   14,957     $   12,342     21.2 %
Adjusted operating income margin   18.9 %     17.3 %    
           
Specialized Agent Services:          
Operating income $   4,642     $   6,199     -25.1 %
Amortization of acquired intangible assets     4,605         5,411     -14.9 %
Share-based compensation     982         1,157     -15.1 %
Secondary equity offering expense     -          (19 )    NM  
Significant restructuring     433         -       NM  
Adjusted operating income $   10,662     $   12,748     -16.4 %
Adjusted operating income margin   14.1 %     17.4 %    
           
Corporate Other:          
Operating income (loss) $   2,310     $   (1,735 )    
Secondary equity offering expense     -          (1 )    
Gain on sale of real estate     (1,101 )       -       
Significant restructuring     38         -       
M&A and acquisition-related costs     -          2      
Adjusted operating income (loss) $   1,247     $   (1,734 )    
           

           
  Reconciliation of Adjusted Operating Income from Operating Income  
Unaudited, in thousands            
    Year Ended Dec. 31,  
Consolidated:   2016       2015     % Change
Operating income $   444,214     $   456,450     -2.7 %
Amortization of acquired intangible assets     66,531         68,458     -2.8 %
Share-based compensation     25,388         22,925     10.7 %
Secondary equity offering expense     -          855      NM  
Significant restructuring     8,423         -       NM  
Gain on sale of real estate     (14,064 )       -       NM  
M&A and acquisition-related costs     3,745         3,074     21.8 %
Adjusted operating income $   534,237     $   551,762     -3.2 %
Adjusted operating income margin   23.3 %     24.2 %    
           
Unified Communications Services:          
Operating income $   327,195     $   377,850     -13.4 %
Amortization of acquired intangible assets     13,000         13,414     -3.1 %
Share-based compensation     14,330         13,119     9.2 %
Secondary equity offering expense     -          153      NM  
Significant restructuring     5,482         -       NM  
M&A and acquisition-related costs     1,659         485      NM  
Adjusted operating income $   361,666     $   405,021     -10.7 %
Adjusted operating income margin   25.4 %     27.6 %    
           
Safety Services:          
Operating income $   54,703     $   22,408     144.1 %
Amortization of acquired intangible assets     14,139         19,055     -25.8 %
Share-based compensation     4,061         3,697     9.8 %
Secondary equity offering expense     -          19      NM  
Significant restructuring     2,373         -       NM  
M&A and acquisition-related costs     3,653         -       NM  
Adjusted operating income $   78,929     $   45,179     74.7 %
Adjusted operating income margin   26.6 %     16.1 %    
           
Interactive Services:          
Operating income $   30,631     $   25,044     22.3 %
Amortization of acquired intangible assets     21,005         16,210     29.6 %
Share-based compensation     2,533         2,328     8.8 %
Secondary equity offering expense     -          22      NM  
Significant restructuring     97         -       NM  
M&A and acquisition-related costs     2,122         2,353     -9.8 %
Adjusted operating income $   56,388     $   45,957     22.7 %
Adjusted operating income margin   18.7 %     17.3 %    
           
Specialized Agent Services:          
Operating income $   16,438     $   30,468     -46.0 %
Amortization of acquired intangible assets     18,387         19,779     -7.0 %
Share-based compensation     4,464         3,781     18.1 %
Secondary equity offering expense     -          31      NM  
Significant restructuring     433         -       NM  
M&A and acquisition-related costs     (3,689 )       150      NM  
Adjusted operating income $   36,033     $   54,209     -33.5 %
Adjusted operating income margin   12.8 %     19.6 %    
           
Corporate Other:          
Operating income $   15,247     $   680      
Secondary equity offering expense     -          630      
Gain on sale of real estate     (14,064 )       -       
Significant restructuring     38         -       
M&A and acquisition-related costs     -          86      
Adjusted operating income $   1,221     $   1,396      
           

Adjusted Net Income, Adjusted Income from Continuing Operations and Adjusted Earnings per Share ReconciliationAdjusted net income, adjusted income from continuing operations and adjusted earnings per share (EPS) are non-GAAP measures. The Company believes these measures provide a useful indication of profitability and basis for assessing the operations of the Company without the impact of bond redemption premiums, acquisitions and acquisition-related costs, significant restructuring costs and certain non-cash items. Adjusted net income and adjusted income from continuing operations should not be considered in isolation or as a substitute for net income or other profitability metrics prepared in accordance with GAAP. Adjusted net income and adjusted income from continuing operations, as presented, may not be comparable to similarly titled measures of other companies. The Company utilizes these non-GAAP measures to make decisions about the use of resources, analyze performance, measure management's performance with stated objectives and compensate management relative to the achievement of such objectives. Set forth below is a reconciliation of adjusted income from continuing operations from income from continuing operations and adjusted net income from net income. 

