Dover : Q2 2020 Earnings Presentation Slides

July 22, 2020 - 8:00am CT

Earnings Conference Call Second Quarter 2020

Forward-Looking Statements and Non-GAAP Measures

We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties and risks, including the impacts of the novel coronavirus (COVID-19) on the global economy and on our customers, suppliers, employees, operations, business, liquidity and cash flow. We caution everyone to be guided in their analysis of Dover Corporation by referring to the documents we file from time to time with the SEC, including our Form 10-K for 2019 and Form 10-Q for the second quarter of 2020, for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements.

We would also direct your attention to our website, dovercorporation.com, where considerably more information can be found.

In addition to financial measures based on U.S. GAAP, Dover provides supplemental non-GAAP financial information. Management uses non-GAAP measures in addition to GAAP measures to understand and compare operating results across periods, make resource allocation decisions, and for forecasting and other purposes. Management believes these non-GAAP measures reflect results in a manner that enables, in many instances, more meaningful analysis of trends and facilitates comparison of results across periods and to those of peer companies. These non-GAAP financial measures have no standardized meaning presented in U.S. GAAP and may not be comparable to other similarly titled measures used by other companies due to potential differences between the companies in calculations. The use of these non-GAAP measures has limitations and they should not be considered as substitutes for measures of financial performance and financial position as prepared in accordance with U.S. GAAP. Reconciliations and definitions are included either in this presentation or in Dover's earnings release and investor supplement for the second quarter, which are available on Dover's website.

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Summary Corporate Q2 Results and Highlights

				Q2 2020			Highlights and Comments
	Revenue change	All-in	-17%	 Expectedly slower demand across segments
	 Material sequential improvement in June
(Y-o-Y)		Organic(1)	-16%
	 FX impact: -1%; acquisitions offset dispositions
	Bookings change	All-in	-22%		Book-to-bill(3): 0.94
(Y-o-Y)		Organic(3)	-21%	 Backlog(3) remains strong (+8% Y-o-Y); increase in 4 of 5 segments
Segment EBIT margin	Reported(2)	-270 bps	 Cost containment and in-flight actions yield 27% adj. decremental
			margin(1)
improvement (Y-o-Y)	(1)	-190 bps	 DFS and DPPS adj. margin increase Y-o-Y despite lower volume
			Adjusted
Earnings		Reported	$125M		Reported Y-o-Y change: -37%
	Adjusted(1)	$164M		Adjusted Y-o-Y change: -28%
Diluted EPS	Reported	$0.86		Reported Y-o-Y change: -36%
Adjusted(1)	$1.13		Adjusted Y-o-Y change: -28%
Cash Flow change	OpCF(4)	+$63M	 Q2 FCF(1) up Y-o-Y on lower Capex, NWC management, tax
	deferrals
(Y-o-Y)		FCF(1)	+$78M
	 YTD FCF(1) up $126M Y-o-Y; liquidity position remains robust
					 2020 EPS guidance reinstated:
Guidance and other activities			̶	Reported EPS: $4.16 - $4.41
						̶	Adjusted EPS(1): $5.00 - $5.25
		(1) Non-GAAP measures (definitions and reconciliations in appendix)
3	(2) Refer to definition of total segment earnings (EBIT) margin in appendix
(3) See performance measures definitions in appendix

(4) Cash flow from operations

Q2 2020 Segment Results

Q2 2020(1)

