Atento Reports Fiscal 2016 Fourth-Quarter and Full Year Results, Highlighted by Revenue Diversification, Margin Protection and Strong Cash Flow Generation Company Announces Agreement to Acquire...

($ in millions except EPS)

Q4 2016

Q4 2015

CCY
Growth

FY 2016

FY 2015

CCY
Growth

Revenue ⁽¹⁾

442.0

453.8

-4.2%

1,757.5

1,949.9

-1.4%

Reported Net Income ⁽²⁾

16.7

7.5

131.9%

3.4

52.2

-92.8%

Reported Earnings Per Share ⁽²⁾

$0.23

$0.10

130.0 %

$0.05

$0.71

-92.2%

Net Operating Cash Flow from/(used)
in Operating Activities

83.8

40.3

141.9

37.0

Adjusted EBITDA ⁽³⁾

58.6

63.8

-9.7%

221.9

249.7

-3.6%

Adjusted Margin 

13.3%

14.1%

12.6%

12.8%

Adjusted Earnings per Share ⁽²⁾

$0.19

$0.36

-38.7%

$0.65

$1.06

-30.1%

Free Cash Flow before Net Interest ⁽⁴⁾

90.0

20.1

136.3

(8.6)

Leverage (x) ⁽⁵⁾

1.5x

1.6x

1.5x

1.6x

(1)

Revenue excludes Morocco which was divested in September 2016.  

(2)

Reported Net Income and Earnings Per Share and Adjusted EBITDA, adjusted EBITDA margin and Adjusted Earnings per Share refer only to continuing operations. Reported and Adjusted Earnings Per Share, for the period ended December 31, 2016, were calculated considering the number of ordinary shares of 73,816,933. For the period ended December 30, 2015, the number of ordinary shares was 73,648,760.

(3)

EBITDA is defined as profit/(loss) for the period from continuing operations before net finance costs, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site relocation costs, financing and IPO fees, and other items which are not related to our core results of operations. EBITDA and Adjusted EBITDA are not measures defined by IFRS. The most directly comparable IFRS measure to EBITDA and Adjusted EBITDA is net income for the period from continuing operations.

(4)

We define Free Cash flow (FCF) as net cash flows from operating activities less net cash and disposals of payments for acquisition of property, plant, equipment and intangible assets.

(5)

Considered the pro-forma Net Debt adjusted to give effect to the Reorganization Transaction, regarding Preferred Equity Certificates.

($ in millions)

Q4 2016

Q4 2015

CCY
growth

FY 2016

FY 2015

CCY
growth

Brazil Region

Revenue

214.4

192.6

-4.6%

816.4

930.2

-7.0%

Operating Income

13.8

10.9

9.5%

46.3

66.5

-27.3%

Adjusted EBITDA

35.9

29.4

5.0%

121.0

129.4

-3.9%

Margin

16.7%

15.3%

14.8%

13.9%

Americas Region

Revenue

172.8

203.9

-4.1%

718.9

789.8

6.5%

Operating Income*

46.8

17.3

N.M

88.2

65.8

59.5%

Adjusted EBITDA

19.6

29.1

-23.7%

92.0

109.1

-1.5%%

Margin

11.3%

14.3%

12.8%

13.8%

EMEA Region

Revenue

55.3

57.7

-2.6%

223.9

231.7

-3.1%

Operating Income

(0.4)

1.6

N.M

(7.5)

(0.3)

N.M

Adjusted EBITDA

5.1

6.9

-23.9%

16.3

18.6

-10.4%

Margin

9.2%

12.0%

7.3%

8.0%

* includes the favorable impact in the fourth quarter and full-year Fiscal 2016 of the termination of our CVI in Argentina.

