Dana Incorporated 2018 Annual Report – Record Sales, Profit, & Margin $DAN

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IMMEDIATE RELEASE

Dana Incorporated Achieves Record Annual Sales, Profit, and Margin Full-Year Highlights, as filed with the SEC.

Record sales of $8.143 billion, an increase of $934 million or growth of 13 percent, compared with 2017
Net income attributable to Dana of $427 million; diluted EPS of $2.91
Record adjusted EBITDA of $957 million, an increase of $122 million, or growth of 15 percent
Record margin of 11.8 percent of sales, an expansion of 20 basis points
Record diluted adjusted EPS of $2.97, an improvement of 18 percent over 2017
Operating cash flow of $568 million
Cash dividends of $0.40 per share declared in 2018, a 67 percent increase over dividends declared in 2017
Adjusted free cash flow of $243 million, a 51 percent improvement over 2017
Second consecutive year of double-digit sales growth, adjusted EBITDA, and adjusted free cash flow growth
Company expects to achieve nearly $1 billion in sales growth for third consecutive year in 2019; strong sales backlog of $700 million through 2021
Acquisition of SME Group enhances electromobility capabilities
Company expects to complete acquisition of Oerlikon Drive Systems by March 1,2019

MAUMEE, Ohio, USA, Feb. 15, 2019 – Dana Incorporated (NYSE: DAN) today announced strong financial results for 2018 and affirmed 2019 guidance.

“Dana achieved record annual sales, profit, and profit margin performance in 2018, and we increased adjusted free cash flow by more than 50 percent. At the same time, we organically and inorganically established complete e-Propulsion capability to support all our end markets,” said James Kamsickas, Dana president and chief executive officer. “Through the outstanding efforts and commitment of our associates and the support of our customers, we have achieved exceptional results and expect to continue this strong trajectory in 2019, including increasing sales by nearly one billion dollars for the third consecutive year.”

Fourth-quarter 2018 Financial Results

Sales for the fourth quarter of 2018 totaled $1.973 billion, compared with $1.837 billion in the same period of 2017, representing a 7 percent improvement. The increase was largely attributable to higher end-market demand in all business units, conversion of sales backlog, and favorable currency translation.

Dana reported net income of $100 million for the fourth quarter of 2018, compared with a net loss of $104 million in the same period of 2017. The increase was primarily due to a $186 million charge related to the enactment of U.S. tax reform in the fourth quarter 2017, and increased operating earnings associated with higher sales in the fourth quarter of 2018.


Reported diluted earnings per share were $0.69, compared with a loss of $0.74 in the fourth quarter of 2017.

Adjusted EBITDA for the fourth quarter of 2018 was $223 million, compared with $197 million for the same period last year. Profit in the fourth quarter of 2018 benefited from higher end-market demand, conversion of the sales backlog, and acquisition synergies, partially offset by higher commodity costs.

Diluted adjusted earnings per share were $0.71 in the fourth quarter of 2018, compared with $0.62 in the same period last year.

Operating cash flow in the fourth quarter of 2018 was $331 million, compared with $193 million in the same period of 2017. Adjusted free cash flow was $241 million, compared with $51 million in the fourth quarter of 2017, driven by higher earnings and lower capital spending, partially offset by higher working capital requirements to support new program launches in 2018.

Full-year 2018 Financial Results

Sales for 2018 were $8.143 billion, $934 million higher than 2017, primarily due to strong end-market demand, conversion of sales backlog, and to a lesser extent, acquisitions and recovery of material inflation.

Net income in 2018 was $427 million, compared with net income of $111 million in 2017, which included the fourth-quarter non-recurring tax item in 2017 referenced above.

Reported diluted earnings per share were $2.91, compared with $0.71 in 2017.

Adjusted EBITDA for 2018 was $957 million, or 11.8 percent of sales, 20 basis points higher than 2017. Stronger end-market demand more than offset the margin headwind attributable to the effects of higher raw material prices and the associated material recovery reflected in sales.

Diluted adjusted earnings per share for 2018 were $2.97, compared with $2.52 in 2017, an 18 percent increase, primarily reflecting higher year-over-year earnings improvement.

