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PRESS RELEASE from provider: Globe Newswire
This content is a press release from our partner Globe Newswire. The AP newsroom and editorial departments were not involved in its creation.

H&R Block Announces Fiscal 2019 Third Quarter Results, Reiterates Financial Outlook for Fiscal Year

March 7, 2019

KANSAS CITY, Mo., March 07, 2019 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) today released its U.S. tax return volume through February 28, 2019 and financial results for the fiscal 2019 third quarter ended January 31, 2019. The company normally reports a fiscal third quarter loss due to the seasonality of its tax business.

Tax Season and Fiscal Third Quarter Highlights1

-- Delay in tax returns filed industry wide impacted fiscal third quarter results; company reiterates its financial outlook for the full fiscal year. -- H&R Block total U.S. returns declined through February 28, as growth in DIY returns was offset by a decline in Assisted returns; the decline in Assisted returns was anticipated due to the discontinuation of the Free Federal 1040EZ promotion. -- Revenues for the fiscal third quarter ended January 31, 2019 decreased $20 million, or 4 percent, to $468 million primarily due to a delay in overall industry filings. -- Pretax loss from continuing operations increased 31 percent to $159 million; however, loss per share from continuing operations2 improved from $1.16 to $0.58 due to the impact of corporate tax rate changes in the prior year.

Tax Season Results3

H&R Block total U.S. return volume decreased 1.2% through February 28, as an increase in DIY returns of 6.4% was offset by a 6.5% decrease in Assisted returns. On a comparable basis with the most recent IRS data for this tax season, the company grew market share in DIY due to product enhancements and improved conversion. In Assisted, when comparing to the most recent IRS data for this tax season, the business was down modestly in market share, which was expected due to the discontinuation of its Free Federal 1040EZ promotion.

“The significant improvements we’ve made across our business have resulted in increased client satisfaction scores related to our new upfront and transparent pricing, third party accolades for our DIY products, and growth in our virtual offerings so far this tax season,” said Jeff Jones, H&R Block’s president and chief executive officer. “H&R Block is leading the way in the tax industry with offerings that span the full spectrum of tax preparation, whether clients want little to no help, complete in-person assistance, or anything in between.”

Fiscal 2019 Third Quarter Results From Continuing Operations

“The slow start to the tax season for the industry impacted the timing of our business, lowering financial results for our fiscal third quarter,” said Tony Bowen, H&R Block’s chief financial officer. “We remain on track with our strategic and operational plans and expect to achieve our financial outlook for the fiscal year.”

(in millions, except EPS) Q3 FY2019 Q3 FY2018 ------------------------------ --------- --------- Revenue $ 468 $ 488 ------------------------------ - ----- - - ----- - Pretax Loss $ (159 ) $ (121 ) ------------------------------ - ----- - - ----- - Net Loss $ (120 ) $ (243 ) ------------------------------ - ----- - - ----- - Weighted-Avg. Shares - Diluted 205.5 209.1 ------------------------------ ------- - ------- - EPS2 $ (0.58 ) $ (1.16 ) ------------------------------ - ----- - - ----- - EBITDA4 $ (92 ) $ (48 ) ------------------------------ - ----- - - ----- -

Key Financial Metrics

-- Total revenues decreased $20.0 million, or 4.1 percent, to $468.4 million primarily due to lower Assisted tax preparation revenues and royalties as a result of the delay in overall filings with the IRS. -- Total operating expenses increased $20.8 million, or 3.5 percent, to $606.5 million primarily due to technology spend related to long-term initiatives and marketing, bad debt, and supplies expense. -- Pretax loss increased $37.9 million, or 31.3 percent, to $158.7 million. -- Loss per share from continuing operations improved from $1.16 to $0.58, due to the impact of corporate tax rate changes in the prior year. These changes resulted in an income tax expense in the third quarter of fiscal 2018, as opposed to an income tax benefit, which is customary in fiscal quarters in which the company has a seasonal pretax loss.

Dividends

As previously announced, a quarterly cash dividend of $0.25 per share is payable on April 1, 2019 to shareholders of record as of March 18, 2019. H&R Block has paid quarterly dividends consecutively since the company went public in 1962.

Discontinued Operations

For information on Sand Canyon, please refer to disclosures in the company’s reports on Forms 10-K, 10-Q, and other filings with the SEC.

