Market Newsdesk

August 2, 2022 7:00 am

TopBuild Reports Second Quarter 2022 Results

Sales increase 52.7% to $1.3 billion, same branch revenue increases 20.7%
Net income increases 59.0% to $143.7 million, and 57.5% on an adjusted basis
Adjusted EBITDA margin expands 100 basis points to 19.0%, 19.9% on a same branch basis, up 190 basis points

DAYTONA BEACH, Fla., Aug. 02, 2022 (GLOBE NEWSWIRE) — TopBuild Corp.(NYSE:BLD), a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada today reported results for the second quarter ended June 30, 2022.

Robert Buck, President and Chief Executive Officer, stated “We are pleased to report another quarter of strong financial results. Our unique business model combining both installation and specialty distribution, a key differentiator and critical component of our success, should enable us to outperform in any environment.

“We also continue to make great progress in the integration of DI and are ahead of schedule to achieve the $35 million to $40 million of synergies forecasted when we announced
this transaction.”

Second Quarter Financial Highlights ($ in 000s)

(unless otherwise indicated, comparisons are to the quarter ended June 30, 2021)

3 Months Ended 6/30/22	Reported	Change
Sales	$1,274,285	52.7%
Gross Margin	30.1%	100 bps
SG&A as % of revenue	13.9%	10 bps
Operating Profit	$207,221	61.5%
Operating Margin	16.3%	90 bps
Net Income	$143,697	59.0%
Net Income per diluted share	$4.41	62.1%

3 Months Ended 6/30/22	Adjusted	Change
Sales	$1,274,285	52.7%
Gross Margin	30.1%	90 bps
SG&A as % of revenue	13.8%	20 bps
Operating Profit	$208,798	60.8%
Operating Margin	16.4%	80 bps
Net Income	$144,381	57.5%
Net Income per diluted share	$4.43	60.5%
EBITDA	$242,254	61.7%
EBITDA Margin	19.0%	100 bps

3 Months Ended 6/30/22	Adj. Same Branch	Change
Sales	$1,007,185	20.7%
Gross Margin	31.2%	200 bps
Operating Margin	17.8%	220 bps
EBITDA Margin	19.9%	190 bps
Incremental EBITDA	29.4%

Six Month Financial Highlights ($ in 000s)

(unless otherwise indicated, comparisons are to the six months ended June 30, 2021)

6 Months Ended 6/30/22	Reported	Change
Sales	$2,443,203	54.9%
Gross Margin	29.3%	130 bps
SG&A as % of revenue	14.1%	40 bps
Operating Profit	$371,175	65.6%
Operating Margin	15.2%	100 bps
Net Income	$258,410	72.0%
Net Income per diluted share	$7.87	73.7%

6 Months Ended 6/30/22	Adjusted	Change
Sales	$2,443,203	54.9%
Gross Margin	29.3%	130 bps
SG&A as % of revenue	13.9%	30 bps
Operating Profit	$376,302	65.7%
Operating Margin	15.4%	100 bps
Net Income	$259,986	63.8%
Net Income per diluted share	$7.92	65.7%
EBITDA	$443,984	67.1%
EBITDA Margin	18.2%	140 bps

6 Months Ended 6/30/22	Adj. Same Branch	Change
Sales	$1,889,050	19.8%
Gross Margin	30.4%	240 bps
Operating Margin	17.2%	280 bps
EBITDA Margin	19.3%	250 bps
Incremental EBITDA	32.0%

Operating Segment Highlights
($ in 000s)

(unless otherwise indicated, comparisons are to the period ended June 30, 2021)

Installation	3 Months Ended 6/30/22	6 Months Ended 6/30/22	Specialty Distribution	3 Months Ended 6/30/22	6 Months Ended 6/30/22
Sales	$748,968	$1,425,661	Sales	$587,791	$1,131,653
Change			Change
Volume	8.3%	5.8%	Volume	0.3%	0.2%
Price	13.3%	13.7%	Price	20.0%	21.4%
M&A	2.0%	5.7%	M&A	94.7%	94.0%
Total Change	23.7%	25.2%	Total Change	115.0%	115.6%
Operating Margin	18.7%	17.7%	Operating Margin	14.8%	13.9%
Change	230 bps	250 bps	Change	(90) bps	(100) bps
Adj. Operating Margin	18.7%	17.8%	Adj. Operating Margin	14.8%	13.9%
Change	210 bps	250 bps	Change	(90) bps	(100) bps
Adj. EBITDA Margin	20.8%	20.0%	Adj. EBITDA Margin	17.2%	16.5%
Change	170 bps	220 bps	Change	70 bps	70 bps

Capital Allocation

Acquisitions

The Company acquired one residential insulation company in the second quarter, Assured Insulating, which serves markets in Northeastern Texas and Northwestern Louisiana. Through June 30, the Company has completed four acquisitions which are expected to contribute approximately $15.7 million in annual revenue.

Share Repurchases

The Company announced that its Board of Directors recently approved a new share repurchase program with authorization to purchase up to $200 million shares of the Company’s common stock.

As of June 30, 2022, Company has repurchased a total of 647,466 shares which includes a portion of the shares repurchased under an accelerated share repurchase program which will be completed in the third quarter.

2022 Outlook

“As we look toward the second half of 2022, we expect demand for our services to remain steady in all three end-markets we serve: residential, commercial, and industrial. Our focus will remain on the successful integration of DI, the strategic allocation of capital and ongoing initiatives to enhance operational efficiency, drive productivity and leverage our fixed costs,” added Buck.

Sales and Adjusted EBITDA Guidance
⁽¹
⁾

($ in millions)

2022	Low		High
Sales	$	4,800	$	4,900
Adjusted EBITDA*	$	860	$	900

*See table for adjusted EBITDA reconciliation.

⁽¹⁾This outlook reflects management’s current view of present and future market conditions and are based on assumptions such as housing starts and completions, general and administrative expenses, weighted average diluted shares outstanding and interest rates. These targets do not include any effects related to potential acquisitions or divestitures that may occur after the date of this press release. A reconciliation of non-GAAP targets to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future and therefore, cannot be reasonably predicted. The effect of these excluded items may be significant. Factors that could cause actual long-term results to differ materially from TopBuild’s current expectations are discussed below and are also detailed in the Company’s 2021 Annual Report on Form 10-K and subsequent SEC reports.

Conference Call

A conference call to discuss second quarter financial results is scheduled for today, Tuesday, August 2nd, at 9:00 a.m. Eastern Time. The call may be accessed by dialing (877) 407-9037. The conference call will be webcast simultaneously on the Company’s website at www.topbuild.com. In addition, a copy of management’s formal remarks and a presentation that summarizes management’s formal remarks will be available immediately prior to the conference call on www.topbuild.com.

About TopBuild

TopBuild Corp., headquartered in Daytona Beach, Florida, is a leading installer and specialty distributor of insulation and related building material products to the construction industry in the United States and Canada. We provide insulation installation services nationwide through our contractor services business which has approximately 230 branches located across the United States. We distribute building and mechanical insulation, insulation accessories and other building product materials for the residential, commercial, and industrial end markets through our Specialty Distribution business. Our specialty distribution network encompasses approximately 180 branches. To learn more about TopBuild please visit our website at www.topbuild.com.

Use of Non-GAAP Financial Measures

Adjusted EBITDA, incremental EBITDA margin, adjusted EBITDA margin, the “adjusted” financial measures presented above, and figures presented on a “same branch basis” are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company believes that these non-GAAP financial measures, which are used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. We define same branch sales as sales from branches in operation for at least 12 full calendar months. Such non-GAAP financial measures are reconciled to their closest GAAP financial measures in tables contained in this press release. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under GAAP. Additional information may be found in the Company’s filings with the Securities and Exchange Commission which are available on TopBuild’s website under “SEC Filings” at www.topbuild.com.

Safe Harbor Statement
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results, and our plan to repurchase our common stock under stock repurchase transactions. These forward-looking statements are distinguished by use of words such as “will,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” or “intend,” the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. Our forward-looking statements contained herein speak only as of the date of this press release. Factors or events that we cannot predict, including those described in the risk factors contained in our filings with the Securities and Exchange Commission, may cause our actual results to differ from those expressed in forward-looking statements. Although TopBuild believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved and it undertakes no obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.

Investor Relations and Media Contact

Tabitha Zane
[email protected]
386-763-8801

(tables follow)

TopBuild Corp.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per common share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net sales	$	1,274,285		$	834,255		$	2,443,203		$	1,577,053
Cost of sales		890,188			591,075			1,727,905			1,136,114
Gross profit		384,097			243,180			715,298			440,939

Selling, general, and administrative expense		176,876			114,894			344,123			216,767
Operating profit		207,221			128,286			371,175			224,172

Other income (expense), net:
Interest expense		(13,410	)		(6,105	)		(25,375	)		(12,707	)
Loss on extinguishment of debt		—			—			—			(13,862	)
Other, net		(279	)		66			406			144
Other expense, net		(13,689	)		(6,039	)		(24,969	)		(26,425	)
Income before income taxes		193,532			122,247			346,206			197,747

Income tax expense		(49,835	)		(31,867	)		(87,796	)		(47,525	)
Net income	$	143,697		$	90,380		$	258,410		$	150,222

Net income per common share:
Basic	$	4.43		$	2.75		$	7.93		$	4.57
Diluted	$	4.41		$	2.72		$	7.87		$	4.53

Weighted average shares outstanding:
Basic		32,405,292			32,865,303			32,570,988			32,846,016
Diluted		32,614,449			33,177,435			32,827,549			33,190,107

TopBuild Corp.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(in thousands)

	Three Months Ended June 30,					Six Months Ended June 30,
	2022			2021		2022		2021
Net income	$	143,697		$	90,380	$	258,410	$	150,222
Other comprehensive (loss) income:
Foreign currency translation adjustment		(2,193	)		—		1,026		—
Comprehensive income	$	141,504		$	90,380	$	259,436	$	150,222

TopBuild Corp.
Condensed Consolidated Balance Sheets and Other Financial Data (Unaudited)
(dollars in thousands)
	As of
	June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	123,869		$	139,779
Receivables, net of an allowance for credit losses of $12,558 at June 30, 2022, and $8,798 at December 31, 2021		773,744			668,419
Inventories, net		431,098			352,801
Prepaid expenses and other current assets		25,835			26,692
Total current assets		1,354,546			1,187,691

Right of use assets		174,361			177,177
Property and equipment, net		250,051			244,574
Goodwill		1,968,603			1,949,763
Other intangible assets, net		653,458			684,209
Deferred tax assets, net		—			1,905
Other assets		19,965			13,211
Total assets	$	4,420,984		$	4,258,530

LIABILITIES
Current liabilities:
Accounts payable	$	508,227		$	461,917
Current portion of long-term debt		38,162			38,640
Accrued liabilities		197,308			175,891
Short-term operating lease liabilities		55,284			54,591
Short-term finance lease liabilities		2,712			2,387
Total current liabilities		801,693			733,426

Long-term debt		1,437,102			1,454,483
Deferred tax liabilities, net		245,687			248,243
Long-term portion of insurance reserves		60,805			51,875
Long-term operating lease liabilities		124,191			125,339
Long-term finance lease liabilities		7,055			7,770
Other liabilities		1,788			960
Total liabilities		2,678,321			2,622,096

EQUITY		1,742,663			1,636,434
Total liabilities and equity	$	4,420,984		$	4,258,530

	As of June 30,
	2022			2021
Other Financial Data
Receivable days		46			45
Inventory days		48			30
Accounts payable days		62			74
Receivables, net plus inventories, net less accounts payable	$	696,615		$	313,631
Receivables, net plus inventories, net less accounts payable as a percent of sales (TTM) †		15.0	%		9.9	%

† Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches

TopBuild Corp.
Condensed Consolidated Statement of Cash Flows (Unaudited)
(in thousands)

	Six Months Ended June 30,
	2022			2021
Cash Flows Provided by (Used in) Operating Activities:
Net income	$	258,410		$	150,222
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		60,621			33,221
Share-based compensation		7,061			5,377
Loss on extinguishment of debt		—			13,862
Loss on sale of property and equipment		525			833
Amortization of debt issuance costs		1,427			858
Provision for bad debt expense		6,404			4,037
Loss from inventory obsolescence		3,610			1,129
Change in certain assets and liabilities
Receivables, net		(107,739	)		(36,277	)
Inventories, net		(82,621	)		(8,055	)
Prepaid expenses and other current assets		648			(2,273	)
Accounts payable		47,540			21,782
Accrued liabilities		16,884			17,693
Other, net		4,927			(206	)
Net cash provided by operating activities		217,697			202,203

Cash Flows Provided by (Used in) Investing Activities:
Purchases of property and equipment		(36,034	)		(28,560	)
Acquisition of businesses, net of cash acquired		(18,746	)		(195,411	)
Proceeds from sale of property and equipment		618			193
Net cash used in investing activities		(54,162	)		(223,778	)

Cash Flows Provided by (Used in) Financing Activities:
Proceeds from issuance of long-term debt		—			411,250
Repayment of long-term debt		(19,287	)		(421,716	)
Payment of debt issuance costs		—			(6,500	)
Proceeds from revolving credit facility		70,000			—
Repayment of revolving credit facility		(70,000	)		—
Taxes withheld and paid on employees’ equity awards		(11,667	)		(11,491	)
Exercise of stock options		1,452			5,952
Repurchase of shares of common stock		(150,050	)		(24,038	)
Payment of contingent consideration		(35	)		(150	)
Net cash used in financing activities		(179,587	)		(46,693	)
Impact of exchange rate changes on cash		142			—
Net decrease in cash and cash equivalents		(15,910	)		(68,268	)
Cash and cash equivalents- Beginning of period		139,779			330,007
Cash and cash equivalents- End of period	$	123,869		$	261,739

Supplemental disclosure of noncash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	36,129		$	39,135
Accruals for property and equipment		563			460

TopBuild Corp.
Segment Data (Unaudited)
(dollars in thousands)

	Three Months Ended June 30,									Six Months Ended June 30,
		2022			2021		Change				2022			2021		Change
Installation
Sales	$	748,968		$	605,625			23.7	%	$	1,425,661		$	1,138,378			25.2	%

Operating profit, as reported	$	139,919		$	99,066					$	252,598		$	172,702
Operating margin, as reported		18.7	%		16.4	%					17.7	%		15.2	%

Rationalization charges		—			—						473			—
Acquisition related costs		16			1,112						96			1,112
COVID-19 pay		—			116						—			605
Operating profit, as adjusted	$	139,935		$	100,294					$	253,167		$	174,419
Operating margin, as adjusted		18.7	%		16.6	%					17.8	%		15.3	%

Share-based compensation		282			274						689			614
Depreciation and amortization		15,319			14,857						31,004			27,683
EBITDA, as adjusted	$	155,536		$	115,425			34.8	%	$	284,860		$	202,716			40.5	%
EBITDA margin, as adjusted		20.8	%		19.1	%					20.0	%		17.8	%

Specialty Distribution
Sales	$	587,791		$	273,364			115.0	%	$	1,131,653		$	524,965			115.6	%

Operating profit, as reported	$	86,749		$	42,856					$	157,170		$	78,241
Operating margin, as reported		14.8	%		15.7	%					13.9	%		14.9	%

Acquisition related costs		334			—						575			—
COVID-19 pay		—			20						—			54
Operating profit, as adjusted	$	87,083		$	42,876					$	157,745		$	78,295
Operating margin, as adjusted		14.8	%		15.7	%					13.9	%		14.9	%

Share-based compensation		287			244						641			488
Depreciation and amortization		14,005			2,112						28,034			4,200
EBITDA, as adjusted	$	101,375		$	45,232			124.1	%	$	186,420		$	82,983			124.6	%
EBITDA margin, as adjusted		17.2	%		16.5	%					16.5	%		15.8	%

TopBuild Corp.
Adjusted EBITDA (Unaudited)
(dollars in thousands)

	Three Months Ended June 30,											Six Months Ended June 30,
		2022				2021			Change				2022				2021			Change
Total net sales
Sales before eliminations	$	1,336,759			$	878,989						$	2,557,314			$	1,663,343
Intercompany eliminations		(62,474	)			(44,734	)						(114,111	)			(86,290	)
Net sales after eliminations	$	1,274,285			$	834,255				52.7	%	$	2,443,203			$	1,577,053				54.9	%

Operating profit, as reported – segments	$	226,668			$	141,922						$	409,768			$	250,943
General corporate expense, net		(9,012	)			(6,704	)						(19,449	)			(13,311	)
Intercompany eliminations		(10,435	)			(6,932	)						(19,144	)			(13,460	)
Operating profit, as reported	$	207,221			$	128,286						$	371,175			$	224,172
Operating margin, as reported		16.3		%		15.4		%					15.2		%		14.2		%

Rationalization charges		—				—							473				16
Acquisition related costs ^†		1,577				1,457							4,654				2,210
COVID-19 pay		—				136							—				659
Operating profit, as adjusted	$	208,798			$	129,879						$	376,302			$	227,057
Operating margin, as adjusted		16.4		%		15.6		%					15.4		%		14.4		%

Share-based compensation		3,334				2,266							7,061				5,377
Depreciation and amortization		30,122				17,703							60,621				33,221
EBITDA, as adjusted	$	242,254			$	149,848				61.7	%	$	443,984			$	265,655				67.1	%
EBITDA margin, as adjusted		19.0		%		18.0		%					18.2		%		16.8		%

Sales change period over period		440,030											866,150
EBITDA, as adjusted, change period over period		92,406											178,329
Incremental EBITDA, as adjusted, as a percentage of change in sales		21.0		%									20.6		%

† Acquisition related costs include corporate level adjustments as well as segment operating adjustments.

TopBuild Corp.
Non-GAAP Reconciliations (Unaudited)
(in thousands, except share and per common share amounts)

	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Gross Profit Reconciliation

Net sales	$	1,274,285			$	834,255			$	2,443,203			$	1,577,053

Gross profit, as reported	$	384,097			$	243,180			$	715,298			$	440,939

Acquisition related costs		—				—				121				—
COVID-19 pay		—				122				—				592
Gross profit, as adjusted	$	384,097			$	243,302			$	715,419			$	441,531

Gross margin, as reported		30.1		%		29.1		%		29.3		%		28.0		%
Gross margin, as adjusted		30.1		%		29.2		%		29.3		%		28.0		%

Selling, General and Administrative Expense Reconciliation

Selling, general, and administrative expense, as reported	$	176,876			$	114,894			$	344,123			$	216,767

Rationalization charges		—				—				473				16
Acquisition related costs		1,577				1,457				4,533				2,210
COVID-19 pay		—				14				—				67
Selling, general, and administrative expense, as adjusted	$	175,299			$	113,423			$	339,117			$	214,474

Operating Profit Reconciliation

Operating profit, as reported	$	207,221			$	128,286			$	371,175			$	224,172

Rationalization charges		—				—				473				16
Acquisition related costs		1,577				1,457				4,654				2,210
COVID-19 pay		—				136				—				659
Operating profit, as adjusted	$	208,798			$	129,879			$	376,302			$	227,057

Operating margin, as reported		16.3		%		15.4		%		15.2		%		14.2		%
Operating margin, as adjusted		16.4		%		15.6		%		15.4		%		14.4		%

Income Per Common Share Reconciliation

Income before income taxes, as reported	$	193,532			$	122,247			$	346,206			$	197,747

Rationalization charges		—				—				473				16
Acquisition related costs		1,577				1,457				4,654				2,210
Refinancing costs and loss on extinguishment of debt		—				—				—				13,862
COVID-19 pay		—				136				—				659
Income before income taxes, as adjusted		195,109				123,840				351,333				214,494

Tax rate at 26.0%		(50,728	)			(32,198	)			(91,347	)			(55,769	)
Income, as adjusted	$	144,381			$	91,642			$	259,986			$	158,725

Income per common share, as adjusted	$	4.43			$	2.76			$	7.92			$	4.78

Weighted average diluted common shares outstanding		32,614,449				33,177,435				32,827,549				33,190,107

TopBuild Corp.
Same Branch and Acquisition Metrics (Unaudited)
(dollars in thousands)

	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Net sales
Same branch:
Installation	$	736,643			$	605,625			$	1,360,243			$	1,138,378
Specialty Distribution		328,807				273,364				638,018				524,965
Eliminations		(58,265	)			(44,734	)			(109,211	)			(86,290	)
Total same branch		1,007,185				834,255				1,889,050				1,577,053

Acquisitions (a):
Installation	$	12,325			$	—			$	65,418			$	—
Specialty Distribution		258,984				—				493,635				—
Eliminations		(4,209	)			—				(4,900	)			—
Total acquisitions		267,100				—				554,153				—
Total	$	1,274,285			$	834,255			$	2,443,203			$	1,577,053

Gross profit, as adjusted
Same branch	$	314,012			$	243,302			$	575,127			$	441,531
Acquisitions (a)		70,085				—				140,292				—
Total	$	384,097			$	243,302			$	715,419			$	441,531

Gross margin, as adjusted
Same branch (b)		31.2		%		29.2		%		30.4		%		28.0		%
Acquisitions (c)		26.2		%						25.3		%

Operating profit, as adjusted
Same branch	$	179,512			$	129,879			$	324,127			$	227,057
Acquisitions (a)		29,286				—				52,175				—
Total	$	208,798			$	129,879			$	376,302			$	227,057

Operating margin, as adjusted
Same branch (b)		17.8		%		15.6		%		17.2		%		14.4		%
Acquisitions (c)		11.0		%						9.4		%

EBITDA, as adjusted
Same branch	$	200,667			$	149,848			$	365,435			$	265,655
Acquisitions (a)		41,587				—				78,549				—
Total	$	242,254			$	149,848			$	443,984			$	265,655

EBITDA, as adjusted, as a percentage of sales
Same branch (b)		19.9		%						19.3		%
Acquisitions (c)		15.6		%						14.2		%
Total (d)		19.0		%		18.0		%		18.2		%		16.8		%

As Adjusted Incremental EBITDA, as a percentage of change in sales
Same branch (e)		29.4		%						32.0		%
Acquisitions (c)		15.6		%						14.2		%
Total (f)		21.0		%						20.6		%

(a) Represents current year impact of acquisitions in their first twelve months
(b) Same branch metric, as adjusted, as a percentage of same branch sales
(c) Acquired metric, as adjusted, as a percentage of acquired sales
(d) Total EBITDA, as adjusted, as a percentage of total sales
(e) Change in same branch EBITDA, as adjusted, as a percentage of change in same branch sales
(f) Change in total EBITDA, as adjusted, as a percentage of change in total sales

TopBuild Corp.
Reconciliation of Adjusted EBITDA to Net Income (Unaudited)
(in thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income, as reported	$	143,697	$	90,380	$	258,410	$	150,222
Adjustments to arrive at EBITDA, as adjusted:
Interest expense and other, net		13,689		6,039		24,969		12,563
Income tax expense		49,835		31,867		87,796		47,525
Depreciation and amortization		30,122		17,703		60,621		33,221
Share-based compensation		3,334		2,266		7,061		5,377
Rationalization charges		—		—		473		16
Acquisition related costs		1,577		1,457		4,654		2,210
Refinancing costs and loss on extinguishment of debt		—		—		—		13,862
COVID-19 pay		—		136		—		659
EBITDA, as adjusted	$	242,254	$	149,848	$	443,984	$	265,655

TopBuild Corp.
Acquisition Adjusted Net Sales (Unaudited)
(in thousands)
	2021				2022				Trailing Twelve Months Ended
	Q3		Q4		Q1		Q2		June 30, 2022
Net Sales	$	845,757	$	1,063,398	$	1,168,918	$	1,274,285	$	4,352,358
Acquisitions proforma adjustment †		231,146		48,816		2,481		39		282,482
Net sales, acquisition adjusted	$	1,076,903	$	1,112,214	$	1,171,399	$	1,274,324	$	4,634,840


† Trailing 12 months sales have been adjusted for the pro forma effect of acquired branches

TopBuild Corp.
2022 Estimated Adjusted EBITDA Range (Unaudited)
(in millions)

	Twelve Months Ending December 31, 2022
		Low		High
Estimated net income	$	481.5		520.1
Adjustments to arrive at estimated EBITDA, as adjusted:
Interest expense and other, net		61.0		58.0
Income tax expense		169.2		182.7
Depreciation and amortization		124.9		120.8
Share-based compensation		13.4		11.4
Rationalization charges		2.0		1.0
Acquisition related costs		8.0		6.0
Estimated EBITDA, as adjusted	$	860.0	$	900.0

August 2, 2022 7:00 am

OMNIQ AWARDED AN ADDITIONAL $1 MILLION IN PROJECT FOR SUPPLY CHAIN FORTUNE 100 RETAILER WITH OVER 2300 LOCATIONS IN NORTH AMERICA

Leading retailer continues to deploy modernized AIDC and data collection technology to leverage its investments into Android based devices.
The purchase order is for comprehensive technical support of the new technology that will be used in their mega logistic centers
This order follows the recent announcements of projects and purchase orders including the receipt of a $29 Million project for supply chain equipment from a Fortune 100 corporation and the award of an $11 Million project for the Government of Israel, resulting in an all-time backlog of orders and projects.

SALT LAKE CITY, Aug. 02, 2022 (GLOBE NEWSWIRE) — OMNIQ Corp. (NASDAQ: OMQS) (“OMNIQ” or “the Company”), a provider of Supply Chain and Artificial Intelligence (AI)-based solutions, today announced that it has received a purchase order with a value of $1 million from a fortune 100 company.

The purchase order is for comprehensive technical support of the new technology that will be used in their mega logistic centers. This will streamline the rollout process by ensuring accurate configuration, robust reporting, & concierge enterprise support team assigned specifically to the client.

