Free cash flow conversion clause samples

This release includes non-GAAP financial measures of Sequel, including program revenue, EBITDA, adjusted EBITDA, free cash flows and free cash flow conversion. In this release, “program revenue” is total program billings, including (i) amounts billed by Sequel on behalf of not-for-profits under its provider service agreements, of which a portion of the billings are retained by the not-for-profits and (ii) individually significant disposals. “EBITDA” means net income (loss) before interest expense, income taxes and depreciation and amortization. “Adjusted EBITDA” means EBITDA adjusted for items that are not part of regular operating activities, including acquisition costs, founder’s fee and profits interest expense (both of which will cease post-closing of the transaction) and non-cash items such as non-cash unit based compensation, losses on disposal of property, losses from discontinued operations and individually significant disposals and expenses related to tax changes. Adjusted EBITDA does not represent, and should not be considered as, an alternative to net income or cash flows from operations, each as determined in accordance with GAAP. “Free cash flows” means adjusted EBITDA less capital expenditures. “Free cash flow conversion” means adjusted EBITDA less capital expenditures, divided by adjusted EBITDA.

This communication contains financial forecasts prepared by Gateway management with respect to certain financial metrics of Gateway, including, but not limited to, revenue, Adjusted EBITDA and Adjusted EBITDA to Free Cash Flow Conversion. Neither Gateway’s independent auditors, nor the independent registered public accounting firm of Leisure, audited, reviewed, compiled, or performed any procedures with respect to the projections for the purpose of their inclusion in this communication, and accordingly, neither of them expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this communication. The financial forecasts and projections in this communication were prepared by Gateway’s management, and these financial forecasts and projections should not be relied upon as being necessarily indicative of future results. Neither Gateway nor Leisure undertakes any commitment to update or revise the projections, whether as a result of new information, future events, or otherwise. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective forecasts are indicative of the future performance of Gateway or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this communication should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved.

In addition to our GAAP results, which we regularly report on a quarterly basis, we provide organic revenues, adjusted EBITDA, adjusted net income, adjusted earnings per diluted share, adjusted diluted weighted average shares outstanding, free cash flow, and adjusted free cash flow conversion. Organic revenues consist of total revenues excluding the effects of currency exchange rates, acquired revenues, and product discontinuances. The various measures of adjusted EBITDA consist of GAAP net income, excluding: (i)depreciation and amortization, (ii)other income (expense), (iii)interest income and expense, (iv)income taxes, (v)and those operating expenses also excluded from adjusted net income. The measure of adjusted net income consists of GAAP net income, excluding: (i)global enterprise resource planning (“ERP”) implementation charges; (ii)structural optimization charges; (iii)post-spin SeaSpine separation related charges (iv)certain employee severance charges; (v)acquisition-related charges; (vi)convertible debt non-cash interest; (vii)intangible asset amortization expense; and (viii)income tax impact from adjustments and other items. The measure of adjusted diluted weighted average shares outstanding is calculated by adding the economic benefit of the convertible note hedge transactions relating to Integra’s 2016 convertible notes. The adjusted earnings per diluted share measure is calculated by dividing adjusted net income attributable to diluted shares by adjusted diluted weighted average shares outstanding. The measure of free cash flow consists of GAAP net cash provided by operating activities less purchases of property and equipment. The measure of adjusted free cash flow consists of free cash flow adjusted for certain one-time unusual items. The adjusted free cash flow conversion measure is calculated by dividing free cash flow by adjusted net income.

• On a pro forma basis, assuming the Merger had completed on 31December 2016, the Combined Company would have US$1.5billion of adjusted EBITDA, an EBITDA margin of 48per cent. and free cash flow generation of over US$1.0billion with 78per cent. free cash flow conversion. The Merger is expected to be modestly dilutive to Vantiv’s pro forma adjusted net income per share in 2018, and accretive to Vantiv’s pro forma adjusted net income per share in 2019 and thereafter.