Please note: Adjustments were made to third quarter 2016 M&A and acquisition-related costs for the Safety Services and Specialized Agent Services segments. On a consolidated basis, these adjustments totaled $0.1 million. Full year results shown in the tables below reflect these adjustments.
           
  Reconciliation of Adj. Income from Continuing Ops from Income from Continuing Ops  
  and Adjusted Net Income from Net Income  
Unaudited, in thousands except per share data          
CONTINUING OPERATIONS   Three Months Ended Dec. 31,  
    2016       2015     % Change
Income from continuing operations $   68,320     $   42,340     61.4 %
           
Amortization of acquired intangible assets     16,446         18,977      
Amortization of deferred financing costs     1,834         6,928      
Interest rate swap ineffectiveness     (1,130 )       -       
Share-based compensation     5,459         6,140      
Secondary equity offering expense     -          (186 )    
Gain on sale of real estate     (1,101 )       -       
Significant restructuring     8,423         -       
M&A and acquisition-related costs     375         1,097      
Pre-tax total      30,306         32,956      
Income tax expense on adjustments     11,049         11,630      
Foreign entity restructuring tax benefit     (23,046 )       -       
Adjusted income from continuing operations $   64,531     $   63,666     1.4 %
           
Diluted shares outstanding     84,967         84,809      
Adjusted EPS from continuing operations - diluted $   0.76     $   0.75     1.3 %
           
           
DISCONTINUED OPERATIONS   Three Months Ended Dec. 31,    
    2016       2015      
Income from discontinued operations $   -      $   19,935      
           
Adjusted income from discontinued operations $   -      $   19,935      
           
Diluted shares outstanding     84,967         84,809      
Adjusted EPS from discontinued operations - diluted $   -      $   0.24      
           
           
CONSOLIDATED   Three Months Ended Dec. 31,  
    2016       2015     % Change
Net income $   68,320     $   62,275     9.7 %
           
Amortization of acquired intangible assets     16,446         18,977      
Amortization of deferred financing costs     1,834         6,928      
Interest rate swap ineffectiveness     (1,130 )       -       
Share-based compensation     5,459         6,140      
Secondary equity offering expense     -          (186 )    
Gain on sale of real estate     (1,101 )       -       
Significant restructuring     8,423         -       
M&A and acquisition-related costs     375         1,097      
Pre-tax total      30,306         32,956      
Income tax expense on adjustments     11,049         11,630      
Foreign entity restructuring tax benefit     (23,046 )       -       
Adjusted net income  $   64,531     $   83,601     -22.8 %
           
Diluted shares outstanding     84,967         84,809      
Adjusted EPS - diluted $   0.76     $   0.99     -23.2 %
           

           
  Reconciliation of Adj. Income from Continuing Ops from Income from Continuing Ops  
  and Adjusted Net Income from Net Income  
Unaudited, in thousands except per share data          
CONTINUING OPERATIONS   Year Ended Dec. 31,  
    2016       2015     % Change
Income from continuing operations $   193,389     $   190,916     1.3 %
           
Amortization of acquired intangible assets     66,531         68,458      
Amortization of deferred financing costs     48,342         21,945      
Interest rate swap ineffectiveness     (1,130 )       -       
Share-based compensation     25,388         22,925      
Secondary equity offering expense     -          855      
Gain on sale of real estate     (14,064 )       -       
Significant restructuring     8,423         -       
M&A and acquisition-related costs     3,745         3,074      
Pre-tax total      137,235         117,257      
Income tax expense on adjustments     50,634         42,306      
Foreign entity restructuring tax benefit     (23,046 )       -       
Adjusted income from continuing operations $   256,944     $   265,867     -3.4 %
           
Diluted shares outstanding     84,599         85,394      
Adjusted EPS from continuing operations - diluted $   3.04     $   3.11     -2.3 %
           
           
DISCONTINUED OPERATIONS   Year Ended Dec. 31,      
    2016       2015      
Income from discontinued operations $   -      $   50,924      
           
Amortization of acquired intangible assets     -          41      
Share-based compensation     -          1,576      
M&A and acquisition-related costs     -          386      
Pre-tax total      -          2,003      
Income tax benefit on adjustments     -          (15 )    
Adjusted income from discontinued operations $   -      $   52,942      
           
Diluted shares outstanding     84,599         85,394      
Adjusted EPS from discontinued operations - diluted $   -      $   0.62      
           