Shai Lustgarten, CEO. commented: “Implementing new technology presents challenges, such as reluctance to adopt new hardware and lack of confidence in the ability to use it. We know and understand the unspoken needs of our customers and offer a solution that greatly enhances their overall experience throughout the entire deployment lifecycle. Providing excellent technical support and reporting capabilities helps amplify automation by incorporating user-friendly problem-solving capabilities. As a result, we expect that the customer will be greatly benefited, and that loyalty will increase over time.”

About OMNIQ Corp:

OMNIQ Corp. provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real-time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking management, and access control applications. The technology and services provided by the Company help clients move people, assets, and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments.

OMNIQ’s customers include government agencies and leading Fortune 500 companies from several sectors, including manufacturing, retail, distribution, food and beverage, transportation and logistics, healthcare, oil, gas, and chemicals. Since 2014, annual revenues have grown to more than $50 million from clients in the USA and abroad.

The Company currently addresses several billion-dollar markets, including the Global Safe City market, forecast to grow to $29 billion by 2022, and the Ticketless Safe Parking market, forecast to grow to $5.2 billion by 2023. For more information please visit www.omniq.com.

Information about Forward-Looking Statements

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

This release contains “forward-looking statements” that include information relating to future events and future financial and operating performance. The words “anticipate”, “may,” “would,” “will,” “expect,” “estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Examples of forward-looking statements include, among others, statements made in this press release regarding the closing of the private placement and the use of proceeds received in the private placement. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for the Company’s products particularly during the current health crisis, the introduction of new products, the Company’s ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company’s liquidity and financial strength to support its growth, the Company’s ability to manage credit and debt structures from vendors, debt holders and secured lenders, the Company’s ability to successfully integrate its acquisitions, and other information that may be detailed from time-to-time in OMNIQ Corp.’s filings with the United States Securities and Exchange Commission. Examples of such forward looking statements in this release include, among others, statements regarding revenue growth, driving sales, operational and financial initiatives, cost reduction and profitability, and simplification of operations. For a more detailed description of the risk factors and uncertainties affecting OMNIQ Corp., please refer to the Company’s recent Securities and Exchange Commission filings, which are available at https://www.sec.gov. OMNIQ Corp. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.

Contact:

Corporate Contact
Koko Kimball
(385) 758-9241
[email protected]

August 2, 2022 7:00 am

Arconic Reports Second Quarter 2022 Results

Arconic Reports Second Quarter 2022 Results

Second Quarter 2022 Highlights

Sales of $2.5 billion, up 41% year over year, up 16% from prior quarter
Net income of $114 million, or $1.05 per share, compared with a net loss of $427 million, or $3.89 per share, in second quarter 2021
Adjusted EBITDA of $204 million, up 9% year over year
Cash provided from operations of $162 million

PITTSBURGH–(BUSINESS WIRE)–
Arconic Corporation (NYSE: ARNC) (“Arconic” or “the Company”) today reported second quarter 2022 results. Revenue was $2.5 billion, up 16% from the prior quarter, primarily due to the ramp up of packaging sales in the United States, growth in ground transportation and building and construction sales, ongoing recovery in aerospace, and aluminum prices. The Company reported net income of $114 million, or $1.05 per share, compared with a net loss of $427 million, or $3.89 per share in second quarter 2021. Second quarter 2022 net income includes after-tax net foreign currency gains of $48 million. Second quarter 2021 net loss included an after-tax non-cash pension settlement charge of $423 million.

Second quarter 2022 Adjusted EBITDA was $204 million, an increase of 9% year over year, driven by strength in aerospace, packaging, and building and construction end markets, and partially offset by weakness in industrial production. Cash provided from operations was $162 million and capital expenditures were $33 million.

Tim Myers, Chief Executive Officer, said, “Our business continues to perform near all-time high levels as North American packaging capacity ramps up, aerospace and ground transportation markets recover, and our Building and Construction Systems segment delivers strong performance. We are on track to deliver double-digit adjusted EBITDA growth for a second straight year and, as we announced at our recent investor day, are positioned for several more years of annual growth at similar rates.”

Second Quarter Segment Performance

Revenue by Segment (in millions)
	Quarter ended
	June 30, 2022		June 30, 2021
Rolled Products	$	2,113	$	1,474
Building and Construction Systems	329			257
Extrusions	105			70

Adjusted EBITDA (in millions)
	Quarter ended
	June 30, 2022			June 30, 2021
Rolled Products	$	174		$	173
Building and Construction Systems		53			35
Extrusions		(12	)		(8	)
Subtotal		215			200
Corporate		(11	)		(13	)
Adjusted EBITDA	$	204		$	187

Outlook

The Company is updating its full-year 2022 outlook to reflect the impact of declining aluminum prices on revenue and working capital. Arconic revenue expectations are now in the range of $9.6 billion to $10.0 billion for full-year 2022 compared with the prior expected range of $10.1 billion to $10.5 billion. This assumes LME aluminum price of $2,500/mt and Midwest Premium of $700/mt, reduced from prior assumptions for LME of $3,350/mt and Midwest Premium of $850/mt as published in the first quarter 2022 results. Adjusted EBITDA is currently expected to be at the low end of the previously guided range of $820 million to $870 million. Free cash flow for full-year 2022 is now anticipated to be approximately $300 million compared with the prior outlook of approximately $250 million due to lower working capital use associated with the decline in aluminum prices. This assumes LME aluminum price of $2,500/mt and Midwest Premium of $700/mt, reduced from prior assumptions for LME of $2,870/mt and Midwest Premium of $830/mt as published in the June 2022 Investor Day presentation.

Share Repurchase Program

In the 2022 second quarter, the Company repurchased approximately 1.3 million shares for a total of approximately $37 million. Since the start of the program in May 2021 through June 30, 2022, the Company repurchased approximately 6.7 million shares for a total of approximately $214 million of the $300 million two-year authorization.

Kawneer Sale Transaction Paused

The Company announced in early June that it had begun evaluating a sale of its Kawneer business. At this time, the Company is pausing the transaction due to current uncertainty in the debt markets. Kawneer is a very valuable business and the Company does not believe it would receive proper value for it under current economic and market conditions.

Arconic will hold its quarterly conference call at 10:00 AM Eastern Time on August 2, 2022, to present second quarter 2022 financial results. The call will be webcast on the Arconic website. Call information and related details are available at www.arconic.com under “Investors.”

About Arconic

Arconic Corporation (NYSE: ARNC), headquartered in Pittsburgh, Pennsylvania, is a leading provider of aluminum sheet, plate, and extrusions, as well as innovative architectural products, that advance the ground transportation, aerospace, building and construction, industrial and packaging end markets. For more information: www.arconic.com.

Dissemination of Company Information

Arconic intends to make future announcements regarding Company developments and financial performance through its website at www.arconic.com.

Forward-Looking Statements

This release contains statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “outlook,” “plans,” “projects,” “seeks,” “sees,” “should,” “targets,” “will,” “would,” or other words of similar meaning. All statements that reflect Arconic’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, relating to the condition of, or trends or developments in, the ground transportation, aerospace, building and construction, industrial, packaging and other end markets; Arconic’s future financial results, operating performance, working capital, cash flows, liquidity and financial position; cost savings and restructuring programs; Arconic’s strategies, outlook, business and financial prospects; share repurchases; costs associated with pension and other post-retirement benefit plans; projected sources of cash flow; and potential legal liability. These statements reflect beliefs and assumptions that are based on Arconic’s perception of historical trends, current conditions and expected future developments, as well as other factors Arconic believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and changes in circumstances, many of which are beyond Arconic’s control. Such risks and uncertainties include, but are not limited to: (a) continuing uncertainty regarding the duration and impact of the COVID-19 pandemic on our business and the businesses of our customers and suppliers including labor shortages and increased quarantine rates; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the end markets we serve; (d) the inability to achieve the level of revenue growth, cash generation, cost savings, benefits of our management of legacy liabilities, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; (e) adverse changes in discount rates or investment returns on pension assets; (f) competition from new product offerings, disruptive technologies, industry consolidation or other developments; (g) the loss of significant customers or adverse changes in customers’ business or financial condition; (h) manufacturing difficulties or other issues that impact product performance, quality or safety; (i) the impact of pricing volatility in raw materials and inflationary pressures on our costs of production; (j) a significant downturn in the business or financial condition of a key supplier or other supply chain disruptions; (k) challenges to or infringements on our intellectual property rights; (l) the inability to successfully implement our re-entry into the U.S. packaging market or to realize the expected benefits of other strategic initiatives or projects; (m) our ability to complete the previously announced sale with respect to our Kawneer® business; (n) the inability to identify or successfully respond to changing trends in our end markets; (o) the impact of potential cyber attacks and information technology or data security breaches; (p) geopolitical, economic, and regulatory risks relating to our global operations, including compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (q) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation and compliance matters; (r) restrictions imposed by authorities on our Russian operations; (s) our ability to complete the announced divestiture of our Russian operations and the impact of such divestiture on our business and operations; (t) reactions to or consequences of our announcement regarding the sale of our Russian operations, including the potential for our Russian operations to be nationalized or otherwise expropriated by the Russian government; (u) the impact of the conflict between Russia and Ukraine on economic conditions in general and on our business and operations; and (v) the other risk factors summarized in Arconic’s Form 10-K for the year ended December 31, 2021 and other reports filed with the U.S. Securities and Exchange Commission (SEC). The above list of factors is not exhaustive or necessarily in order of importance. Market projections are subject to the risks discussed above and in this release, and other risks in the market. The statements in this release are made as of the date of this release, even if subsequently made available by Arconic on its website or otherwise. Arconic disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

Non-GAAP Financial Measures

Some of the information included in this release is derived from Arconic’s consolidated financial information but is not presented in Arconic’s financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these financial measures are considered “non-GAAP financial measures” under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to any measure of performance or financial condition as determined in accordance with GAAP, and investors should consider Arconic’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of Arconic. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Non-GAAP financial measures presented by Arconic may not be comparable to non-GAAP financial measures presented by other companies. Reconciliations to the most directly comparable GAAP financial measures and management’s rationale for the use of the non-GAAP financial measures can be found in the schedules to this release. Arconic has not provided reconciliations of any forward-looking non-GAAP financial measures, such as adjusted EBITDA, and free cash flow, to the most directly comparable GAAP financial measures because such reconciliations are not available without unreasonable efforts due to the variability and complexity with respect to the charges and other components excluded from the non-GAAP measures, such as the effects of metal price lag, foreign currency movements, unrealized gains or losses on mark-to-market hedging, gains or losses on sales of assets, taxes, and any future restructuring or impairment charges. These reconciling items are in addition to the inherent variability already included in the GAAP measures, which includes, but is not limited to, price/mix and volume. Arconic believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.


Arconic Corporation and subsidiaries Statement of Consolidated Operations (unaudited) (dollars in millions, except per-share amounts)

	Quarter ended
	June 30,			March 31,		June 30,
	2022			2022		2021
Sales	$	2,548		$	2,191	$	1,801

Cost of goods sold (exclusive of expenses below)⁽¹⁾		2,258			1,956		1,567
Selling, general administrative, and other expenses		73			65		61
Research and development expenses		9			9		9
Provision for depreciation and amortization		62			60		62
Restructuring and other charges⁽²⁾		2			5		597
Operating income (loss)		144			96		(495	)

Interest expense		26			25		25
Other (income) expenses, net⁽³⁾		(35	)		17		15

Income (Loss) before income taxes		153			54		(535	)
Provision (Benefit) for income taxes		38			12		(108	)

Net income (loss)		115			42		(427	)

Less: Net income attributable to noncontrolling interest		1			–		–

NET INCOME (LOSS) ATTRIBUTABLE TO ARCONIC CORPORATION	$	114		$	42	$	(427	)


EARNINGS PER SHARE ATTRIBUTABLE TO ARCONIC CORPORATION COMMON STOCKHOLDERS:
Basic:
Net income (loss)	$	1.08		$	0.40	$	(3.89	)
Weighted-average number of shares		105,650,970			105,407,022		110,035,026

Diluted:
Net income (loss)	$	1.05		$	0.39	$	(3.89	)
Weighted-average number of shares⁽⁴⁾		108,044,957			108,504,118		110,035,026


COMMON STOCK OUTSTANDING AT THE END OF THE PERIOD		104,499,058			105,784,425		109,933,436

⁽¹⁾	On May 14, 2022, the Company and the United Steelworkers reached a tentative four-year labor agreement covering approximately 3,300 employees at four U.S. locations; the previous labor agreement expired on May 15, 2022. The tentative agreement was ratified by the union employees on June 1, 2022. In the quarter ended June 30, 2022, Arconic recognized $19 in Cost of goods sold primarily for a one-time signing bonus for the covered employees.

⁽²⁾	In the quarter ended June 30, 2021, Restructuring and other charges includes $568 related to the settlement of a portion of the Company’s U.S. defined benefit pension plan obligations as a result of the purchase of a group annuity contract ($549) and elections by certain plan participants to receive lump-sum benefit payments ($19).

⁽³⁾	In the quarter ended June 30, 2022, Other income, net includes a $54 gain for the remeasurement of monetary balances, primarily cash, related to the Company’s operations in Russia from rubles to the U.S. dollar. This gain was the result of a significant strengthening of the ruble against the U.S. dollar in the 2022 second quarter.

⁽⁴⁾	For periods in which the Company generates net income, the diluted weighted-average number of shares include common share equivalents associated with outstanding employee stock awards. For periods in which the Company generates a net loss, the diluted weighted-average number of shares does not include any common share equivalents as their effect is anti-dilutive.


Arconic Corporation and subsidiaries Consolidated Balance Sheet (unaudited) (in millions)

	June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	252		$	335
Receivables from customers, less allowances of $1 in both 2022 and 2021		1,078			922
Other receivables		178			226
Inventories		1,910			1,630
Fair value of hedging instruments and derivatives		173			1
Prepaid expenses and other current assets		83			54
Total current assets		3,674			3,168

Properties, plants, and equipment		7,522			7,529
Less: accumulated depreciation and amortization		4,930			4,878
Properties, plants, and equipment, net		2,592			2,651
Goodwill		308			322
Operating lease right-of-use-assets		116			122
Deferred income taxes		139			229
Other noncurrent assets		84			88
Total assets	$	6,913		$	6,580

LIABILITIES
Current liabilities:
Short term debt⁽¹⁾	$	50		$	–
Accounts payable, trade		1,842			1,718
Accrued compensation and retirement costs		126			116
Taxes, including income taxes		74			61
Environmental remediation		24			15
Operating lease liabilities		32			35
Fair value of hedging instruments and derivatives		6			23
Other current liabilities		102			95
Total current liabilities		2,256			2,063
Long-term debt		1,596			1,594
Accrued pension benefits		635			717
Accrued other postretirement benefits		396			411
Environmental remediation		45			49
Operating lease liabilities		86			90
Deferred income taxes		12			12
Other noncurrent liabilities		79			85
Total liabilities		5,105			5,021

EQUITY
Arconic Corporation stockholders’ equity:
Common stock		1			1
Additional capital		3,371			3,368
Accumulated deficit		(396	)		(552	)
Treasury stock		(214	)		(161	)
Accumulated other comprehensive loss		(969	)		(1,111	)
Total Arconic Corporation stockholders’ equity		1,793			1,545
Noncontrolling interest		15			14
Total equity		1,808			1,559
Total liabilities and equity	$	6,913		$	6,580

⁽¹⁾

Arconic maintains a five-year credit agreement, dated May 13, 2020, with a syndicate of lenders named therein and Deutsche Bank AG New York Branch as administrative agent (the “ABL Credit Agreement”). The ABL Credit Agreement provides for a senior secured asset-based revolving credit facility (the “ABL Credit Facility”) to be used, generally, for working capital or other general corporate purposes. On February 16, 2022, the Company’s ABL Credit Agreement was amended to increase the revolving commitments under the ABL Credit Facility to $1,200 from $800. The Company borrowed $100 under this facility in March 2022, of which $50 was repaid in June 2022. In July 2022, the Company borrowed $50 under the ABL Credit Facility.


Arconic Corporation and subsidiaries Statement of Consolidated Cash Flows (unaudited) (dollars in millions)

	Quarter ended
	June 30,			March 31,			June 30,
	2022			2022			2021
OPERATING ACTIVITIES
Net income (loss)	$	115		$	42		$	(427	)
Adjustments to reconcile net income (loss) to cash provided from (used for) operations:
Depreciation and amortization		62			60			62
Deferred income taxes		30			(4	)		(117	)
Restructuring and other charges⁽¹⁾		2			5			597
Net periodic pension benefit cost		18			16			18
Stock-based compensation		8			5			5
Amortization of debt issuance costs		1			1			1
Other		(25	)		11			1
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
(Increase) in receivables⁽²⁾		(31	)		(110	)		(61	)
(Increase) in inventories		(98	)		(206	)		(196	)
(Increase) in prepaid expenses and other current assets		(9	)		(10	)		(13	)
Increase in accounts payable, trade		80			116			206
Increase (Decrease) in accrued expenses		11			(28	)		(1	)
Increase in taxes, including income taxes		4			1			5
Pension contributions⁽³⁾		(9	)		(4	)		(252	)
Decrease (Increase) in noncurrent assets		–			1			(4	)
Increase in noncurrent liabilities		3			1			9
CASH PROVIDED FROM (USED FOR) OPERATIONS		162			(103	)		(167	)

FINANCING ACTIVITIES
Net change in short term borrowings (original maturities of three months or less)⁽⁴⁾		(50	)		100			–
Debt issuance costs		–			(1	)		(1	)
Repurchases of common stock⁽⁵⁾		(37	)		(16	)		(9	)
Other		1			(11	)		1
CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES		(86	)		72			(9	)

INVESTING ACTIVITIES
Capital expenditures		(33	)		(95	)		(44	)
Other		–			1			(3	)
CASH USED FOR INVESTING ACTIVITIES		(33	)		(94	)		(47	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(1	)		–			–
Net change in cash and cash equivalents and restricted cash		42			(125	)		(223	)
Cash and cash equivalents and restricted cash at beginning of period⁽⁶⁾		210			335			763
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD⁽⁶⁾	$	252		$	210		$	540

⁽¹⁾	For the quarter ended June 30, 2021, see footnote 2 to the Statement of Consolidated Operations included in this release.

⁽²⁾	In January 2022, the Company entered into a one-year arrangement with a financial institution to sell certain customer receivables outright without recourse on a continuous basis. All such sales are at Arconic’s discretion. Under this arrangement, the Company serves in an administrative capacity, including collection of the receivables from the respective customers and remittance of these cash collections to the financial institution. Accordingly, upon the sale of customer receivables to the financial institution, Arconic removes the underlying trade receivables from the Consolidated Balance Sheet and includes the reduction as a positive amount in the (Increase) in receivables line item within Operating Activities on the Statement of Consolidated Cash Flows. In the quarters ended June 30, 2022 and March 31, 2022, the Company sold $329 and $221 in customer receivables, respectively, collected $280 and $158 in cash from customers, respectively, and remitted $267 and $158 in cash collections, respectively, to the financial institution.

⁽³⁾	In April 2021, the Company contributed a total of $250 to its two funded U.S. defined benefit pension plans to maintain the funding level of the remaining plan obligations not transferred under a group annuity contract. Arconic had no minimum required funding due in the 2022 first quarter and contributed $7 in the 2022 second quarter to these two plans. The Company expects to contribute a total of $15 to these two plans in the remainder of 2022.

⁽⁴⁾	For the quarters ended June 30, 2022 and March 31, 2022, see footnote 1 to the Consolidated Balance Sheet included in this release.

⁽⁵⁾	In May 2021, Arconic announced that its Board of Directors approved a share repurchase program authorizing the Company to repurchase shares of its outstanding common stock up to an aggregate transactional value of $300 over a two-year period expiring April 28, 2023. In the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021, the Company repurchased 1,324,027, 505,982, and 246,011 shares of its common stock, respectively, under this program. Cumulatively, the Company has repurchased 6,742,514 shares of its common stock for $214 since the program’s inception.

⁽⁶⁾	Cash and cash equivalents and restricted cash at beginning of period for all periods presented and Cash and cash equivalents and restricted cash at end of period for all periods presented includes Restricted cash of less than $0.03.


Arconic Corporation and subsidiaries Segment Adjusted EBITDA Reconciliation (unaudited) (in millions)

	Quarter ended
	June 30,			March 31,			June 30,
	2022			2022			2021
Total Segment Adjusted EBITDA⁽¹⁾	$	215		$	215		$	200
Unallocated amounts:
Corporate expenses⁽²⁾		(10	)		(9	)		(10	)
Stock-based compensation expense		(8	)		(5	)		(5	)
Metal price lag⁽³⁾		30			(36	)		(11	)
Unrealized gains on mark-to-market hedging instruments and derivatives		21			2			–
Provision for depreciation and amortization		(62	)		(60	)		(62	)
Restructuring and other charges⁽⁴⁾		(2	)		(5	)		(597	)
Other⁽⁵⁾		(40	)		(6	)		(10	)
Operating income (loss)		144			96			(495	)
Interest expense		(26	)		(25	)		(25	)
Other income (expenses), net⁽⁶⁾		35			(17	)		(15	)
(Provision) Benefit for income taxes		(38	)		(12	)		108
Net income attributable to noncontrolling interest		(1	)		–			–
Consolidated net income (loss) attributable to Arconic Corporation	$	114		$	42		$	(427	)

⁽¹⁾	Arconic’s profit or loss measure for its reportable segments is Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization). The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus each of (i) Cost of goods sold, (ii) Selling, general administrative, and other expenses, and (iii) Research and development expenses, plus each of (i) Stock-based compensation expense, (ii) Metal price lag (see footnote 3), and (iii) Unrealized (gains) losses on mark-to-market hedging instruments and derivatives (see below). Arconic’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies’ reportable segments.

	Effective in the first quarter of 2022, management modified the Company’s definition of Segment Adjusted EBITDA to exclude the impact of unrealized gains and losses on mark-to-market hedging instruments and derivatives. This modification was deemed appropriate as Arconic is considering entering into additional hedging instruments in future reporting periods if favorable conditions exist to mitigate cost inflation. Certain of these instruments may not qualify for hedge accounting resulting in unrealized gains and losses being recorded directly to Sales or Cost of goods sold, as appropriate (i.e., mark-to-market). Additionally, this change was also applied to derivatives that do not qualify for hedge accounting for consistency purposes. The Company does not have a regular practice of entering into contracts that are treated as derivatives for accounting purposes. Ultimately, this change was made to maintain the transparency and visibility of the underlying operating performance of Arconic’s reportable segments. Prior to this change, the Company had a limited number of hedging instruments and derivatives that did not qualify for hedge accounting, the unrealized impact of which was not material to Arconic’s Segment Adjusted EBITDA performance measure. Accordingly, periods prior to the effective date of this change were not recast to reflect this change.

	Total Segment Adjusted EBITDA is the sum of the respective Segment Adjusted EBITDA for each of the Company’s three reportable segments: Rolled Products, Building and Construction Systems, and Extrusions. This amount is being presented for the sole purpose of reconciling Segment Adjusted EBITDA to the Company’s Consolidated net income (loss).

⁽²⁾	Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities.

⁽³⁾	Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions.

⁽⁴⁾	For the quarter ended June 30, 2021, see footnote 2 to the Statement of Consolidated Operations included in this release.

⁽⁵⁾	Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on the Company’s Statement of Consolidated Operations that are not included in Segment Adjusted EBITDA, including those described as “Other special items” (see footnote 4 to the reconciliation of Adjusted EBITDA within Calculation of Non-GAAP Financial Measures included in this release).

⁽⁶⁾	For the quarter ended June 30, 2022, see footnote 3 to the Statement of Consolidated Operations included in this release.


Arconic Corporation and subsidiaries Calculation of Non-GAAP Financial Measures (unaudited) (in millions)

Adjusted EBITDA	Quarter ended
Adjusted EBITDA	June 30,			March 31,			June 30,
	2022			2022			2021
Net income (loss) attributable to Arconic Corporation	$	114		$	42		$	(427	)

Add:
Net income attributable to noncontrolling interest		1			–			–
Provision (Benefit) for income taxes		38			12			(108	)
Other (income) expenses, net⁽¹⁾		(35	)		17			15
Interest expense		26			25			25
Restructuring and other charges⁽²⁾		2			5			597
Provision for depreciation and amortization		62			60			62
Stock-based compensation		8			5			5
Metal price lag⁽³⁾		(30	)		36			11
Unrealized gains on mark-to-market hedging instruments and derivatives		(21	)		(2	)		–
Other special items⁽⁴⁾		39			5			7

Adjusted EBITDA	$	204		$	205		$	187

Sales	$	2,548		$	2,191		$	1,801

Adjusted EBITDA Margin		8.0	%		9.4	%		10.4	%

	Arconic’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for the following items: Provision for depreciation and amortization; Stock-based compensation; Metal price lag (see footnote 3); Unrealized (gains) losses on mark-to-market hedging instruments and derivatives (see below); and Other special items. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items are composed of restructuring and other charges, discrete income tax items, and other items as deemed appropriate by management. There can be no assurances that additional special items will not occur in future periods. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Arconic’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

	Effective in the first quarter of 2022, management modified the Company’s definition of Adjusted EBITDA to exclude the impact of unrealized gains and losses on mark-to-market hedging instruments and derivatives. This modification was deemed appropriate as Arconic is considering entering into additional hedging instruments in future reporting periods if favorable conditions exist to mitigate cost inflation. Certain of these instruments may not qualify for hedge accounting resulting in unrealized gains and losses being recorded directly to Sales or Cost of goods sold, as appropriate (i.e., mark-to-market). Additionally, this change was also applied to derivatives that do not qualify for hedge accounting for consistency purposes. The Company does not have a regular practice of entering into contracts that are treated as derivatives for accounting purposes. Ultimately, this change was made to maintain the transparency and visibility of the underlying operating performance of Arconic. Prior to this change, the Company had a limited number of hedging instruments and derivatives that did not qualify for hedge accounting, the unrealized impact of which was not material to Arconic’s Adjusted EBITDA. Accordingly, periods prior to the effective date of this change were not recast to reflect this change.