	Revenue ($M) Adj. EBIT %
Segment / Organic	/ bps ∆	Comments
	Change %	Y-o-Y
			 Relative resilience in waste handling and aerospace & defense off strong backlogs,
DEP	$342	15.2%	weakness in other Capex-levered industrial businesses
-20%	-300 bps	 Margin decline due to lower volumes and difficult year-over-year comp (Q2'19 saw peak
			margin). Expect margin gap to narrow in H2 as volumes recover
			 Sustained strong activity in above ground retail fueling in North America (incl. EMV),
DFS	$326	14.7%	lower demand in EMEA and in Asia largely due to expected lower activity
-15%	+80 bps	 Margin up on productivity gains and geo/product mix offsetting low volumes. Expect full
			year margin accretion for the segment
			 Marking & Coding resilient with strength in consumables and fast moving consumer
DII	$228	16.5%	goods. Textiles significantly impacted by disruption in apparel demand and retail activity
-14%	-450 bps	 High segment gross margin and decline in digital print drove decremental margin. Strong
			margin performance in Marking & Coding (~flat Y-o-Y) expected to continue
			 Record growth in biopharma and thermal connector business. Lower sales in industrial
DPPS	$309	23.4%	pumps and precision components. Plastics expectedly lower due to H2-geared backlog
-9%	+60 bps	 Margin improvement on productivity gains and mix. Expect to hold absolute profits
			approximately flat for full year
			 Resilience in heat exchangers. Expectedly weak demand in foodservice and slow
	$294	6.2%	backlog conversion in food retail due to COVID disruption
DRFE	 Proactive production curtailments resulted in negative fixed cost absorption and Q2
-20%	-550 bps
	margin decline. Cost and productivity actions improved margins intra-quarter. Expect H2

Y-o-Y growth in absolute earnings and in margin

1. Non-GAAPreconciliations in appendix

4

Q2 2020 Revenue & Bookings

Revenue

Geographic Detail		Change in Organic Revenue(1): -$289M, or -16.0%

			Organic Rev
			Growth(1)
OTHER	3%	(33)%
	ASIA	11%	(14)%
					1,811		-86		-58	-37	-30	-78	-24	1	1,499	($M)
					Q2 2019	DEP		DFS	DII	DPPS	DRFE	FX	ACQ./	Q2 2020
												DISP. (2)
			(19)%							Organic
EUROPE	21%
										Bookings(4)
OTHER AMER.	8%	(34)%					Change in Organic Bookings(4): -$375M, or -20.6%
	US	57%	(10)%		1,816	-119		-72	-43	-97	-44	-29	1	1,413	($M)
					Q2 2019	DEP		DFS	DII	DPPS	DRFE	FX	ACQ./	Q2 2020
										Organic				DISP. (3)
														Full DOV
				June vs. May '20	12%		30%	22%	11%	21%			19%
				Bookings(4) Change
				Q2 Y-o-Y Backlog(4)	-39 /-9%	13 / 7%	52 / 45%	1 / -%	80 / 26%			106 / 8%
	Q2 2020 % of Revenue	Change ($ / %)
												Note: $ in millions. Numbers may not add due to rounding
	(1)	Non-GAAP measure (definition and reconciliation in appendix)	(3)	Acquisitions: $13M, dispositions: $12M
5	(2)	Acquisitions: $13M, dispositions: $12M		(4) See performance measure definitions in appendix

Q2 2020 Adjusted Segment EBIT and Adjusted Net Earnings

Change in Adjusted Segment EBIT (3)

					-$83M
		20.7%
17.2%								19.5%
										15.2%
311	65	376	-27	-7	-16	-4	-28	293	-65	228	($M)
ADJ. EBIT	D&A (1)	ADJ. EBITDA	DEP	DFS	DII	DPPS	DRFE	ADJ. EBITDA	D&A (2)	ADJ. EBIT
	Q2 2019								Q2 2020

Change in Adjusted Net Earnings (3)

					-$65M
			12.7%
							11.0%
198	5	26	229	-83	-2	20	164	-26	-13	-1	125
											($M)
GAAP	RIGHT	ACQ.	ADJ.	SEGMENT	CORP.	INT./TAX	ADJ.	ACQ.	RIGHT	ADJ. ON	GAAP
EARNINGS	SIZING	AMORT.	EARNINGS	EBIT	EXPENSE	EXPENSE	EARNINGS	AMORT.	SIZING	SALE OF	EARNINGS
										CHINO
	Q2 2019							Q2 2020

	(1)	Depreciation: $30M, Amortization: $35M	Note: $ in millions. Numbers may not add due to rounding
6	(2)	Depreciation: $31M, Amortization: $34M
(3)	Non-GAAP measures (definitions and reconciliations in appendix)