           
CONSOLIDATED   Year Ended Dec. 31,  
    2016       2015     % Change
Net income $   193,389     $   241,840     -20.0 %
           
Amortization of acquired intangible assets     66,531         68,499      
Amortization of deferred financing costs     48,342         21,945      
Interest rate swap ineffectiveness     (1,130 )       -       
Share-based compensation     25,388         24,501      
Secondary equity offering expense     -          855      
Gain on sale of real estate     (14,064 )       -       
Significant restructuring     8,423         -       
M&A and acquisition-related costs     3,745         3,460      
Pre-tax total      137,235         119,260      
Income tax expense on adjustments     50,634         42,291      
Foreign entity restructuring tax benefit     (23,046 )       -       
Adjusted net income  $   256,944     $   318,809     -19.4 %
           
Diluted shares outstanding     84,599         85,394      
Adjusted EPS - diluted $   3.04     $   3.73     -18.5 %

Free Cash Flow ReconciliationThe Company believes free cash flow provides a relevant measure of liquidity and a useful basis for assessing the Company's ability to fund its activities, including the financing of acquisitions, debt service, stock repurchases and distribution of earnings to shareholders. Free cash flow is calculated as cash flows from operating activities less cash capital expenditures. Free cash flow is not a measure of financial performance under GAAP. Free cash flow should not be considered in isolation or as a substitute for cash flows from operating activities or other liquidity measures prepared in accordance with GAAP. Free cash flow, as presented, may not be comparable to similarly titled measures of other companies. Set forth below is a reconciliation of free cash flow from cash flows from operating activities.
                       
  Reconciliation of Free Cash Flow from Operating Cash Flow  
Unaudited, in thousands                      
CONTINUING OPERATIONS   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016     2015   % Change     2016     2015   % Change
Cash flows from operating activities $   126,673   $   127,547   -0.7 %   $   428,275   $   410,768   4.3 %
Cash capital expenditures     27,278       40,628   -32.9 %       126,581       136,810   -7.5 %
Free cash flow $   99,395   $   86,919   14.4 %   $   301,694   $   273,958   10.1 %
                       
                       
DISCONTINUED OPERATIONS   Three Months Ended Dec. 31,         Year Ended Dec. 31,      
    2016     2015         2016     2015    
Cash flows from (used in) operating activities   $   -    $   15,419       $   -    $   7,222    
Cash capital expenditures     -        -            -        1,930    
Free cash flow $   -    $   15,419       $   -    $   5,292    
                       
                       
CONSOLIDATED   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016     2015   % Change     2016     2015   % Change
Cash flows from operating activities $   126,673   $   142,966   -11.4 %   $   428,275   $   417,990   2.5 %
Cash capital expenditures     27,278       40,628   -32.9 %       126,581       138,740   -8.8 %
Free cash flow $   99,395   $   102,338   -2.9 %   $   301,694   $   279,250   8.0 %

EBITDA and Adjusted EBITDA ReconciliationThe common definition of EBITDA is "Earnings Before Interest Expense, Taxes, Depreciation and Amortization." In evaluating liquidity and performance, the Company uses "Adjusted EBITDA." The Company defines Adjusted EBITDA as earnings before interest expense, share-based compensation, taxes, depreciation and amortization, gain on assets held for sale and transaction costs. EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under GAAP. Although the Company uses Adjusted EBITDA as a measure of its liquidity and performance, the use of Adjusted EBITDA is limited because it does not include certain material costs, such as depreciation, amortization and interest, necessary to operate the business. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flow from operating activities or other income or cash flow data prepared in accordance with GAAP. Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is presented here as the Company understands investors use it as a measure of its historical ability to service debt and compliance with covenants in its senior credit facilities. Further, Adjusted EBITDA is presented here as the Company uses it to measure its performance and to conduct and evaluate its business during its regular review of operating results for the periods presented. Set forth below is a reconciliation of EBITDA and Adjusted EBITDA from cash flow from operating activities and net income.

Please note: Adjustments were made to third quarter 2016 M&A and acquisition-related costs for the Safety Services and Specialized Agent Services segments. On a consolidated basis, these adjustments totaled $0.1 million. Full year results shown in the tables below reflect these adjustments.
               