Guidance

Consolidated Revenue Growth (CCY)

1% to 5%

Adjusted EBITDA Margin Range (CCY) ⁽¹⁾

11% to 12%

Non-recurring Expenses – Adjustments to EBITDA

~$13MM

Net Interest Expense Range

$60MM to $65MM

Cash Capex (% of Revenue)

~3-4%

Effective Tax Rate

~34%

Free Cash Flow Cash Conversion

~40%

Diluted Share Count

~73.9MM shares

For the year ended December 31,

Change
excluding

FX (%)

For the year
ended
December 31,

Change
excluding

FX (%)

2014 ^(*)

2016

(audited)

(unaudited)

Revenue

2,278,244

1,949,883

9.3

1,757,498

(1.4)

Other operating income

4,578

4,319

10.9

5,790

45.0

Own work capitalized

475

6

(100.0)

90

N.M.

Other gains ⁽¹⁾

35,092

-

(100.0)

41,748

N.M.

Operating expenses:

Supplies

(103,496)

(77,604)

(2.6)

(65,598)

(7.0)

Employee benefit expenses

(1,621,812)

(1,410,526)

10.4

(1,309,901)

1.7

Depreciation

(57,793)

(50,077)

11.9

(46,448)

(0.4)

Amortization

(60,529)

(51,430)

9.9

(50,916)

6.3

Changes in trade provisions

1,589

(1,319)

N.M.

(1,902)

46.2

Other operating expenses

(357,000)

(241,478)

(12.5)

(214,015)

(4.8)

Impairment charges

(31,792)

-

(100.0)

-

N.M.

Total operating expenses

(2,230,833)

(1,832,434)

4.7

(1,688,780)

0.6

Operating profit

87,556

121,774

82.5

116,346

7.5

Finance income

17,326

15,459

24.3

7,188

(49.7)

Finance costs ⁽¹⁾

(122,032)

(75,469)

(19.9)

(59,151)

(17.3)

Change in fair value of financial instruments ^(**)

27,272

17,535

(48.7)

675

(96.0)

Net foreign exchange loss ⁽¹⁾

(33,382)

(3,919)

(97.9)

(56,494)

N.M.

Net finance expense

(110,816)

(46,394)

(43.2)

(107,782)

N.M.

Profit/(loss) before tax

(23,260)

75,380

N.M.

8,564

(87.3)

Income tax expense

(18,401)

(23,150)

61.4

(5,207)

(74.5)

Profit/(loss) from continuing operations

(41,661)

52,230

N.M.

3,357

(92.8)

Discontinued operations:

Loss from discontinued operations

(491)

(3,082)

N.M.

(3,206)

6.7

Profit/(loss) for the year

(42,152)

49,148

N.M.

151

(99.6)

Profit/(loss) attributable to:

Owners of the parent

(42,152)

49,148

N.M.

65

(99.8)

Non-controlling interest

-

-

N.M.

86

N.M.

Basic result per share from continuing operations (in U.S. dollars) ^(***)

(0.57)

0.71

N.M.

0.05

(92.2)

Basic result per share from discontinued operations (in U.S. dollars) ^(***)

(0.01)

(0.04)

N.M.

(0.04)

N.M.

(1) Contains the impacts of the CVI termination. The reversal of the principal amount of $41.7 million was recognized in "Other gains", the interest reversal of $19.9 million was recognized in "Finance costs" and the loss of $35.4 million on the conversion of Argentine pesos to U.S. dollars was recognized in "Net foreign exchange loss".

(*) Restated, excluding discontinued operations - Morocco.

(**) The gain or loss of the fair value of derivatives was recorded in the Income Statements within Finance income ($40.9 million for the year ended December 31, 2014) and Finance costs ($13.6 million for the year ended December 31, 2014), instead of Changes in fair value of financial instruments.

(***) The basic result per share, for the year presented in the table above, was calculated based on the weighted average number of ordinary shares of 73,816,933 as of December 31, 2016. For the period ended December 31, 2015 the weighted average number of ordinary shares outstanding was 73,648,760 and for the period ended December 31, 2014 was 73,619,511.