Marc Falcone: Listen, I think as we indicated earlier, to have a prudent capital structure is going to be very important here if we’re going forward.I haven’t had the benefit of time on my side for a long period. But I – listen, I think the targeted leverage right now would look to be in the – four to four and half times leverage is optimal in my opinion, particularly given the free cash flow capacity of the business.But as we move forward, we’ll be able to give more direction, probably upon closing of the transaction and an update at that point in time. Daniel Silvers: But I think it’s also important that people recognize that because of the free cash flow conversion in the business, versus a lot of the U.S. peer group, it – in our mind it really is not apples to apples when you think about versus U.S. operators that do not have the same free cash flow conversion that we think’s inherent in this business. And so, again, leverage ratios are not all created equal for a company that has superior free cash flow conversion. Michael Long: Sure.And one last – just a follow up.You had mentioned at the beginning that you would be meeting with investors.Does that mean you guys are going to do like a follow-on road show and kind of do a dog and pony show, if you could comment on that? Daniel Silvers: I think we’ll be talking with our bankers over the coming weeks about what meetings we might be having. Michael Long: OK. Great.Thank you. Daniel Silvers: Thanks. Gabriel de Alba: I would just – I just would like to emphasize and actually thank everybody for joining the call.We actually had more than 100 participants.So I think that’s also a testimony of the great interest that the market has on Gateway and on the transaction with LACQ.And as Dan is saying, we look forward to meeting with the – all of the investors.

On May4, 2020, the Committee granted certain officers and employees an aggregate of approximately 0.2million options to purchase shares of common stock, approximately 0.5million PSUs and approximately 0.4million RSUs under the Performance Incentive Plan, including to the Named Executive Officers as follows: 244,906PSUs to Mr.Adams; 41,144PSUs and 27,430RSUs to Mr.Peterson; 31,740PSUs and 21,160RSUs to Mr.Zaba; 13,519PSUs and 9,013RSUs to Mr.Powers; and 17,045PSUs and 11,364RSUs to Mr.Wehr. The Committee granted 100% of the long-term equity incentive award to Mr.Adams in PSUs to further align his compensation with the interests of stockholders and the attainment of performance-based metrics. The PSUs can be earned at levels between 0% and 200% based on the satisfaction of performance conditions during the period from April1, 2020, through December31, 2021 (the “Transition Period PSUs”). For the Transition Period PSUs, performance is based solely on goals related to absolute free cash flow conversion. The RSUs vest in two equal installments, with the first installment vesting on the first anniversary of the grant date and the second installment vesting on December31, 2021, assuming continued service.

The three-year performance period for the PSUs granted in fiscal 2018, covering fiscal 2018 through fiscal 2020 (the “fiscal 2018 PSUs”), concluded on March31, 2020. Vesting of the fiscal 2018 PSUs was based on the relative total stockholder return (“TSR”) of the Company’s common stock as compared to companies in the S&P 1500 Industrials Index and on goals related to absolute free cash flow conversion. The PSUs could have been earned at levels between 0% and 200% based on satisfaction of the performance conditions during the performance period. Based on performance on both metrics, which is described below, the fiscal 2018 PSUs vested and paid out, in aggregate, at 180% of target value.

Now turning to Page 17, we talk about our business model. We feel we have a powerful and diverse economic model that drives exceptionally high free cash flow conversion. I think once again we have to think about each of the individual parts and how they interplay together.

For fiscal 2018, the Committee, in furtherance of its emphasis on performance-based compensation, again granted PSUs (the “fiscal 2018 PSUs”) that vest (or will be forfeited) based in part on the relative total stockholder return (“TSR”) of the Company’s common stock as compared to the companies in the S&P 1500 Industrial Sector Index during a three-year performance period through fiscal 2020, and in part on goals related to absolute free cash flow conversion. The Committee used relative TSR as one of the performance metrics for the PSUs to further strengthen the focus on creating stockholder value and absolute free cash flow conversion (defined as free cash flow divided by net income before special items) to reward the efficient generation and use of cash, which also aligns with the Company’s long-term strategic plan. The PSUs have 100% cliff vesting after three years and can be earned at levels between 0% and 200% based on the degree of satisfaction of the performance conditions. The Committee also again granted options, with an exercise price equal to the Company’s closing stock price on the grant date, that vest ratably over three years after the grant date and have a maximum term of 10 years after the grant date.

Table of Contents 1500 Industrials Index and on goals related to absolute free cash flow conversion. The PSUs could have been earned at levels between 0% and 200% based on satisfaction of the performance conditions during the performance period. Based on performance on both metrics, which is described below, the fiscal 2016 PSUs vested and paid out, in aggregate, at 100% of target value.

Our financial profile is very attractive, including consistent positive operating leverage, margin expansion and extremely high free cash flow conversion. And we have an outstanding leadership team that I will now introduce you to.