  Reconciliation of EBITDA and Adjusted EBITDA from Operating Cash Flow  
Unaudited, in thousands              
CONTINUING OPERATIONS   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015       2016       2015  
Cash flows from operating activities $   126,673     $   127,547     $   428,275     $   410,768  
Income tax expense (benefit)     (1,193 )       23,093         66,423         107,757  
Deferred income tax benefit (expense)     14,828         (14,888 )       30,211         (8,930 )
Interest expense and other financing charges     35,685         41,236         186,160         158,356  
Provision for share-based compensation     (5,459 )       (6,140 )       (25,388 )       (22,925 )
Amortization of deferred financing costs     (1,834 )       (6,928 )       (48,342 )       (21,945 )
Gain on sale of real estate     1,101         -          14,064         -   
Other     (322 )       (448 )       (1,512 )       (672 )
Changes in operating assets and liabilities,              
  net of business acquisitions     (17,722 )       (5,454 )       (9,237 )       26,884  
EBITDA     151,757         158,018         640,654         649,293  
Provision for share-based compensation     5,459         6,140         25,388         22,925  
Secondary equity offering expense     -          (186 )       -          855  
Gain on sale of real estate     (1,101 )       -          (14,064 )       -   
Significant restructuring     8,423         -          8,423         -   
M&A and acquisition-related costs     375         1,097         3,745         3,074  
Adjusted EBITDA $   164,913     $   165,069     $   664,146     $   676,147  
               
               
Cash flows from operating activities $   126,673     $   127,547     $   428,275     $   410,768  
Cash flows used in investing activities $   (41,196 )   $   (118,651 )   $   (108,263 )   $   (232,433 )
Cash flows used in financing activities $   (88,376 )   $   (23,453 )   $   (311,911 )   $   (388,243 )
               
               
DISCONTINUED OPERATIONS   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015       2016       2015  
Cash flows from operating activities $   -      $   15,419     $   -      $   7,222  
Income tax expense     -          (19,717 )       -          (372 )
Deferred income tax expense     -          4,516         -          2,223  
Provision for share-based compensation     -          -          -          (1,576 )
Other     -          -          -          29,596  
Changes in operating assets and liabilities,              
  net of business acquisitions     -          -          -          13,500  
EBITDA     -          218         -          50,593  
Provision for share-based compensation     -          -          -          1,576  
M&A and acquisition-related costs     -          -          -          386  
Gain on sale of business     -          (182 )       -          (46,838 )
Adjusted EBITDA $   -      $   36     $   -      $   5,717  
               
               
Cash flows used in operating activities $   -      $   15,419     $   -      $   7,222  
Cash flows from investing activities $   -      $   -      $   -      $   275,815  
Cash flows used in financing activities $   -      $   -      $   -      $   -   
               
               
  Reconciliation of EBITDA and Adjusted EBITDA from Operating Cash Flow, cont.  
CONSOLIDATED   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015       2016       2015  
Cash flows from operating activities $   126,673     $   142,966     $   428,275     $   417,990  
Income tax expense (benefit)     (1,193 )       3,376         66,423         107,385  
Deferred income tax expense     14,828         (10,372 )       30,211         (6,707 )
Interest expense and other financing charges     35,685         41,236         186,160         158,356  
Provision for share-based compensation     (5,459 )       (6,140 )       (25,388 )       (24,501 )
Amortization of deferred financing costs     (1,834 )       (6,928 )       (48,342 )       (21,945 )
Gain on sale of real estate     1,101         -          14,064         -   
Other     (322 )       (448 )       (1,512 )       28,924  
Changes in operating assets and liabilities,              
  net of business acquisitions     (17,722 )       (5,454 )       (9,237 )       40,384  
EBITDA     151,757         158,236         640,654         699,886  
Provision for share-based compensation     5,459         6,140         25,388         24,501  
Secondary equity offering expense     -          (186 )       -          855  
Gain on sale of real estate     (1,101 )       -          (14,064 )       -   
Significant restructuring     8,423         -          8,423         -   
M&A and acquisition-related costs     375         1,097         3,745         3,460  
Gain on sale of business      -          (182 )       -          (46,838 )
Adjusted EBITDA $   164,913     $   165,105     $   664,146     $   681,864  
               
CONSOLIDATED              
Cash flows from operating activities $   126,673     $   142,966     $   428,275     $   417,990  
Cash flows from (used in) investing activities $   (41,196 )   $   (118,651 )   $   (108,263 )   $   43,382  
Cash flows used in financing activities $   (88,376 )   $   (23,453 )   $   (311,911 )   $   (388,243 )
               

               
  Reconciliation of EBITDA and Adjusted EBITDA from Net Income  
Unaudited, in thousands                
CONTINUING OPERATIONS   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015       2016       2015  
Income from continuing operations $   68,320     $   42,340     $   193,389     $   190,916  
Interest expense and other financing charges     35,685         41,236         186,160         158,356  
Depreciation and amortization     48,945         51,349         194,682         192,264  
Income tax expense (benefit)     (1,193 )       23,093         66,423         107,757  
EBITDA     151,757         158,018         640,654         649,293  
Provision for share-based compensation     5,459         6,140         25,388         22,925  
Secondary equity offering expense     -          (186 )       -          855  
Gain on sale of real estate     (1,101 )       -          (14,064 )       -   
Significant restructuring     8,423         -          8,423         -   
M&A and acquisition-related costs     375         1,097         3,745         3,074  
Adjusted EBITDA $   164,913     $   165,069     $   664,146     $   676,147  
               