Year-to-Date Free Cash Flow

$M	YTD '20	YTD '19	∆
Net earnings	301	304	-3
Adjustments for (gains) losses(1)	(6)	47	-53
D&A	136	136	+1
Change in working capital	(80)	(164)	+84
Change in other(2)	(4)	(89)	+85
Cash flow from operations	348	233	+114
Capex	(79)	(91)	12
Free cash flow(3)	269	142	+126
FCF % of revenue(3)	8.5%	4.0%	+450 bps
FCF % of adj. earnings(3)	73.0%	34.5%	+3,850 bps

• NWC management led to improved FCF conversion
• Q2 benefited by ~$40M of deferred US tax payments (to be paid in Q3)
• Capex on "in-flight" committed projects largely completed in H1 '20

Note: Numbers may not add due to rounding

	(1)	Includes gain on disposition and loss on assets held for sale
7	(2)	Includes stock-based compensation and changes in other current and non-current assets and liabilities
(3)	Non-GAAP measures (reconciliation on this slide, definitions in appendix)

Q2 2020: Balance Sheet Update

($ in billions)		2.2x

2.9
Prudent	1.3
Leverage(1)
Net Debt	LTM ADJ.
	EBITDA
	1.6

• Flexible and conservative capital structure in line with long term objective
• Investment grade credit with "margin of safety"

				0.5	$450M New
				Revolver Capacity
Improved	1.0		0.5	Legacy Revolver
		Capacity
Liquidity(2)	0.6
	0.6	Cash
		0.3
		Q2 '19		Q2 '20

 Established new $450M revolver facility in Q2,
	$1B legacy revolver facility remains in place
	Re-entered stabilized commercial paper market
	No long term debt maturities until 2025

65

Principled years Capital

Allocation ~$225

million

Consecutive years of

increasing dividend

Net year-to-date highly- synergistic bolt-on acquisitions(3)

 Continue to pay dividend
	Continue to pursue attractive bolt-on M&A
	opportunities
	Lifting suspension of share repurchases

Note: Numbers may not add due to rounding

	(1)	Net debt and LTM adjusted EBITDA are non-GAAP measures (definitions and reconciliations in appendix)
8	(2)	Q2 '19 and Q2 '20 had $358M and $505M of commercial paper balance, respectively, which nets against legacy revolver capacity
(3)	Represents $239M of cash paid for acquisitions less $17M of cash proceeds from the sale of AMS Chino

Demand Outlook for H2 2020

Segment	H2 Outlook	Demand Outlook Comments
vs. Q2(1)
		 Strong backlog and visibility in aerospace & defense (microwave products); improvement in short-
DEP		cycle businesses (automotive aftermarket, industrial automation)
	 Orders slowed in waste handling driven by pull-back in industry capex and municipal spend
		reductions, backlog remains strong

DFS

DII

DPPS

DRFE

• NA above-ground remains resilient and supported by EMV
• Global activity lower on challenging comparable from 2019, expiration of China double-wall, global decline in miles driven and decline in capital budgets for integrated oil (esp. China and Europe)
• Transportation components and vehicle wash impacted but recovering
• Marking & coding remains steady on robust demand in FMCG and consumables as well as pent- up demand (maintenance postponed due to travel restrictions) in printers and services
• Textile digital printing operating at a reduced capacity; apparel/fashion markets remain challenged, but signs of order upticks at end of Q2
• Continued robust growth in biopharma and thermal connectors, improvement in industrial pumps on improving short cycle trends
• Strong backlog and visibility support stronger H2 in plastics processing; continued slowing in precision components, mainly in O&G and power gen
• Resilience in heat exchangers (esp. non-HVAC markets) and expected H2 deliveries from the large backlog in aluminum can making
• Expect food retail to begin shipping against a healthy backlog; possible upside from pent-up demand due to elevated wear & tear of field equipment in H1 and delayed maintenance/remodels
• Foodservice equipment (~10% of segment) to remain challenged through year-end