Conference Call

Discussion of the fiscal 2019 third quarter results, outlook, and a general business update will occur during the company’s previously announced fiscal third quarter earnings conference call for analysts, institutional investors, and shareholders. The call is scheduled for 8:30 a.m. Eastern time on March 7, 2019. To access the call, please dial the number below approximately 10 minutes prior to the scheduled starting time:

U.S./Canada (855) 702-5257 or International (213) 358-0868Conference ID: 5364734

The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and public. The link to the webcast can be accessed directly at http://investors.hrblock.com. The presentation will be posted on the Webcasts and Presentations page at http://investors.hrblock.com following the conclusion of the call.

A replay of the call will be available beginning at 11:30 a.m. Eastern time on March 7, 2019, and continuing until April 7, 2019, by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 5364734. The webcast will be available for replay beginning on March 8, 2019 and continuing for 90 days at http://investors.hrblock.com.

About H&R Block

H&R Block, Inc. (NYSE: HRB) is a global consumer tax services provider. Tax return preparation services are provided by professional tax preparers in approximately 12,000 company-owned and franchise retail tax offices worldwide, and through H&R Block tax software products for the DIY consumer. H&R Block also offers adjacent Tax Plus products and services. In fiscal 2018, H&R Block had annual revenues of over $3.1 billion with over 23 million tax returns prepared worldwide. For more information, visit the H&R Block Newsroom.

About Non-GAAP Financial Information

This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled “Non-GAAP Financial Information.”

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “commits,” “seeks,” “estimates,” “projects,” “forecasts,” “targets,” “would,” “will,” “should,” “goal,” “could” or “may” or other similar expressions. Forward-looking statements provide management’s current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes or other financial items, descriptions of management’s plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect the company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive and regulatory factors, many of which are beyond the company’s control, that are described in our Annual Report on Form 10-K for the fiscal year ended April 30, 2018 in the section entitled “Risk Factors” and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at http://investors.hrblock.com. In addition, factors that may cause the company’s actual estimated effective tax rate to differ from estimates include the company’s actual results from operations compared to current estimates, future discrete items, changes in interpretations and assumptions the company has made, and future actions of the company. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

1 All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period. 2 All per share amounts are based on fully diluted shares at the end of the corresponding period. 3 Volume changes to prior year noted in this paragraph and in the table attached to this release are based on a date-to-date basis. Comparisons to IRS data are on a day-to-day basis as of February 22, 2019. The company reports non-GAAP financial measures of performance, including earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations, EBITDA margin from continuing 4 operations, and free cash flow which it considers to be useful metrics for management and investors to evaluate and compare the ongoing operating performance of the company. See “About Non-GAAP Financial Information” below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).

For Further Information

Investor Relations: Colby Brown, (816) 854-4559, colby.brown@hrblock.comMedia Relations: Susan Waldron, (816) 854-5522, susan.waldron@hrblock.com

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in 000s - except per share amounts) ------------ -------------------------- Three months ended January Nine months ended January 31, 31, 2019 2018 2019 2018 ------------ ------------ ------------ ------------ REVENUES: Service revenues $ 373,659 $ 388,771 $ 627,786 $ 641,389 Royalty, product and other revenues 94,725 99,655 134,652 125,693 468,384 488,426 762,438 767,082 ---------- - ---------- - ---------- - ---------- - OPERATING EXPENSES: Costs of revenues 421,026 416,601 893,401 884,335 Selling, general and administrative 185,458 169,098 404,517 381,193 ---------- - ---------- - Total operating expenses 606,484 585,699 1,297,918 1,265,528 ---------- - ---------- - ---------- - ---------- - Other income (expense), net 2,269 1,028 11,275 3,259 Interest expense on borrowings (22,833 ) (24,560 ) (65,214 ) (67,102 ) ---------- - ---------- - ---------- - ---------- - Loss from continuing operations before income taxes (158,664 ) (120,805 ) (589,419 ) (562,289 ) (benefit) Income taxes (benefit) (38,885 ) 122,120 (149,906 ) (43,234 ) ---------- - ---------- - ---------- - ---------- - Net loss from continuing operations (119,779 ) (242,925 ) (439,513 ) (519,055 ) Net loss from discontinued operations (6,675 ) (2,720 ) (15,887 ) (10,723 ) ---------- - ---------- - NET LOSS $ (126,454 ) $ (245,645 ) $ (455,400 ) $ (529,778 ) - -------- - - -------- - - -------- - - -------- - BASIC AND DILUTED LOSS PER SHARE: Continuing operations $ (0.58 ) $ (1.16 ) $ (2.13 ) $ (2.49 ) Discontinued operations (0.04 ) (0.02 ) (0.08 ) (0.05 ) ---------- - ---------- - Consolidated $ (0.62 ) $ (1.18 ) $ (2.21 ) $ (2.54 ) - -------- - - -------- - - -------- - - -------- - WEIGHTED AVERAGE BASIC AND DILUTED SHARES 205,532 209,080 206,242 208,693 --------------------------------------------------- ------------ ------------ ------------ ------------