               
DISCONTINUED OPERATIONS   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015       2016       2015  
Income from discontinued operations $   -      $   19,935     $   -      $   50,924  
Depreciation and amortization     -          -          -          41  
Income tax expense     -          (19,717 )       -          (372 )
EBITDA     -          218         -          50,593  
Provision for share-based compensation     -          -          -          1,576  
M&A and acquisition-related costs     -          -          -          386  
Gain on sale of business      -          (182 )       -          (46,838 )
Adjusted EBITDA $   -      $   36     $   -      $   5,717  
               
               
CONSOLIDATED   Three Months Ended Dec. 31,       Year Ended Dec. 31,  
    2016       2015       2016       2015  
Net income $   68,320     $   62,275     $   193,389     $   241,840  
Interest expense and other financing charges     35,685         41,236         186,160         158,356  
Depreciation and amortization     48,945         51,349         194,682         192,305  
Income tax expense (benefit)     (1,193 )       3,376         66,423         107,385  
EBITDA     151,757         158,236         640,654         699,886  
Provision for share-based compensation     5,459         6,140         25,388         24,501  
Secondary equity offering expense     -          (186 )       -          855  
Gain on sale of real estate     (1,101 )       -          (14,064 )       -   
Significant restructuring     8,423         -          8,423         -   
M&A and acquisition-related costs     375         1,097         3,745         3,460  
Gain on sale of business     -          (182 )       -          (46,838 )
Adjusted EBITDA $   164,913     $   165,105     $   664,146     $   681,864  
               

Non-GAAP Metrics used in 2017 Guidance

Ranges are shown for each line item. Totals may not foot.
In millions except per share amounts        
 
  Reconciliation of Adjusted EBITDA from Operating Income    
  2017 Guidance  
  Min (low)   Max (high)  
Operating income $   413    -  $   446    
Depreciation and amortization     195    -      196    
Other income     2    -      2    
EBITDA $   610    -  $   644    
Provision for share-based compensation     27    -      27    
M&A and acquisition-related costs     2    -      2    
Adjusted EBITDA $     639     -   $     672    
 
  Reconciliation of Adj. Operating Income from Operating Income    
  2017 Guidance  
  Min (low)   Max (high)  
Operating income $   413    -  $   446    
Amortization of acquired intangible assets     57    -      57    
Provision for share-based compensation     27    -      27    
M&A and acquisition-related costs     2    -      2    
Adjusted operating income $     500     -   $     532    
 
  Reconciliation of Adj. Net Income and Adj. EPS from Net Income    
  2017 Guidance  
  Min (low)   Max (high)  
Net income $   175    -  $   196    
Amortization of acquired intangible assets     57    -      57    
Amortization of deferred financing costs     8    -      8    
Provision for share-based compensation     27    -      27    
M&A and acquisition-related costs     2    -      2    
Pre-tax total      269    -      290    
Income tax expense on adjustments     (35 )  -      (35 )  
Adjusted net income   $     234     -   $     255    
         
Adjusted EPS - diluted $     2.76     -   $     3.00    

                                                                         
1 See Reconciliation of Non-GAAP Financial Measures below.                                                                              
2 Free cash flow is calculated as cash flows from operating activities less cash capital expenditures.  
3 Revenue growth attributable to acquired entities for the fourth quarter of 2016 includes Magnetic North, ClientTell, Synrevoice and 911 ETC. Revenue growth attributable to acquired entities for the full year 2016 includes SharpSchool, Magnetic North, ClientTell, Synrevoice and 911 ETC.  
4 Based on loan covenants. Covenant loan ratio is debt net of cash and excludes accounts receivable securitization debt.  
5 Adjusted organic growth, a non-GAAP metric, is provided on the Selected Financial Data tables and excludes revenue from acquired entities, revenue from previously disclosed lost clients and the estimated impact of foreign currency exchange rates. The Company believes adjusted organic growth provides a useful measure of growth in its ongoing business. Details of the Company's revenue growth are presented in the Selected Financial Data table.
NM: Not Meaningful  
AT THE COMPANY:       Dave PleissInvestor RelationsWest Corporation(402) 963-1500DMPleiss@west.com

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