Pool Corporation Reports Record Third Quarter Results
Highlights
- Net sales growth of 9% for Q3 2018, with 8% growth in base business sales
- Q3 2018 diluted EPS increase of 43% to $1.66; YTD growth of 34% to $5.20, each including tax benefits
- Updates 2018 earnings guidance range to $5.58 - $5.78 per diluted share from previous $5.50 - $5.70 range
COVINGTON, La., Oct. 18, 2018 (GLOBE NEWSWIRE) -- Pool Corporation (NASDAQ/GSM: POOL) today reported record results for the third quarter of 2018.
“We produced strong third quarter results thanks to our operational execution and a continuation of the elevated demand trends for discretionary pool and irrigation related products. Despite bouts of severe weather, with Hurricane Florence impacting the Carolinas, elevated rainfall in Texas and wildfires in California, we achieved favorable results. Natural disasters not only impact our business, but the lives of those in and around the impacted areas. In that spirit, we would like to recognize the resiliency of all affected and the ability of our team to continue to produce solid results in spite of these obstacles,” said Manuel Perez de la Mesa, President and CEO.
Net sales increased 9% to a record $811.3 million in the third quarter of 2018 compared to $743.4 million in the third quarter of 2017. Base business sales grew 8% over the same quarter of 2017, with demand for discretionary products such as building materials and our expanded commercial product offerings driving our sales growth.
Gross profit increased 8% to a record $235.0 million in the third quarter of 2018 from $216.6 million in the same period of 2017. Base business gross profit improved 8% over the third quarter of 2017. Gross profit as a percentage of net sales (gross margin) was 29.0% for the third quarter of 2018 compared to 29.1% for the third quarter of 2017. This decline in gross margin mainly reflects differences in product mix.
Selling and administrative expenses (operating expenses) increased 6% to $142.7 million in the third quarter of 2018 compared to the third quarter of 2017, with base business operating expenses up 5% over the comparable 2017 period. We attribute the expense growth to variable labor and freight costs together with higher facility costs. As a percentage of net sales, base business operating expenses declined to 17.4% for the third quarter of 2018 compared to 18.0% for the third quarter of 2017.
Operating income for the third quarter of 2018 increased 13% to a record $92.3 million compared to the same period in 2017. Operating income as a percentage of net sales (operating margin) was 11.4% for the third quarter of 2018 and 11.0% for the same period in 2017, while base business operating margin was 11.5% for the third quarter of 2018 and 11.2% for the same period in 2017.
Both Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, which we adopted on January 1, 2017, and U.S. tax reform enacted in December 2017, impacted our income tax provision for the third quarter of 2018. Our effective tax rate was 20.8% and 37.4% for the third quarters of 2018 and 2017, respectively. We recorded a $3.3 million benefit from ASU 2016-09 in the quarter ended September 30, 2018 compared to a benefit of $0.3 million realized in the same period in 2017. Excluding the benefits from ASU 2016-09, our effective tax rate was 24.6% and 37.9% for the third quarters of 2018 and 2017, respectively. As previously reported, we expect our annual effective tax rate (excluding the benefit from ASU 2016-09) for 2018 and future periods to approximate 25.5%, which is a reduction compared to our historical rate of approximately 38.5% due to the impact of the recent U.S. tax reform.
Net income attributable to Pool Corporation was $69.3 million in the third quarter of 2018 compared to $48.8 million in the third quarter of 2017. Earnings per share increased 43% to a record $1.66 per diluted share for the three months ended September 30, 2018 compared to $1.16 per diluted share for the same period in 2017. The reduction in our effective tax rate from 37.4% to 20.8% as discussed above reduced our income tax expense by approximately $14.5 million, or $0.35 per diluted share, in the third quarter of 2018.
Net sales for the nine months ended September 30, 2018 increased 8% to a record $2,455.0 million from $2,278.0 million in the comparable 2017 period, with most of this growth coming from the 7% improvement in base business sales. Gross margin for the nine months ended September 30, 2018 was 28.9% compared to 29.0% from the same period in 2017.
Operating expenses for the nine months ended September 30, 2018 increased 7% compared to the first nine months of 2017, with base business operating expenses up 6%. Operating income for the first nine months of 2018 increased 8% to $287.9 million compared to $267.1 million in the same period in 2017.