CONSOLIDATED BALANCE SHEETS (unaudited, in 000s - except per share data) As of January 31, January 31, April 30, 2019 2018 2018 ----------------------------------------------------------------- ------------- ------------- ------------- ASSETS Cash and cash equivalents $ 203,226 $ 187,366 $ 1,544,944 Cash and cash equivalents - restricted 101,903 83,033 118,734 Receivables, net 758,217 791,618 146,774 Income taxes receivable 36,486 72,775 12,310 Prepaid expenses and other current assets 134,820 149,349 68,951 ----------- - Total current assets 1,234,652 1,284,141 1,891,713 Property and equipment, net 220,505 249,911 231,888 Intangible assets, net 356,952 390,993 373,981 Goodwill 520,005 504,789 507,871 Deferred tax assets and income taxes receivable 141,366 25,305 34,095 Other noncurrent assets 95,326 106,161 101,401 ----------- - Total assets $ 2,568,806 $ 2,561,300 $ 3,140,949 - --------- - - --------- - - --------- - LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES: Accounts payable and accrued expenses $ 202,101 $ 163,653 $ 251,975 Accrued salaries, wages and payroll taxes 140,902 135,626 141,499 Accrued income taxes and reserves for uncertain tax positions 49,009 164,246 263,050 Current portion of long-term debt — 1,015 1,026 Deferred revenue and other current liabilities 195,634 201,988 186,101 ----------- - Total current liabilities 587,646 666,528 843,651 Long-term debt and line of credit borrowings 1,876,989 2,284,231 1,494,609 Deferred tax liabilities and reserves for uncertain tax positions 214,217 201,384 229,430 Deferred revenue and other noncurrent liabilities 103,545 107,226 179,548 ----------- - Total liabilities 2,782,397 3,259,369 2,747,238 ----------- - ----------- - ----------- - COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ EQUITY: Common stock, no par, stated value $.01 per share 2,415 2,462 2,462 Additional paid-in capital 764,982 758,361 760,250 Accumulated other comprehensive loss (17,642 ) (9,374 ) (14,303 ) Retained earnings (deficit) (254,277 ) (729,578 ) 362,980 Less treasury shares, at cost (709,069 ) (719,940 ) (717,678 ) ----------- - Total stockholders’ equity (deficiency) (213,591 ) (698,069 ) 393,711 ----------- - ----------- - ----------- - Total liabilities and stockholders’ equity $ 2,568,806 $ 2,561,300 $ 3,140,949 ----------------------------------------------------------------- ------------- ------------- -------------

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s) Nine months ended January 31, 2019 2018 --------------------------------------------------------------------------- ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (455,400 ) $ (529,778 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 126,013 136,878 Provision for bad debt 35,009 33,429 Deferred taxes 20,557 113,345 Stock-based compensation 18,009 17,065 Changes in assets and liabilities, net of acquisitions: Receivables (640,482 ) (651,200 ) Prepaid expenses and other current assets (66,497 ) (83,201 ) Other noncurrent assets 9,662 8,310 Accounts payable and accrued expenses (47,510 ) (36,608 ) Accrued salaries, wages and payroll taxes (465 ) (49,255 ) Deferred revenue and other current liabilities 3,990 10,113 Deferred revenue and other noncurrent liabilities (70,794 ) (58,695 ) Income tax receivables, accrued income taxes and income tax reserves (277,240 ) (255,650 ) Other, net (2,308 ) (12,454 ) ---------- - ---------- - Net cash used in operating activities (1,347,456 ) (1,357,701 ) ---------- - ---------- - CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (79,982 ) (77,865 ) Payments made for business acquisitions, net of cash acquired (42,428 ) (39,397 ) Franchise loans funded (16,875 ) (20,226 ) Payments received on franchise loans 15,149 13,391 Other, net 4,877 1,524 ---------- - Net cash used in investing activities (119,259 ) (122,573 ) ---------- - ---------- - CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of line of credit borrowings (230,000 ) (40,000 ) Proceeds from line of credit borrowings 615,000 830,000 Dividends paid (154,866 ) (150,258 ) Repurchase of common stock, including shares surrendered (102,152 ) (7,746 ) Proceeds from exercise of stock options 2,527 28,268 Other, net (20,126 ) (28,922 ) ---------- - Net cash provided by financing activities 110,383 631,342 ---------- - ---------- - Effects of exchange rate changes on cash (2,217 ) 1,792 Net decrease in cash, cash equivalents and restricted cash (1,358,549 ) (847,140 ) Cash, cash equivalents and restricted cash, beginning of period 1,663,678 1,117,539 ---------- - Cash, cash equivalents and restricted cash, end of period $ 305,129 $ 270,399 - -------- - SUPPLEMENTARY CASH FLOW DATA: Income taxes paid, net of refunds received $ 103,789 $ 102,755 Interest paid on borrowings 55,581 57,834 Accrued additions to property and equipment 2,241 1,078 Accrued purchase of common stock 12,301 — --------------------------------------------------------------------------- ------------ ------------