The company reported operating cash flow of $568 million in 2018, an improvement of $14 million compared with 2017. Adjusted free cash flow was $243 million, or 3 percent of sales, compared with $161 million, or 2 percent of sales in 2017. The improvement was driven by higher earnings and lower capital spending, partially offset by higher working capital requirements to support sales growth.


Company Affirms 2019 Full-year Financial Targets

The company affirmed guidance for Dana as currently consolidated, as well as guidance resulting from the completion of the acquisition of the Drive Systems segment of the Oerlikon Group (ODS), which is expected to close by March 1. Guidance ranges are:

Sales of $8.250 to $8.550 billion; or $8.950 to $9.350 billion including ODS;
Adjusted EBITDA of $995 million to $1.055 billion, an implied adjusted EBITDA margin of approximately 12.2 percent at the midpoint of the range; $1.085 billion to $1.165 billion including ODS, an implied adjusted EBITDA margin of approximately 12.3 percent at the midpoint of the range;
Diluted adjusted EPS1 of $2.90 to $3.30; $2.95 to $3.45 including ODS;
Operating cash flow of approximately 6.5 percent of sales; 5.5 percent including ODS; and
Adjusted free cash flow of approximately 4.0 percent of sales; 3.0 percent including ODS.
1 Net income and diluted EPS guidance are not provided, as discussed below in Non-GAAP Financial Information.

“Strong customer demand and delivery of our sales backlog, combined with our recent acquisitions, allowed us to achieve a record performance in 2018,” said Jonathan Collins, executive vice president and chief financial officer of Dana. “We have a positive outlook for 2019 due to stable end markets, our solid sales backlog, and accretive acquisitions, all of which we expect to provide us a third consecutive year of double-digit sales and profit growth.”

Dana to Host Conference Call at 9 a.m. Today

Dana will discuss its full-year and fourth-quarter results in a conference call at 9 a.m. EST today. Participants may listen to the audio portion of the conference call either through audio streaming online or by telephone. Slide viewing is available online via a link provided on the Dana investor website: www.dana.com/investors. U.S. and Canadian locations should dial 1-888-311-4590 and international locations should call 1-706-758-0054. Please enter conference I.D. 2947329 and ask for the “Dana Incorporated’s Financial Webcast and Conference Call.” Phone registration will be available starting at 8:30 a.m. EST.

An audio recording of the webcast will be available after 5 p.m. EST on Feb. 15 by dialing 1-855-859-2056 (U.S. or Canada) or 1-404-537-3406(international) and entering conference I.D. 2947329. A webcast replay will also be available after 5 p.m. EST and may be accessed via Dana’s investor website.

Non-GAAP Financial Information

This release refers to adjusted EBITDA, a non-GAAP financial measure which we have defined as net income before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit costs, and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). Adjusted EBITDA is a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. We use adjusted EBITDA in assessing the effectiveness of our business strategies, evaluating and pricing potential acquisitions and as a factor in making incentive compensation decisions. In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by


securities analysts, investors and others to evaluate financial performance of our company relative to other Tier 1 automotive suppliers. Adjusted EBITDA should not be considered a substitute for income before income taxes, net income or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Diluted adjusted EPS is a non-GAAP financial measure, which we have defined as adjusted net income divided by adjusted diluted shares. We define adjusted net income as net income (loss) attributable to the parent company, excluding any nonrecurring income tax items, restructuring charges, amortization expense, and other adjustments not related to our core operations (as used in adjusted EBITDA), net of any associated income tax effects. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income. This measure is considered useful for purposes of providing investors, analysts, and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies. Diluted adjusted EPS is neither intended to represent nor be an alternative measure to diluted EPS reported under GAAP.