1. Denotes directional assessment of expected year-over-year revenue change in H2 2020 compared to Q2 2020

9	- H2 YoY decline at a slower rate vs. Q2	- H2 Trajectory approximately in line with Q2
- H2 YoY growth or decline at a rate less than 50% of that seen in Q2

FY2020 Guidance

Revenue

EBIT

Conversion(1)

• Negative FY organic revenue(1) change
• Sequential improvement from Q2 through Q3 and Q4
• 20-25%full year decremental margin(1) range
• Revising favorably (vs. 25-30% on Q1 call) on back of strong first half performance

		Corp Expense: $110M - $115M
Corporate		Interest Expense: $105M - $108M
Items		Tax Rate: 20 - 22%

• Free Cash Flow(1) Conversion:
  - 100+% of Adjusted Net Earnings

Cash Flow

• - 10-12% of Revenue

• Capex: $140M - $160M

		 Reported: $4.16 - $4.41
	EPS	 Adjusted(1): $5.00 - $5.25

(1) Non-GAAP measure (definition in appendix)

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Appendix

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Q2 2019 to Q2 2020 Revenue and Bookings Bridges by Segment

Revenue Bridge by Segment

($ in millions)
		DEP		DFS	DII	DPPS	DRFE	Total
Q2 2019 Revenue		430	391	267	339	385	1,811
Organic Growth		(86)	(58)	(37)	(30)	(78)	(289)
FX	(2)	(6)	(9)	(4)	(2)	(24)
Acquisitions / Dispositions		1	-	8	4	(12)	1
Q2 2020 Revenue	342	326	228	309	294	1,499
					Bookings Bridge by Segment
($ in millions)
		DEP		DFS	DII	DPPS	DRFE	Total
Q2 2019 Bookings		397	394	264	376	384	1,816
Organic Growth		(119)	(72)	(43)	(97)	(44)	(375)
FX	(2)	(11)	(9)	(5)	(2)	(29)
Acquisitions / Dispositions		1	-	10	2	(12)	1
Q2 2020 Bookings		278	311	221	276	326	1,413

Note: Numbers may not add due to rounding

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Q2 2020 Organic Revenue and Bookings Bridges

Q2 2020 Segment Growth Factors

		Revenue Growth		Bookings Growth
Organic
Engineered Products	-20.1%	-29.8%
Fueling Solutions	-14.8%	-18.2%
Imaging & Identification	-14.0%	-16.5%
Pumps & Process Solutions	-8.8%	-25.7%
Refrigeration & Food Equipment		-20.2%		-11.6%
Total Organic		-16.0%		-20.6%
Acquisitions	0.7%	0.7%
Dispositions	-0.7%	-0.6%
Currency translation		-1.2%		-1.7%
Total		-17.2%		-22.2%

Q2 2020 Geographic Revenue Growth Factors

Revenue Growth

Organic
US	-10.3%
Other Americas	-33.5%
Europe	-19.5%
Asia	-14.3%
Other	-33.1%
Total Organic	-16.0%
Acquisitions	0.7%
Dispositions	-0.7%
Currency translation	-1.2%
Total	-17.2%

Note: Numbers may not add due to rounding

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Reconciliation of Q2 2020 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment

			Q2 2020
($ in millions)	DEP	DFS	DII	DPPS	DRFE	Total
Revenue	342	326	228	309	294	1,499
Net earnings	-	-	-	-	-	125
Add back:
Corporate expense	-	-	-	-	-	27
Interest expense, net	-	-	-	-	-	28
Income tax expense	-	-	-	-	-	32
Segment earnings (EBIT)	48	47	38	68	11	212
EBIT %	13.9%	14.5%	16.7%	21.9%	3.9%	14.1%
Adjustments:
Rightsizing and other costs	4	1	(1)	5	6	15
Loss on disposition	-	-	-	-	1	1
Adjusted EBIT - Segment	52	48	38	72	18	228
Adjusted EBIT %	15.2%	14.7%	16.5%	23.4%	6.2%	15.2%
Adjusted depreciation and amortization expense(1)	10	18	9	17	11	65
Adjusted EBITDA - Segment	62	66	47	89	30	293
Adjusted EBITDA %	18.0%	20.2%	20.5%	28.9%	10.1%	19.5%