Our effective tax rate was 20.5% for the nine months ended September 30, 2018 compared to 35.2% for the nine months ended September 30, 2017. ASU 2016-09 benefited our income tax provision by $13.9 million in the first nine months of 2018 and $7.7 million in the first nine months of 2017, or $0.33 and $0.14 per diluted share, respectively.
Net income attributable to Pool Corporation for the nine months ended September 30, 2018 was $217.6 million compared to $166.0 million for the nine months ended September 30, 2017. Earnings per share for the first nine months of 2018 increased 34% to a record $5.20 per diluted share compared to $3.89 per diluted share for the first nine months of 2017. The reduction in our effective tax rate as discussed above from 35.2% to 20.5% reduced our income tax expense by approximately $40.3 million, or $0.96 per diluted share, in the first nine months of 2018. Excluding the benefits from ASU 2016-09, our effective tax rate was 25.5% and 38.2% for the nine months ended September 30, 2018 and September 30, 2017, respectively. Considering the impact of U.S. Tax Reform in 2018 and the ASU 2016-09 impacts in both 2018 and 2017, diluted earnings per share increased approximately 15% year over year.
On the balance sheet at September 30, 2018, total net receivables, including pledged receivables, increased 10%, while inventory levels grew 26% compared to September 30, 2017. In 2018, we increased our inventory purchases in advance of greater than normal vendor price increases, which negatively impacted operating cash flow, but should positively impact operating income for the remainder of 2018 and into fiscal 2019. Inventory also increased due to normal business growth and as a result of acquisitions. Total debt outstanding was $580.7 million at September 30, 2018, a $16.1 million increase from total debt at September 30, 2017.
Cash provided by operations was $51.3 million in the first nine months of 2018 compared to $112.0 million in the first nine months of 2017. The decline in cash provided by operations reflects timing differences from the pre-price increase inventory purchases discussed above, which should benefit future periods’ cash flow as the inventory is sold. Adjusted EBITDA (as defined in the addendum to this release) was $102.5 million and $91.7 million in the third quarters of 2018 and 2017, respectively, and $318.0 million and $295.3 million in the first nine months of 2018 and 2017, respectively.
We are updating our 2018 earnings guidance to a range of $5.58 to $5.78 per diluted share from our previous range of $5.50 to $5.70 per diluted share to reflect the $0.08 benefit realized from ASU 2016-09 in the third quarter. We have not projected any additional tax benefit from ASU 2016-09 in our earnings guidance range for the remainder of the year.
“Based on our expectations of sustained demand, combined with our proactive supply chain management, we expect to finish the year strong with a solid fourth quarter. Looking further, I have complete confidence in our leadership team and the opportunities available to our business. I believe they will sustain our track record of exceptional performance, while adding value to our industry. It has been a privilege to do my job for almost 20 years working with truly outstanding individuals in a great industry,” said Perez de la Mesa.
POOLCORP is the world’s largest wholesale distributor of swimming pool and related backyard products. As of September 30, 2018, POOLCORP operated 360 sales centers in North America, Europe, South America and Australia, through which it distributes more than 180,000 national brand and private label products to roughly 120,000 wholesale customers. For more information, please visit www.poolcorp.com.
This news release includes “forward-looking” statements that involve risks and uncertainties that are generally identifiable through the use of words such as “believe,” “expect,” “intend,” “plan,” “estimate,” “project,” “should” and similar expressions and include projections of earnings. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. Actual results may differ materially due to a variety of factors, including the sensitivity of our business to weather conditions, changes in the economy and the housing market, our ability to maintain favorable relationships with suppliers and manufacturers, competition from other leisure product alternatives and mass merchants, excess tax benefits or deficiencies recognized under ASU 2016-09 and other risks detailed in POOLCORP’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) as updated by POOLCORP’s subsequent filings with the SEC. In addition, this press release includes forward-looking statements and estimates regarding the effects of the Tax Cuts and Jobs Act, which are based on our current interpretation of this legislation and on reasonable estimates and may change as a result of new guidance issued by regulators or changes in our estimates.