Adjusted free cash flow is a non-GAAP financial measure, which we have defined as cash provided by (used in) operating activities excluding voluntary pension contributions, less purchases of property, plant, and equipment. We believe this measure is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Adjusted free cash flow is neither intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported under GAAP. Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

We have not provided reconciliations of preliminary and projected adjusted EBITDA and diluted adjusted EPS to the most comparable GAAP measures of net income and diluted EPS. Providing net income and diluted EPS guidance is potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items that are included in net income and diluted EPS, including restructuring actions, asset impairments, and income tax valuation adjustments. Reconciliations of these non-GAAP measures with the most comparable GAAP measures for historical periods are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. Please reference the “Non-GAAP financial information” accompanying our quarterly earnings conference call presentations on our website at www.dana.com/investors for our GAAP results and the reconciliations of these measures, where used, to the comparable GAAP measures.

Forward-Looking Statements

Certain statements and projections contained in this news release are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends”,“plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.


Dana’s Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss important risk factors that could affect our business, results of operations and financial condition. The forward-looking statements in this news release speak only as of this date. Dana does not undertake any obligation to revise or update publicly any forward-looking statement for any reason.

About Dana Incorporated

Dana is a world leader in highly engineered solutions for improving the efficiency, performance, and sustainability of powered vehicles and machinery. Dana supports the passenger vehicle, commercial truck, and off-highway markets, as well as industrial and stationary equipment applications. Founded in 1904, Dana employs more than 30,000 people in 33 countries on six continents who are committed to delivering long-term value to customers. The company reported sales of $8.1 billion in 2018. Based in Maumee, Ohio, USA, the company’s operations in Northwest Ohio and Southeast Michigan were selected as a Top Workplace for the last three years by The (Toledo) Blade and its research partner, Energage. For more information, please visit www.dana.com. ###

Media Contact:Jeff Cole
+1-419-887-3535
[email protected]
Investor Contact:Craig Barber
+1-419-887-5166
[email protected]

RTON Right On Brands To Market CBD Products in partnership with Texas Select Beverage

Texas Select Beverage Signs Development and Sales Agreement To Market CBD Products With Right On Brands

Texas Select Beverages has agreed to a development and distribution agreement with Right On Brands, Inc.™ Texas Select also obtained the rights for exclusive distribution of ENDO brands CBD products and Humbly Hemp Products throughout its Texas Select Retail and wholesale distribution network.

Texas Select Beverage has a very strong market presence in the South West and boasts a market reach of 27 states and 2 countries. Distribution of ENDO Brands products and CBD infused teas powered by ENDO labs will create national market presence in the United States virtually overnight. Texas Select and Right on Brands will jointly develop Hemp infused Teas and coffees.

“Texas Select products have been on Major Supermarket and Beverage retailer shelves for over 30 years “This marketing and distribution agreement have opened the door to large nationally based retail store chains who at their discretion can bring in CBD products from a trusted vendor that has been established for many years. We couldn’t ask for a better introduction.”

Texas Select was founded in 1981 by American Entrepreneur Manny Zelzer and is America’s oldest non-alcoholic beer. Since first produced in downtown San Antonio, TX this faithful brew continues to provide the very best all-natural ingredients. Our premium Non-Alcoholic beer is a light classic lager that pours golden creating soft, rich and complex aromas.

In 2008 the company now operating as Texas Select Beverage Company introduced specialty commercial teas and coffees. Brewing of Texas Select NA was moved to Fort Worth while tea and coffee production remained at their headquarters in Carrollton (Dallas). Expanding product development continues today in numerous categories.

Visit our corporate website at: http://www.tsbevco.com

SEC Filing 0001477932-19-000519

Olympic Steel $ZEUS Reports Record 2018 Results

Olympic Steel Reports Record Fourth-Quarter and Full-Year 2018 Net Sales

Full-Year Net Sales Increased 29%, Versus 2017, to Record-High $1.7 Billion in 2018

Full-Year Operating Income Grew 138% to $57 Million in 2018

CLEVELAND–(BUSINESS WIRE)–February 15, 2019–Olympic Steel Inc. (Nasdaq: ZEUS), a leading national metals service center, today announced financial results for the three and twelve months ended Dec. 31, 2018. As filed with the SEC.