N.M. means not meaningful

For the three months ended
December 31,

Change excluding

 FX (%)

2015 ^(*)

2016

(unaudited)

Revenue

453,760

442,005

(4.2)

Other operating income

2,305

2,429

9.1

Own work capitalized

21

62

N.M.

Other gains ⁽¹⁾

-

41,748

N.M.

Operating expenses:

Supplies

(18,345)

(18,610)

(1.1)

Employee benefit expenses

(326,195)

(329,482)

(0.1)

Depreciation

(12,393)

(12,013)

(7.7)

Amortization

(11,288)

(13,405)

15.5

Changes in trade provisions

(393)

(1,456)

N.M.

Other operating expenses

(60,718)

(55,733)

(12.6)

Total operating expenses

(429,332)

(430,699)

(1.5)

Operating profit

26,754

55,545

111.8

Finance income

2,783

2,760

(9.7)

Finance costs ⁽¹⁾

(17,469)

613

(103.1)

Change in fair value of financial instruments

3,492

114

(133.3)

Net foreign exchange loss ⁽¹⁾

(4,495)

(41,263)

N.M.

Net finance expense

(15,689)

(37,776)

N.M.

Profit before tax

11,065

17,769

58.9

Income tax expense

(3,539)

(1,058)

(72.5)

Profit from continuing operations

7,526

16,711

131.9

Discontinued operations:

Loss from discontinued operations

(2,122)

-

(100.0)

Profit for the period

5,404

16,711

N.M.

Profit attributable to:

Owners of the parent

5,404

16,714

N.M.

Non-controlling interest

-

(3)

N.M.

Basic result per share from continuing operations (in U.S. dollars) ^(**)

0.10

0.23

130.0

Basic result per share from discontinued operations (in U.S. dollars) ^(**)

(0.03)

-

(100.0)

(1) Contains the impacts of the CVI termination. The reversal of the principal amount of $41.7 million was recognized in "Other gains", the interest reversal of $19.9 million was recognized in "Finance costs" and the loss of $35.4 million on the conversion of Argentine pesos to U.S. dollars was recognized in "Net foreign exchange loss".

(*) Restated, excluding discontinued operations - Morocco.

(**) The basic result per share, for the period presented in the table above, was calculated based on the weighted average number of ordinary shares of 73,816,933 as of December 31, 2016. For the period ended December 31, 2015 the weighted average number of ordinary shares outstanding was 73,648,760.

N.M. means not meaningful

Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss):

For the year ended December 31,

For the three months ended
December 31,

($ in millions)

2014

2015

2016

2015

2016

(audited)

(unaudited)

(unaudited)

Profit/(loss) from continuing operations

(41.6)

52.2

3.4

7.5

16.7

Net finance expense

110.8

46.4

107.8

15.7

37.7

Income tax expense

18.4

23.2

5.2

3.5

1.1

Depreciation and amortization

118.3

101.5

97.3

23.7

25.4

EBITDA (non-GAAP) (unaudited)

205.9

223.3

213.7

50.4

80.9

Acquisition and integration related costs ^(a)

9.9

0.1

-

-

-

Restructuring costs ^(b)

26.7

15.8

33.7

8.2

14.7

Sponsor management fees ^(c)

7.3

-

-

-

-

Site relocation costs ^(d)

1.7

3.4

9.3

2.9

2.8

Financing and IPO fees ^(e)

51.9

0.3

-

-

-

Contingent Value Instrument ^(f)

-

-

(41.7)

-

(41.7)

Asset impairments and Other ^(g)

1.9

6.8

6.9

2.3

1.9

Total non-recurring items ^(*)

99.4

26.4

8.2

13.4

(22.3)

Adjusted EBITDA (non-GAAP) (unaudited)

305.3

249.7

221.9

63.8

58.6

(*)   

Non-recurring items fall primarily into three categories of investment:

• The first includes investments to lower our variable cost structure, which is mostly labor, in response to the exceptional and severe adverse macroeconomic conditions in key markets such as Brazil, Argentina and Spain, which drove significant declines in volume. In 2016 we invested $14.6 million in these activities.
  