FINANCIAL RESULTS (unaudited, in 000s - except per share amounts) -------------------------------------------------- ------------------------------------------------------ Three months ended January Nine months ended January 31, 31, 2019 2018 2019 2018 ------------ ------------ ------------ ------------ REVENUES: U.S. assisted tax preparation $ 256,813 $ 267,328 $ 329,569 $ 333,956 U.S. royalties 42,265 45,420 57,898 59,395 U.S. DIY tax preparation 31,885 31,322 37,660 38,811 International revenues 12,304 12,308 96,980 100,659 Revenues from Refund Transfers 47,482 50,770 49,466 54,721 Revenues from Emerald Card® 14,980 16,125 38,704 40,292 Revenues from Peace of Mind® Extended Service Plan 16,596 19,967 77,491 76,495 Revenues from Tax Identity Shield® 7,655 6,818 17,639 7,329 Interest and fee income on Emerald AdvanceTM 30,924 31,075 31,768 32,333 Other 7,480 7,293 25,263 23,091 ---------- - ---------- - 468,384 488,426 762,438 767,082 ---------- - ---------- - ---------- - ---------- - Compensation and benefits: Field wages 153,764 156,027 262,792 261,866 Other wages 54,243 50,717 152,111 140,637 Benefits and other compensation 42,778 42,156 89,887 86,384 ---------- - ---------- - ---------- - ---------- - 250,785 248,900 504,790 488,887 Occupancy (1) 94,407 97,557 290,013 282,755 Marketing and advertising 72,876 64,209 88,356 82,875 Depreciation and amortization 44,088 48,488 126,013 136,878 Bad debt 33,861 29,191 33,191 33,429 Supplies 9,950 4,950 15,343 12,052 Other (1) 100,517 92,404 240,212 228,652 ---------- - ---------- - Total operating expenses 606,484 585,699 1,297,918 1,265,528 ---------- - ---------- - ---------- - ---------- - Other income (expense), net 2,269 1,028 11,275 3,259 Interest expense on borrowings (22,833 ) (24,560 ) (65,214 ) (67,102 ) ---------- - ---------- - ---------- - ---------- - Pretax loss (158,664 ) (120,805 ) (589,419 ) (562,289 ) Income taxes (benefit) (38,885 ) 122,120 (149,906 ) (43,234 ) ---------- - ---------- - ---------- - ---------- - Net loss from continuing operations (119,779 ) (242,925 ) (439,513 ) (519,055 ) Net loss from discontinued operations (6,675 ) (2,720 ) (15,887 ) (10,723 ) ---------- - ---------- - NET LOSS $ (126,454 ) $ (245,645 ) $ (455,400 ) $ (529,778 ) - -------- - - -------- - - -------- - - -------- - BASIC AND DILUTED LOSS PER SHARE: Continuing operations $ (0.58 ) $ (1.16 ) $ (2.13 ) $ (2.49 ) Discontinued operations (0.04 ) (0.02 ) (0.08 ) (0.05 ) ---------- - ---------- - Consolidated $ (0.62 ) $ (1.18 ) $ (2.21 ) $ (2.54 ) - -------- - - -------- - - -------- - - -------- - Weighted average basic and diluted shares 205,532 209,080 206,242 208,693 EBITDA from continuing operations (2) $ (91,743 ) $ (47,757 ) $ (398,192 ) $ (358,309 ) -------------------------------------------------- ------------ ------------ ------------ ------------

We reclassified $10.2 million and $28.6 million of software and information technology (IT) maintenance (1) expense from occupancy to other expenses for the three and nine months ended January 31, 2018, respectively, to conform to the current period presentation. (2) See “Non-GAAP Financial Information” for a reconciliation of non-GAAP measures.