Full-Year 2018 Results

Net sales rose 29% in 2018, reaching $1.7 billion, compared with $1.3 billion in 2017. Increased year-over-year shipping volume, combined with higher average prices in all three of the Company’s operating segments, drove the net sales increase. Operating income more than doubled in 2018, to $57.1 million, up from $24.0 million in the prior year. Full-year 2018 (GAAP) net income improved 78% to $33.8 million, or $2.95 per diluted share, compared with net income of $19.0 million, or $1.67 per diluted share in 2017.

“All three operating segments achieved record net sales in 2018,” said Chief Executive Officer Richard T. Marabito. “Building on the strong results generated in 2017, our 2018 results marked the third-most profitable year in our Company’s history.”

In 2018, LIFO expense totaled $8.4 million, or $0.56 per diluted share, compared with LIFO expense of $2.7 million, or $0.15 per diluted share, in the prior year. In 2017, results were also impacted by a $6.2 million deferred tax liability revaluation benefit, partially offset by a $1.0 million commercial settlement, and a write-off of $0.2 million in deferred financing expenses, which were realized in the fourth quarter of 2017.

“On Jan. 2, 2019, we announced our acquisition of McCullough Industries. This is our first acquisition of a manufacturer of metal-intensive branded products,” Marabito said. “The vertical downstream advantages of the McCullough acquisition and capital expenditures in all three of our operating segments in 2018 advance our long-term growth strategy to deploy capital for higher financial returns while reducing volatility. We continue to seek additional manufacturers of branded products where we can deploy our purchasing, logistics and processing expertise to achieve synergies.”

Fourth-Quarter 2018 Results

The Company achieved record fourth quarter sales of $430 million in 2018, up 39% from $308 million in sales during the fourth quarter of 2017. Fourth quarter 2018 operating income totaled $1.8 million, compared to an operating loss of $2.0 million in 2017. The current quarter results include $3.7 million of LIFO expense. The impacts of higher LIFO expense in 2018, and the aforementioned fourth quarter 2017 tax benefit and other unusual items, resulted in a (GAAP) net loss of $1.3 million, or $0.11 per share in 2018, compared to net income of $4.2 million or $0.37 per share last year. Adjusting for the LIFO expenses in both periods, and for the 2017 tax income and other unusual items, adjusted (non-GAAP) earnings per share improved to $0.14 in the fourth quarter of 2018, versus an adjusted (non-GAAP) net loss per share of $0.04 in last year’s fourth quarter. The table that follows provides a reconciliation of non-GAAP measured to measures prepared in accordance with GAAP.

WABCO 2018 Report – Record Sales and Income, 2019 Guidance

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WABCO Delivers Record Sales and Operating Income in 2018; Continues to Solidly Outperform Global Commercial Vehicle Market; Provides Guidance for 2019

Q4 2018 sales of $911.6 million, 2.4% lower versus a year ago, while up 1.4% in local currencies
Full year 2018 sales of $3,831.0 million, up 15.9% from a year ago and up 13.9% in local currencies
Q4 2018 reported operating margin of 12.3% versus 13.4% a year ago; performance operating margin of 13.8% versus 15.4% a year ago
Full year 2018 reported operating margin of 13.4%, up from 13.2% a year ago; performance operating margin of 14.2% versus 14.9% a year ago
Q4 2018 reported diluted EPS of $2.20 versus $3.12 a year ago; performance diluted EPS of $2.13, up from $2.00 a year ago
Full year 2018 reported diluted EPS of $7.43 versus $7.50 a year ago; performance diluted EPS of $7.87, up from $6.86 a year ago
For full year 2018, WABCO continued to strongly convert income into cash, resulting in net cash from operating activities of $468.5 million, up 11.2% from a year ago
Provides guidance for full year 2019: sales growth to range from 1.5% to 6.5% in local currencies; reported diluted EPS guidance to range from $6.88 to $7.38 and performance diluted EPS to range from $7.60 to $8.10

BRUSSELS, Belgium, February 15, 2019 – WABCO Holdings Inc. (NYSE: WBC), the leading global supplier of braking control systems and other advanced technologies that improve the safety, efficiency and connectivity of commercial vehicles, today reported Q4 and full year 2018 results.