• The second includes investments in Brazil to relocate and consolidate our sites from higher to lower costs locations. This program started in 2014 when 53 percent of our sites were in Tier 2 cities. In 2016 we invested $9.4 million in these activities and we ended the year with 62.4% of our sites in Tier 2 cities. This program is now substantially completed.
  
• The third includes investments to drive a more sustainable lower-cost and competitive operating model, especially considering the exceptional adverse macroeconomic circumstances and associated declines in volume referenced above. In 2016 we invested $10.4 million in these activities. We expect these adjustments due to exceptional macro circumstances in most cases like Brazil and Argentina, will continue until the third quarter of 2017.

(a)     

Acquisition and integration related costs incurred in 2014 and 2015, are costs associated with the post-acquisition process in connection with a full strategy review and our SAP IT transformation project. These projects were substantially completed by the end of 2015.

 (b)    

Restructuring costs incurred in 2014, 2015 and 2016 primarily included several restructuring activities and other personnel costs that were not related to our core result of operations. For the year ended December 31, 2014, $8.6 million of our restructuring costs were related to the relocation of our corporate headquarters and severance payments directly related to the acquisition. In addition, in 2014, we incurred $1.5 million in restructuring costs in Spain (relating to restructuring expenses incurred as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain), and $1.4 million in Chile (related to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica). Restructuring costs incurred for the year ended December 31, 2015, are primarily related to headcount restructuring activities in Spain. In addition, we incurred restructuring costs not related to our core results of operations in Argentina and Peru of $4.8 million, $2.5 million in Chile of restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica, and certain changes to the executive team, and an additional $0.7 million related to the relocation of our corporate headquarters. Restructuring costs incurred in the year ended December 31, 2016, primarily relates to: (i) the optimization of labor relative to current or expected adjustments in activity levels, mainly in EMEA, Brazil and Argentina due to economic crises, and (ii) adjustments in the fixed costs structure to adapt the structure to the new macroeconomic adverse environment. We expect these adjustments due to exceptional macro circumstances in most cases like Brazil and Argentina, will continue until the third quarter of 2017.

Restructuring costs incurred for the three months ended December 31, 2015, primarily include $2.7 million related to restructuring in Chile ($1.1 million) in connection with certain changes to the executive team, and the restructuring of specific operations in Peru and Argentina ($1.6 million). For the three months ended December 31, 2016 restructuring costs of $10.6 million to align labor costs with macro driven declines in volume in Brazil, EMEA and Argentina, largely driven by Telefónica.

(c)     

Sponsor management fees represent the annual advisory fee paid to Bain Capital Partners, LLC that were expensed during 2014. The advisory agreement was terminated in connection with the initial public offering.

(d)      

Site relocation costs incurred in the year ended December 31, 2014, 2015 and 2016 include costs associated with our strategic initiative to relocate call centers from tier 1 cities to tier 2 cities in Brazil to achieve efficiencies through lower rental costs, attrition and absenteeism. Site relocation costs incurred for the three months ended December 31, 2015 related to the anticipation for site closures in Brazil in connection of the site relocation program to tier 2 and tier 3 cities and for the three months ended December 31, 2016 related to Brazil's Corporate office migration, that will be concluded in the second quarter of 2017 ($2.2 million).

(e)      

Financing and IPO fees for the year ended December 31, 2014 and 2015 primarily relate to non-core professional fees incurred during the IPO process, including advisory, auditing and legal expenses.

(f)     

On November 8, 2016 the CVI nominal value of ARS666.8 million, or $135.6 million, was terminated. As a result, during the fourth quarter we recognized a gain of $41.7 million in "Other gains" representing the principle amount of the CVI.