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Note: Numbers may not add due to rounding

(1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs

Reconciliation of Q2 2019 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment

			Q2 2019
($ in millions)	DEP	DFS	DII	DPPS	DRFE	Total
Revenue	430	391	267	339	385	1,811
Net earnings	-	-	-	-	-	198
Add back:
Corporate expense	-	-	-	-	-	25
Interest expense, net	-	-	-	-	-	31
Income tax expense	-	-	-	-	-	52
Segment earnings (EBIT)	77	53	55	76	44	305
EBIT %	17.9%	13.5%	20.5%	22.5%	11.5%	16.8%
Adjustments:
Rightsizing and other costs	1	2	1	1	1	6
Adjusted EBIT - Segment	78	54	56	77	45	311
Adjusted EBIT %	18.2%	13.9%	21.0%	22.8%	11.7%	17.2%
Adjusted depreciation and amortization expense (1)	10	19	7	16	13	65
Adjusted EBITDA - Segment	88	73	63	93	58	376
Adjusted EBITDA %	20.5%	18.8%	23.7%	27.6%	15.0%	20.7%

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Note: Numbers may not add due to rounding

(1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs

Reconciliation of Free Cash Flow and Net Debt

		Free Cash Flow
($ millions)	Q2 2020	Q2 2019	Q2 YTD	Q2 YTD
2020		2019
Net Cash Provided by Operating Activities	272	209	348		233
Capital Expenditures	(39)	(54)	(79)		(91)
Free Cash Flow	233	155	269		142
Free Cash Flow as a % of Earnings	186.6%	78.1%	89.2%		46.8%
Free Cash Flow as a % of Adjusted Earnings	141.6%	67.5%	73.0%		34.5%
Free Cash Flow as a % of Revenue	15.5%	8.5%	8.5%		4.0%
					Net Debt
($ in millions)					Q2 '20
Short term borrowings					-
Commercial paper					505
Notes payables					505
Long-term debt					3,001
Total debt					3,506
Less: Cash and cash equivalents					(649)
Net debt					2,857

Note: Numbers may not add due to rounding

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Reconciliation of Adjusted Net Earnings to Net Earnings and Calculation of Adjusted Diluted EPS under U.S. GAAP

($ in millions, except per share data)
		Q2 2020	Q2 2019		Q2 YTD	Q2 YTD
				2020	2019
Net earnings ($)	125	198	301	304
Acquisition-related amortization, pre tax	34	35	68	71
Acquisition-related amortization, tax impact	(8)	(9)	(17)	(18)
Rightsizing and other costs, pre tax	17	6	25	10
Rightsizing and other costs, tax impact	(3)	(1)	(5)	(2)
Loss (gain) on disposition, pre tax	1	-	(6)	-
Loss (gain) on disposition, tax impact	(0)	-	1	-
Loss on assets held for sale	-	-	-	47
Adjusted net earnings ($)	164	229	368	412
Weighted average shares outstanding - diluted	145	147	145	147
Diluted EPS ($)	0.86	1.35	2.07	2.07
Acquisition-related amortization, pre tax	0.24	0.24	0.47	0.48
Acquisition-related amortization, tax impact	(0.06)	(0.06)	(0.12)	(0.12)
Rightsizing and other costs, pre tax	0.12	0.04	0.17	0.07
Rightsizing and other costs, tax impact	(0.02)	(0.01)	(0.03)	(0.02)
Loss (gain) on disposition, pre tax	0.00	-	(0.04)	-
Loss (gain) on disposition, tax impact	(0.00)	-	0.01	-
Loss on assets held for sale	-	-	-	0.32
Adjusted diluted EPS ($)	1.13	1.56	2.53	2.80

Note: Numbers may not add due to rounding

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Reconciliation of Corporate Last Twelve Months ("LTM") Adjusted