WABCO Q4 2018

U.S. Dollars in millions except EPS or otherwise indicatedQ4 2018Q4 2017
Sales$911.6 $934.1 
Sales change – in U.S. Dollars year on year Down 2.4 —   
Sales change – in local currencies year on year Up 1.4 —   
Operating Income – Reported$112.0 $124.9 
Operating Income – Performance$125.7 $144.2 
Operating Margin – Reported 12.3 13.4
Operating Margin – Performance 13.8 15.4
Net Income Attributable to the Company – Reported$114.5 $168.3 
Net Income Attributable to the Company – Performance$110.6 $107.7 
Diluted EPS – Reported$2.20 $3.12 
Diluted EPS – Performance$2.13 $2.00 

“In Q4 2018, WABCO faced a slowdown in key global markets, notably in Europe as well as China and India, which was partially offset by growth in the Americas, Japan and Thailand,” said Jacques Esculier, WABCO Chairman and Chief Executive Officer.

“Navigating this environment, WABCO again demonstrated its resilience and proven ability to continue to outperform global truck and bus production,” said Esculier. “Further helped by a favorable tax resolution, WABCO also achieved record quarterly earnings per share on a performance basis.”

WABCO Full Year 2018

U.S. Dollars in millions except EPS or otherwise indicatedFY 2018FY 2017
Sales$3,831.0 $3,304.2 
Sales change – in U.S. Dollars year on year Up 15.9 —   
Sales change – in local currencies year on year Up 13.9 —   
Operating Income – Reported$512.5 $435.0 
Operating Income – Performance$545.7 $492.1 
Operating Margin – Reported 13.4 13.2
Operating Margin – Performance 14.2 14.9
Net Income Attributable to the Company – Reported$394.1 $406.1 
Net Income Attributable to the Company – Performance$417.8 $371.6 
Diluted EPS – Reported$7.43 $7.50 
Diluted EPS – Performance$7.87 $6.86 

“On a full year basis, WABCO propelled sales to a record level of over $3.8 billion, up 15.9% from the previous year and up 13.9% in local currencies,” said Esculier. “Marking its twelfth consecutive year of solid outperformance of the commercial vehicle industry, WABCO also delivered record performance operating income of $545.7 million and record annual earnings per share on a performance basis, up 14.7% versus a year ago.”

In 2018, in spite of significant industry supply chain challenges, WABCO still delivered a solid 5.0% of gross materials productivity and 7.7% of conversion productivity totaling $74.9 million of net savings.

WABCO also continued to strongly convert income into cash in 2018, resulting in net cash from operating activities of $468.5 million, up 11.2% versus the prior year.

WABCO Share Buyback Program

During the fourth quarter of 2018, WABCO repurchased 808,964 shares for $90 million through its share buyback program. Between June 2011 and December 31, 2018, WABCO repurchased 21,807,366 shares for $1,891 million in open market transactions. This includes the repurchase of shares during 2018 for a total of $300 million. As previously reported, WABCO is further authorized to repurchase shares up to a total of $600 million through December 31, 2020. WABCO intends to repurchase $400 million of shares in 2019, subject to market conditions and applicable legal and regulatory requirements.

WABCO Announces New Corporate Headquarters

As part of its change in organizational logic, WABCO decided to relocate its corporate headquarters to Bern, Switzerland, with the objective of creating a singular focus on fully globalizing WABCO’s advanced technology strategy. The current Brussels base will become the headquarters of its newly formed division covering Europe, Middle East and Africa.

“Decoupling WABCO’s corporate headquarters from its four business regions creates a better platform to globally manage the next wave of advanced technologies and scale their adoption in all regions of the world,” said Esculier. “Switzerland is world-renowned for providing a highly favorable environment for breakthrough innovations and offers many distinct advantages for corporate headquarters.”