CONTACT:Curtis J. ScheelDirector of Investor Relations985.801.5341[email protected]
POOL CORPORATIONConsolidated Statements of Income(Unaudited)(In thousands, except per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net sales | $ | 811,311 | $ | 743,401 | $ | 2,455,015 | $ | 2,278,005 | |||||||
| Cost of sales | 576,308 | 526,795 | 1,745,283 | 1,618,114 | |||||||||||
| Gross profit | 235,003 | 216,606 | 709,732 | 659,891 | |||||||||||
| Percent | 29.0 | % | 29.1 | % | 28.9 | % | 29.0 | % | |||||||
| Selling and administrative expenses | 142,666 | 134,678 | 421,812 | 392,779 | |||||||||||
| Operating income | 92,337 | 81,928 | 287,920 | 267,112 | |||||||||||
| Percent | 11.4 | % | 11.0 | % | 11.7 | % | 11.7 | % | |||||||
| Interest and other non-operating expenses, net | 4,931 | 4,009 | 14,449 | 11,608 | |||||||||||
| Income before income taxes and equity earnings | 87,406 | 77,919 | 273,471 | 255,504 | |||||||||||
| Provision for income taxes | 18,206 | 29,179 | 55,989 | 89,951 | |||||||||||
| Equity earnings in unconsolidated investments, net | 61 | 43 | 167 | 121 | |||||||||||
| Net income | 69,261 | 48,783 | 217,649 | 165,674 | |||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | 294 | |||||||||||
| Net income attributable to Pool Corporation | $ | 69,261 | $ | 48,783 | $ | 217,649 | $ | 165,968 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 1.71 | $ | 1.20 | $ | 5.39 | $ | 4.04 | |||||||
| Diluted | $ | 1.66 | $ | 1.16 | $ | 5.20 | $ | 3.89 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 40,422 | 40,659 | 40,416 | 41,065 | |||||||||||
| Diluted | 41,797 | 42,207 | 41,831 | 42,691 | |||||||||||
| Cash dividends declared per common share | $ | 0.45 | $ | 0.37 | $ | 1.27 | $ | 1.05 | |||||||
POOL CORPORATIONCondensed Consolidated Balance Sheets(Unaudited)(In thousands)
| September 30, | September 30, | Change | ||||||||||||
| 2018 | 2017 | $ | % | |||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 35,693 | $ | 36,398 | $ | (705 | ) | (2 | )% | |||||
| Receivables, net (1) | 90,775 | 90,142 | 633 | 1 | ||||||||||
| Receivables pledged under receivables facility | 196,998 | 172,654 | 24,344 | 14 | ||||||||||
| Product inventories, net (2) | 609,983 | 484,287 | 125,696 | 26 | ||||||||||
| Prepaid expenses and other current assets | 19,457 | 14,832 | 4,625 | 31 | ||||||||||
| Total current assets | 952,906 | 798,313 | 154,593 | 19 | ||||||||||
| Property and equipment, net | 109,942 | 103,880 | 6,062 | 6 | ||||||||||
| Goodwill | 189,029 | 189,024 | 5 | — | ||||||||||
| Other intangible assets, net | 12,305 | 13,206 | (901 | ) | (7 | ) | ||||||||
| Equity interest investments | 1,163 | 1,168 | (5 | ) | — | |||||||||
| Other assets | 18,413 | 16,333 | 2,080 | 13 | ||||||||||
| Total assets | $ | 1,283,758 | $ | 1,121,924 | $ | 161,834 | 14 | % | ||||||
| Liabilities and stockholders’ equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 204,706 | $ | 209,062 | $ | (4,356 | ) | (2 | ) | |||||
| Accrued expenses and other current liabilities | 75,639 | 87,887 | (12,248 | ) | (14 | ) | ||||||||
| Short-term borrowings and current portion of long-term debt | 9,343 | 8,609 | 734 | 9 | ||||||||||
| Total current liabilities | 289,688 | 305,558 | (15,870 | ) | (5 | ) | ||||||||
| Deferred income taxes | 24,802 | 27,244 | (2,442 | ) | (9 | ) | ||||||||
| Long-term debt, net | 571,360 | 555,964 | 15,396 | 3 | ||||||||||
| Other long-term liabilities | 25,170 | 22,614 | 2,556 | 11 | ||||||||||
| Total liabilities | 911,020 | 911,380 | (360 | ) | — | |||||||||
| Total stockholders’ equity | 372,738 | 210,544 | 162,194 | 77 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 1,283,758 | $ | 1,121,924 | $ | 161,834 | 14 | % | ||||||
(1) The allowance for doubtful accounts was $5.4 million at September 30, 2018 and $4.1 million at September 30, 2017.(2) The inventory reserve was $8.8 million at September 30, 2018 and $7.8 million at September 30, 2017.