EBITDA and Decremental Margin

				LTM Adjusted EBITDA
($ in millions)	Q3 '19		Q4 '19	Q1 '20	Q2 '20	LTM
Net earnings		206	168	176	125	675
Add back:
Corporate expense		29	40	24	27	120
Interest expense, net		30	29	26	28	113
Income tax expense		52	29	37	32	150
Loss on extinguishment of debt		-	24	-	-	24
Segment earnings (EBIT)		317	290	264	212	1,083
Adjustments:
Rightsizing and other costs		3	13	7	15	38
(Gain) loss on disposition		-	-	(7)	1	(6)
Adjusted EBIT - Segment		320	304	264	228	1,116
Adjusted depreciation and amortization (2)		65	67	65	65	262
Adjusted Segment EBITDA		385	371	329	293	1,378
Less: Corporate expenses (1)		(29)	(64)	(24)	(27)	(144)
Plus: Corporate rightsizing & other costs (1)		-	28	1	2	31
Plus: Corporate depreciation & amortization		2	2	2	2	7
Adjusted Corporate EBITDA		359	337	308	269	1,272

					Decremental Margin
	($ in millions)	Q2 '20	Q2 '19	∆
	Revenue				1,499	1,811	(312)
	Adjusted EBIT - Segment	228	311	(83)
	Decremental Margin			27%
					Note: Numbers may not add due to rounding
18	(1)	Q4 '19 corporate expenses and rightsizing & other costs include a $24M loss on extinguishment of debt
(2)	Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs

Reconciliation of EPS to Adjusted EPS

		Range
2020 Guidance for Earnings per Share (GAAP)	$4.16	$4.41
Acquisition-related amortization, net		0.71-
Rightsizing and other costs, net		0.16-
Gain on disposition, net		(0.03)
2020 Guidance for Adjusted Earnings per Share (Non-GAAP)	$5.00	$5.25

Note: Numbers may not add due to rounding

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Non-GAAP Definitions

Definitions of Non-GAAP Measures:

Adjusted Net Earnings: is defined as net earnings adjusted for the effect of acquisition-related amortization, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain on disposition.

Adjusted Diluted Net Earnings Per Share: is defined as adjusted net earnings divided by average diluted shares.

Total segment earnings (EBIT): is defined as net earnings before income taxes, net interest expense and corporate expenses.

Total segment earnings (EBIT) margin: is defined as total segment earnings (EBIT) divided by revenue.

Adjusted EBIT by Segment: is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain/loss on disposition.

Adjusted EBIT Margin by Segment: is defined as adjusted EBIT by segment divided by segment revenue. The bps change Y-o-Y is calculated as the difference between adjusted EBIT margin for the current period and the prior period.

Adjusted EBITDA by Segment: is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs.

Adjusted EBITDA Margin by Segment: is defined as adjusted EBITDA by segment divided by segment revenue.

EBIT Conversion / Decremental Margin: is defined as the change in total adjusted segment earnings (EBIT) divided by the change in revenue.

Free Cash Flow: is defined as net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings equals free cash flow divided by net earnings. Free cash flow as a percentage of adjusted net earnings equals free cash flow divided by adjusted net earnings.

Organic Revenue Growth: is defined as revenue growth excluding the impact of foreign currency exchange rates and the impact of acquisitions and dispositions.

Net debt: is defined as total debt minus cash and cash equivalents.

LTM Adjusted EBITDA: is defined as adjusted segment EBITDA, less corporate expenses, plus corporate rightsizing and other costs and corporate depreciation and amortization.

The tables included in this presentation provide reconciliations of the non-GAAP measures used in this presentation to the most directly comparable U.S. GAAP measures. Further information regarding management's use of these non-GAAP measures is included in Dover's earnings release and investor supplement for the second quarter.

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Performance Measure Definitions

Definitions of Performance Measures:

Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.

Organic Bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisitions and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.

Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet been satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.

Book-to-bill is a ratio of the amount of bookings received from customers during a period divided by the amount of revenue recorded during that same period. This metric is a useful indicator of demand.

We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.

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