⁽¹⁾	For the quarter ended June 30, 2022, see footnote 3 to the Statement of Consolidated Operations included in this release.

⁽²⁾	For the quarter ended June 30, 2021, see footnote 2 to the Statement of Consolidated Operations included in this release.

⁽³⁾	Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions.

⁽⁴⁾	Other special items include the following:
•	for the quarter ended June 30, 2022, costs related to a new labor agreement with the United Steelworkers ($19), a charge for two environmental remediation matters ($9), costs related to several legal matters, including Grenfell Tower ($3) and other ($4), and other items ($4);
•	for the quarter ended March 31, 2022, costs related to several legal matters ($2), costs related to the packaging restart at the Tennessee rolling mill ($2), and other items ($1); and
•	for the quarter ended June 30, 2021, a write-down of inventory related to the idling of both the remaining operations at the Chandler (Arizona) extrusions facility and the casthouse operations at the Lafayette (Indiana) extrusions facility ($4) and costs related to several legal matters ($3).


Adjusted EBITDA to Free Cash Flow Bridge	Quarter ended
Adjusted EBITDA to Free Cash Flow Bridge	June 30,			March 31,			December 31,			September 30,			June 30,
	2022			2022			2021			2021			2021
Adjusted EBITDA⁽¹⁾	$	204		$	205		$	175		$	171		$	187

Change in working capital⁽²⁾		(49	)		(200	)		11			(126	)		(51	)
Cash payments for:
Environmental remediation		(2	)		(4	)		(40	)		(23	)		(4	)
Pension contributions⁽³⁾		(9	)		(4	)		(2	)		(3	)		(252	)
Other postretirement benefits		(8	)		(8	)		(10	)		(9	)		(10	)
Restructuring actions		(1	)		(2	)		(4	)		(2	)		(4	)
Interest		(23	)		(29	)		(22	)		(28	)		(22	)
Income taxes		(23	)		(4	)		(10	)		(4	)		(6	)
Capital expenditures		(33	)		(95	)		(61	)		(51	)		(44	)
Other⁽⁴⁾		73			(57	)		(2	)		(18	)		(5	)

Free Cash Flow⁽⁵⁾	$	129		$	(198	)	$	35		$	(93	)	$	(211	)

⁽¹⁾	Adjusted EBITDA is a non-GAAP financial measure. See the reconciliation of Adjusted EBITDA included in this release for (i) Arconic’s definition of Adjusted EBITDA, (ii) management’s rationale for the presentation of this non-GAAP measure, and (iii) a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

⁽²⁾	Arconic’s definition of working capital is Receivables plus Inventories less Accounts payable, trade.

⁽³⁾	In April 2021, the Company contributed a total of $250 to its two funded U.S. defined benefit pension plans to maintain the funding level of the remaining plan obligations not transferred under a group annuity contract.

⁽⁴⁾	Other includes the impact of metal price lag as follows: 2Q 2022-$30; 1Q 2022-$(36); 4Q 2021-$11; 3Q 2021-$(21); and 2Q 2021-$(11). See footnote 3 in reconciliation of Adjusted EBITDA included in this release for additional information on metal price lag.

⁽⁵⁾	Arconic’s definition of Free Cash Flow is Cash from operations less capital expenditures. Free Cash Flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures, which are both necessary to maintain and expand the Company’s asset base and expected to generate future cash flows from operations. It is important to note that Free Cash Flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.
•	2Q 2022: Cash provided from operations of $162 less capital expenditures of $33 = free cash flow of $129
•	1Q 2022: Cash used for operations of $(103) less capital expenditures of $95 = free cash flow of $(198)
•	4Q 2021: Cash provided from operations of $96 less capital expenditures of $61 = free cash flow of $35
•	3Q 2021: Cash used for operations of $(42) less capital expenditures of $51 = free cash flow of $(93)
•	2Q 2021: Cash used for operations of $(167) less capital expenditures of $44 = free cash flow of $(211)

View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005694/en/

Investor Contact

Shane Rourke

(412) 315-2984

[email protected]

Media Contact

Tracie Gliozzi

(412) 992-2525

[email protected]

KEYWORDS: United States North America Pennsylvania

INDUSTRY KEYWORDS: Building Systems Construction & Property Aerospace Manufacturing Other Transport Trucking Transport Other Manufacturing Machinery Machine Tools, Metalworking & Metallurgy Steel Packaging Architecture Other Construction & Property Engineering

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August 2, 2022 7:00 am

Marathon Petroleum Corp. Reports Second-Quarter 2022 Results

PR Newswire

FINDLAY, Ohio
, Aug. 2, 2022 /PRNewswire/ —

Net income attributable to MPC of $5.9 billion, or $10.95 per diluted share; reported adjusted net income of $5.7 billion, or $10.61 per diluted share
Adjusted EBITDA of $9.1 billion, as the refining system ran at full utilization to meet demand
Maintaining focus on low-cost culture and improving commercial performance
Published annual Sustainability and Climate Perspectives reports, demonstrating continued progress toward goals

Marathon Petroleum Corp. (NYSE: MPC) today reported net income attributable to MPC of $5.9 billion, or $10.95 per diluted share, for the second quarter of 2022, compared with net income attributable to MPC of $8.5 billion, or $13.00 per diluted share, for the second quarter of 2021.

Adjusted net income was $5.7 billion, or $10.61 per diluted share, for the second quarter of 2022. This compares to adjusted net income of $437 million, or $0.67 per diluted share, for the second quarter of 2021. Adjusted results for these periods exclude net pre-tax benefits of $238 million and $11.6 billion, for the second-quarter 2022 and second-quarter 2021, respectively. Adjustments are shown in the accompanying release tables.

Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $9.1 billion in the second quarter of 2022, compared with $2.2 billion for the second quarter of 2021.

“We accomplished a lot during the quarter,” said President and Chief Executive Officer Michael J. Hennigan. “Our team delivered on supplying products to meet strong market demand. Utilizing the proceeds from the Speedway divestiture, we have completed approximately $12 billion of our $15 billion return of capital program. We also recently published our annual Sustainability and Climate reports, which highlight the progress we have made across our sustainability commitments.”

Results from Operations

Adjusted EBITDA from Continuing and Discontinued Operations (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Refining & Marketing Segment
Segment income (loss) from operations	$	7,134	$	224	$	7,902	$	(374)
Add: Depreciation and amortization		475		466		936		944
Refining planned turnaround costs		151		61		296		173
Storm impacts		—		—		—		31
Refining & Marketing segment adjusted EBITDA		7,760		751		9,134		774

Midstream Segment
Segment income from operations		1,126		977		2,198		1,949
Add: Depreciation and amortization		330		331		661		665
Storm impacts		—		—		—		16
Midstream segment adjusted EBITDA		1,456		1,308		2,859		2,630

Subtotal		9,216		2,059		11,993		3,404
Corporate		(170)		(180)		(321)		(337)
Add: Depreciation and amortization		14		31		27		63
Adjusted EBITDA from continuing operations	$	9,060	$	1,910	$	11,699	$	3,130

Speedway
Speedway	$	—	$	283	$	—	$	613
Add: Depreciation and amortization		—		1		—		3
Adjusted EBITDA from discontinued operations	$	—	$	284	$	—	$	616

Adjusted EBITDA from continuing and discontinued operations	$	9,060	$	2,194	$	11,699	$	3,746

Refining & Marketing (R&M)

Segment adjusted EBITDA was $7.8 billion in the second quarter of 2022, versus $751 million for the second quarter of 2021. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $151 million in the second quarter of 2022 and $61 million in the second quarter of 2021. The increase in segment adjusted EBITDA was driven by higher margins and throughput in all regions.

R&M margin was $37.54 per barrel for the second quarter of 2022, versus $12.45 per barrel for the second quarter of 2021. Crude capacity utilization was approximately 100%, resulting in total throughput of 3.1 million barrels per day for the second quarter of 2022. This compares to crude capacity utilization of approximately 94% for the second quarter of 2021, which resulted in total throughput of 2.9 million barrels per day.

Midstream

Segment adjusted EBITDA was $1.5 billion in the second quarter of 2022, versus $1.3 billion for the second quarter of 2021.

Corporate and Items Not Allocated

Corporate expenses totaled $170 million in the second quarter of 2022, compared with $180 million in the second quarter of 2021.

In the second quarter of 2022, items not allocated to segments includes a $238 million benefit related to changes in RVO requirements for 2020 and 2021.

Speedway

This business was sold on May 14, 2021. Historic results are reported as discontinued operations.

Financial Position, Liquidity, and Return of Capital

As of June 30, 2022, MPC had $13.3 billion of cash, cash equivalents, and short-term investments and $5 billion available on its bank revolving credit facility. Effective July 7, 2022, the company entered into a new $5 billion five-year bank revolving credit facility to replace its previously existing credit facility that was scheduled to expire in October 2023. MPC debt at the end of the second quarter of 2022 totaled $7.0 billion, excluding MPLX debt. MPC’s gross debt-to-capital ratio, excluding MPLX debt, was 21% at the end of the second quarter of 2022.

Since the last earnings call, the company repurchased approximately $4.1 billion of company shares, and as of July 31, 2022, has completed approximately $12.1 billion of its previously committed $15 billion capital return program.

As MPC approaches completing its $15 billion capital return program with the proceeds of the Speedway sale, its Board of Directors has approved a separate and incremental $5 billion share repurchase authorization. This authorization has no expiration date. The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions, and repurchases may be initiated, suspended or discontinued at any time. MPC may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, accelerated share repurchases, tender offers, or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans.

Strategic and Operations Update

On the Martinez Renewable Fuels Project, the Final Environmental Impact Report was certified on May 3, 2022. On July 22, 2022, the Bay Area Air Quality Management District air quality permit for Martinez was posted, commencing a 30-day public comment period. The first phase of the facility is currently targeted to be mechanically complete by year-end 2022. Initial production capacity is expected to be 260 million gallons per year of renewable fuels. Pretreatment capabilities are expected to come online in the second half of 2023 and the facility is expected to be capable of producing 730 million gallons per year by the end of 2023. The expected and targeted timelines for achieving these production capacities are dependent upon the timing of obtaining the air quality permit for the facility.

The Midstream segment remains focused on executing the strategic priorities of strict capital discipline, embedding a low-cost culture, and optimizing the portfolio. MPLX continues to evaluate opportunities to expand its logistics to meet the needs of today and participate in an energy-diverse future.

During the quarter, the company published both its annual Sustainability and Climate-Related Scenarios reports. The reports are available on the company’s website at www.marathonpetroleum.com.

Third Quarter 2022 Outlook

Refining & Marketing Segment:
Refining operating costs per barrel^(a)	$	5.50
Distribution costs (in millions)	$	1,300
Refining planned turnaround costs (in millions)	$	400
Depreciation and amortization (in millions)	$	460

Refinery throughputs (mbpd):
Crude oil refined		2,705
Other charge and blendstocks		200
Total		2,905

Corporate (in millions)	$	170

^(a)	Excludes refining planned turnaround and depreciation and amortization expense

Conference Call

At 11:00 a.m. ET today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen by visiting MPC’s website at www.marathonpetroleum.com. A replay of the webcast will be available on the company’s website for two weeks. Financial information, including the earnings release and other investor-related materials, will also be available online prior to the conference call and webcast at www.marathonpetroleum.com.

About Marathon Petroleum Corporation

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation’s largest refining system. MPC’s marketing system includes branded locations across the United States, including Marathon brand retail outlets. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.

Investor Relations Contacts: (419) 421-2071

Kristina Kazarian, Vice President
Brian Worthington, Manager
Kenan Kinsey, Analyst

Media Contact: (419) 421-3312
Jamal Kheiry, Communications Manager

References to Earnings and Defined Terms

References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC’s share after excluding amounts attributable to noncontrolling interests.

Forward-Looking Statements

This press release contains forward-looking statements regarding MPC. These forward-looking statements may relate to, among other things, MPC’s expectations, estimates and projections concerning its business and operations, financial priorities, strategic plans and initiatives, capital return plans, operating cost reduction objectives, and environmental, social and governance (“ESG”) goals and targets, including those related to greenhouse gas emissions, diversity and inclusion and ESG reporting. You can identify forward-looking statements by words such as “anticipate,” “believe,” “commitment,” “could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,” “position,” “potential,” “predict,” “priority,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” “would” or other similar expressions that convey the uncertainty of future events or outcomes. MPC cautions that these statements are based on management’s current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside of the control of MPC, that could cause actual results and events to differ materially from the statements made herein. Factors that could cause MPC’s actual results to differ materially from those implied in the forward-looking statements include but are not limited to: the continuance or escalation of the military conflict between Russia and Ukraine and related sanctions and market disruptions; general economic, political or regulatory developments, including inflation, and changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, or taxation; the magnitude, duration and extent of future resurgences of the COVID-19 pandemic and its effects; the regional, national and worldwide demand for refined products and related margins; the regional, national or worldwide availability and pricing of crude oil, natural gas, NGLs and other feedstocks and related pricing differentials; the success or timing of completion of ongoing or anticipated projects or transactions, including the conversion of the Martinez Refinery to a renewable fuels facility and joint venture with Neste, and the timing and ability to obtain necessary regulatory approvals and permits and to satisfy other conditions necessary to complete such projects or consummate such transactions within the expected timeframe if at all; the availability of desirable strategic alternatives to optimize portfolio assets and the ability to obtain regulatory and other approvals with respect thereto; our ability to successfully implement our sustainable energy strategy and principles, achieve our ESG goals and targets and realize the expected benefits thereof; accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, means of transportation, or those of our suppliers or customers; the impact of adverse market conditions or other similar risks to those identified herein affecting MPLX; and the factors set forth under the heading “Risk Factors” in MPC’s and MPLX’s Annual Reports on Form 10-K for the year ended Dec. 31, 2021, and in other filings with the SEC. Any forward-looking statement speaks only as of the date of the applicable communication and we undertake no obligation to update any forward-looking statement except to the extent required by applicable law.

Copies of MPC’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other SEC filings are available on the SEC’s website, MPC’s website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC’s Investor Relations office. Copies of MPLX’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other SEC filings are available on the SEC’s website, MPLX’s website at http://ir.mplx.com or by contacting MPLX’s Investor Relations office.

Consolidated Statements of Income (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per-share data)		2022		2021		2022		2021
Revenues and other income:
Sales and other operating revenues	$	53,795	$	29,615	$	91,853	$	52,326
Income from equity method investments		147		93		289		184
Net gain on disposal of assets		39		—		21		3
Other income		257		119		459		196
Total revenues and other income		54,238		29,827		92,622		52,709
Costs and expenses:
Cost of revenues (excludes items below)		44,207		27,177		79,275		48,261
Depreciation and amortization		819		871		1,624		1,715
Selling, general and administrative expenses		694		625		1,297		1,200
Other taxes		190		189		382		351
Total costs and expenses		45,910		28,862		82,578		51,527
Income from continuing operations		8,328		965		10,044		1,182
Net interest and other financial costs		312		372		574		725
Income from continuing operations before income taxes		8,016		593		9,470		457
Provision for income taxes on continuing operations		1,799		5		2,081		39
Income from continuing operations, net of tax		6,217		588		7,389		418
Income from discontinued operations, net of tax		—		8,214		—		8,448
Net income		6,217		8,802		7,389		8,866
Less net income attributable to:
Redeemable noncontrolling interest		21		21		42		41
Noncontrolling interests		323		269		629		555
Net income attributable to MPC	$	5,873	$	8,512	$	6,718	$	8,270

Per share data
Basic:
Continuing operations	$	11.03	$	0.46	$	12.24	$	(0.27)
Discontinued operations		—		12.63		—		12.98
Net income per share	$	11.03	$	13.09	$	12.24	$	12.71

Weighted average shares outstanding (in millions)		532		650		549		651
Diluted:
Continuing operations	$	10.95	$	0.45	$	12.15	$	(0.27)
Discontinued operations		—		12.55		—		12.98
Net income per share	$	10.95	$	13.00	$	12.15	$	12.71

Weighted average shares outstanding (in millions)		536		654		553		651

Income Summary for Continuing Operations (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Refining & Marketing	$	7,134	$	224	$	7,902	$	(374)
Midstream		1,126		977		2,198		1,949
Corporate		(170)		(180)		(321)		(337)
Income from continuing operations before items not allocated to segments		8,090		1,021		9,779		1,238
Items not allocated to segments:
Impairment and idling expenses		—		(56)		—		(56)
Renewable volume obligation requirements		238		—		238		—
Litigation		—		—		27		—
Income from continuing operations	$	8,328	$	965	$	10,044	$	1,182

Income Summary for Discontinued Operations (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Speedway	$	—	$	283	$	—	$	613
Gain on sale of assets		—		11,682		—		11,682
Transaction-related costs		—		(23)		—		(46)
Income from discontinued operations	$	—	$	11,942	$	—	$	12,249

Capital Expenditures and Investments (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Refining & Marketing	$	315	$	176	$	559	$	310
Midstream		222		178		505		316
Corporate^(a)		40		39		86		74
Speedway		—		74		—		177
Total	$	577	$	467	$	1,150	$	877

^(a)	Includes capitalized interest of $25 million, $16 million, $48 million and $30 million for the second quarter 2022, the second quarter 2021, the first six months of 2022 and the first six months of 2021, respectively.

Refining & Marketing Operating Statistics (unaudited)

*Dollar per Barrel of Net Refinery Throughput*	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Refining & Marketing margin^(a)	$	37.54	$	12.45	$	26.93	$	11.37
Less:
Refining operating costs, excluding storm impacts^(b)		5.19		4.59		5.20		4.86
Distribution costs^(c)		4.76		5.04		4.77		5.11
Other (income) loss^(d)		(0.20)		(0.08)		(0.14)		(0.18)
Refining & Marketing adjusted EBITDA		27.79		2.90		17.10		1.58
Less:
Storm impacts on refining operating cost^(e)		—		—		—		0.06
Refining planned turnaround costs		0.54		0.24		0.56		0.35
Depreciation and amortization		1.70		1.80		1.75		1.93
Refining & Marketing income (loss) from operations	$	25.55	$	0.86	$	14.79	$	(0.76)

Fees paid to MPLX included in distribution costs above	$	3.30	$	3.33	$	3.38	$	3.49

^(a)	Sales revenue less cost of refinery inputs and purchased products, divided by net refinery throughput.
^(b)	Excludes refining planned turnaround and depreciation and amortization expense.
^(c)	Excludes depreciation and amortization expense.
^(d)	Includes income (loss) from equity method investments, net gain (loss) on disposal of assets and other income.
^(e)	A storm in the first quarter of 2021 resulted in higher costs, including maintenance and repairs.

*Refining & Marketing – Supplemental Operating Data*	Three Months Ended June 30,			Six Months Ended June 30,
		2022	2021		2022	2021
Refining & Marketing refined product sales volume (mbpd)^(a)		3,615	3,489		3,455	3,279
Crude oil refining capacity (mbpcd)^(b)		2,887	2,874		2,887	2,874
Crude oil capacity utilization (percent)^(b)		100	94		96	89

Refinery throughputs (mbpd):
Crude oil refined		2,896	2,713		2,761	2,548
Other charge and blendstocks		173	141		191	162
Net refinery throughput		3,069	2,854		2,952	2,710

Sour crude oil throughput (percent)		48	48		47	48
Sweet crude oil throughput (percent)		52	52		53	52

Refined product yields (mbpd):
Gasoline		1,536	1,436		1,510	1,380
Distillates		1,123	984		1,051	933
Propane		74	54		71	50
NGLs and petrochemicals		224	301		193	262
Heavy fuel oil		54	27		70	31
Asphalt		91	91		89	94
Total		3,102	2,893		2,984	2,750
Inter-region refinery transfers excluded from throughput and yields above (mbpd)		76	69		68	52

^(a)	Includes intersegment sales.
^(b)	Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. Excludes idled Martinez and Gallup facilities and our Dickinson plant in renewable diesel service.

Refining & Marketing – Supplemental Operating Data by Region (unaudited)

The per barrel for Refining & Marketing margin is calculated based on net refinery throughput (excludes inter-refinery transfer volumes). The per barrel for the refining operating costs, refining planned turnaround costs and refining depreciation and amortization for the regions, as shown in the tables below, is calculated based on the gross refinery throughput (includes inter-refinery transfer volumes).

Refining operating costs exclude refining planned turnaround costs, refining depreciation and amortization expense and the estimated 2021 storm impacts.

*Gulf Coast Region*	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Dollar per barrel of refinery throughput:
Refining & Marketing margin	$	35.60	$	9.63	$	26.61	$	9.40
Refining operating costs		3.90		3.65		4.18		3.92
Refining planned turnaround costs		0.60		0.32		0.69		0.64
Refining depreciation and amortization		1.30		1.40		1.35		1.50

Refinery throughputs (mbpd):
Crude oil refined		1,209		1,074		1,114		1,000
Other charge and blendstocks		148		108		148		106
Gross refinery throughput		1,357		1,182		1,262		1,106

Sour crude oil throughput (percent)		58		63		57		62
Sweet crude oil throughput (percent)		42		37		43		38

Refined product yields (mbpd):
Gasoline		653		523		624		507
Distillates		504		401		440		375
Propane		42		26		41		24
NGLs and petrochemicals		129		237		115		203
Heavy fuel oil		34		7		45		5
Asphalt		19		16		20		21
Total		1,381		1,210		1,285		1,135
Inter-region refinery transfers included in throughput and yields above (mbpd)		46		37		37		26

*Mid-Continent Region*	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Dollar per barrel of refinery throughput:
Refining & Marketing margin	$	37.30	$	14.30	$	25.18	$	12.40
Refining operating costs		4.96		4.00		4.80		4.32
Refining planned turnaround costs		0.46		0.20		0.37		0.17
Refining depreciation and amortization		1.50		1.53		1.55		1.64

Refinery throughputs (mbpd):
Crude oil refined		1,164		1,150		1,135		1,081
Other charge and blendstocks		62		49		65		53
Gross refinery throughput		1,226		1,199		1,200		1,134

Sour crude oil throughput (percent)		26		27		27		27
Sweet crude oil throughput (percent)		74		73		73		73

Refined product yields (mbpd):
Gasoline		619		624		622		596
Distillates		433		406		424		386
Propane		21		21		21		19
NGLs and petrochemicals		63		69		51		55
Heavy fuel oil		20		13		16		12
Asphalt		71		74		69		73
Total		1,227		1,207		1,203		1,141
Inter-region refinery transfers included in throughput and yields above (mbpd)		8		8		9		8

*West Coast Region*	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
Dollar per barrel of refinery throughput:
Refining & Marketing margin	$	42.78	$	14.43	$	31.53	$	13.30
Refining operating costs		8.08		7.36		7.73		7.51
Refining planned turnaround costs		0.53		0.11		0.58		0.11
Refining depreciation and amortization		1.41		1.36		1.38		1.57

Refinery throughputs (mbpd):
Crude oil refined		523		489		512		467
Other charge and blendstocks		39		53		46		55
Gross refinery throughput		562		542		558		522

Sour crude oil throughput (percent)		72		66		71		69
Sweet crude oil throughput (percent)		28		34		29		31

Refined product yields (mbpd):
Gasoline		289		289		291		277
Distillates		197		177		193		172
Propane		11		7		9		7
NGLs and petrochemicals		39		51		35		46
Heavy fuel oil		33		20		36		24
Asphalt		1		1		—		—
Total		570		545		564		526
Inter-region refinery transfers included in throughput and yields above (mbpd)		22		24		22		18

Midstream Operating Statistics (unaudited)

	Three Months Ended June 30,			Six Months Ended June 30,
		2022	2021		2022	2021
Pipeline throughputs (mbpd)^(a)		6,012	5,674		5,719	5,448
Terminal throughput (mbpd)		3,101	2,986		3,021	2,801
Gathering system throughput (million cubic feet per day)^(b)		5,626	5,077		5,452	5,081
Natural gas processed (million cubic feet per day)^(b)		8,476	8,372		8,372	8,371
C2 (ethane) + NGLs fractionated (mbpd)^(b)		536	545		531	552

^(a)	Includes common-carrier pipelines and private pipelines contributed to MPLX. Excludes equity method affiliate pipeline volumes.
^(b)	Includes amounts related to unconsolidated equity method investments on a 100% basis.

Select Financial Data (unaudited)

	June 30, 2022		March 31, 2022
(In millions)
Cash and cash equivalents	$	9,078	$	7,148
Short-term investments		4,241		3,449
MPC debt		6,999		6,953
MPLX debt		19,775		19,756
Total consolidated debt^(a)		26,774		26,709
Redeemable noncontrolling interest		965		965
Equity		32,704		30,334
Shares outstanding		513		545

^(a)	Net of unamortized debt issuance costs and unamortized premium/discount, net.

Non-GAAP Financial Measures

Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to their most comparable GAAP financial measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. The non-GAAP financial measures we use are as follows:

Adjusted Net Income Attributable to MPC

Adjusted net income attributable to MPC is defined as net income attributable to MPC excluding the items in the table below, along with their related income tax effect. We have excluded these items because we believe that they are not indicative of our core operating performance and that their exclusion results in an important measure of our ongoing financial performance to better assess our underlying business results and trends.

Adjusted Diluted Earnings Per Share

Adjusted diluted earnings per share is defined as adjusted net income attributable to MPC divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.