Recent WABCO Highlights

In Q4 2018, WABCO disclosed that it had extended and expanded its relationship with one of the world’s top original equipment manufacturers (OEMs) by signing a $950 million long-term agreement. Under the eight-year agreement, WABCO will equip two of the OEM’s brands with its leading braking, advanced driver assistance systems (ADAS) and efficiency technologies. Representing a further industry endorsement of WABCO’s global leadership in braking system platforms, this agreement confirms WABCO as the OEM’s sole supplier for electronic braking systems (EBS) in Europe. The OEM also is confirmed as WABCO’s lead customer for its next generation OnGuardACTIVETM Advanced Emergency Braking System (AEBS) solution. With more than 450,000 OnGuard safety systems sold world-wide, WABCO is the global industry leader, independent of OEMs, for collision mitigation systems and ADAS.

WABCO disclosed in January 2019 that it had entered a global long-term agreement to supply its next generation automated manual transmission (AMT) control technology to Daimler, one of the world’s largest commercial vehicle producers. WABCO will develop and introduce its next generation AMT control technology into Daimler’s global truck and bus series production. With a lighter-weight, robust and more compact design, WABCO’s new gearbox control unit reduces noise levels, optimizes gear shifting performance and increases driver comfort. In addition, the innovative new system is designed to support an extensive range of different truck types, gearboxes and market specific functionalities, which will support global AMT technology to further increase penetration in all regions. With more than four million systems sold, WABCO is the global market leader for AMT control solutions.

In Q4 2018, WABCO reported that it had signed a long-term agreement with Hyundai Motor Company, South Korea’s leading manufacturer of commercial vehicles. Under this latest supply agreement with Hyundai, WABCO will furnish the manufacturer with a broad portfolio of its advanced technologies to support series production of Hyundai’s new medium-duty trucks. WABCO will equip Hyundai’s range of medium-duty trucks with EBS, anti-lock braking systems (ABS), electronic stability control (ESC) and electronically controlled air suspension (ECAS) systems as well as air processing units (APU). WABCO also will become the first supplier to equip Hyundai with EBS and integrated pedal units (IPU) for its medium-duty trucks.

In February 2019, WABCO announced that it had signed a long-term agreement to develop and supply innovative air suspension technology for one of the world’s largest manufacturers of premium passenger cars, based in Europe. Under this 10-year agreement, WABCO will develop and deliver an innovative air supply module along with control software to operate a range of air suspension system configurations for one of the manufacturer’s high-volume global premium passenger car platforms. Air suspension is now a standard feature on most of the manufacturer’s electric and plug-in hybrid vehicles, so WABCO will support a 30% increase in air suspension production volumes compared to the manufacturer’s preceding car platform.

WABCO Full Year 2019 Guidance

Based on its estimate of future economic and market conditions, WABCO provides guidance for 2019.

Full Year 2019
Sales – in millions$3,800 – $4,000
1 Euro = $1.15
Sales growth – in local currencies1.5% – 6.5%
Operating Margin – Reported12.4% – 12.8%
Operating Margin – Performance13.4% – 13.8%
Diluted EPS – Reported$6.88 – $7.38
Diluted EPS – Performance$7.60 – $8.10

“WABCO remains laser-focused in its commitment to deliver continued market outperformance, which fuels top-line growth and delivers enhanced bottom-line results,” said Esculier. “We also reaffirm our unwavering confidence in our ability to again deliver superb value for shareowners in 2019.”

WABCO Conference Call Today

Jacques Esculier, Chairman and Chief Executive Officer, and Roberto Fioroni, Chief Financial Officer, will discuss WABCO’s results and outlook on a conference call at 9:00 a.m. Eastern Time today. It will be webcast at ir.wabco-auto.com where the press release and financial information will be available under “WABCO Q4 and Full Year 2018 Results.”

The call also is accessible by telephone in listen only mode. The dial-in number is +1 408 940 3818 and the U.S. toll-free dial-in number is 877 844 0834. A replay of the call will be available from Noon Eastern Time on February 15, 2019 until Noon Eastern Time on February 22, 2019. The replay dial-in number is +1 404 537 3406 and the U.S. toll-free dial-in number is 855 859 2056. The Conference ID is 6697048.