(g)     

Asset impairments and other costs incurred for the year ended December 31, 2014 relate to projects for inventory control in Brazil which are not related to our core results of operations. Asset impairments and other costs incurred for the year ended December 31, 2015, mainly relate to the impairment of goodwill and other intangible assets in the Czech Republic (divested in December 2014) of $3.7 million and Spain of $28.8 million, offset by the amendment of the MSA with Telefónica, by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee paid by Telefónica. Asset impairments and other costs for the year ended December 31, 2016 mainly to other costs with the sale of our operations in Morocco on September 30, 2016. Specifically, the accrual of reserve in amount $3.1 million as guarantee to the buyer, for potential indemnity related to eventual liability assessed from the period before the sale.

Asset impairments and other costs incurred for the three months ended December 31, 2015 primarily related to a one-off tax penalty in Colombia ($1.3 million).

Reconciliation of Adjusted Earnings to profit/(loss):

For the year ended December 31,

For the three months ended
December 31,

($ in millions)

2014

2015

2016

2015

2016

(audited)

(unaudited)

(unaudited)

Profit/(loss) from continuing operations

(41.6)

52.2

3.4

7.5

16.7

Acquisition and integration related costs ^{(a) (*)}

9.9

0.1

-

-

-

Amortization of acquisition related intangible assets ^(b)

36.6

27.5

24.2

6.3

6.3

Restructuring costs ^{(c) (*)}

26.7

15.8

33.7

8.2

14.7

Sponsor management fees ^{(d) (*)}

7.3

-

-

-

-

Site relocation costs ^{(e) (*)}

1.7

3.4

9.3

2.9

2.8

Financing and IPO fees ^{(f) (*)}

51.9

0.3

-

-

-

PECs interest expense ^(g)

25.4

-

-

-

-

Asset impairments and Other ^{(h) (*)}

1.9

6.8

6.9

2.3

1.9

DTA adjustment in Spain ⁽ⁱ⁾

9.8

1.5

-

1.5

-

Net foreign exchange gain on financial instruments ^(j)

(27.3)

(17.5)

(0.7)

(3.5)

(0.1)

Net foreign exchange impacts ^(k)

33.3

4.0

21.1

4.5

5.8

Contingent Value Instrument ^(l)

-

-

(26.2)

-

(26.2)

Tax effect ^(m)

(46.4)

(16.2)

(23.5)

(2.9)

(8.1)

Total of add-backs

130.8

25.7

44.8

19.3

(2.9)

Adjusted Earnings (non-GAAP) (unaudited)

89.2

77.9

48.2

26.8

13.8

Adjusted basic Earnings per share (in U.S. dollars) ^(**) (unaudited)

1.21

1.06

0.65

0.36

0.19

(*)    

Non-recurring items fall primarily into three categories of investment:

• The first includes investments to lower our variable cost structure, which is mostly labor, in response to the exceptional and severe adverse macroeconomic conditions in key markets such as Brazil, Argentina and Spain, which drove significant declines in volume. In 2016 we invested $14.6 million in these activities.
  

• The second includes investments in Brazil to relocate and consolidate our sites from higher to lower costs locations. This program started in 2014 when 53 percent of our sites were in Tier 2 cities. In 2016 we invested $9.4 million in these activities and we ended the year with 62.4% of our sites in Tier 2 cities. This program is now substantially completed.
  

• The third includes investments to drive a more sustainable lower-cost and competitive operating model, especially considering the exceptional adverse macroeconomic circumstances and associated declines in volume referenced above. In 2016 we invested $10.4 million in these activities. We expect these adjustments due to exceptional macro circumstances in most cases like Brazil and Argentina, will continue until the third quarter of 2017.

(a)     

Acquisition and integration related costs incurred in 2014 and 2015, are costs associated with the post-acquisition process in connection with a full strategy review and our SAP IT transformation project. These projects were substantially completed by the end of 2015.

(b)    

Amortization of acquisition related intangible assets represents the amortization expense of customer base, recorded as intangible assets. This customer base represents the fair value (within the business combination involving the acquisition of control of Atento Group) of the intangible assets arising from service agreements (tacit or explicitly formulated in contracts) with Telefónica Group and with other customers.