Reconciliation of Net Income Attributable to MPC to Adjusted Net Income Attributable to MPC (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Net income attributable to MPC	$	5,873	$	8,512	$	6,718	$	8,270
Pre-tax adjustments:
Gain on Speedway sale		—		(11,682)		—		(11,682)
Renewable volume obligation requirements		(238)		—		(238)		—
Impairments		—		56		—		56
Pension settlement		—		49		—		49
Transaction-related costs		—		23		—		46
Storm impacts		—		—		—		47
Tax impact of adjustments^(a)		52		3,497		52		3,543
Non-controlling interest impact of adjustments		—		(18)		—		(24)
Adjusted net income attributable to MPC	$	5,687	$	437	$	6,532	$	305

Diluted income per share	$	10.95	$	13.00	$	12.15	$	12.71
Adjusted diluted income per share^(b)	$	10.61	$	0.67	$	11.81	$	0.47

^(a)	Income taxes for the three and six months ended June 30, 2022 was calculated by applying a combined federal and state tax rate of 22% to the pre-tax adjustments. Income taxes for adjusted earnings for the three and six months ended June 30, 2021 was calculated by applying a combined federal and state statutory tax rate of 24% to the adjusted pre-tax loss. The corresponding adjustments to reported income taxes are shown in the table above.
^(b)	Weighted average diluted shares used for the adjusted net loss per share calculations do not assume the conversion of share-based awards, as the effect would be anti-dilutive.

Adjusted EBITDA

Amounts included in net income (loss) attributable to MPC and excluded from adjusted EBITDA include (i) net interest and other financial costs; (ii) provision/benefit for income taxes; (iii) noncontrolling interests; (iv) depreciation and amortization; (v) refining planned turnaround costs and (vi) other adjustments as deemed necessary, as shown in the table below. We believe excluding turnaround costs from this metric is useful for comparability to other companies as certain of our competitors defer these costs and amortize them between turnarounds.

Adjusted EBITDA should not be considered as a substitute for, or superior to income (loss) from operations, net income attributable to MPC, income before income taxes, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Reconciliation of Net Income Attributable to MPC to Adjusted EBITDA from Continuing Operations (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Net income attributable to MPC	$	5,873	$	8,512	$	6,718	$	8,270
Net income attributable to noncontrolling interests		344		290		671		596
Income from discontinued operations, net of tax		—		(8,214)		—		(8,448)
Provision for income taxes on continuing operations		1,799		5		2,081		39
Net interest and other financial costs		312		372		574		725
Depreciation and amortization		819		871		1,624		1,715
Refining planned turnaround costs		151		61		296		173
Storm impacts		—		—		—		47
Renewable volume obligation requirements		(238)		—		(238)		—
Litigation		—		—		(27)		—
Impairments		—		13		—		13
Adjusted EBITDA from continuing operations	$	9,060	$	1,910	$	11,699	$	3,130

Reconciliation of Income from Discontinued Operations, Net of Tax to Adjusted EBITDA from Discontinued Operations (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Income from discontinued operations, net of tax	$	—	$	8,214	$	—	$	8,448
Provision for income taxes		—		3,726		—		3,795
Net interest and other financial costs		—		2		—		6
Depreciation and amortization		—		1		—		3
Gain on sale of assets		—		(11,682)		—		(11,682)
Transaction-related costs		—		23		—		46
Adjusted EBITDA from discontinued operations	$	—	$	284	$	—	$	616

Refining & Marketing Margin

Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products.

Reconciliation of Refining & Marketing Income (Loss) from Operations to Refining & Marketing Gross Margin and Refining & Marketing Margin (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)		2022		2021		2022		2021
Refining & Marketing income (loss) from operations	$	7,134	$	224	$	7,902	$	(374)
Plus (Less):
Selling, general and administrative expenses		574		499		1,082		955
Income from equity method investments		(6)		(14)		(18)		(19)
Net gain on disposal of assets		(37)		—		(37)		(3)
Other income		(234)		(89)		(415)		(143)
Refining & Marketing gross margin		7,431		620		8,514		416
Plus (Less):
Operating expenses (excluding depreciation and amortization)		2,554		2,305		4,943		4,580
Depreciation and amortization		475		466		936		944
Gross margin excluded from and other income included in Refining & Marketing margin^(a)		71		(116)		85		(295)
Other taxes included in Refining & Marketing margin		(49)		(42)		(92)		(66)
Refining & Marketing margin	$	10,482	$	3,233	$	14,386	$	5,579

Refining & Marketing margin by region:
Gulf Coast	$	4,244	$	1,003	$	5,897	$	1,837
Mid-Continent		4,135		1,550		5,428		2,528
West Coast		2,103		680		3,061		1,214
Refining & Marketing margin	$	10,482	$	3,233	$	14,386	$	5,579

^(a)	Reflects the gross margin, excluding depreciation and amortization, of other related operations included in the Refining & Marketing segment and processing of credit card transactions on behalf of certain of our marketing customers, net of other income.

View original content:https://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-second-quarter-2022-results-301597761.html

SOURCE Marathon Petroleum Corporation

August 2, 2022 7:00 am

INTERNATIONAL GAME TECHNOLOGY PLC REPORTS SECOND QUARTER 2022 RESULTS

PR Newswire

Revenue of $1.02 billion, down 2% as reported and up 3% at constant currency, led by 23% growth in Global Gaming
Operating income of $228 million; operating income margin of 22% at high end of outlook on substantial increase in Global Gaming profitability and resilience in Global Lottery margin
Adjusted EBITDA of $409 million, in line with prior year’s record level at constant currency as Global Gaming performance offsets Lottery discrete benefits in the prior year; 40% adjusted EBITDA margin remains among the highest in Company history
Recognized a non-operating expense of $150 million representing the probable loss associated with legal proceedings related to Double Down Interactive LLC and its social gaming business sold in 2017
Diluted EPS from continuing operations of $(0.02); Adjusted diluted EPS from continuing operations of $0.57, up 78% from the prior year
Compelling shareholder returns with $135 million deployed for cash dividends and share repurchases year-to-date
Tightening full-year 2022 revenue outlook to reflect currency movements and perimeter impact from previously announced divestiture; reconfirming operating income margin outlook as fundamentals remain strong

LONDON
, Aug. 2, 2022 /PRNewswire/ — International Game Technology PLC (“IGT”) (NYSE: IGT) today reported financial results for the second quarter ended June 30, 2022. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

“Strong customer and player demand for IGT’s products and solutions drove some of our strongest profit results ever in the second quarter and first half of the year,” said Vince Sadusky, CEO of IGT. “Our business profile is supported by significant recurring revenue streams backed by long-term contracts and resilient end markets, providing a solid foundation on which to grow. We are laser focused on executing our strategic objectives and creating compelling value for our stakeholders.”

“Our first half results set us firmly on the path to achieving our 2022 financial targets,” said Max Chiara, CFO of IGT. “Rigor on costs and incremental revenue opportunities allow us to maintain our full-year operating income margin outlook despite unfavorable currency movements and macroeconomic challenges. At the same time, we are returning significant capital to shareholders via dividends and share repurchases.”

Overview of Consolidated Second Quarter 2022 Results

	Quarter Ended		Y/Y Change (%)	Constant Currency Change (%)
All amounts from continuing operations	June 30,
	2022	2021
($ in millions)
GAAP Financials:
Revenue
Global Lottery	648	725	(11) %	(4) %
Global Gaming	330	274	21 %	23 %
Digital & Betting	43	42	1 %	4 %
Total revenue	1,021	1,041	(2) %	3 %

Operating income (loss)
Global Lottery	230	300	(23) %	(16) %
Global Gaming	57	1	NM	NM
Digital & Betting	8	9	(11) %	(10) %
Corporate support expense	(29)	(26)	(11) %	(26) %
Other⁽¹⁾	(39)	(40)	3 %	2 %
Total operating income	228	244	(7) %	1 %
Operating income margin	22 %	23 %

Net cash provided by operating activities	196	249	(21) %

Cash and cash equivalents	673	639	5 %

Earnings per share – diluted	$(0.02)	$(0.48)	96 %

Non-GAAP Financial Measures:
Adjusted EBITDA
Global Lottery	330	414	(20) %	(13) %
Global Gaming	87	35	145 %	150 %
Digital & Betting	12	13	(7) %	(6) %
Corporate support expense	(20)	(21)	4 %	(14) %
Total Adjusted EBITDA	409	442	(7) %	(1) %
Adjusted EBITDA margin	40 %	4 %

Adjusted earnings per share – diluted	$0.57	$0.32	78 %

Free cash flow	117	176	(34) %

Net debt	5,722	6,312	(9) %

⁽¹⁾Primarily includes purchase price amortization

Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this
news release

Key Highlights:

Recently completed acquisition of iSoftBet, a leading iGaming content provider and third-party aggregator, greatly expanding the Company’s proprietary content library and providing a world-class game aggregation platform
Won “Lottery Supplier of the Year” at 2022 SBC Awards North America in July
Introduced high-performing Money Mania wide area progressive game to commercial gaming jurisdictions following a successful launch in tribal casinos
Signed agreement with NUSTAR Resort & Casino to deploy IGT ADVANTAGE™ casino management system and a variety of leading games and cabinets
Announced expanded sports betting partnership with SuperBook^® Sports to Tennessee, the fourth state where IGT’s PlaySports platform is powering the SuperBook Sports mobile betting app
Awarded a gold medal sustainability rating from EcoVadis, a leading sustainability rating agency
Recently released 2021 Sustainability Report which outlines the Company’s demonstrated environmental, social, and governance (ESG) performance

Financial Highlights:

Consolidated revenue of $1.02 billion, down 2% as reported, or up 3% at constant currency, from $1.04 billion in the prior year

Global Lottery revenue of $648 million compared to $725 million in the prior-year period, which included $70 million in prior-year benefits primarily from the closure of gaming halls in Italy
Global Gaming revenue increases 21%, or 23% at constant currency, to $330 million, driven by strong U.S. & Canada replacement unit demand, higher average selling prices, and increased installed base yields
Digital & Betting revenue of $43 million, stable with the prior year, as iCasino growth in the U.S. is partially offset by softness in other markets; North America sports betting market gross gaming revenue impacted by lower hold levels

Operating income of $228 million, down 7% as reported, or up 1% at constant currency, from $244 million in the prior-year period

Global Lottery operating income down, primarily due to about $60 million related to prior-year benefits referenced above
Global Gaming rises on higher revenue and profit flow through, partially offset by increased supply chain costs
Digital & Betting operating income of $8 million was relatively stable with the prior year

Adjusted EBITDA of $409 million matches prior year’s record level at constant currency; Adjusted EBITDA margin of 40% remains among the highest in Company history

Net interest expense of $75 million compared to $91 million in the prior year, driven by lower average debt balances and interest rates

During the second quarter, the Company recognized a pre-tax non-operating expense of $150 million ($114 million after tax) representing the probable loss associated with ongoing litigation (Benson v. Double Down Interactive LLC, No. 2:18-cv-00525 (W.D. Wash.)) and associated claims related to Double Down Interactive LLC and its social gaming business sold in 2017 by International Game Technology, a wholly-owned subsidiary of the Company

Income tax benefit of $11 million compared to a provision of $32 million in the prior year, primarily driven by recognition of the non-operating expense mentioned above and foreign exchange losses in the prior year with no tax benefit

Income from continuing operations of $34 million versus a loss from continuing operations of $39 million in the prior-year period, driven by income tax benefit, gains in foreign exchange, and lower debt retirement costs

Net loss attributable to IGT PLC of $4 million compared to net income of $306 million in the prior year due to gain on sale and income from discontinued operations in the prior-year period

Net loss from continuing operations attributable to IGT PLC per diluted share of $0.02 compared to a net loss from continuing operations attributable to IGT per diluted share of $0.48 in the prior year, on higher net income; adjusted net income per diluted share increased 78% to $0.57

Net debt of $5.7 billion compared to $5.9 billion at December 31, 2021; Net debt leverage of 3.5x was stable compared to December 31, 2021

Cash and Liquidity Update

Total liquidity of $2.1 billion as of June 30, 2022; $0.7 billion in unrestricted cash and $1.5 billion in additional borrowing capacity
Executed amendment and extension of revolving credit facilities in July 2022

Increased liquidity by $150 million to $1.83 billion and rebalanced EUR/USD mix to match operational exposure
Extended maturities to July 2027
Lowered interest margin and added ESG provision to allow for further potential reductions
Raised annual permitted restricted payments basket from $300 million to $400 million at current credit rating; potential to increase to $550 million

Other Developments

The Company’s Board of Directors declared a quarterly cash dividend of $0.20 per common share

Ex-dividend date of August 15, 2022
Record date of August 16, 2022
Payment date of August 30, 2022

Repurchased 750,000 shares for $15 million in the second quarter at an average price of $20.48 per share; 2.2 million shares repurchased for $54 million on a year-to-date basis at an average price of $24.89 per share

The Company expects to close on the sale of its Italian proximity payments/commercial services business in mid-to-late September

Tightening Full-year Revenue Outlook for Currency Rates and Business Disposition; Introducing Third Quarter 2022 Outlook

Full Year

Revenue of $4.1 billion – $4.2 billion

Lowered high end of range by $100 million
Reflecting changes in currency rates and impact from sale of Italian proximity payments/commercial services business in Q3’22

Operating income margin of 20% – 22% remains unchanged
Cash from operations of $850 – $950 million

Lowered high end of range by $50 million
Primarily driven by a working capital investment in higher inventory levels to proactively manage supply chain disruptions

Capital expenditures of approximately $350 million, lowered by $50 million to adjust for updated timing of spending
Free cash flow outlook remains unchanged

Third Quarter

Revenue of approximately $1.0 billion – $1.1 billion
Operating income margin of 18% – 20% includes approximately 150 – 200 basis point impact from project-related expenses

Outlook assumptions

EUR/USD exchange rate of 1.00 in the second half of 2022
Impact from sale of Italian proximity payments/commercial services business in mid-to-late September 2022
Operating income margin includes approximately 150 – 200 basis point impact from project-related and restructuring expenses expected in the second half of 2022

Earnings Conference Call and Webcast

August 2, 2022, at 8:00 a.m. EDT

To register to participate in the conference call, or to listen to the live audio webcast, please visit the “Events Calendar” on IGT’s Investor Relations website at www.IGT.com. A replay will be available on the website following the live event.

Comparability of Results

All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise. Adjusted figures exclude the impact of items such as purchase accounting, impairment charges, restructuring expense, foreign exchange, and certain one-time, primarily transaction-related items. Reconciliations to the most directly comparable U.S. GAAP measures are included in the tables in this news release. Constant currency changes for 2022 are calculated using the same foreign exchange rates as the corresponding 2021 period. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company’s financial performance. Management believes these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with U.S. GAAP. Amounts reported in millions are computed based on amounts in thousands. Certain amounts in columns and rows within tables may not foot due to rounding. Percentages and earnings per share amounts presented are calculated from the underlying unrounded amounts.

About IGT

IGT (NYSE: IGT) is a global leader in gaming. We deliver entertaining and responsible gaming experiences for players across all channels and regulated segments, from Lotteries and Gaming Machines to Sports Betting and Digital. Leveraging a wealth of compelling content, substantial investment in innovation, player insights, operational expertise, and leading-edge technology, our solutions deliver unrivaled gaming experiences that engage players and drive growth. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has approximately 10,500 employees. For more information, please visit www.IGT.com.

Cautionary Statement Regarding Forward-Looking Statements
This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning International Game Technology PLC and its consolidated subsidiaries (the “Company”) and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “shall”, “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’s control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the factors and risks described in the Company’s annual report on Form 20-F for the financial year ended December 31, 2021 and other documents filed from time to time with the SEC, which are available on the SEC’s website at www.sec.gov and on the investor relations section of the Company’s website at www.IGT.com. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements. You should carefully consider these factors and other risks and uncertainties that affect the Company’s business. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that the financial performance of International Game Technology PLC for the current or any future financial years will necessarily match or exceed the historical published financial performance of International Game Technology PLC, as applicable. All forward-looking statements contained in this news release are qualified in their entirety by this cautionary statement. All subsequent written or oral forward-looking statements attributable to International Game Technology PLC, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.

Non-GAAP Financial Measures
Management supplements the reporting of financial information, determined under GAAP, with certain non-GAAP financial information. Management believes the non-GAAP information presented provides investors with additional useful information, but it is not intended to nor should it be considered in isolation or as a substitute for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. The Company encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Adjusted EBITDA represents net income (loss) from continuing operations (a GAAP measure) before income taxes, interest expense, net, foreign exchange gain (loss), net, other non-operating expenses (e.g., DDI / Benson Matter provision, gains/losses on extinguishment and modifications of debt, etc.), net, depreciation, impairment losses, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income), and certain other non-recurring items. Other non-recurring items are infrequent in nature and are not reflective of ongoing operational activities. For the business segments, Adjusted EBITDA represents segment operating income (loss) before depreciation, amortization (service revenue, purchase accounting and non-purchase accounting), restructuring expenses, stock-based compensation, litigation expense (income) and certain other non-recurring items. Management believes that Adjusted EBITDA is useful in providing period-to-period comparisons of the results of the Company’s ongoing operational performance.

Adjusted EPS represents diluted earnings per share from continuing operations (a GAAP measure), excluding the effects of foreign exchange, impairments, amortization from purchase accounting, discrete tax items, and other significant non-recurring adjustments that are not reflective of on-going operational activities (e.g., DDI / Benson Matter provision, gains/losses on extinguishment and modifications of debt, etc.). Adjusted EPS is calculated using our diluted weighted-average number of shares outstanding, including the impact of any potentially dilutive common stock equivalents that are anti-dilutive to GAAP net income (loss) per share but dilutive to Adjusted EPS. Management believes that Adjusted EPS is useful in providing period-to-period comparisons of the results of the Company’s ongoing operational performance.

Net debt is a non-GAAP financial measure that represents debt (a GAAP measure, calculated as long-term obligations plus short-term borrowings) minus capitalized debt issuance costs and cash and cash equivalents, including cash and cash equivalents held for sale. Cash and cash equivalents, including cash and cash equivalents classified as held for sale, are subtracted from the GAAP measure because they could be used to reduce the Company’s debt obligations. Management believes that net debt is a useful measure to monitor leverage and evaluate the balance sheet.

Net debt leverage is a non-GAAP financial measure that represents the ratio of Net debt as of a particular balance sheet date to Adjusted EBITDA for the last twelve months (“LTM”) prior to such date. Management believes that Net debt leverage is a useful measure to assess IGT’s financial strength and ability to incur incremental indebtedness when making key investment decisions.

Free cash flow is a non-GAAP financial measure that represents cash flow from operations (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing IGT’s ability to fund its activities, including debt service and distribution of earnings to shareholders.

Constant currency or constant FX is a non-GAAP financial measure that expresses the current financial data using the prior-year/period exchange rate (i.e., the month end exchange rates used in preparing the financial statements for the prior year). Management believes that constant currency is a useful measure to compare period-to-period results without regard to the impact of fluctuating foreign currency exchange rates.

A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this release. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.

Contact:

Phil O’Shaughnessy, Global Communications, toll free in U.S./Canada +1 (844) IGT-7452; outside U.S./Canada +1 (401) 392-7452
Francesco Luti, +39 06 5189 9184; for Italian media inquiries
James Hurley, Investor Relations, +1 (401) 392-7190

Select Performance and KPI data:
($ in millions, unless otherwise noted)

						Sequential
				Constant		Change as
	Q2’22	Q2’21	Y/Y Change	Currency		Reported
GLOBAL LOTTERY	Q2’22	Q2’21	( %)	Change (%)⁽¹⁾	Q1’22	( %)
Revenue
Service
Operating and facilities management contracts	581	675	(14) %	(8) %	599	(3) %
Upfront license fee amortization	(46)	(53)	13 %	— %	(49)	5 %
Operating and facilities management contracts, net	535	623	(14) %	(8) %	551	(3) %
Other	85	79	7 %	22 %	84	1 %
Total service revenue	621	702	(12) %	(5) %	635	(2) %

Product sales	27	23	19 %	27 %	45	(39) %
Total revenue	648	725	(11) %	(4) %	680	(5) %

Operating income	230	300	(23) %	(16) %	252	(9) %
Adjusted EBITDA⁽¹⁾	330	414	(20) %	(13) %	356	(7) %

Global same-store sales growth (%)
Instant ticket & draw games	(8.6 %)	34.9 %			(6.7 %)
Multi-jurisdiction jackpots	10.8 %	28.8 %			(40.0 %)
Total	(7.4 %)	34.5 %			(10.3 %)

North America & Rest of world same-store sales growth (%)
Instant ticket & draw games	(5.6 %)	20.5 %			(3.9 %)
Multi-jurisdiction jackpots	10.8 %	28.8 %			(40.0 %)
Total	(4.2 %)	21.1 %			(9.0 %)

Italy same-store sales growth (%)
Instant ticket & draw games	(17.5 %)	115.2 %			(14.5 %)

⁽¹⁾ Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

						Sequential
				Constant		Change as
	Q2’22	Q2’21	Y/Y Change	Currency		Reported
GLOBAL GAMING	Q2’22	Q2’21	( %)	Change (%)⁽¹⁾	Q1’22	( %)
Revenue
Service
Terminal	123	108	14 %	15 %	108	14 %
Systems, software, and other	56	48	16 %	18 %	58	(3) %
Total service revenue	179	156	14 %	16 %	165	8 %

Product sales
Terminal	108	86	25 %	28 %	104	3 %
Other	44	31	39 %	43 %	55	(21) %
Total product sales revenue	151	118	29 %	32 %	160	(5) %
Total revenue	330	274	21 %	23 %	325	2 %

Operating income	57	1	NM	NM	52	10 %
Adjusted EBITDA⁽¹⁾	87	35	145 %	150 %	81	7 %

Installed base units
Casino	46,765	47,964	(2) %		47,237
Casino – L/T lease⁽²⁾	1,133	1,136	—		1,142
Total installed base units	47,898	49,100	(2) %		48,379

Installed base units (by geography)
US & Canada	32,270	33,820	(5) %		32,772
Rest of world	15,628	15,280	2 %		15,607
Total installed base units	47,898	49,100	(2) %		48,379

Yields (by geography)⁽³⁾, in absolute $
US & Canada	$42.64	$38.41	11 %		$39.05
Rest of world	$6.20	$4.03	54 %		$5.77
Total yields	$30.55	$27.49	11 %		$28.19

Global machine units sold
New/expansion	818	1,167	(30) %		328
Replacement	6,378	5,168	23 %		6,848
Total machine units sold	7,196	6,335	14 %		7,176

US & Canada machine units sold
New/expansion	469	643	(27) %		18
Replacement	4,580	3,485	31 %		5,299
Total machine units sold	5,049	4,128	22 %		5,317

⁽¹⁾ Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein
⁽²⁾ Excluded from yield calculations due to treatment as sales-type leases
⁽³⁾ Excludes Casino L/T lease units due to treatment as sales-type leases; comparability on a Y/Y basis hindered due to lower active units in the prior year

						Sequential
				Constant		Change as
	Q2’22	Q2’21	Y/Y Change	Currency		Reported
GLOBAL GAMING (Continued)	Q2’22	Q2’21	( %)	Change (%)⁽¹⁾	Q1’22	( %)
Rest of world machine units sold
New/expansion	349	524	(33) %		310
Replacement	1,798	1,683	7 %		1,549
Total machine units sold	2,147	2,207	(3) %		1,859

Average Selling Price (ASP), in absolute $
US & Canada	$15,200	$13,900	9 %		$14,800
Rest of world	$13,400	$12,700	6 %		$12,300
Total ASP	$14,600	$13,400	9 %		$14,200

						Sequential
				Constant		Change as
	Q2’22	Q2’21	Y/Y Change	Currency		Reported
DIGITAL & BETTING	Q2’22	Q2’21	( %)	Change (%)⁽¹⁾	Q1’22	( %)
Revenue
Service	43	43	— %	3 %	47	(9) %
Product sales	—	(0)	NA	NA	0	(55) %
Total revenue	43	42	1 %	4 %	47	(9) %

Operating income	8	9	(11) %	(10) %	13	(38) %
Adjusted EBITDA⁽¹⁾	12	13	(7) %	(6) %	17	(28) %


CONSOLIDATED
Revenue (by geography)
US & Canada	585	561	4 %	5 %	598	(2) %
Italy	288	353	(18) %	(7) %	298	(3) %
Rest of world	148	127	16 %	26 %	155	(5 %
Total revenue	1,021	1,041	(2) %	3 %	1,051	(3) %


⁽¹⁾ Non-GAAP measures; see disclaimer and reconciliations to the most directly comparable GAAP measure included herein

International Game Technology PLC
Consolidated Statements of Operations
*($ in millions and shares in thousands, except per share amounts)*
*Unaudited*

	For the three months ended		For the six months ended
	June 30,		June 30,
	2022	2021	2022	2021
Service revenue	842	901	1,688	1,802
Product sales	179	140	384	254
Total revenue	1,021	1,041	2,072	2,055

Cost of services	420	438	848	880
Cost of product sales	117	88	239	160
Selling, general and administrative	195	207	388	393
Research and development	60	61	117	116
Other operating expense	1	1	1	1
Total operating expenses	793	796	1,592	1,551

Operating income	228	244	480	504

Interest expense, net	75	91	151	185
Foreign exchange (gain) loss, net	(19)	90	(22)	(55)
Other non-operating expense, net	150	70	147	94
Total non-operating expenses	205	251	276	224
Income (loss) from continuing operations before (benefit from) provision for income taxes	22	(7)	204	280
(Benefit from) provision for income taxes	(11)	32	53	181
Income (loss) from continuing operations	34	(39)	151	100
Income from discontinued operations, net of tax	—	13	—	24
Gain on sale of discontinued operations, net of tax	—	391	—	391
Income from discontinued operations	—	404	—	415
Net income	34	365	151	514
Less: Net income attributable to non-controlling interests from continuing operations	38	60	76	119
Less: Net loss attributable to non-controlling interests from discontinued operations	—	—	—	(2)
Net (loss) income attributable to IGT PLC	(4)	306	75	397