POOL CORPORATIONCondensed Consolidated Statements of Cash Flows(Unaudited)(In thousands)
| Nine Months Ended | ||||||||||||||||||
| September 30, | ||||||||||||||||||
| 2018 | 2017 | Change | ||||||||||||||||
| Operating activities | ||||||||||||||||||
| Net income | $ | 217,649 | $ | 165,674 | $ | 51,975 | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||
| Depreciation | 19,499 | 17,947 | 1,552 | |||||||||||||||
| Amortization | 1,408 | 1,132 | 276 | |||||||||||||||
| Share-based compensation | 9,793 | 9,496 | 297 | |||||||||||||||
| Equity earnings in unconsolidated investments, net | (167 | ) | (121 | ) | (46 | ) | ||||||||||||
| Other | 3,584 | 1,074 | 2,510 | |||||||||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||||||||||||
| Receivables | (93,911 | ) | (90,204 | ) | (3,707 | ) | ||||||||||||
| Product inventories | (80,142 | ) | 9,057 | (89,199 | ) | |||||||||||||
| Prepaid expenses and other assets | 143 | (1,523 | ) | 1,666 | ||||||||||||||
| Accounts payable | (40,143 | ) | (27,328 | ) | (12,815 | ) | ||||||||||||
| Accrued expenses and other current liabilities | 13,547 | 26,816 | (13,269 | ) | ||||||||||||||
| Net cash provided by operating activities | 51,260 | 112,020 | (60,760 | ) | ||||||||||||||
| Investing activities | ||||||||||||||||||
| Acquisition of businesses, net of cash acquired | (578 | ) | (6,879 | ) | 6,301 | |||||||||||||
| Purchases of property and equipment, net of sale proceeds | (27,976 | ) | (37,709 | ) | 9,733 | |||||||||||||
| Other investments, net | — | 4 | (4 | ) | ||||||||||||||
| Net cash used in investing activities | (28,554 | ) | (44,584 | ) | 16,030 | |||||||||||||
| Financing activities | ||||||||||||||||||
| Proceeds from revolving line of credit | 820,967 | 918,338 | (97,371 | ) | ||||||||||||||
| Payments on revolving line of credit | (813,996 | ) | (857,609 | ) | 43,613 | |||||||||||||
| Proceeds from asset-backed financing | 193,400 | 156,600 | 36,800 | |||||||||||||||
| Payments on asset-backed financing | (138,400 | ) | (97,800 | ) | (40,600 | ) | ||||||||||||
| Proceeds from short-term borrowings and current portion of long-term debt | 16,118 | 25,001 | (8,883 | ) | ||||||||||||||
| Payments on short-term borrowings and current portion of long-term debt | (17,610 | ) | (17,497 | ) | (113 | ) | ||||||||||||
| Payments of deferred financing costs | (8 | ) | (909 | ) | 901 | |||||||||||||
| Payments of deferred and contingent acquisition consideration | (265 | ) | (199 | ) | (66 | ) | ||||||||||||
| Purchase of redeemable noncontrolling interest | — | (2,573 | ) | 2,573 | ||||||||||||||
| Proceeds from stock issued under share-based compensation plans | 12,732 | 8,647 | 4,085 | |||||||||||||||
| Payments of cash dividends | (51,371 | ) | (43,165 | ) | (8,206 | ) | ||||||||||||
| Purchases of treasury stock | (38,906 | ) | (141,580 | ) | 102,674 | |||||||||||||
| Net cash used in financing activities | (17,339 | ) | (52,746 | ) | 35,407 | |||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 386 | (248 | ) | 634 | ||||||||||||||
| Change in cash and cash equivalents | 5,753 | 14,442 | (8,689 | ) | ||||||||||||||
| Cash and cash equivalents at beginning of period | 29,940 | 21,956 | 7,984 | |||||||||||||||