(c)    

Restructuring costs incurred in 2014, 2015 and 2016 primarily included a number of restructuring activities and other personnel costs that were not related to our core result of operations. For the year ended December 31, 2014, $8.6 million of our restructuring costs were related to the relocation of our corporate headquarters and severance payments directly related to the acquisition. In addition, in 2014, we incurred $1.5 million in restructuring costs in Spain (relating to restructuring expenses incurred as a consequence of significant reduction in activity levels as a result of adverse market conditions in Spain), and $1.4 million in Chile (related to restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica). Restructuring costs incurred for the year ended December 31, 2015, are primarily related to headcount restructuring activities in Spain. In addition, we incurred restructuring costs not related to our core results of operations in Argentina and Peru of $4.8 million, $2.5 million in Chile in connection with the implementation of a new service delivery model with Telefónica, and certain changes to the executive team, and an additional $0.7 million related to the relocation of our corporate headquarters. Restructuring costs incurred in the year ended December 31, 2016, primarily relates to: (i) the optimization of labor relative to current or expected adjustments in activity levels, mainly in EMEA, Brazil and Argentina due to economic crises, and (ii) adjustments in the fixed costs structure to adapt the structure to the new macroeconomic adverse environment. We expect these adjustments due to exceptional macro circumstances in most cases like Brazil and Argentina, will continue until the third quarter of 2017.

Restructuring costs incurred for the three months ended December 31, 2015, primarily include $2.7 million related to restructuring in Chile ($1.1 million) in connection with certain changes to the executive team, and the restructuring of specific operations in Peru and Argentina ($1.6 million). For the three months ended December 31, 2016 restructuring costs of $10.6 million to align labor costs with macro driven declines in volume in Brazil, EMEA and Argentina, largely driven by Telefónica.

(d)    

Sponsor management fees represent the annual advisory fee paid to Bain Capital Partners, LLC that were expensed during 2014. The advisory agreement was terminated in connection with the initial public offering.

(e)    

Site relocation costs incurred in the year ended December 31, 2014, 2015 and 2016 include costs associated with our strategic initiative to relocate call centers from tier 1 cities to tier 2 cities in Brazil to achieve efficiencies through lower rental costs, attrition and absenteeism. Site relocation costs incurred for the three months ended December 31, 2015 related to the anticipation for site closures in Brazil in connection of the site relocation program to tier 2 and tier 3 cities and for the three months ended December 31, 2016 related to Brazil's Corporate office migration, that will be concluded in the second quarter of 2017 ($2.2 million).

(f)     

Financing and IPO fees for the year ended December 31, 2014 and 2015 primarily relate to non-core professional fees incurred during the IPO process, including advisory, auditing and legal expenses.

(g)    

PECs interest expense represents accrued interest on the preferred equity certificates that were capitalized in connection with the IPO.

(h)    

Asset impairments and other costs incurred for the year ended December 31, 2014 relate to projects for inventory control in Brazil which are not related to our core results of operations. Asset impairments and other costs incurred for the year ended December 31, 2015, mainly relate to the impairment of goodwill and other intangible assets in the Czech Republic (divested in December 2014) of $3.7 million and Spain of $28.8 million, offset by the amendment of the MSA with Telefónica, by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee paid by Telefónica. Asset impairments and other costs for the year ended December 31, 2016 mainly to other costs with the sale of our operations in Morocco on September 30, 2016. Specifically, the accrual of reserve in amount $3.1 million as guarantee to the buyer, for potential indemnity related to eventual liability assessed from the period before the sale.

Asset impairments and other costs incurred for the three months ended December 31, 2015 primarily related to a one off tax penalty in Colombia ($1.3 million).

(i)  

Deferred tax asset adjustment as a consequence of the tax rate reduction in Spain from 30% to 28% in 2015 and to 25% in 2016.