Net (loss) income from continuing operations attributable to IGT PLC per common share – basic	(0.02)	(0.48)	0.37	(0.09)
Net (loss) income from continuing operations attributable to IGT PLC per common share – diluted	(0.02)	(0.48)	0.37	(0.09)
Net (loss) income attributable to IGT PLC per common share – basic	(0.02)	1.49	0.37	1.94
Net (loss) income attributable to IGT PLC per common share – diluted	(0.02)	1.49	0.37	1.94
Weighted-average shares – basic	202,696	205,096	203,217	204,977
Weighted-average shares – diluted	202,696	205,096	204,613	204,977

International Game Technology PLC
Consolidated Balance Sheets
*($ in millions)*
*Unaudited*

	June 30,	December 31,
	2022	2021
Assets
Current assets:
Cash and cash equivalents	673	591
Restricted cash and cash equivalents	70	218
Trade and other receivables, net	602	903
Inventories	235	183
Other current assets	614	589
Assets held for sale	647	4
Total current assets	2,841	2,487
Systems, equipment and other assets related to contracts, net	882	937
Property, plant and equipment, net	118	119
Operating lease right-of-use assets	257	283
Goodwill	4,318	4,656
Intangible assets, net	1,316	1,413
Other non-current assets	1,247	1,429
Total non-current assets	8,139	8,836
Total assets	10,979	11,322

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	594	1,035
Short term borrowings	—	52
Other current liabilities	953	828
Liabilities held for sale	269	—
Total current liabilities	1,816	1,914
Long-term debt, less current portion	6,453	6,477
Deferred income taxes	330	368
Operating lease liabilities	242	269
Other non-current liabilities	310	323
Total non-current liabilities	7,336	7,437
Total liabilities	9,152	9,351
Commitments and contingencies
IGT PLC’s shareholders’ equity	1,323	1,282
Non-controlling interests	504	689
Shareholders’ equity	1,827	1,971
Total liabilities and shareholders’ equity	10,979	11,322

International Game Technology PLC
Consolidated Statements of Cash Flows
*($ in millions)*
*Unaudited*
	For the three months ended		For the six months ended
	June 30,		June 30,
	2022	2021	2022	2021
Cash flows from operating activities
Net income	34	365	151	514
Less: Income from discontinued operations, net of tax	—	404	—	415
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities from continuing operations:
DDI / Benson Matter provision	150	—	150	—
Depreciation	74	83	148	165
Amortization of upfront license fees	48	55	100	110
Amortization	46	50	94	100
Stock-based compensation	12	7	22	11
Debt issuance cost amortization	4	5	8	11
Loss on extinguishment of debt	—	67	—	91
Deferred income taxes	(40)	(18)	(31)	82
Foreign exchange (gain) loss, net	(19)	90	(22)	(55)
Other non-cash items, net	(2)	4	(10)	5
Changes in operating assets and liabilities, excluding the effects of dispositions:
Trade and other receivables	102	(48)	67	(134)
Inventories	(28)	1	(53)	5
Accounts payable	(154)	(91)	(136)	24
Other assets and liabilities	(31)	81	(102)	(14)
Net cash provided by operating activities from continuing operations	196	249	385	500
Net cash provided by (used in) operating activities from discontinued operations	—	5	—	(31)
Net cash provided by operating activities	196	254	385	469

Cash flows from investing activities
Capital expenditures	(79)	(73)	(153)	(121)
Proceeds from sale of assets	2	5	13	11
Other	—	2	—	1
Net cash used in investing activities from continuing operations	(78)	(66)	(139)	(108)
Net cash provided by investing activities from discontinued operations	—	743	—	734
Net cash (used in) provided by investing activities	(78)	677	(139)	626

Cash flows from financing activities
Net (repayments of) proceeds from short-term borrowings	(40)	4	(52)	3
Net (repayments of) receipts from financial liabilities	(6)	(6)	36	3
Principal payments on long-term debt	—	(1,035)	—	(2,422)
Payments in connection with the extinguishment of debt	—	(63)	—	(85)
Payments of debt issuance costs	—	(1)	—	(7)
Proceeds from long-term debt	—	—	—	750
Net proceeds from Revolving Credit Facilities	212	84	245	516
Repurchases of common stock	(15)	—	(54)	—
Dividends paid	(41)	—	(81)	—
Dividends paid – non-controlling interests	(76)	(20)	(173)	(89)
Return of capital – non-controlling interests	(39)	(51)	(49)	(61)
Capital increase – non-controlling interests	3	1	3	11
Other	(3)	(5)	(10)	(10)
Net cash used in financing activities	(4)	(1,091)	(134)	(1,392)

Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents	115	(160)	111	(297)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(49)	23	(62)	(13)
Cash and cash equivalents and restricted cash and cash equivalents at the beginning of the period	791	956	808	1,129
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period	858	819	858	819
Less: Cash and cash equivalents included within assets held for sale	58	—	58	—
Less: Restricted cash and cash equivalents included within assets held for sale	57	—	57	—
Cash and cash equivalents and restricted cash and cash equivalents at the end of the period of continuing operations	743	819	743	819

Supplemental Cash Flow Information
Interest paid	43	53	150	219
Income taxes paid	71	35	78	39

International Game Technology PLC
Net Debt
*($ in millions)*
*Unaudited*

	June 30,	December 31,
	2022	2021
5.350% Senior Secured U.S. Dollar Notes due October 2023	61	61
3.500% Senior Secured Euro Notes due July 2024	517	564
6.500% Senior Secured U.S. Dollar Notes due February 2025	1,094	1,093
4.125% Senior Secured U.S. Dollar Notes due April 2026	744	744
3.500% Senior Secured Euro Notes due June 2026	775	844
6.250% Senior Secured U.S. Dollar Notes due January 2027	745	745
2.375% Senior Secured Euro Notes due April 2028	516	562
5.250% Senior Secured U.S. Dollar Notes due January 2029	744	744
Senior Secured Notes	5,197	5,357

Euro Term Loan Facilities due January 2027	1,029	1,121
Euro Revolving Credit Facility B due July 2024	109	—
U.S. Dollar Revolving Credit Facility A due July 2024	118	—
Long-term debt, less current portion	6,453	6,477

Short-term borrowings	—	52
Total debt	6,453	6,529

Less: Cash and cash equivalents	673	591
Less: Cash and cash equivalents included within assets held for sale	58	—
Less: Debt issuance costs, net – Revolving Credit Facilities due July 2024	—	17
Net debt	5,722	5,922

Note: Net debt is a non-GAAP financial measure

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
*($ in millions, except per share amounts)*
*Unaudited*

	For the three months ended June 30, 2022
				Business
	Global	Global	Digital &	Segment	Corporate	Total IGT
	Lottery	Gaming	Betting	Total	and Other	PLC
Income from continuing operations						34
Benefit from income taxes						(11)
Interest expense, net						75
Foreign exchange gain, net						(19)
Other non-operating expense, net						150
Operating income (loss)	230	57	8	295	(68)	228
Depreciation	43	27	4	74	—	74
Amortization – service revenue ⁽¹⁾	48	—	—	48	—	48
Amortization – non-purchase accounting	6	1	—	7	1	8
Amortization – purchase accounting	—	—	—	—	39	39
Stock-based compensation	2	1	—	4	8	12
Other	—	—	—	—	1	1
Adjusted EBITDA	330	87	12	429	(20)	409


Cash flows from operating activities – continuing operations						196
Capital expenditures						(79)
Free Cash Flow						117

				Pre-Tax Impact	Tax Impact ⁽²⁾⁽³⁾	Net Impact
Reported EPS from continuing operations attributable to IGT PLC – diluted						(0.02)
Adjustments:
Foreign exchange gain, net				(0.09)	0.04	(0.14)
Amortization – purchase accounting				0.19	0.05	0.14
Discrete tax items				—	(0.02)	0.02
DDI / Benson Matter provision				0.74	0.18	0.56
Net adjustments						0.59
Adjusted EPS from continuing operations attributable to IGT PLC – diluted ⁽⁴⁾						0.57

⁽¹⁾ Includes amortization of upfront license fees
⁽²⁾ Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
⁽³⁾ The reported effective tax rate was (50.8)%. Adjusted for the above items, the effective tax rate was 20.3%
⁽⁴⁾ Adjusted EPS was calculated using weighted average shares outstanding of 204.1 million, which includes the dilutive impact of share-based payment awards

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
*($ in millions, except per share amounts)*
*Unaudited*

	For the three months ended June 30, 2021
				Business
	Global	Global	Digital &	Segment	Corporate	Total IGT
	Lottery	Gaming	Betting	Total	and Other	PLC
Loss from continuing operations						(39)
Provision for income taxes						32
Interest expense, net						91
Foreign exchange loss, net						90
Other non-operating expense, net						70
Operating income (loss)	300	1	9	310	(66)	244
Depreciation	49	31	4	83	—	83
Amortization – service revenue ⁽¹⁾	55	—	—	55	—	55
Amortization – non-purchase accounting	9	1	—	10	1	11
Amortization – purchase accounting	—	—	—	—	39	39
Stock-based compensation	2	2	—	3	4	7
Other	—	—	—	—	1	1
Adjusted EBITDA	414	35	13	463	(21)	442


Cash flows from operating activities – continuing operations						249
Capital expenditures						(73)
Free Cash Flow						176

				Pre-Tax Impact	Tax Impact ^{(2) (3)}	Net Impact
Reported EPS from continuing operations attributable to IGT PLC – diluted						(0.48)
Adjustments:
Foreign exchange loss, net				0.44	0.03	0.40
Amortization – purchase accounting				0.19	0.05	0.15
Loss on extinguishment and modifications of debt, net				0.32	—	0.32
Discrete tax items				—	0.08	(0.08)
Other (non-recurring adjustments)				0.01	—	0.01
Net adjustments						0.80
Adjusted EPS from continuing operations attributable to IGT PLC – diluted ⁽⁴⁾						0.32

⁽¹⁾ Includes amortization of upfront license fees
⁽²⁾ Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
⁽³⁾ The reported effective tax rate was (492.1)%. Adjusted for the above items, the effective tax rate was 34.3%
⁽⁴⁾ Adjusted EPS was calculated using weighted average shares outstanding of 206.8 million, which includes the dilutive impact of share-based payment awards

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
*($ in millions, except per share amounts)*
*Unaudited*

	For the six months ended June 30, 2022
				Business
	Global	Global	Digital &	Segment	Corporate	Total
	Lottery	Gaming	Betting	Total	and Other	IGT PLC
Income from continuing operations						151
Provision for income taxes						53
Interest expense, net						151
Foreign exchange gain, net						(22)
Other non-operating expense, net						147
Operating income (loss)	482	108	21	612	(132)	480
Depreciation	87	54	8	148	(1)	148
Amortization – service revenue ⁽¹⁾	100	—	—	100	—	100
Amortization – non-purchase accounting	13	3	—	16	1	17
Amortization – purchase accounting	—	—	—	—	77	77
Stock-based compensation	5	3	—	8	14	22
Other	—	—	—	—	1	1
Adjusted EBITDA	686	168	29	883	(41)	842


Cash flows from operating activities – continuing operations						385
Capital expenditures						(153)
Free Cash Flow						232

				Pre-Tax Impact	Tax Impact ^{(2) (3)}	Net Impact
Reported EPS from continuing operations attributable to IGT PLC – diluted						0.37
Adjustments:
Foreign exchange gain, net				(0.11)	0.08	(0.19)
Amortization – purchase accounting				0.37	0.09	0.28
Discrete tax items				—	(0.15)	0.15
DDI / Benson Matter provision				0.73	0.18	0.56
Net adjustments						0.80
Adjusted EPS from continuing operations attributable to IGT PLC – diluted ⁽⁴⁾						1.17

⁽¹⁾ Includes amortization of upfront license fees
⁽²⁾ Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
⁽³⁾ The reported effective tax rate was 26.0%. Adjusted for the above items, the effective tax rate was 22.8%
⁽⁴⁾ Adjusted EPS was calculated using weighted average shares outstanding of 204.6 million, which includes the dilutive impact of share-based payment awards

International Game Technology PLC
Reconciliation of Non-GAAP Financial Measures
*($ in millions, except per share amounts)*
*Unaudited*

	For the six months ended June 30, 2021
				Business
	Global	Global	Digital &	Segment	Corporate	Total
	Lottery	Gaming	Betting	Total	and Other	IGT PLC
Income from continuing operations						100
Provision for income taxes						181
Interest expense, net						185
Foreign exchange gain, net						(55)
Other non-operating expense, net						94
Operating income (loss)	637	(25)	16	628	(124)	504
Depreciation	96	63	7	166	(1)	165
Amortization – service revenue ⁽¹⁾	110	—	—	110	—	110
Amortization – non-purchase accounting	17	2	—	19	2	21
Amortization – purchase accounting	—	—	—	—	79	79
Stock-based compensation	2	2	—	5	6	11
Other	—	—	—	—	1	1
Adjusted EBITDA	862	44	24	929	(37)	892


Cash flows from operating activities – continuing operations						500
Capital expenditures						(121)
Free Cash Flow						380

				Pre-Tax Impact	Tax Impact ^{(2) (3)}	Net Impact
Reported EPS from continuing operations attributable to IGT PLC – diluted						(0.09)
Adjustments:
Foreign exchange gain, net				(0.27)	0.02	(0.29)
Amortization – purchase accounting				0.38	0.09	0.29
Loss on extinguishment and modifications of debt, net				0.42	—	0.42
Discrete tax items				—	(0.33)	0.33
Other (non-recurring adjustments)				0.01	—	0.01
Net adjustments						0.74
Adjusted EPS from continuing operations attributable to IGT PLC – diluted ⁽⁴⁾						0.65

⁽¹⁾ Includes amortization of upfront license fees
⁽²⁾ Calculated based on nature of item, including any realizable deductions, and statutory tax rate in effect for the relevant jurisdiction
⁽³⁾ The reported effective tax rate was 64.4%. Adjusted for the above items, the effective tax rate was 35.2%
⁽⁴⁾ Adjusted EPS was calculated using weighted average shares outstanding of 206.6 million, which includes the dilutive impact of share-based payment awards

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SOURCE International Game Technology PLC

August 2, 2022 7:00 am

SUNCOKE ENERGY, INC. INCREASES QUARTERLY CASH DIVIDEND TO $0.08 PER SHARE

PR Newswire

LISLE, Ill.
, Aug. 2, 2022 /PRNewswire/ — Today, SunCoke Energy, Inc. (NYSE: SXC) announced that its Board of Directors approved an increased cash dividend of $0.08 per share of the Company’s common stock, representing a 33% increase over the regular quarterly cash dividend of $0.06 per share. The announced dividend is payable on September 1, 2022 to stockholders of record at the close of business on August 18, 2022.

ABOUT SUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to domestic and international customers. Our coke is used in the blast furnace production of steel as well as the foundry production of casted iron, with the majority of sales under long-term, take-or-pay contracts. We also export coke to overseas customers seeking high-quality product for their blast furnaces. Our process utilizes an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and draws upon more than 60 years of cokemaking experience to operate our facilities in Illinois, Indiana, Ohio, Virginia and Brazil. Our logistics business provides export and domestic material handling services to coke, coal, steel, power and other bulk customers. The logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.

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SOURCE SunCoke Energy, Inc.

August 2, 2022 6:59 am

ChromaDex to Report Second Quarter 2022 Financial Results on Wednesday, August 10, 2022

ChromaDex to Report Second Quarter 2022 Financial Results on Wednesday, August 10, 2022

LOS ANGELES–(BUSINESS WIRE)–
ChromaDex Corp. (NASDAQ:CDXC) announced that it will hold a conference call on Wed. August 10, 2022 at 4:30 p.m. ET to discuss its financial results for the second quarter, which ended June 30, 2022. The financial results will be reported in a press release after the close of regular stock market trading hours on the same day as the conference call.

Investor Conference Call:

ChromaDex management will host an investor conference call to discuss the second quarter results and provide a general business update on Wed., August 10, at 4:30 p.m. ET.

Participants should call in at least 10 minutes prior to the call. The dial-in information is as follows:

Date: Wed., August 10, 2022

Time: 4:30 p.m. ET (1:30 p.m. PT)

Toll-free dial-in number: 1-888-330-2446

Conference ID: 4126168

Webcast link: ChromaDex Second Quarter 2022 Earnings Conference Call

The conference call will be broadcast live and available for replay here and via the investor relations section of the Company’s website at www.chromadex.com.

A replay of the conference call will be available from 7:30 p.m. ET on August 10, 2022, to 11:59 p.m. ET on August 17, 2022.

Toll-free replay number: 1-800-770-2030

Replay ID: 4126168

About ChromaDex:

ChromaDex Corp. is a global bioscience company dedicated to healthy aging. The ChromaDex team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (NAD+), levels of which decline with age. ChromaDex is the innovator behind NAD+ precursor nicotinamide riboside (NR), commercialized as the flagship ingredient Niagen®. Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent portfolio. ChromaDex maintains a website at www.chromadex.com to which ChromaDex regularly posts copies of its press releases as well as additional and financial information about the Company.

Forward-Looking Statements:

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities and Exchange Act of 1934. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as “expects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “possible,” “probable,” “believes,” “seeks,” “may,” “will,” “should,” “could,” “predicts,” “projects,” “continue,” “would” or the negative of such terms or other similar expressions. More detailed information about ChromaDex and the risk factors that may affect the realization of forward-looking statements is set forth in ChromaDex’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, ChromaDex’s Quarterly Reports on Form 10-Q and other filings submitted by ChromaDex to the SEC, copies of which may be obtained from the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and actual results may differ materially from those suggested by these forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement and ChromaDex undertakes no obligation to revise or update this release to reflect events or circumstances after the date hereof.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220802005139/en/

ChromaDex Investor Relations Contact:

Brianna Gerber, Vice President of Finance and Investor Relations

949-419-0288 ext. 127

[email protected]

ChromaDex Media Contact:

Kendall Knysch, Director of Media Relations

310-388-6706 ext. 689

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Health Other Science General Health Research Science Pharmaceutical Biotechnology

MEDIA:

Logo

August 2, 2022 6:59 am

Cat Financial Announces Second-Quarter 2022 Results

PR Newswire

NASHVILLE, Tenn.
, Aug. 2, 2022 /PRNewswire/ — Cat Financial reported second-quarter 2022 revenues of $668 million, an increase of $22 million, or 3%, compared with $646 million in the second quarter of 2021. Second-quarter 2022 profit was $143 million, an increase of $1 million, or 1%, compared with $142 million in the second quarter of 2021.

The increase in revenues was primarily due to a $20 million favorable impact from higher average financing rates and an $18 million favorable impact from returned or repossessed equipment, partially offset by a $15 million unfavorable impact from lower average earning assets.

Second-quarter 2022 profit before income taxes was $199 million, an increase of $10 million, or 5%, compared with $189 million in the second quarter of 2021. The increase was primarily due to an $18 million favorable impact from returned or repossessed equipment, partially offset by a $12 million increase in provision for credit losses.

The provision for income taxes reflected an estimated annual tax rate of 26% in the second quarter of 2022, compared with 25% in the second quarter of 2021.

During the second quarter of 2022, retail new business volume was $3.10 billion, a decrease of $429 million, or 12%, from the second quarter of 2021. The decrease was driven by lower volume across all segments with the exception of an increase in Latin America.

At the end of the second quarter of 2022, past dues were 2.19%, compared with 2.58% at the end of the second quarter of 2021. The decrease in past dues was mostly driven by the Caterpillar Power Finance, EAME and North America portfolios. Write-offs, net of recoveries, were less than $1 million for the second quarter of 2022, compared with $54 million for the second quarter of 2021. As of June 30, 2022, the allowance for credit losses totaled $376 million, or 1.41% of finance receivables, compared with $357 million, or 1.29% of finance receivables at March 31, 2022. The increase in allowance for credit losses included a higher reserve for the Russia and Ukraine portfolios. The allowance for credit losses at year-end 2021 was $337 million, or 1.22% of finance receivables.

“Cat Financial’s second-quarter results reflected strong portfolio performance,” said Dave Walton, President of Cat Financial and Senior Vice President with responsibility for the Financial Products Division of Caterpillar Inc. “The global Cat Financial team continues to focus on providing financial services solutions to Caterpillar customers and dealers worldwide.”

About Cat Financial

Cat Financial is a subsidiary of Caterpillar, the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. For more than 40 years, Cat Financial has provided a wide range of financing solutions to customers and Cat® dealers for machines, engines, Solar® gas turbines, genuine Cat parts and services. Headquartered in Nashville, Tennessee, Cat Financial serves customers globally with offices and subsidiaries located throughout North and South America, Asia, Australia, Europe and Africa. Visit cat.com to learn more about Cat Financial.

STATISTICAL HIGHLIGHTS:

SECOND-QUARTER 2022 VS. SECOND-QUARTER 2021 (ENDED JUNE 30, EXCEPT TOTAL ASSETS) (Millions of dollars)

	2022	2021	CHANGE
Revenues	$ 668	$ 646	3 %
Profit Before Income Taxes	$ 199	$ 189	5 %
Profit (excluding profit attributable to noncontrolling interests)	$ 143	$ 142	1 %
Retail New Business Volume	$ 3,095	$ 3,524	(12) %
Total Assets at June 30 and December 31, respectively	$ 31,852	$ 32,387	(2) %

SIX-MONTHS 2022 VS. SIX-MONTHS 2021 (ENDED JUNE 30) (Millions of dollars)

	2022	2021	CHANGE
Revenues	$ 1,320	$ 1,285	3 %
Profit Before Income Taxes	$ 392	$ 385	2 %
Profit (excluding profit attributable to noncontrolling interests)	$ 286	$ 282	1 %
Retail New Business Volume	$ 5,874	$ 6,333	(7) %

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.

Cat Financial’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (ii) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (iii) changes in interest rates, currency fluctuations or market liquidity conditions; (iv) an increase in delinquencies, repossessions or net losses of our customers; (v) residual values of leased equipment; (vi) our compliance with financial and other restrictive covenants in debt agreements; (vii) government monetary or fiscal policies; (viii) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (ix) demand for Caterpillar products; (x) marketing, operational or administrative support received from Caterpillar; (xi) our ability to develop, produce and market quality products that meet our customers’ needs; (xii) information technology security threats and computer crime; (xiii) alleged or actual violations of trade or anti-corruption laws and regulations; (xiv) new regulations or changes in financial services regulations; (xv) additional tax expense or exposure; (xvi) changes in accounting guidance; (xvii) the ongoing global coronavirus pandemic; and (xviii) other factors described in more detail in Cat Financial’s Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

View original content:https://www.prnewswire.com/news-releases/cat-financial-announces-second-quarter-2022-results-301597768.html

SOURCE Cat Financial

August 2, 2022 6:59 am

Caterpillar Reports Second-Quarter 2022 Results

PR Newswire

Second-quarter 2022 sales and revenues increased 11% to $14.2 billion
Second-quarter 2022 profit per share of $3.13; adjusted profit per share of $3.18
Returned $1.7 billion to shareholders through share repurchases and dividends in the quarter

DEERFIELD, Ill.
, Aug. 2, 2022 /PRNewswire/ —

	Second Quarter
($ in billions except profit per share)	2022	2021
Sales and Revenues	$14.2	$12.9
Profit Per Share	$3.13	$2.56
Adjusted Profit Per Share	$3.18	$2.60

Caterpillar Inc. (NYSE: CAT) announced second-quarter 2022 sales and revenues of $14.2 billion, an 11% increase compared with $12.9 billion in the second quarter of 2021. The increase was primarily due to favorable price realization and higher sales volume.

Operating profit margin was 13.6% for the second quarter of 2022, compared with 13.9% for the second quarter of 2021. Second-quarter 2022 profit per share was $3.13, compared with second-quarter 2021 profit per share of $2.56. Adjusted profit per share in the second quarter of 2022 was $3.18, compared with second-quarter 2021 adjusted profit per share of $2.60. Adjusted profit per share for both quarters excluded restructuring costs. Please see a reconciliation of GAAP to non-GAAP financial measures in the appendix on page 13.

For the first half of 2022, enterprise operating cash flow was $2.5 billion. In the quarter, the company repurchased $1.1 billion of Caterpillar common stock and paid dividends of $0.6 billion. The company ended the period with $6.0 billion of enterprise cash.

“Our team delivered another good quarter with double-digit top line and adjusted profit per share growth despite ongoing supply chain challenges,” said Chairman and CEO Jim Umpleby. “Our second-quarter results reflect healthy demand across most of our end markets. We remain focused on executing our strategy for long-term profitable growth.”

CONSOLIDATED RESULTS

Consolidated Sales and Revenues

Consolidated Sales and Revenues Comparison

Second Quarter 2022 vs. Second Quarter 2021

To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar second-quarter 2022 earnings.

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the second quarter of 2021 (at left) and the second quarter of 2022 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees.

Total sales and revenues for the second quarter of 2022 were $14.247 billion, an increase of $1.358 billion, or 11%, compared with $12.889 billion in the second quarter of 2021. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable currency impacts primarily related to the euro, Australian dollar and Japanese yen. The increase in sales volume was driven by services, partially offset by lower sales of equipment to end users.

Sales were higher across the three primary segments.