U.S. TAX OPERATING DATA --------------------------------------- --------- --------- --------- --------- --------- -------- Fiscal Year-to-Date Fiscal Year-to-Date January 31, February 28, -------- 2019 2018 % Change 2019 2018 % Change --------- --------- --------- --------- --------- -------- Tax Returns Prepared: (in 000s) (1) (2) Company-Owned Operations 1,310 1,453 (9.8 ) % 4,101 4,429 (7.4 ) % Franchise Operations 657 707 (7.1 ) % 1,938 2,028 (4.4 ) % -------- -------- -------- -------- Total H&R Block Assisted 1,967 2,160 (8.9 ) % 6,039 6,457 (6.5 ) % -------- -------- -------- -------- Desktop 128 151 (15.2 ) % 706 764 (7.6 ) % Online 1,164 1,126 3.4 % 3,480 3,170 9.8 % -------- -------- Total H&R Block DIY 1,292 1,277 1.2 % 4,186 3,934 6.4 % -------- -------- -------- -------- IRS Free File 101 94 7.4 % 340 306 11.1 % -------- -------- -------- -------- Total H&R Block Returns 3,360 3,531 (4.8 ) % 10,565 10,697 (1.2 ) % -------- -------- -------- -------- Net Average Charge: (3) Company-Owned Operations $ 252.60 $ 236.38 6.9 % $ 231.64 $ 223.03 3.9 % Franchise Operations (4) 244.08 224.00 9.0 % 218.78 205.21 6.6 % DIY 29.15 30.39 (4.1 ) % 27.29 27.71 (1.5 ) % --------------------------------------- --------- --------- --------- --------- --------- --------

An assisted tax return is defined as a current or prior year individual tax return that has been accepted (1) and paid for by the client. Also included are business returns, which account for less than 1% of assisted tax returns. A DIY return is defined as a return that has been electronically filed and accepted by the IRS. Also included are online returns paid and printed. (2) Amounts have been reclassified between company-owned and franchise for offices which were refranchised or repurchased by the company during the year. (3) Net average charge is calculated as tax preparation fees divided by tax returns prepared. For DIY, net average charge excludes IRS Free File. Net average charge related to H&R Block Franchise Operations represents tax preparation fees collected by (4) H&R Block franchisees divided by returns prepared in franchise offices. H&R Block will recognize a portion of franchise revenues as franchise royalties based on the terms of franchise agreements.

Three months ended January Nine months ended January 31, 31, NON-GAAP FINANCIAL MEASURE - EBITDA 2019 2018 2019 2018 ------------------------------------------------------ ------------ ------------ ------------ ------------ Net loss - as reported $ (126,454 ) $ (245,645 ) $ (455,400 ) $ (529,778 ) Discontinued operations, net 6,675 2,720 15,887 10,723 Net loss from continuing operations - as reported (119,779 ) (242,925 ) (439,513 ) (519,055 ) ---------- - ---------- - ---------- - ---------- - Add back: Income taxes of continuing operations (38,885 ) 122,120 (149,906 ) (43,234 ) Interest expense of continuing operations 22,833 24,560 65,214 67,102 Depreciation and amortization of continuing operations 44,088 48,488 126,013 136,878 ---------- - ---------- - ---------- - ---------- - 28,036 195,168 41,321 160,746 ---------- - ---------- - ---------- - ---------- - EBITDA from continuing operations $ (91,743 ) $ (47,757 ) $ (398,192 ) $ (358,309 ) ------------ ------------ ------------ ------------ Three months ended January Nine months ended January 31, 31, Supplemental Information 2019 2018 2019 2018 ------------------------------------------------------ ------------ ------------ ------------ ------------ Stock-based compensation expense: Pretax $ 6,170 $ 5,438 $ 18,009 $ 17,065 After-tax 4,440 8,228 13,429 15,753 Amortization of intangible assets: Pretax $ 18,737 $ 20,792 $ 54,461 $ 59,465 After-tax 13,487 29,863 40,612 54,892 ------------------------------------------------------ ------------ ------------ ------------ ------------

NON-GAAP FINANCIAL INFORMATION

The accompanying press release contains non-GAAP financial measures. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business.

We may consider whether significant items that arise in the future should be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including EBITDA from continuing operations, EBITDA margin from continuing operations, and free cash flow. We also use EBITDA from continuing operations and pretax income from continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.