(j)    

As of April 1, 2015, the Company designated the foreign currency risk on certain of its subsidiaries as net investment hedges using financial instruments as the hedging items. As a consequence, any gain or loss on the hedging instrument, related to the effective portion of the hedge will be recognized in other comprehensive income (equity) as from that date. The gain or loss related to the ineffective portion will be recognized in the income statements. In 2015, cumulative net foreign exchange gain of such instruments was reversed from equity to profit/(loss). For comparability, this adjustment was added back to calculate adjusted earnings.

(k)     

As of 2015, management analyzes the Company's financial performance excluding net foreign exchange impacts, which eliminates the volatility to foreign exchange variances from our operational results. For comparability purposes, 2014 adjusted earnings was restated by the net foreign exchange non-cash results from currency fluctuations impacting loans between group companies and other minor effects.

(l)   

On November 8, 2016 the CVI nominal value of ARS666.8 million, or $135.6 million was terminated. As a result, during the fourth quarter we recognized a gain of $41.7 million in "Other gains" representing the principle amount of the CVI.

(m)   

The tax effect represents the impact of the taxable adjustments based on a tax rate of 26.2% for 2014, for 38.7% for 2015 and 24.9% for the year ended December 31, 2016. For the three months ended December 31, 2015 and 2016 13.1% and 25.8%, respectively.

(**)   

The Adjusted Earnings per share, for the period presented, was calculated based on the weighted average number of ordinary shares outstanding of 73,816,933 as of December 31, 2016. For the period ended December 31, 2015 and 2014 the weighted average number of ordinary shares was 73,648,760 and 73,619,511, respectively.

As of December 31,

($ in millions, except Net Debt/Adj. EBITDA LTM)

2014

2015

2016

Cash and cash equivalents

211.4

184.0

194.0

Short-term financial investments

26.9

-

-

Debt:

  7.375% Senior Secured Notes due 2020

300.3

301.7

303.3

  Brazilian Debentures

245.9

168.1

156.6

  Contingent Value Instrument ⁽¹⁾

36.4

26.3

-

  Finance Lease Payables

9.0

4.7

3.6

  Other Borrowings

61.7

74.8

71.4

Total Debt

653.3

575.6

534.9

Net Debt with third parties ⁽²⁾ (unaudited)

415.0

391.6

340.9

  Adjusted EBITDA LTM ⁽³⁾ (non-GAAP) (unaudited)

305.3

249.7

221.9

Net Debt/Adjusted EBITDA LTM (non-GAAP) (unaudited)

1.4x

1.6x

1.5x

(1)

The CVI was terminated on November 8, 2016 as described in above sections.

(2)

In considering our financial condition, our management analyzes Net debt with third parties, which is defined as total debt less cash, cash equivalents, and short-term financial investments. Net debt with third parties is not a measure defined by IFRS and it has limitations as an analytical tool. Net debt with third parties is neither a measure defined by or presented in accordance with IFRS nor a measure of financial performance, and should not be considered in isolation or as an alternative financial measure determined in accordance with IFRS. Net debt is not necessarily comparable to similarly titled measures used by other companies.

(3)

Adjusted EBITDA LTM (Last Twelve Months) is defined as EBITDA adjusted to exclude certain acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site-relocation costs, financing fees, IPO costs and other items, which are not related to our core results of operations for the last twelve months.

For the year ended December 31,

For the three months
ended December 31,

($ in millions)

2014

2015

2016

2015

2016

(audited)

(unaudited)

(unaudited)

Net cash flow from operating activities

135.3

37.0

141.9

40.3

83.8

Payments for acquisition of property, plant, equipment and intangible assets

(117.9)

(96.4)

(69.9)

(35.8)

(13.5)

Disposals of property, plant, equipment, and intangible assets

0.9

2.4

1.0

-

(0.1)

Free cash flow (non-GAAP) (unaudited)

18.3

(57.0)

73.0

4.5

70.2