Sales and Revenues by Segment
(Millions of dollars)	Second Quarter 2021	Sales Volume	Price Realization	Currency	Inter- Segment / Other	Second Quarter 2022	$ Change	% Change

Construction Industries	$ 5,656	$ (25)	$ 535	$ (122)	$ (11)	$ 6,033	$ 377	7 %
Resource Industries	2,547	140	317	(33)	(10)	2,961	414	16 %
Energy & Transportation	4,975	363	260	(103)	210	5,705	730	15 %
All Other Segment	128	4	1	(1)	(14)	118	(10)	(8 %)
Corporate Items and Eliminations	(1,113)	17	(8)	1	(175)	(1,278)	(165)
Machinery, Energy & Transportation	12,193	499	1,105	(258)	—	13,539	1,346	11 %

Financial Products Segment	774	—	—	—	24	798	24	3 %
Corporate Items and Eliminations	(78)	—	—	—	(12)	(90)	(12)
Financial Products Revenues	696	—	—	—	12	708	12	2 %

Consolidated Sales and Revenues	$ 12,889	$ 499	$ 1,105	$ (258)	$ 12	$ 14,247	$ 1,358	11 %

Sales and Revenues by Geographic Region
	North America		Latin America		EAME		Asia/Pacific		External Sales and Revenues		Inter-Segment		Total Sales and Revenues
(Millions of dollars)	$	% Chg	$	% Chg	$	% Chg	$	% Chg	$	% Chg	$	% Chg	$	% Chg
Second Quarter 2022
Construction Industries	$ 3,006	20 %	$ 635	48 %	$ 1,202	(7 %)	$ 1,148	(17 %)	$ 5,991	7 %	$ 42	(21 %)	$ 6,033	7 %
Resource Industries	1,027	29 %	466	(4 %)	489	(7 %)	913	38 %	2,895	17 %	66	(13 %)	2,961	16 %
Energy & Transportation	2,277	14 %	382	53 %	1,215	2 %	766	12 %	4,640	13 %	1,065	25 %	5,705	15 %
All Other Segment	18	64 %	—	(100 %)	5	25 %	15	(17 %)	38	12 %	80	(15 %)	118	(8 %)
Corporate Items and Eliminations	(20)		(2)		—		(3)		(25)		(1,253)		(1,278)
Machinery, Energy & Transportation	6,308	20 %	1,481	27 %	2,911	(3 %)	2,839	4 %	13,539	11 %	—	— %	13,539	11 %

Financial Products Segment	505	3 %	87	34 %	97	1 %	109	(13 %)	798	3 %	—	— %	798	3 %
Corporate Items and Eliminations	(42)		(21)		(10)		(17)		(90)		—		(90)
Financial Products Revenues	463	3 %	66	22 %	87	— %	92	(12 %)	708	2 %	—	— %	708	2 %

Consolidated Sales and Revenues	$ 6,771	18 %	$ 1,547	27 %	$ 2,998	(3 %)	$ 2,931	3 %	$ 14,247	11 %	$ —	— %	$ 14,247	11 %

Second Quarter 2021
Construction Industries	$ 2,498		$ 430		$ 1,291		$ 1,384		$ 5,603		$ 53		$ 5,656
Resource Industries	799		487		525		660		2,471		76		2,547
Energy & Transportation	1,992		250		1,196		682		4,120		855		4,975
All Other Segment	11		1		4		18		34		94		128
Corporate Items and Eliminations	(31)		(1)		(1)		(2)		(35)		(1,078)		(1,113)
Machinery, Energy & Transportation	5,269		1,167		3,015		2,742		12,193		—		12,193

Financial Products Segment	488		65		96		125		774		—		774
Corporate Items and Eliminations	(38)		(11)		(9)		(20)		(78)		—		(78)
Financial Products Revenues	450		54		87		105		696		—		696

Consolidated Sales and Revenues	$ 5,719		$ 1,221		$ 3,102		$ 2,847		$ 12,889		$ —		$ 12,889

Consolidated Operating Profit

Consolidated Operating Profit Comparison

Second Quarter 2022 vs. Second Quarter 2021

To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar second-quarter 2022 earnings.

The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2021 (at left) and the second quarter of 2022 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation’s other operating (income) expenses.

Operating profit for the second quarter of 2022 was $1.944 billion, an increase of $155 million, or 9%, compared with $1.789 billion in the second quarter of 2021. The increase was primarily due to favorable price realization and higher sales volume, partially offset by higher manufacturing costs and higher selling, general and administrative (SG&A) and research and development (R&D) expenses. Unfavorable manufacturing costs largely reflected higher material and freight costs. The increase in SG&A/R&D expenses was mainly driven by investments aligned with the company’s strategy for profitable growth and higher short-term incentive compensation expense.

Profit (Loss) by Segment
(Millions of dollars)	Second Quarter 2022	Second Quarter 2021	$ Change	% Change
Construction Industries	$ 989	$ 1,029	$ (40)	(4 %)
Resource Industries	355	349	6	2 %
Energy & Transportation	659	738	(79)	(11 %)
All Other Segment	31	(10)	41	n/a
Corporate Items and Eliminations	(230)	(453)	223
Machinery, Energy & Transportation	1,804	1,653	151	9 %

Financial Products Segment	217	243	(26)	(11 %)
Corporate Items and Eliminations	17	(29)	46
Financial Products	234	214	20	9 %

Consolidating Adjustments	(94)	(78)	(16)

Consolidated Operating Profit	$ 1,944	$ 1,789	$ 155	9 %
Corporate Items and Eliminations included corporate-level expenses, timing differences (as some expenses are reported in segment profit on a cash basis), methodology differences between segment and consolidated external reporting (the company values segment inventories and cost of sales using a current cost methodology), certain restructuring costs and inter-segment eliminations.

Other Profit/Loss and Tax Items

Other income (expense) in the second quarter of 2022 was income of $260 million, compared with income of $201 million in the second quarter of 2021. The change was primarily driven by favorable impacts from foreign currency exchange, partially offset by unfavorable impacts from commodity hedges, unrealized losses on marketable securities and lower pension and other postemployment benefit (OPEB) plan income.
The provision for income taxes for the second quarter of 2022 reflected an estimated annual global tax rate of approximately 24%, compared with 26% for the second quarter of 2021, excluding the discrete items discussed below. The comparative tax rate for full-year 2021 was 23%.
In the second quarter of 2022, the company recorded discrete tax benefits of $55 million, primarily for a prior year tax adjustment due to a change in estimate, compared with a $17 million benefit in the second quarter of 2021 for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense.

CONSTRUCTION INDUSTRIES
(Millions of dollars)
Segment Sales
	Second Quarter 2021	Sales Volume	Price Realization	Currency	Inter- Segment	Second Quarter 2022	$ Change	% Change
Total Sales	$ 5,656	$ (25)	$ 535	$ (122)	$ (11)	$ 6,033	$ 377	7 %

Sales by Geographic Region
	Second Quarter 2022	Second Quarter 2021	$ Change	% Change
North America	$ 3,006	$ 2,498	$ 508	20 %
Latin America	635	430	205	48 %
EAME	1,202	1,291	(89)	(7 %)
Asia/Pacific	1,148	1,384	(236)	(17 %)
External Sales	5,991	5,603	388	7 %
Inter-segment	42	53	(11)	(21 %)
Total Sales	$ 6,033	$ 5,656	$ 377	7 %

Segment Profit
	Second Quarter 2022	Second Quarter 2021	Change	% Change
Segment Profit	$ 989	$ 1,029	$ (40)	(4 %)
Segment Profit Margin	16.4 %	18.2 %	(1.8 pts)

Construction Industries’ total sales were $6.033 billion in the second quarter of 2022, an increase of $377 million, or 7%, compared with $5.656 billion in the second quarter of 2021. The increase was due to favorable price realization, partially offset by unfavorable currency impacts primarily related to the euro, Japanese yen and Australian dollar. Sales volume decreased slightly as lower sales of equipment to end users was mostly offset by higher sales of aftermarket parts.

In North America, sales increased due to favorable price realization and higher sales volume. Higher sales volume was driven by the impact from changes in dealer inventories. Dealer inventory decreased more during the second quarter of 2021 than during the second quarter of 2022.
Sales increased in Latin America primarily due to higher sales volume and favorable price realization. Higher sales volume was driven by higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2022, compared with an increase during the second quarter of 2021.
In EAME, sales decreased due to lower sales volume and unfavorable currency impacts primarily related to the euro, partially offset by favorable price realization. Lower sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2022, compared with an increase during the second quarter of 2021.
Sales decreased in Asia/Pacific mainly due to lower sales volume and unfavorable currency impacts primarily related to the Japanese yen and Australian dollar, partially offset by favorable price realization. Lower sales volume was driven by lower sales of equipment to end users, primarily in China.

Construction Industries’ profit was $989 million in the second quarter of 2022, a decrease of $40 million, or 4%, compared with $1.029 billion in the second quarter of 2021. Favorable price realization was offset by unfavorable manufacturing costs and lower sales volume. Unfavorable manufacturing costs largely reflected higher material and freight costs.

RESOURCE INDUSTRIES
(Millions of dollars)
Segment Sales
	Second Quarter 2021	Sales Volume	Price Realization	Currency	Inter- Segment	Second Quarter 2022	$ Change	% Change
Total Sales	$ 2,547	$ 140	$ 317	$ (33)	$ (10)	$ 2,961	$ 414	16 %

Sales by Geographic Region
	Second Quarter 2022	Second Quarter 2021	$ Change	% Change
North America	$ 1,027	$ 799	$ 228	29 %
Latin America	466	487	(21)	(4 %)
EAME	489	525	(36)	(7 %)
Asia/Pacific	913	660	253	38 %
External Sales	2,895	2,471	424	17 %
Inter-segment	66	76	(10)	(13 %)
Total Sales	$ 2,961	$ 2,547	$ 414	16 %

Segment Profit
	Second Quarter 2022	Second Quarter 2021	Change	% Change
Segment Profit	$ 355	$ 349	$ 6	2 %
Segment Profit Margin	12.0 %	13.7 %	(1.7 pts)

Resource Industries’ total sales were $2.961 billion in the second quarter of 2022, an increase of $414 million, or 16%, compared with $2.547 billion in the second quarter of 2021. The increase was primarily due to favorable price realization and higher sales volume. The increase in sales volume was due to higher sales of aftermarket parts.

Resource Industries’ profit was $355 million in the second quarter of 2022, an increase of $6 million, or 2%, compared with $349 million in the second quarter of 2021. Unfavorable manufacturing costs were offset by favorable price realization and higher sales volume. Unfavorable manufacturing costs largely reflected higher material and freight costs.

ENERGY & TRANSPORTATION
(Millions of dollars)
Segment Sales
	Second Quarter 2021	Sales Volume	Price Realization	Currency	Inter- Segment	Second Quarter 2022	$ Change	% Change
Total Sales	$ 4,975	$ 363	$ 260	$ (103)	$ 210	$ 5,705	$ 730	15 %

Sales by Application
	Second Quarter 2022	Second Quarter 2021	$ Change	% Change
Oil and Gas	$ 1,232	$ 1,137	$ 95	8 %
Power Generation	1,186	1,052	134	13 %
Industrial	1,117	899	218	24 %
Transportation	1,105	1,032	73	7 %
External Sales	4,640	4,120	520	13 %
Inter-segment	1,065	855	210	25 %
Total Sales	$ 5,705	$ 4,975	$ 730	15 %

Segment Profit
	Second Quarter 2022	Second Quarter 2021	Change	% Change
Segment Profit	$ 659	$ 738	$ (79)	(11 %)
Segment Profit Margin	11.6 %	14.8 %	(3.2 pts)

Energy & Transportation’s total sales were $5.705 billion in the second quarter of 2022, an increase of $730 million, or 15%, compared with $4.975 billion in the second quarter of 2021. Sales increased across all applications and inter-segment sales.

Oil and Gas – Sales increased due to higher sales of reciprocating engine aftermarket parts and engines used in well servicing and gas compression applications, primarily in North America, partially offset by lower sales for turbines and turbine-related services.
Power Generation – Sales rose due to higher sales volume in small reciprocating engine applications, reciprocating engine aftermarket parts and turbines and turbine-related services.
Industrial – Sales were up due to higher sales volumes across all regions.
Transportation – Sales increased in reciprocating engines aftermarket parts and rail services.

Energy & Transportation’s profit was $659 million in the second quarter of 2022, a decrease of $79 million, or 11%, compared with $738 million in the second quarter of 2021. The decrease was mainly due to unfavorable manufacturing costs and higher SG&A/R&D expenses, partially offset by favorable price realization and higher sales volume. Unfavorable manufacturing costs largely reflected higher material and freight costs. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives and higher short-term incentive compensation expense.

FINANCIAL PRODUCTS SEGMENT
(Millions of dollars)
Revenues by Geographic Region
	Second Quarter 2022	Second Quarter 2021	$ Change	% Change
North America	$ 505	$ 488	$ 17	3 %
Latin America	87	65	22	34 %
EAME	97	96	1	1 %
Asia/Pacific	109	125	(16)	(13 %)
Total Revenues	$ 798	$ 774	$ 24	3 %

Segment Profit
	Second Quarter 2022	Second Quarter 2021	Change	% Change
Segment Profit	$ 217	$ 243	$ (26)	(11 %)

Financial Products’ segment revenues were $798 million in the second quarter of 2022, an increase of $24 million, or 3%, compared with $774 million in the second quarter of 2021.The increase was primarily due to a favorable impact from returned or repossessed equipment in North America and higher average financing rates in Latin America, partially offset by lower average earning assets in Asia/Pacific.

Financial Products’ segment profit was $217 million in the second quarter of 2022, a decrease of $26 million, or 11%, compared with $243 million in the second quarter of 2021. The decrease was mainly due to an unfavorable impact from equity securities in Insurance Services and a higher provision for credit losses at Cat Financial, partially offset by a favorable impact from returned or repossessed equipment.

At the end of the second quarter of 2022, past dues at Cat Financial were 2.19%, compared with 2.58% at the end of the second quarter of 2021. The decrease in past dues was mostly driven by the Caterpillar Power Finance, EAME and North America portfolios. Write-offs, net of recoveries, were less than $1 million for the second quarter of 2022, compared with $54 million for the second quarter of 2021. As of June 30, 2022, Cat Financial’s allowance for credit losses totaled $376 million, or 1.41% of finance receivables, compared with $357 million, or 1.29% of finance receivables at March 31, 2022. The increase in allowance for credit losses included a higher reserve for the Russia and Ukraine portfolios. The allowance for credit losses at year-end 2021 was $337 million, or 1.22% of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $213 million in the second quarter of 2022, a decrease of $269 million from the second quarter of 2021, primarily driven by lower expenses due to timing differences, favorable impacts of segment reporting methodology and a favorable change in fair value adjustments related to deferred compensation plans, partially offset by higher corporate costs.

Notes

i.
Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx.

ii.
Sales of equipment to end users is demonstrated by the company’s Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on Tuesday, August 2, 2022.

iii.
Information on non-GAAP financial measures is included in the appendix on page 13.

iv.
Some amounts within this report are rounded to the millions or billions and may not add.

v.
Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Tuesday, August 2, 2022, to discuss its 2022 second-quarter results. The accompanying slides will be available before the webcast on the Caterpillar website at https://investors.caterpillar.com/events-presentations/default.aspx.

About Caterpillar

With 2021 sales and revenues of $51.0 billion, Caterpillar Inc. is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. For nearly 100 years, we’ve been helping customers build a better, more sustainable world and are committed and contributing to a reduced-carbon future. Our innovative products and services, backed by our global dealer network, provide exceptional value that helps customers succeed. Caterpillar does business on every continent, principally operating through three primary segments – Construction Industries, Resource Industries and Energy & Transportation – and providing financing and related services through our Financial Products segment. Visit us at caterpillar.com or join the conversation on our social media channels at caterpillar.com/en/news/social-media.html.

Caterpillar’s latest financial results are also available online:

https://investors.caterpillar.com/overview/default.aspx

https://investors.caterpillar.com/financials/quarterly-results/default.aspx
(live broadcast/replays of quarterly conference call)

Forward-Looking Statements

Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “forecast,” “target,” “guide,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.

Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers’ needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment’s risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial’s customers; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) other factors described in more detail in Caterpillar’s Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

APPENDIX

NON-GAAP FINANCIAL MEASURES

The following definitions are provided for the non-GAAP financial measures. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures.

The company believes it is important to separately quantify the profit impact of one significant item in order for the company’s results to be meaningful to readers. This item consists of (i) restructuring costs, which were incurred to generate longer-term benefits. The company does not consider this item indicative of earnings from ongoing business activities and believes the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing the company’s period-over-period results. The company intends to discuss adjusted profit per share for the fourth quarter and full-year 2022, excluding mark-to-market gains or losses for remeasurement of pension and other postemployment benefit plans along with any other discrete items.

Reconciliations of adjusted results to the most directly comparable GAAP measure are as follows:

(Dollars in millions except per share data)	Operating Profit	Operating Profit Margin	Profit Before Taxes	Provision (Benefit) for Income Taxes	Effective Tax Rate	Profit	Profit per Share

Three Months Ended June 30, 2022 – U.S. GAAP	$ 1,944	13.6 %	$ 2,096	$ 427	20.4 %	$ 1,673	$ 3.13
Restructuring costs	28	0.2 %	28	2	10.0 %	26	$ 0.05
Three Months Ended June 30, 2022 – Adjusted	$ 1,972	13.8 %	$ 2,124	$ 429	20.2 %	$ 1,699	$ 3.18
Three Months Ended June 30, 2021 – U.S. GAAP	$ 1,789	13.9 %	$ 1,870	$ 470	25.1 %	$ 1,413	$ 2.56
Restructuring costs	25	0.2 %	25	3	15.0 %	22	$ 0.04
Three Months Ended June 30, 2021 – Adjusted	$ 1,814	14.1 %	$ 1,895	$ 473	25.0 %	$ 1,435	$ 2.60

Supplemental Consolidating Data

The company is providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows:

Consolidated – Caterpillar Inc. and its subsidiaries.

Machinery, Energy & Transportation (ME&T) – The company defines ME&T as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T’s information relates to the design, manufacturing and marketing of its products.

Financial Products – The company defines Financial Products as it is presented in the supplemental data as its finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products’ information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.

Consolidating Adjustments – Eliminations of transactions between ME&T and Financial Products.

The nature of the ME&T and Financial Products businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. The company believes this presentation will assist readers in understanding its business.

Pages 14 to 24 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information.

Caterpillar Inc. Condensed Consolidated Statement of Results of Operations (Unaudited) (Dollars in millions except per share data)

	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Sales and revenues:
Sales of Machinery, Energy & Transportation	$ 13,539	$ 12,193	$ 26,425	$ 23,384
Revenues of Financial Products	708	696	1,411	1,392
Total sales and revenues	14,247	12,889	27,836	24,776

Operating costs:
Cost of goods sold	9,975	8,881	19,534	16,893
Selling, general and administrative expenses	1,425	1,364	2,771	2,603
Research and development expenses	480	446	937	820
Interest expense of Financial Products	120	116	226	241
Other operating (income) expenses	303	293	569	616
Total operating costs	12,303	11,100	24,037	21,173

Operating profit	1,944	1,789	3,799	3,603

Interest expense excluding Financial Products	108	120	217	262
Other income (expense)	260	201	513	526

Consolidated profit before taxes	2,096	1,870	4,095	3,867

Provision (benefit) for income taxes	427	470	896	945
Profit of consolidated companies	1,669	1,400	3,199	2,922

Equity in profit (loss) of unconsolidated affiliated companies	4	14	11	23

Profit of consolidated and affiliated companies	1,673	1,414	3,210	2,945

Less: Profit (loss) attributable to noncontrolling interests	—	1	—	2

Profit ¹	$ 1,673	$ 1,413	$ 3,210	$ 2,943


Profit per common share	$ 3.15	$ 2.58	$ 6.03	$ 5.38
Profit per common share — diluted ²	$ 3.13	$ 2.56	$ 5.99	$ 5.33

Weighted-average common shares outstanding (millions)
– Basic	531.0	547.9	532.6	547.1
– Diluted ²	534.1	552.1	536.1	551.8

1	Profit attributable to common shareholders.
2	Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

Caterpillar Inc. Condensed Consolidated Statement of Financial Position (Unaudited) (Millions of dollars)

	June 30, 2022	December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$ 6,014	$ 9,254
Receivables – trade and other	8,393	8,477
Receivables – finance	8,922	8,898
Prepaid expenses and other current assets	2,772	2,788
Inventories	15,881	14,038
Total current assets	41,982	43,455

Property, plant and equipment – net	11,744	12,090
Long-term receivables – trade and other	1,197	1,204
Long-term receivables – finance	12,372	12,707
Noncurrent deferred and refundable income taxes	2,121	1,840
Intangible assets	889	1,042
Goodwill	6,195	6,324
Other assets	4,607	4,131
Total assets	$ 81,107	$ 82,793

Liabilities
Current liabilities:
Short-term borrowings:
— Machinery, Energy & Transportation	$ —	$ 9
— Financial Products	5,002	5,395
Accounts payable	8,092	8,154
Accrued expenses	3,782	3,757
Accrued wages, salaries and employee benefits	1,772	2,242
Customer advances	1,608	1,087
Dividends payable	633	595
Other current liabilities	2,333	2,256
Long-term debt due within one year:
— Machinery, Energy & Transportation	124	45
— Financial Products	5,617	6,307
Total current liabilities	28,963	29,847

Long-term debt due after one year:
— Machinery, Energy & Transportation	9,589	9,746
— Financial Products	16,630	16,287
Liability for postemployment benefits	5,160	5,592
Other liabilities	5,006	4,805
Total liabilities	65,348	66,277

Shareholders’ equity
Common stock	6,464	6,398
Treasury stock	(29,501)	(27,643)
Profit employed in the business	41,263	39,282
Accumulated other comprehensive income (loss)	(2,499)	(1,553)
Noncontrolling interests	32	32
Total shareholders’ equity	15,759	16,516
Total liabilities and shareholders’ equity	$ 81,107	$ 82,793

Caterpillar Inc. Condensed Consolidated Statement of Cash Flow (Unaudited) (Millions of dollars)

	Six Months Ended June 30,
	2022	2021
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$ 3,210	$ 2,945
Adjustments for non-cash items:
Depreciation and amortization	1,110	1,173
Provision (benefit) for deferred income taxes	(283)	68
Other	49	(20)
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other	283	(343)
Inventories	(2,003)	(1,179)
Accounts payable	427	893
Accrued expenses	(80)	22
Accrued wages, salaries and employee benefits	(445)	618
Customer advances	514	49
Other assets – net	86	(47)
Other liabilities – net	(322)	(133)
Net cash provided by (used for) operating activities	2,546	4,046
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others	(586)	(419)
Expenditures for equipment leased to others	(688)	(681)
Proceeds from disposals of leased assets and property, plant and equipment	468	636
Additions to finance receivables	(6,705)	(6,203)
Collections of finance receivables	6,519	5,580
Proceeds from sale of finance receivables	21	27
Investments and acquisitions (net of cash acquired)	(36)	(398)
Proceeds from sale of businesses and investments (net of cash sold)	1	28
Proceeds from sale of securities	1,204	276
Investments in securities	(2,118)	(500)
Other – net	32	(63)
Net cash provided by (used for) investing activities	(1,888)	(1,717)
Cash flow from financing activities:
Dividends paid	(1,187)	(1,126)
Common stock issued, including treasury shares reissued	4	123
Common shares repurchased	(1,924)	(251)
Proceeds from debt issued (original maturities greater than three months)	4,015	4,906
Payments on debt (original maturities greater than three months)	(4,246)	(5,966)
Short-term borrowings – net (original maturities three months or less)	(553)	1,460
Other – net	—	(2)
Net cash provided by (used for) financing activities	(3,891)	(856)
Effect of exchange rate changes on cash	(7)	3
Increase (decrease) in cash, cash equivalents and restricted cash	(3,240)	1,476
Cash, cash equivalents and restricted cash at beginning of period	9,263	9,366
Cash, cash equivalents and restricted cash at end of period	$ 6,023	$ 10,842

Cash equivalents primarily represent short-term, highly liquid investments with original maturities of generally three months or less.

Caterpillar Inc. Supplemental Data for Results of Operations For the Three Months Ended June 30, 2022 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation	$ 13,539	$ 13,539	$ —	$ —
Revenues of Financial Products	708	—	828	(120)	¹
Total sales and revenues	14,247	13,539	828	(120)

Operating costs:
Cost of goods sold	9,975	9,978	—	(3)	²
Selling, general and administrative expenses	1,425	1,261	167	(3)	²
Research and development expenses	480	480	—	—
Interest expense of Financial Products	120	—	120	—
Other operating (income) expenses	303	16	307	(20)	²
Total operating costs	12,303	11,735	594	(26)

Operating profit	1,944	1,804	234	(94)

Interest expense excluding Financial Products	108	108	—	—
Other income (expense)	260	180	(14)	94	³

Consolidated profit before taxes	2,096	1,876	220	—

Provision (benefit) for income taxes	427	374	53	—
Profit of consolidated companies	1,669	1,502	167	—

Equity in profit (loss) of unconsolidated affiliated companies	4	7	—	(3)	⁴

Profit of consolidated and affiliated companies	1,673	1,509	167	(3)

Less: Profit (loss) attributable to noncontrolling interests	—	—	3	(3)	⁵

Profit ⁶	$ 1,673	$ 1,509	$ 164	$ —

1	Elimination of Financial Products’ revenues earned from ME&T.
2	Elimination of net expenses recorded by ME&T paid to Financial Products.
3	Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4	Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
5	Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6	Profit attributable to common shareholders.