| Cash and cash equivalents at end of period | $ | 35,693 | $ | 36,398 | $ | (705 | ) | |||||||||||
ADDENDUM
Base Business
The following table breaks out our consolidated results into the base business component and the excluded component (sales centers excluded from base business):
| (Unaudited)(in thousands) | Base BusinessThree Months EndedSeptember 30, | ExcludedThree Months EndedSeptember 30, | TotalThree Months EndedSeptember 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 800,971 | $ | 738,391 | $ | 10,340 | $ | 5,010 | $ | 811,311 | $ | 743,401 | |||||||||||||||||||||||||||||||||||||
| Gross profit | 231,841 | 215,078 | 3,162 | 1,528 | 235,003 | 216,606 | |||||||||||||||||||||||||||||||||||||||||||
| Gross margin | 28.9 | % | 29.1 | % | 30.6 | % | 30.5 | % | 29.0 | % | 29.1 | % | |||||||||||||||||||||||||||||||||||||
| Operating expenses | 139,392 | 132,663 | 3,274 | 2,015 | 142,666 | 134,678 | |||||||||||||||||||||||||||||||||||||||||||
| Expenses as a % of net sales | 17.4 | % | 18.0 | % | 31.7 | % | 40.2 | % | 17.6 | % | 18.1 | % | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | 92,449 | 82,415 | (112 | ) | (487 | ) | 92,337 | 81,928 | |||||||||||||||||||||||||||||||||||||||||
| Operating margin | 11.5 | % | 11.2 | % | (1.1 | )% | (9.7 | )% | 11.4 | % | 11.0 | % | |||||||||||||||||||||||||||||||||||||
| (Unaudited)(in thousands) | Base BusinessNine Months EndedSeptember 30, | ExcludedNine Months EndedSeptember 30, | TotalNine Months EndedSeptember 30, | ||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 2,419,766 | $ | 2,266,386 | $ | 35,249 | $ | 11,619 | $ | 2,455,015 | $ | 2,278,005 | |||||||||||||||||||||||||||||||||||
| Gross profit | 699,058 | 656,433 | 10,674 | 3,458 | 709,732 | 659,891 | |||||||||||||||||||||||||||||||||||||||||
| Gross margin | 28.9 | % | 29.0 | % | 30.3 | % | 29.8 | % | 28.9 | % | 29.0 | % | |||||||||||||||||||||||||||||||||||
| Operating expenses | 409,791 | 388,299 | 12,021 | 4,480 | 421,812 | 392,779 | |||||||||||||||||||||||||||||||||||||||||
| Expenses as a % of net sales | 16.9 | % | 17.1 | % | 34.1 | % | 38.6 | % | 17.2 | % | 17.2 | % | |||||||||||||||||||||||||||||||||||
| Operating income (loss) | 289,267 | 268,134 | (1,347 | ) | (1,022 | ) | 287,920 | 267,112 | |||||||||||||||||||||||||||||||||||||||
| Operating margin | 12.0 | % | 11.8 | % | (3.8 | )% | (8.8 | )% | 11.7 | % | 11.7 | % | |||||||||||||||||||||||||||||||||||
We have excluded the following acquisitions from base business for the periods identified:
| Acquired | AcquisitionDate | NetSales CentersAcquired | PeriodsExcluded | |||
| Tore Pty. Ltd. (Pool Power) (1) | January 2018 | 1 | January - September 2018 | |||
| Chem Quip, Inc. (1) | December 2017 | 5 | January - September 2018 | |||
| Intermark | December 2017 | 1 | January - September 2018 | |||
| E-Grupa | October 2017 | 1 | January - September 2018 | |||
| New Star Holdings Pty. Ltd. (Newline) | July 2017 | 1 | January - September 2018 and July - September 2017 | |||
| Lincoln Aquatics (1) | April 2017 | 1 | January - July 2018and May - July 2017 | |||
(1) We acquired certain distribution assets of each of these companies.