Caterpillar Inc. Supplemental Data for Results of Operations For the Three Months Ended June 30, 2021 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation	$ 12,193	$ 12,193	$ —	$ —
Revenues of Financial Products	696	—	796	(100)	¹
Total sales and revenues	12,889	12,193	796	(100)

Operating costs:
Cost of goods sold	8,881	8,884	—	(3)	²
Selling, general and administrative expenses	1,364	1,210	159	(5)	²
Research and development expenses	446	446	—	—
Interest expense of Financial Products	116	—	116	—
Other operating (income) expenses	293	—	307	(14)	²
Total operating costs	11,100	10,540	582	(22)

Operating profit	1,789	1,653	214	(78)

Interest expense excluding Financial Products	120	120	—	—
Other income (expense)	201	445	28	(272)	³

Consolidated profit before taxes	1,870	1,978	242	(350)

Provision (benefit) for income taxes	470	415	55	—
Profit of consolidated companies	1,400	1,563	187	(350)

Equity in profit (loss) of unconsolidated affiliated companies	14	17	—	(3)	⁴

Profit of consolidated and affiliated companies	1,414	1,580	187	(353)

Less: Profit (loss) attributable to noncontrolling interests	1	1	3	(3)	⁵

Profit ⁶	$ 1,413	$ 1,579	$ 184	$ (350)

1	Elimination of Financial Products’ revenues earned from ME&T.
2	Elimination of net expenses recorded by ME&T paid to Financial Products.
3	Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4	Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
5	Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6	Profit attributable to common shareholders.

Caterpillar Inc. Supplemental Data for Results of Operations For the Six Months Ended June 30, 2022 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation	$ 26,425	$ 26,425	$ —	$ —
Revenues of Financial Products	1,411	—	1,641	(230)	¹
Total sales and revenues	27,836	26,425	1,641	(230)

Operating costs:
Cost of goods sold	19,534	19,538	—	(4)	²
Selling, general and administrative expenses	2,771	2,443	339	(11)	²
Research and development expenses	937	937	—	—
Interest expense of Financial Products	226	—	226	—
Other operating (income) expenses	569	(12)	621	(40)	²
Total operating costs	24,037	22,906	1,186	(55)

Operating profit	3,799	3,519	455	(175)

Interest expense excluding Financial Products	217	217	—	—
Other income (expense)	513	337	1	175	³

Consolidated profit before taxes	4,095	3,639	456	—

Provision (benefit) for income taxes	896	786	110	—
Profit of consolidated companies	3,199	2,853	346	—

Equity in profit (loss) of unconsolidated affiliated companies	11	15	—	(4)	⁴

Profit of consolidated and affiliated companies	3,210	2,868	346	(4)

Less: Profit (loss) attributable to noncontrolling interests	—	—	4	(4)	⁵

Profit ⁶	$ 3,210	$ 2,868	$ 342	$ —

1	Elimination of Financial Products’ revenues earned from ME&T.
2	Elimination of net expenses recorded by ME&T paid to Financial Products.
3	Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4	Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
5	Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6	Profit attributable to common shareholders.

Caterpillar Inc. Supplemental Data for Results of Operations For the Six Months Ended June 30, 2021 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation	$ 23,384	$ 23,384	$ —	$ —
Revenues of Financial Products	1,392	—	1,584	(192)	¹
Total sales and revenues	24,776	23,384	1,584	(192)

Operating costs:
Cost of goods sold	16,893	16,897	—	(4)	²
Selling, general and administrative expenses	2,603	2,324	283	(4)	²
Research and development expenses	820	820	—	—
Interest expense of Financial Products	241	—	241	—
Other operating (income) expenses	616	26	621	(31)	²
Total operating costs	21,173	20,067	1,145	(39)

Operating profit	3,603	3,317	439	(153)

Interest expense excluding Financial Products	262	262	—	—
Other income (expense)	526	676	47	(197)	³

Consolidated profit before taxes	3,867	3,731	486	(350)

Provision (benefit) for income taxes	945	827	118	—
Profit of consolidated companies	2,922	2,904	368	(350)

Equity in profit (loss) of unconsolidated affiliated companies	23	29	—	(6)	⁴

Profit of consolidated and affiliated companies	2,945	2,933	368	(356)

Less: Profit (loss) attributable to noncontrolling interests	2	2	6	(6)	⁵

Profit ⁶	$ 2,943	$ 2,931	$ 362	$ (350)

1	Elimination of Financial Products’ revenues earned from ME&T.
2	Elimination of net expenses recorded by ME&T paid to Financial Products.
3	Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4	Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
5	Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6	Profit attributable to common shareholders.

Caterpillar Inc. Supplemental Data for Financial Position At June 30, 2022 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents	$ 6,014	$ 5,213	$ 801	$ —
Receivables – trade and other	8,393	3,422	541	4,430	^1,2
Receivables – finance	8,922	—	13,499	(4,577)	²
Prepaid expenses and other current assets	2,772	2,706	320	(254)	³
Inventories	15,881	15,881	—	—
Total current assets	41,982	27,222	15,161	(401)

Property, plant and equipment – net	11,744	7,852	3,892	—
Long-term receivables – trade and other	1,197	324	398	475	^1,2
Long-term receivables – finance	12,372	—	12,877	(505)	²
Noncurrent deferred and refundable income taxes	2,121	2,644	109	(632)	⁴
Intangible assets	889	889	—	—
Goodwill	6,195	6,195	—	—
Other assets	4,607	3,801	2,005	(1,199)	⁵
Total assets	$ 81,107	$ 48,927	$ 34,442	$ (2,262)

Liabilities
Current liabilities:
Short-term borrowings	$ 5,002	$ —	$ 5,002	$ —
Accounts payable	8,092	8,008	231	(147)	⁶
Accrued expenses	3,782	3,398	384	—
Accrued wages, salaries and employee benefits	1,772	1,737	35	—
Customer advances	1,608	1,608	—	—
Dividends payable	633	633	—	—
Other current liabilities	2,333	1,865	745	(277)	^4,7
Long-term debt due within one year	5,741	124	5,617	—
Total current liabilities	28,963	17,373	12,014	(424)

Long-term debt due after one year	26,219	9,619	16,630	(30)	⁸
Liability for postemployment benefits	5,160	5,160	—	—
Other liabilities	5,006	4,179	1,517	(690)	⁴
Total liabilities	65,348	36,331	30,161	(1,144)

Shareholders’ equity
Common stock	6,464	6,464	919	(919)	⁹
Treasury stock	(29,501)	(29,501)	—	—
Profit employed in the business	41,263	37,029	4,223	11	⁹
Accumulated other comprehensive income (loss)	(2,499)	(1,430)	(1,069)	—
Noncontrolling interests	32	34	208	(210)	⁹
Total shareholders’ equity	15,759	12,596	4,281	(1,118)
Total liabilities and shareholders’ equity	$ 81,107	$ 48,927	$ 34,442	$ (2,262)

1	Elimination of receivables between ME&T and Financial Products.
2	Reclassification of ME&T’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables.
3	Elimination of ME&T’s insurance premiums that are prepaid to Financial Products.
4	Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
5	Elimination of other intercompany assets between ME&T and Financial Products.
6	Elimination of payables between ME&T and Financial Products.
7	Elimination of prepaid insurance in Financial Products’ other liabilities.
8	Elimination of debt between ME&T and Financial Products.
9	Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries.

Caterpillar Inc. Supplemental Data for Financial Position At December 31, 2021 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents	$ 9,254	$ 8,428	$ 826	$ —
Receivables – trade and other	8,477	3,279	435	4,763	^1,2
Receivables – finance	8,898	—	13,828	(4,930)	²
Prepaid expenses and other current assets	2,788	2,567	358	(137)	³
Inventories	14,038	14,038	—	—
Total current assets	43,455	28,312	15,447	(304)

Property, plant and equipment – net	12,090	8,172	3,918	—
Long-term receivables – trade and other	1,204	375	204	625	^1,2
Long-term receivables – finance	12,707	—	13,358	(651)	²
Noncurrent deferred and refundable income taxes	1,840	2,396	105	(661)	⁴
Intangible assets	1,042	1,042	—	—
Goodwill	6,324	6,324	—	—
Other assets	4,131	3,388	1,952	(1,209)	⁵
Total assets	$ 82,793	$ 50,009	$ 34,984	$ (2,200)

Liabilities
Current liabilities:
Short-term borrowings	$ 5,404	$ 9	$ 5,395	$ —
Accounts payable	8,154	8,079	242	(167)	⁶
Accrued expenses	3,757	3,385	372	—
Accrued wages, salaries and employee benefits	2,242	2,186	56	—
Customer advances	1,087	1,086	1	—
Dividends payable	595	595	—	—
Other current liabilities	2,256	1,773	642	(159)	^4,7
Long-term debt due within one year	6,352	45	6,307	—
Total current liabilities	29,847	17,158	13,015	(326)

Long-term debt due after one year	26,033	9,772	16,287	(26)	⁸
Liability for postemployment benefits	5,592	5,592	—	—
Other liabilities	4,805	4,106	1,425	(726)	⁴
Total liabilities	66,277	36,628	30,727	(1,078)

Shareholders’ equity
Common stock	6,398	6,398	919	(919)	⁹
Treasury stock	(27,643)	(27,643)	—	—
Profit employed in the business	39,282	35,390	3,881	11	⁹
Accumulated other comprehensive income (loss)	(1,553)	(799)	(754)	—
Noncontrolling interests	32	35	211	(214)	⁹
Total shareholders’ equity	16,516	13,381	4,257	(1,122)
Total liabilities and shareholders’ equity	$ 82,793	$ 50,009	$ 34,984	$ (2,200)

1	Elimination of receivables between ME&T and Financial Products.
2	Reclassification of ME&T’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables.
3	Elimination of ME&T’s insurance premiums that are prepaid to Financial Products.
4	Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
5	Elimination of other intercompany assets between ME&T and Financial Products.
6	Elimination of payables between ME&T and Financial Products.
7	Elimination of prepaid insurance in Financial Products’ other liabilities.
8	Elimination of debt between ME&T and Financial Products.
9	Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries.

Caterpillar Inc. Supplemental Data for Cash Flow For the Six Months Ended June 30, 2022 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$ 3,210	$ 2,868	$ 346	$ (4)	¹
Adjustments for non-cash items:
Depreciation and amortization	1,110	715	395	—
Provision (benefit) for deferred income taxes	(283)	(232)	(51)	—
Other	49	(54)	(93)	196	²
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other	283	(32)	12	303	^2,3
Inventories	(2,003)	(2,003)	—	—
Accounts payable	427	396	11	20	²
Accrued expenses	(80)	(89)	9	—
Accrued wages, salaries and employee benefits	(445)	(428)	(17)	—
Customer advances	514	515	(1)	—
Other assets – net	86	(44)	(25)	155	²
Other liabilities – net	(322)	(323)	149	(148)	²
Net cash provided by (used for) operating activities	2,546	1,289	735	522
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others	(586)	(583)	(5)	2	²
Expenditures for equipment leased to others	(688)	(11)	(683)	6	²
Proceeds from disposals of leased assets and property, plant and equipment	468	43	433	(8)	²
Additions to finance receivables	(6,705)	—	(7,175)	470	³
Collections of finance receivables	6,519	—	6,896	(377)	³
Net intercompany purchased receivables	—	—	615	(615)	³
Proceeds from sale of finance receivables	21	—	21	—
Net intercompany borrowings	—	—	3	(3)	⁴
Investments and acquisitions (net of cash acquired)	(36)	(36)	—	—
Proceeds from sale of businesses and investments (net of cash sold)	1	1	—	—
Proceeds from sale of securities	1,204	1,014	190	—
Investments in securities	(2,118)	(1,724)	(394)	—
Other – net	32	58	(26)	—
Net cash provided by (used for) investing activities	(1,888)	(1,238)	(125)	(525)
Cash flow from financing activities:
Dividends paid	(1,187)	(1,187)	—	—
Common stock issued, including treasury shares reissued	4	4	—	—
Common shares repurchased	(1,924)	(1,924)	—	—
Net intercompany borrowings	—	(3)	—	3	⁴
Proceeds from debt issued > 90 days	4,015	—	4,015	—
Payments on debt > 90 days	(4,246)	(13)	(4,233)	—
Short-term borrowings – net < 90 days	(553)	(141)	(412)	—
Net cash provided by (used for) financing activities	(3,891)	(3,264)	(630)	3
Effect of exchange rate changes on cash	(7)	—	(7)	—
Increase (decrease) in cash, cash equivalents and restricted cash	(3,240)	(3,213)	(27)	—
Cash, cash equivalents and restricted cash at beginning of period	9,263	8,433	830	—
Cash, cash equivalents and restricted cash at end of period	$ 6,023	$ 5,220	$ 803	$ —

1	Elimination of equity profit earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
2	Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.
3	Reclassification of Financial Products’ cash flow activity from investing to operating for receivables that arose from the sale of inventory.
4	Elimination of net proceeds and payments to/from ME&T and Financial Products.

Caterpillar Inc. Supplemental Data for Cash Flow For the Six Months Ended June 30, 2021 (Unaudited) (Millions of dollars)

		Supplemental Consolidating Data
	Consolidated	Machinery, Energy & Transportation	Financial Products	Consolidating Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$ 2,945	$ 2,933	$ 368	$ (356)	^1,5
Adjustments for non-cash items:
Depreciation and amortization	1,173	772	401	—
Provision (benefit) for deferred income taxes	68	111	(43)	—
Other	(20)	74	(169)	75	²
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other	(343)	(206)	11	(148)	^2,3
Inventories	(1,179)	(1,180)	—	1	²
Accounts payable	893	871	2	20	²
Accrued expenses	22	93	(71)	—
Accrued wages, salaries and employee benefits	618	593	25	—
Customer advances	49	49	—	—
Other assets – net	(47)	(154)	15	92	²
Other liabilities – net	(133)	(157)	97	(73)	²
Net cash provided by (used for) operating activities	4,046	3,799	636	(389)
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others	(419)	(417)	(7)	5	²
Expenditures for equipment leased to others	(681)	(13)	(670)	2	²
Proceeds from disposals of leased assets and property, plant and equipment	636	49	595	(8)	²
Additions to finance receivables	(6,203)	—	(6,680)	477	³
Collections of finance receivables	5,580	—	6,095	(515)	³
Net intercompany purchased receivables	—	—	(78)	78	³
Proceeds from sale of finance receivables	27	—	27	—
Net intercompany borrowings	—	1,000	2	(1,002)	⁴
Investments and acquisitions (net of cash acquired)	(398)	(398)	—	—
Proceeds from sale of businesses and investments (net of cash sold)	28	28	—	—
Proceeds from sale of securities	276	35	241	—
Investments in securities	(500)	(225)	(275)	—
Other – net	(63)	26	(89)	—
Net cash provided by (used for) investing activities	(1,717)	85	(839)	(963)
Cash flow from financing activities:
Dividends paid	(1,126)	(1,126)	(350)	350	⁵
Common stock issued, including treasury shares reissued	123	123	—	—
Common shares repurchased	(251)	(251)	—	—
Net intercompany borrowings	—	(2)	(1,000)	1,002	⁴
Proceeds from debt issued > 90 days	4,906	494	4,412	—
Payments on debt > 90 days	(5,966)	(1,902)	(4,064)	—
Short-term borrowings – net < 90 days	1,460	(6)	1,466	—
Other – net	(2)	(2)	—	—
Net cash provided by (used for) financing activities	(856)	(2,672)	464	1,352
Effect of exchange rate changes on cash	3	(5)	8	—
Increase (decrease) in cash, cash equivalents and restricted cash	1,476	1,207	269	—
Cash, cash equivalents and restricted cash at beginning of period	9,366	8,822	544	—
Cash, cash equivalents and restricted cash at end of period	$ 10,842	$ 10,029	$ 813	$ —

1	Elimination of equity profit earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
2	Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.
3	Reclassification of Financial Products’ cash flow activity from investing to operating for receivables that arose from the sale of inventory.
4	Elimination of net proceeds and payments to/from ME&T and Financial Products.
5	Elimination of dividend activity between Financial Products and ME&T.

View original content:https://www.prnewswire.com/news-releases/caterpillar-reports-second-quarter-2022-results-301597721.html

SOURCE Caterpillar Inc.

August 2, 2022 6:59 am

IDEXX Laboratories Announces Second Quarter Results

PR Newswire

Achieves second quarter revenue growth of 4% reported and 6.5% organic, driven by CAG Diagnostics recurring revenue growth of 4% reported and 7% organic, building on high prior year growth
Solid demand for diagnostic services and strong IDEXX execution support record second quarter premium instrument placements, driving 15% growth in global premium installed base
Delivers EPS of $1.56, representing declines of 33% as reported and 30% on a comparable basis, including $0.72 per share impact from discrete R&D investments
Adjusts 2022 revenue guidance to 3% – 5.5% growth as reported and 5.5% – 8% organic. At midpoint, updated outlook reflects expectations for solid second half growth for CAG Diagnostics recurring revenues, similar to recent trends, adjusted for incremental benefits from higher pricing. The low end of the updated outlook incorporates a 2.5% second half organic growth risk estimate related to potential additional impacts from macroeconomic conditions
Updated EPS outlook of $7.77 – $8.05 reflects updated revenue outlook, a 50 basis point adjustment to the full year comparable operating margin outlook and $0.08 combined per share impact from updated foreign exchange and interest rate projections

WESTBROOK, Maine
, Aug. 2, 2022 /PRNewswire/ — IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in pet healthcare innovation, today announced second quarter results, as well as an update on U.S. companion animal diagnostics trends.

Second Quarter Results

The Company reports revenues of $861 million for the second quarter of 2022, a 4% increase as reported and 6.5% organically, driven by Companion Animal Group (“CAG”) Diagnostics recurring revenue growth of 4% reported and 7% organic compared to strong prior year performance. Continued solid companion animal sector demand and benefits from IDEXX execution drove premium instrument placements 18% higher than the prior year period, supporting CAG Diagnostics capital instrument revenue growth of 3% as reported and 8% organic. Continued strong momentum in cloud-based software placements supported veterinary software, services and diagnostic imaging systems revenue growth of 27% as reported and 14% organically. Overall revenue gains in the quarter were also supported by Water revenue growth of 5% reported and 9% organic.

Second quarter earnings per diluted share (“EPS”) were $1.56, decreasing 33% as reported and 30% on a comparable basis compared to strong prior year profit levels, reflecting impacts from $80 million of discrete R&D investment in the quarter and operating expense growth related to investments in commercial capabilities. EPS results included $0.06 per share negative impact from currency changes and $0.03 per share in tax benefits from share-based compensation.

“Building on strong prior year gains, IDEXX drove continued solid organic growth in the second quarter,” said Jay Mazelsky, President and Chief Executive Officer. “I am especially pleased with the strong execution of our global teams resulting in record premium instrument placements and cloud- based practice management software adoption. IDEXX innovations have never been more important in helping veterinary clinics manage through capacity challenges and to achieve outstanding care for their patients.”

Companion Animal Diagnostics Trends Update

Continued growth in demand for companion animal healthcare supported solid gains in CAG diagnostic products and services, compared to strong prior year demand levels. Average diagnostics revenues grew 6% at U.S. veterinary practices on a same-store basis in the second quarter, ahead of 3% growth in overall clinic revenues, reflecting continued expansion of demand for pet healthcare services. U.S. same-store clinical visits at veterinary practices declined 3% in the second quarter compared to prior year period clinical visit growth of 13%, which included benefits from increases in new pet ownership during the COVID-19 pandemic. Growth for pet healthcare including diagnostics has increased significantly from pre-pandemic levels reflecting compound annual growth of 2% in clinical visits and 10% in same-store diagnostics revenues for the U.S. compared to the second quarter of 2019.

Additional U.S. companion animal practice key metrics are available in the Q2 2022 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.

Second Quarter Performance Highlights

Companion Animal Group

The Companion Animal Group generated revenue growth of 5% reported and 7% organically for the quarter, supported by CAG Diagnostics recurring revenue growth of 4% on a reported basis and 7% organically. Solid growth was achieved across IDEXX’s major modalities, building off high gains in the prior year period. Overall CAG revenue growth included CAG Diagnostics capital instrument revenue growth of 3% reported and 8% organic, reflecting record second quarter premium instrument placements.

IDEXX VetLab^®consumables generated 4% reported and 8% organic revenue growth, with gains across U.S. and international regions supported by expansion of our global premium instrument installed base, benefits from net price gains and high customer retention levels.
Reference laboratory diagnostic and consulting services generated 4% reported and 6% organic revenue growth driven by strong gains in the U.S., offset by flat organic revenue growth in international regions compared to strong prior year levels. Revenue growth reflects benefits from strong customer retention, new business gains and net price improvement.
Rapid assay products revenues grew 4% as reported and 6% organically, supported by continued solid volume growth in the U.S. and net price gains.

Veterinary software, services and diagnostic imaging systems revenues grew 27% as reported and 14% organically, supported by double-digit organic gains in recurring software and digital imaging revenues. Reported growth includes benefits from ezyVet^®, acquired during the second quarter of 2021, which continues to show strong momentum in customer gains.

Water

Water revenues grew 5% on a reported basis and 9% on an organic basis for the quarter, reflecting solid volume growth across U.S. and international regions and benefits from net price gains.

Livestock, Poultry and Dairy (“LPD”)

LPD revenues declined 11% as reported and 5% on an organic basis for the quarter, reflecting comparisons to high prior year revenue levels of African Swine Fever and core Swine testing in China. This impact was partially offset by moderate overall organic revenue gains in other areas of the LPD business. Comparisons to high revenue levels for African Swine Fever testing are expected to improve in the second half of 2022.

Gross Profit and Operating Profit

Gross profits increased 5% as reported and 7% on a comparable basis. Gross margin of 59.7% increased 50 basis points as reported and was flat on a comparable basis. Benefits from net price gains, lab productivity initiatives and improvement in software service gross margins offset select inflationary effects and impacts from lower LPD revenues.

Operating margin was 20.8% in the quarter, 1,060 basis points lower than the prior year as reported and 1,050 basis points lower on a comparable basis, driven by year-over-year operating expense growth of 46% as reported and 48% on a comparable basis. Operating expense includes a 35% growth impact and a 900 basis point operating margin impact related to $80 million in discrete R&D investments and reflects increased investments supporting global commercial capabilities, higher travel costs and inflationary impacts.

2022 Growth and Financial Performance Outlook

The Company is updating its full year revenue growth outlook to 3% – 5.5% as reported and 5.5% – 8% organically, a reduction in the projected full year revenue growth range of 250 basis points and 200 basis points, respectively. This outlook range includes projected full year CAG Diagnostics recurring revenue growth of 4% – 6% as reported and 6.5% – 9% organic, supported by continued benefits from strong IDEXX execution including additional second half price gains. The updated outlook also incorporates expectations for continued near-term pressure on veterinary clinical visits from factors including constraints on vet clinic capacity, lapping of new patient step-up benefits, as well as additional potential growth impacts related to macroeconomic risk.

The Company now projects full year operating margins of 26.4% – 26.9%, reflecting ~50 basis points of net operating margin impact related to updated revenue growth estimates.

The Company’s EPS outlook of $7.77 – $8.05 reflects an adjustment of $0.32 at midpoint, including $0.05 of negative impact from higher projected interest rates and $0.03 of negative impact related to the strengthening U.S. dollar.

The following table provides the Company’s updated outlook for annual key financial metrics in 2022:

Amounts in millions except per share data and percentages

Growth and Financial Performance Outlook	2022

Revenue	$3,305	–	$3,385
Reported growth	3 %	–	5.5 %
*Organic growth*	5.5 %	–	8 %
CAG Diagnostics Recurring Revenue Growth
Reported growth	4 %	–	6 %
*Organic growth*	6.5 %	–	9 %
Operating Margin	26.4 %	–	26.9 %
Operating margin expansion	(260 bps)	–	(210 bps)
*Impact of foreign exchange*	*~ 20 bps*
*Comparable margin expansion*	*(280 bps)*	–	*(230 bps)*
*Impact of discrete in-license of technology*	*(230 bps)*
EPS	$7.77	–	$8.05
Reported growth	(10 %)	–	(6 %)
*Comparable growth*	(4 %)	–	(1 %)
Other Key Metrics
Net interest expense	$38	–	$39
Share-based compensation tax benefit	~ $10
Share-based compensation tax rate benefit	~ 1%
Effective tax rate	21.5 %	–	22 %
Share-based compensation EPS impact	~ $0.12
Reduction in average shares outstanding	~ 2.0%
Operating Cash Flow	90% – 95% of net income
Free Cash Flow	65% – 70% of net income
Capital Expenditures	~ $180

The following table outlines estimates of foreign currency exchange rate impacts, net of foreign currency hedging transactions, and foreign currency exchange rate assumptions reflected in the above financial performance outlook for 2022.

Estimated Foreign Currency Exchange Rates and Impacts	2022

Revenue growth rate impact	(3.0 %)	–	(3.5 %)
CAG Diagnostics recurring revenue growth rate impact	~ (3.5)%
Operating margin growth impact	~ 20 bps
EPS impact	(~ $0.21)
EPS growth impact	(~ 2.0%)

Foreign Currency Exchange Rate Assumptions
In U.S. dollars
euro	$1.00
British pound	$1.18
Canadian dollar	$0.76
Australian dollar	$0.67
Relative to the U.S. dollar
Japanese yen	¥139
Chinese renminbi	¥6.79
Brazilian real	R$5.40

Conference Call and Webcast Information

IDEXX Laboratories, Inc. will be hosting a conference call today at 8:30 a.m. (EDT) to discuss its second quarter 2022 results and management’s outlook. To participate in the conference call, dial 1-866-374-5140 or 1-404-400-0571 and reference pin 28182746. Individuals can access a live webcast of the conference call through a link on the IDEXX website, www.idexx.com/investors. An archived edition of the webcast will be available after 1:00 p.m. (EDT) on that day via the same link and will remain available for one year.

2022 Investor Day

IDEXX Laboratories, Inc. will host its 2022 Investor Day on Thursday, August 11, 2022 from 8:00 am to approximately 12:00 pm (EDT). A live audio webcast and accompanying slide presentations will be available at www.idexx.com/investors. An archived webcast replay of the event will be available approximately one hour following the event at www.idexx.com/investors. For additional information contact [email protected].

About IDEXX Laboratories, Inc.

IDEXX is a global leader in pet healthcare innovation. Our diagnostic and software products and services create clarity in the complex, constantly evolving world of veterinary medicine. We support longer, fuller lives for pets by delivering insights and solutions that help the veterinary community around the world make confident decisions—to advance medical care, improve efficiency, and build thriving practices. Our innovations also help ensure the safety of milk and water across the world and maintain the health and well-being of people and livestock. IDEXX Laboratories, Inc. is a member of the S&P 500^® Index. Headquartered in Maine, IDEXX employs more than 10,000 people and offers solutions and products to customers in more than 175 countries. For more information about IDEXX, visit www.idexx.com.

Note Regarding Forward-Looking Statements

This earnings release contains statements about the Company’s business prospects and estimates of the Company’s financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are included above under “Livestock, Poultry and Dairy (“LPD”)”, “2022 Growth and Financial Performance Outlook”, and elsewhere and can be identified by the use of words such as “expects”, “may”, “anticipates”, “intends”, “would”, “will”, “plans”, “believes”, “estimates”, “projected”, “should”, and similar words and expressions. Our forward-looking statements include statements relating to our expectations regarding LPD financial performance; revenue growth and EPS outlooks; operating and free cash flow forecast; projected impact of foreign currency exchange rates and interest rates; projected operating margins and expenses and capital expenditures; projected tax, tax rate and EPS benefits from share-based compensation arrangements; and projected effective tax rates, reduction of average shares outstanding and net interest expense. These statements are intended to provide management’s expectation of future events as of the date of this earnings release; are based on management’s estimates, projections, beliefs and assumptions as of the date of this earnings release; and are not guarantees of future performance. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among other things, the matters described under the headings “Business,” “Risk Factors,” “Legal Proceedings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and in the corresponding sections of the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, as well as those described from time to time in the Company’s other filings with the U.S. Securities and Exchange Commission available at www.sec.gov. The Company specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Statement Regarding Non-GAAP Financial Measures

The following defines terms and conventions and provides reconciliations regarding certain measures used in this earnings release and/or the accompanying earnings conference call that are not required by, or presented in accordance with, generally accepted accounting principles in the United States of America (“GAAP”), otherwise referred to as non-GAAP financial measures. To supplement the Company’s consolidated results presented in accordance with GAAP, the Company has disclosed non-GAAP financial measures that exclude or adjust certain items. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors’ evaluation of the Company’s business performance and liquidity and are useful for period-over-period comparisons of the performance of the Company’s business and its liquidity and to the performance and liquidity of our peers. While management believes that these non-GAAP financial measures are useful in evaluating the Company’s business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Constant currency – Constant currency references are non-GAAP financial measures which exclude the impact of changes in foreign currency exchange rates and are consistent with how management evaluates our performance and comparisons with prior and future periods. We estimated the net impacts of currency on our revenue, gross profit, operating profit, and EPS results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates. These estimated currency changes impacted second quarter 2022 results as follows: decreased gross profit growth by 2%, increased gross margin growth by 50 basis points, decreased operating expense growth by 2%, decreased operating profit growth by 2%, decreased operating profit margin growth by 10 basis points, and decreased EPS growth by 2%. Constant currency revenue growth represents the percentage change in revenue during the applicable period, as compared to the prior year period, excluding the impact of changes in foreign currency exchange rates. See the supplementary analysis of results below for revenue percentage change from currency for the three months and six months ended June 30, 2022 and refer to the 2022 Growth and Financial Performance Outlook section of this earnings release for estimated foreign currency exchange rate impacts on 2022 projections and estimates.

Growth and organic revenue growth – All references to growth and organic growth refer to growth compared to the equivalent prior year period unless specifically noted. Organic revenue growth is a non-GAAP financial measure that excludes the impact of changes in foreign currency exchange rates, certain business acquisitions, and divestitures. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. Organic revenue growth should be considered in addition to, and not as a replacement of or a superior measure to, revenue growth reported in accordance with GAAP. See the supplementary analysis of results below for a reconciliation of reported revenue growth to organic revenue growth for the three months and six months ended June 30, 2022. Please refer to the 2022 Growth and Financial Performance Outlook section of this earnings release for estimated full year 2022 organic revenue growth for the Company and CAG Diagnostics recurring revenue. The percentage change in revenue resulting from acquisitions represents revenues during the current year period, limited to the initial 12 months from the date of the acquisition, that are directly attributable to business acquisitions. Revenue from acquisitions is expected to increase projected full year 2022 revenue growth by 50 basis points and to have no impact to projected full year 2022 CAG Diagnostics recurring revenue growth.

Comparable growth metrics – Comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) are non-GAAP financial measures and exclude the impact of changes in foreign currency exchange rates and non-recurring or unusual items (if any). Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts. Management believes that reporting comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) provides useful information to investors because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding key metrics used by management. Comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating margin gain (or growth) should be considered in addition to, and not as replacements of or superior measures to, gross profit growth, gross margin gain, operating expense growth, operating profit growth and operating margin gain reported in accordance with GAAP.

The reconciliation of these non-GAAP financial measures is as follows:

	Three Months Ended		Year-over-Year	Six Months Ended		Year-over-Year
	June 30	June 30	Change	June 30	June 30	Change
Dollar amounts in thousands	2022	2021		2022	2021
Gross Profit (as reported)	$ 514,032	$ 489,308	5 %	$ 1,012,785	$ 960,090	5 %
*Gross margin*	59.7 %	59.2 %	*50 bps*	59.7 %	59.9 %	*(20) bps*
Less: comparability adjustments
Change from currency	(11,768)	—		(18,615)	—
Comparable gross profit growth	$ 525,800	$ 489,308	7 %	$ 1,031,400	$ 960,090	7 %
*Comparable gross margin and gross margin gain (or growth)*	59.2 %	59.2 %	*0 bps*	59.3 %	59.9 %	*(60) bps*

Operating expenses (as reported)	$ 334,966	$ 230,055	46 %	$ 585,375	$ 453,215	29 %
Less: comparability adjustments
Change from currency	$ 5,517	—		$ 8,386	—
Comparable operating expense growth	$ 340,483	$ 230,055	48 %	$ 593,761	$ 453,215	31 %

Income from operations (as reported)	$ 179,066	$ 259,253	(31) %	$ 427,410	$ 506,875	(16) %
*Operating margin*	20.8 %	31.4 %	*(1,060) bps*	25.2 %	31.6 %	*(640) bps*
Less: comparability adjustments
Change from currency	(6,251)	—		(10,229)	—
Comparable operating profit growth	$ 185,317	$ 259,253	(29) %	$ 437,639	$ 506,875	(14) %
*Comparable operating margin and operating margin gain (or growth)*	20.9 %	31.4 %	*(1,050) bps*	25.2 %	31.6 %	*(640) bps*
Amounts presented may not recalculate due to rounding.

Projected 2022 comparable operating margin expansion outlined in the 2022 Growth and Financial Performance Outlook section of this earnings release reflects projected full year 2022 reported operating margin adjusted for estimated positive year-over-year foreign currency exchange rate change impact of approximately 20 basis points.

This impact and those described in the constant currency note above reconcile reported gross profit growth, gross margin gain, operating expense growth, operating profit growth and operating margin gain (including projected 2022 operating margin expansion) to comparable gross profit growth, comparable gross margin gain, comparable operating expense growth, comparable operating profit growth and comparable operating margin gain for the Company.

Comparable EPS growth – Comparable EPS growth is a non-GAAP financial measure that represents the percentage change in earnings per share (diluted) (“EPS”) for a measurement period, as compared to the prior base period, net of the impact of changes in foreign currency exchange rates from the prior base period and excluding the tax benefits of share-based compensation activity under ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, and non-recurring or unusual items (if any). Management believes comparable EPS growth is a more useful way to measure the Company’s business performance than EPS growth because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding a key metric used by management. Comparable EPS growth should be considered in addition to, and not as a replacement of or a superior measure to, EPS growth reported in accordance with GAAP. Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts.

The reconciliation of this non-GAAP financial measure is as follows:

	Three Months Ended		Year-over-Year	Six Months Ended		Year-over-Year
	June 30	June 30	Growth	June 30	June 30	Growth
	2022	2021		2022	2021
Earnings per share (diluted)	$ 1.56	$ 2.34	(33) %	$ 3.82	$ 4.69	(19) %
Less: comparability adjustments
Share-based compensation activity	0.03	0.07		0.09	0.24
Change from currency	(0.06)	—		(0.09)	—
Comparable EPS growth	1.58	2.27	(30) %	3.83	4.45	(14) %
Amounts presented may not recalculate due to rounding.

Projected 2022 comparable EPS growth outlined in the 2022 Growth and Financial Performance Outlook section of this earnings release reflects adjustments including estimated positive share-based compensation activity of $0.12 and estimated negative year-over-year foreign currency exchange rate change impact of $0.21.

These impacts and those described in the constant currency note above reconcile reported EPS growth (including projected 2022 reported EPS growth) to comparable EPS growth for the Company.

Free cash flow – Free cash flow is a non-GAAP financial measure and means, with respect to a measurement period, the cash generated from operations during that period, reduced by the Company’s investments in property and equipment. Management believes free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. Free cash flow should be considered in addition to, and not as a replacement of or a superior measure to, net cash provided by operating activities. See the supplementary analysis of results below for our calculation of free cash flow for the six months ended June 30, 2022 and 2021. To estimate projected 2022 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $180 million. To calculate trailing twelve-month net income to free cash flow ratio for the twelve months ended June 30, 2022, we have deducted purchases of property and equipment of approximately $139 million from net cash provided from operating activities of approximately $578 million, divided by net income of approximately $664 million.

Debt to Adjusted EBITDA (Leverage Ratios) – Adjusted EBITDA, gross debt, and net debt are non-GAAP financial measures. Adjusted EBITDA is a non-GAAP financial measure of earnings before interest, taxes, depreciation, amortization, non-recurring transaction expenses incurred in connection with acquisitions, share-based compensation expense, and certain other non-cash losses and charges. Management believes that reporting Adjusted EBITDA, gross debt and net debt in the Debt to Adjusted EBITDA ratios provides supplemental analysis to help investors further evaluate the Company’s business performance and available borrowing capacity under the Company’s credit facility. Adjusted EBITDA, gross debt, and net debt should be considered in addition to, and not as replacements of or superior measures to, net income or total debt reported in accordance with GAAP. For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratios are calculated, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

IDEXX Laboratories, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
Amounts in thousands except per share data (Unaudited)
		Three Months Ended		Six Months Ended
		June 30,	June 30,	June 30,	June 30,
		2022	2021	2022	2021
Revenue:	Revenue	$860,546	$826,142	$1,697,095	$1,603,849
Expenses and Income:	Cost of revenue	346,514	336,834	684,310	643,759
	Gross profit	514,032	489,308	1,012,785	960,090
	Sales and marketing	130,257	119,032	262,549	233,843
	General and administrative	81,488	73,326	159,437	144,096
	Research and development	123,221	37,697	163,389	75,276
	Income from operations	179,066	259,253	427,410	506,875
	Interest expense, net	(7,983)	(7,522)	(14,836)	(15,054)
	Income before provision for income taxes	171,083	251,731	412,574	491,821
	Provision for income taxes	39,104	49,125	86,630	84,926
Net Income:	Net income	131,979	202,606	325,944	406,895
	Less: Noncontrolling interest in subsidiary’s earnings	—	24	—	56
	Net income attributable to stockholders	$131,979	$202,582	$325,944	$406,839
	Earnings per share: Basic	$1.57	$2.37	$3.87	$4.76
	Earnings per share: Diluted	$1.56	$2.34	$3.82	$4.69
	Shares outstanding: Basic	83,922	85,325	84,164	85,427
	Shares outstanding: Diluted	84,858	86,654	85,222	86,794

IDEXX Laboratories, Inc. and Subsidiaries
Selected Operating Information (Unaudited)
		Three Months Ended		Six Months Ended
		June 30,	June 30,	June 30,	June 30,
		2022	2021	2022	2021
Operating Ratios	Gross profit	59.7 %	59.2 %	59.7 %	59.9 %
(as a percentage of revenue):	Sales, marketing, general and administrative expense	24.6 %	23.3 %	24.9 %	23.6 %
	Research and development expense	14.3 %	4.6 %	9.6 %	4.7 %
	Income from operations¹	20.8 %	31.4 %	25.2 %	31.6 %

¹Amounts presented may not recalculate due to rounding.

IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands (Unaudited)

		Three Months Ended
		June 30, 2022	Percent of Revenue	June 30, 2021	Percent of Revenue
		June 30, 2022	Percent of Revenue	June 30, 2021	Percent of Revenue
Revenue:	CAG	$784,087		$745,595
	Water	39,195		37,191
	LPD	29,889		33,524
	Other	7,375		9,832
	Total	$860,546		$826,142

Gross Profit:	CAG	$466,254	59.5 %	$440,786	59.1 %
	Water	27,359	69.8 %	25,747	69.2 %
	LPD	16,996	56.9 %	19,526	58.2 %
	Other	3,423	46.4 %	3,249	33.0 %
	Total	$514,032	59.7 %	$489,308	59.2 %

Income from Operations:	CAG	$156,526	20.0 %	$234,735	31.5 %
	Water	17,920	45.7 %	17,228	46.3 %
	LPD	3,230	10.8 %	6,868	20.5 %
	Other	1,390	18.8 %	422	4.3 %
	Total	$179,066	20.8 %	$259,253	31.4 %


IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands (Unaudited)

		Six Months Ended
		June 30, 2022	Percent of Revenue	June 30, 2021	Percent of Revenue
		June 30, 2022	Percent of Revenue	June 30, 2021	Percent of Revenue
Revenue:	CAG	$1,545,271		$1,438,362
	Water	75,566		71,231
	LPD	60,759		72,794
	Other	15,499		21,462
	Total	$1,697,095		$1,603,849

Gross Profit:	CAG	$915,353	59.2 %	$853,660	59.3 %
	Water	53,096	70.3 %	49,212	69.1 %
	LPD	36,543	60.1 %	46,407	63.8 %
	Other	7,793	50.3 %	10,811	50.4 %
	Total	$1,012,785	59.7 %	$960,090	59.9 %

Income from Operations:	CAG	$379,651	24.6 %	$447,945	31.1 %
	Water	34,574	45.8 %	32,000	44.9 %
	LPD	9,967	16.4 %	20,676	28.4 %
	Other	3,218	20.8 %	6,254	29.1 %
	Total	$427,410	25.2 %	$506,875	31.6 %

IDEXX Laboratories, Inc. and Subsidiaries

Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets

Amounts in thousands (Unaudited)

Three Months Ended

June 30, 2022

June 30, 2021

Dollar
Change

Reported
Revenue
Growth¹

Percentage
Change from
Currency

Percentage
Change from
Acquisitions

Organic
Revenue
Growth¹

Net Revenue

CAG

$784,087

$745,595

$38,492

5.2 %

(3.3 %)

1.1 %

7.3 %

United States

532,626

486,252

46,374

9.5 %

—

1.5 %

8.1 %

International

251,461

259,343

(7,882)

(3.0 %)

(9.2 %)

0.4 %

5.7 %

Water

39,195

37,191

2,004

5.4 %

(3.5 %)

—

8.9 %

United States

19,533

17,747

1,786

10.1 %

—

10.1 %

International

19,662

19,444

218

1.1 %

(6.7 %)

—

7.8 %

LPD

29,889

33,524

(3,635)

(10.8 %)

(5.8 %)

—

(5.0 %)

United States

3,742

3,516

226

6.5 %

—

6.5 %

International

26,147

30,008

(3,861)

(12.9 %)

(6.4 %)

—

(6.4 %)

Other

7,375

9,832

(2,457)

(25.0 %)

1.9 %

—

(26.9 %)

Total Company

$860,546

$826,142

$34,404

4.2 %

(3.3 %)

1.0 %

6.5 %

United States

559,825

515,238

44,587

8.7 %

—

1.4 %

7.3 %

International

300,721

310,904

(10,183)

(3.3 %)

(8.6 %)

0.3 %

5.0 %

Three Months Ended

June 30, 2022

June 30, 2021

Dollar
Change

Reported
Revenue
Growth¹

Percentage
Change from

Currency

Percentage
Change from
Acquisitions

Organic
Revenue
Growth¹

Net CAG Revenue

CAG Diagnostics recurring revenue:

$685,413

$661,300

$24,113

3.6 %

(3.3 %)

0.2 %

6.8 %

IDEXX VetLab consumables

266,079

256,352

9,727

3.8 %

(4.1 %)

—

7.9 %

Rapid assay products

87,481

83,887

3,594

4.3 %

(1.6 %)

—

5.8 %

Reference laboratory diagnostic and consulting services

304,130

293,675

10,455

3.6 %

(3.0 %)

0.4 %

6.1 %

CAG Diagnostics services and accessories

27,723

27,386

337

1.2 %

(4.4 %)

—

5.7 %

CAG Diagnostics capital – instruments

36,227

35,054

1,173

3.3 %

(4.9 %)

—

8.3 %

Veterinary software, services and diagnostic imaging systems

62,447

49,241

13,206

26.8 %

(1.1 %)

13.8 %

14.0 %

Net CAG revenue

$784,087

$745,595

$38,492

5.2 %

(3.3 %)

1.1 %

7.3 %

Three Months Ended

June 30, 2022

June 30, 2021

Dollar
Change

Reported
Revenue
Growth¹

Percentage
Change from
Currency

Percentage
Change from
Acquisitions

Organic
Revenue
Growth¹

CAG Diagnostics recurring revenue:

$685,413

$661,300

$24,113

3.6 %

(3.3 %)

0.2 %

6.8 %

United States

$460,357

$427,583

$32,774

7.7 %

—

0.1 %

7.6 %

International

$225,056

$233,717

($8,661)

(3.7 %)

(9.2 %)

0.4 %

5.1 %

¹See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.

IDEXX Laboratories, Inc. and Subsidiaries

Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets

Amounts in thousands (Unaudited)

Six Months Ended

June 30, 2022

June 30, 2021

Dollar
Change

Reported
Revenue
Growth¹

Percentage
Change from
Currency

Percentage
Change from
Acquisitions

Organic
Revenue
Growth¹

Net Revenue

CAG

$1,545,271

$1,438,362

$106,909

7.4 %

(2.6 %)

1.3 %

8.7 %

United States

1,032,392

930,662

101,730

10.9 %

—

1.8 %

9.1 %

International

512,879

507,700

5,179

1.0 %

(7.3 %)

0.4 %

7.9 %

Water

75,566

71,231

4,335

6.1 %

(2.6 %)

—

8.7 %

United States

37,364

34,315

3,049

8.9 %

—

8.9 %

International

38,202

36,916

1,286

3.5 %

(5.0 %)

—

8.5 %

LPD

60,759

72,794

(12,035)

(16.5 %)

(3.8 %)

—

(12.7 %)

United States

7,602

7,264

338

4.7 %

—

4.7 %

International

53,157

65,530

(12,373)

(18.9 %)

(4.1 %)

—

(14.8 %)

Other

15,499

21,462

(5,963)

(27.8 %)

0.7 %

—

(28.5 %)

Total Company

$1,697,095

$1,603,849

$93,246

5.8 %

(2.6 %)

1.2 %

7.2 %

United States

1,085,731

987,876

97,855

9.9 %

—

1.7 %

8.2 %

International

611,364

615,973

(4,609)

(0.7 %)

(6.7 %)

0.3 %

5.6 %

Six Months Ended

June 30, 2022

June 30, 2021

Dollar
Change

Reported
Revenue
Growth¹

Percentage
Change from

Currency

Percentage
Change from
Acquisitions

Organic
Revenue
Growth¹

Net CAG Revenue

CAG Diagnostics recurring revenue:

$1,350,223

$1,278,580

$71,643

5.6 %

(2.6 %)

0.2 %

8.0 %

IDEXX VetLab consumables

533,252

502,444

30,808

6.1 %

(3.3 %)

—

9.5 %

Rapid assay products

162,000

153,498

8,502

5.5 %

(1.3 %)

—

6.9 %

Reference laboratory diagnostic and consulting services

599,205

569,456

29,749

5.2 %

(2.3 %)

0.5 %

7.0 %

CAG Diagnostics services and accessories

55,766

53,182

2,584

4.9 %

(3.6 %)

—

8.4 %

CAG Diagnostics capital – instruments

73,224

66,244

6,980

10.5 %

(4.3 %)

—

14.8 %

Veterinary software, services and diagnostic imaging systems

121,824

93,538

28,286

30.2 %

(0.8 %)

17.3 %

13.7 %

Net CAG revenue

$1,545,271

$1,438,362

$106,909

7.4 %

(2.6 %)

1.3 %

8.7 %

Six Months Ended

June 30, 2022

June 30, 2021

Dollar
Change

Reported
Revenue
Growth¹

Percentage
Change from
Currency

Percentage
Change from
Acquisitions

Organic
Revenue
Growth¹

CAG Diagnostics recurring revenue:

$1,350,223

$1,278,580

$71,643

5.6 %

(2.6 %)

0.2 %

8.0 %

United States

$892,859

$820,485

$72,374

8.8 %

—

0.1 %

8.7 %

International

$457,364

$458,095

($731)

(0.2 %)

(7.3 %)

0.5 %

6.6 %

¹See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.

IDEXX Laboratories, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
Amounts in thousands (Unaudited)
		June 30, 2022	December 31, 2021
		June 30, 2022	December 31, 2021
Assets:	Current Assets:
	Cash and cash equivalents	$114,362	$144,454
	Accounts receivable, net	412,898	368,348
	Inventories	332,565	269,030
	Other current assets	183,000	173,823
	Total current assets	1,042,825	955,655
	Property and equipment, net	594,224	587,667
	Other long-term assets, net	970,136	893,881
	Total assets	$2,607,185	$2,437,203
Liabilities and Stockholders’
Equity:	Current Liabilities:
	Accounts payable	$127,262	$116,140
	Accrued liabilities	387,510	458,909
	Line of credit	611,000	73,500
	Current portion of long-term debt	—	74,996
	Deferred revenue	40,775	40,034
	Total current liabilities	1,166,547	763,579
	Long-term debt, net of current portion	767,995	775,205
	Other long-term liabilities, net	215,635	208,427
	Total long-term liabilities	983,630	983,632
	Total stockholders’ equity	457,008	689,992
	Total liabilities and stockholders’ equity	$2,607,185	$2,437,203

IDEXX Laboratories, Inc. and Subsidiaries
Select Balance Sheet Information (Unaudited)
		June 30, 2022	March 31, 2022	December 31, 2021	September 30, 2021	June 30, 2021
Selected Balance Sheet Information:	Days sales outstanding¹	43.2	42.0	42.4	42.7	42.2
	Inventory turns²	1.5	1.6	2.0	1.9	2.1

¹Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by
revenue for that quarter, the result of which is then multiplied by 91.25 days.

²Inventory turns represent inventory-related cost of product revenue for the twelve months preceding each quarter-end divided by the average
inventory balances at the beginning and end of each quarter.

IDEXX Laboratories, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
		Six Months Ended
		June 30, 2022	June 30, 2021
		June 30, 2022	June 30, 2021
Operating:	Cash Flows from Operating Activities:
	Net income	$325,944	$406,895
	Non-cash adjustments to net income	61,563	79,002
	Changes in assets and liabilities	(206,951)	(127,520)
	Net cash provided by operating activities	180,556	358,377
Investing:	Cash Flows from Investing Activities:
	Purchases of property and equipment	(61,924)	(42,744)
	Acquisition of intangible assets, businesses and equity investment	(35,000)	(156,506)
	Net cash used by investing activities	(96,924)	(199,250)
Financing:	Cash Flows from Financing Activities:
	Borrowings under revolving credit facilities, net	537,500	—
	Payment of senior debt	(75,000)	—
	Payments for the acquisition-related contingent consideration and holdbacks	(2,816)	(1,500)
	Repurchases of common stock	(573,060)	(320,787)
	Proceeds from exercises of stock options and employee stock purchase plans	18,379	27,371
	Shares withheld for statutory tax withholding payments on restricted stock	(10,390)	(14,952)
	Net cash used by financing activities	(105,387)	(309,868)
	Net effect of changes in exchange rates on cash	(8,337)	(1,053)
	Net decrease in cash and cash equivalents	(30,092)	(151,794)
	Cash and cash equivalents, beginning of period	144,454	383,928
	Cash and cash equivalents, end of period	$114,362	$232,134

IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow
Amounts in thousands except per share data (Unaudited)
		Six Months Ended
		June 30, 2022	June 30, 2021
		June 30, 2022	June 30, 2021
Free Cash Flow:	Net cash provided by operating activities	$ 180,556	$ 358,377
	Investing cash flows attributable to purchases of property and equipment	(61,924)	(42,744)
	Free cash flow¹	$ 118,632	$ 315,633

¹See Statements Regarding Non-GAAP Financial Measures, above.

IDEXX Laboratories, Inc. and Subsidiaries
Common Stock Repurchases
Amounts in thousands except per share data (Unaudited)
	Three Months Ended		Six Months Ended
	June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
	June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Shares repurchased in the open market	809	341	1,311	618
Shares acquired through employee surrender for statutory tax withholding	—	—	21	28
Total shares repurchased	809	341	1,332	646

Cost of shares repurchased in the open market	$ 313,455	$ 188,409	$ 576,238	$ 327,622
Cost of shares for employee surrenders	52	3	10,390	14,986
Total cost of shares	$ 313,507	$ 188,412	$ 586,628	$ 342,608

Average cost per share – open market repurchases	$ 387.78	$ 552.08	$ 439.63	$ 529.45
Average cost per share – employee surrenders	$ 369.63	$ 550.59	$ 504.60	$ 544.08
Average cost per share – total	$ 387.78	$ 552.08	$ 440.63	$ 530.07

Contact: John Ravis, Investor Relations, 1-207-556-8155

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SOURCE IDEXX Laboratories, Inc.