When calculating our base business results, we exclude sales centers that are acquired, closed or opened in new markets for a period of 15 months. We also exclude consolidated sales centers when we do not expect to maintain the majority of the existing business and existing sales centers that are consolidated with acquired sales centers.
We generally allocate corporate overhead expenses to excluded sales centers on the basis of their net sales as a percentage of total net sales. After 15 months of operations, we include acquired, consolidated and new market sales centers in the base business calculation including the comparative prior year period.
The table below summarizes the changes in our sales center count in the first nine months of 2018.
| December 31, 2017 | 351 | |||
| Acquired location | 1 | |||
| New locations | 9 | |||
| Consolidated location | (1 | ) | ||
| September 30, 2018 | 360 | |||
Adjusted EBITDA
We define Adjusted EBITDA as net income or net loss plus interest and other non-operating expenses, income taxes, depreciation, amortization, share‑based compensation, goodwill and other non-cash impairments and equity earnings or loss in unconsolidated investments. Adjusted EBITDA is not a measure of cash flow or liquidity as determined by generally accepted accounting principles (GAAP). We have included Adjusted EBITDA as a supplemental disclosure because we believe that it is widely used by our investors, industry analysts and others as a useful supplemental liquidity measure in conjunction with cash flows provided by or used in operating activities to help investors understand our ability to provide cash flows to fund growth, service debt and pay dividends as well as compare our cash flow generating capacity from year to year.
We believe Adjusted EBITDA should be considered in addition to, not as a substitute for, operating income or loss, net income or loss, cash flows provided by or used in operating, investing and financing activities or other income statement or cash flow statement line items reported in accordance with GAAP. Other companies may calculate Adjusted EBITDA differently than we do, which may limit its usefulness as a comparative measure.
The table below presents a reconciliation of net income to Adjusted EBITDA.
| (Unaudited) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (In thousands) | September 30, | September 30, | |||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
| Net income | $ | 69,261 | $ | 48,783 | $ | 217,649 | $ | 165,674 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||||||
| Interest and other non-operating expenses (1) | 4,931 | 4,009 | 14,449 | 11,608 | |||||||||||||||||||||||
| Provision for income taxes | 18,206 | 29,179 | 55,989 | 89,951 | |||||||||||||||||||||||
| Share-based compensation | 3,312 | 3,197 | 9,793 | 9,496 | |||||||||||||||||||||||
| Equity earnings in unconsolidated investments | (61 | ) | (43 | ) | (167 | ) | (121 | ) | |||||||||||||||||||
| Depreciation | 6,611 | 6,330 | 19,499 | 17,947 | |||||||||||||||||||||||
| Amortization (2) | 276 | 253 | 827 | 724 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 102,536 | $ | 91,708 | $ | 318,039 | $ | 295,279 | |||||||||||||||||||
(1) Shown net of interest income and includes amortization of deferred financing costs as discussed below.(2) Excludes amortization of deferred financing costs of $194 and $136 for the three months ended September 30, 2018 and September 30, 2017, respectively, and $581 and $408 for the nine months ended September 30, 2018 and September 30, 2017, respectively.
The table below presents a reconciliation of Adjusted EBITDA to net cash provided by (used in) operating activities. Please see page 6 for our Condensed Consolidated Statements of Cash Flows.
| (Unaudited) | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (In thousands) | September 30, | September 30, | |||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 102,536 | $ | 91,708 | $ | 318,039 | $ | 295,279 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||||||
| Interest and other non-operating expenses, net of interest income | (4,737 | ) | (3,873 | ) | (13,868 | ) | (11,200 | ) | |||||||||||||||||||
| Provision for income taxes | (18,206 | ) | (29,179 | ) | (55,989 | ) | (89,951 | ) | |||||||||||||||||||
| Other | 1,723 | (1,048 | ) | 3,584 | 1,074 | ||||||||||||||||||||||
| Change in operating assets and liabilities | 6,753 | 95,758 | (200,506 | ) | (83,182 | ) | |||||||||||||||||||||
| Net cash provided by operating activities | $ | 88,069 | $ | 153,366 | $ | 51,260 | $ | 112,020 | |||||||||||||||||||