About WABCO

WABCO (NYSE: WBC) is the leading global supplier of braking control systems and other advanced technologies that improve the safety, efficiency and connectivity of commercial vehicles. Originating from the Westinghouse Air Brake Company founded nearly 150 years ago, WABCO is powerfully “Mobilizing Vehicle Intelligence” to support the increasingly autonomous, connected and electric future of the commercial vehicle industry. WABCO continues to pioneer innovations to address key technology milestones in autonomous mobility and apply its extensive expertise to integrate the complex control and fail-safe systems required to efficiently and safely govern vehicle dynamics at every stage of a vehicle’s journey – on the highway, in the city and at the depot. Today, leading truck, bus and trailer brands worldwide rely on WABCO’s differentiating technologies. Powered by its vision for accident-free driving and greener transportation solutions, WABCO is also at the forefront of advanced fleet management systems and digital services that contribute to commercial fleet efficiency. In 2018, WABCO reported sales of over $3.8 billion and has more than 16,000 employees in 40 countries. For more information, visit www.wabco-auto.com.

WABCO Forward-Looking Statements

This document contains certain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995 that are based on management’s good faith expectations and beliefs concerning future developments. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “strategies,” “prospects,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward looking in nature and not historical facts. Actual results may differ materially from these expectations as a result of many factors. These factors include, but are not limited to, the actual level of commercial vehicle production in our end markets, adverse developments in the business of our key customers, pricing changes to our supplies or products, our ability to successfully integrate any acquired businesses or our acquired businesses not performing as planned, our ability to mitigate any tax risks, including, but not limited to, those risks associated with changes in legislation, tax audits and the loss of the benefits associated with our tax rulings and incentives in certain jurisdictions, our ability to complete and realize the tax benefits associated with certain projects relating to the reorganization of our treasury function and the establishment of a regulated insurance company to better manage our group unfunded pension liabilities and the other risks and uncertainties described in the “Risk Factors” section and the “Information Concerning Forward Looking Statements” section of WABCO’s Form 10-K, as well as in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Information Concerning Forward Looking Statements” section of WABCO’s Form 10-Q Quarterly Reports. WABCO does not undertake any obligation to update such forward-looking statements. All market and industry data are based on company estimates.


Non-GAAP Financial Measures

To facilitate the understanding of Q4 and full year 2018 results, several tables follow this news release. Sales, gross profit, operating expenses, and operating income, which are adjusted to exclude the effects of foreign exchange, as well as EBIT, are non-GAAP financial measures and are denoted by the word “adjusted” in the line item. Additionally, gross profit, operating expenses, operating income, operating margin, EBIT, tax rate, pre-taxincome attributable to the company, net income attributable to the company, and net income attributable to the company per diluted share on a “performance basis” are non-GAAP financial measures that exclude items for separation, streamlining and acquisition, discrete and one-time tax items, and other items that management believes may mask the underlying operating results of the company, as applicable. These measures should be considered in addition to, not as a substitute for, GAAP measures. These measures may not be comparable to similar measures of other companies as not all companies calculate these measures in the same manner. Management believes that presenting these non-GAAP measures is useful to shareholders because it enhances their understanding of how management assesses the operating performance of the company’s business. Certain non-GAAPmeasures may be used, in part, to determine incentive compensation for current employees.

WABCO Financial Attachment

Consolidated Statements of Operations
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Three Months Ended December 31, 2018 Data Supplement Sheet
Twelve Months Ended December 31, 2018 Data Supplement Sheet
Reconciliation of GAAP to Non-GAAP Financial Measures for Full Year 2019 Guidance

WABCO media, investors and analysts contact

Sean Deason, +1 248 270 9287, [email protected]

Full details and financial filings available from the SEC report.

Reed’s Launching Wellness Ginger Beer with Hemp Extract

Product Launches

Wellness Ginger Beer with Hemp Extract

By the end of the second quarter of 2019, we intend to launch a pilot test of our Wellness Ginger Beer with Hemp Extract in the Pacific Northwest. Packaging will be consistent with our new base brand design with color differentiation in a 10oz sleek can to reinforce functional halo and separation from core offerings. Pricing is expected to be $3.99 SRP/can- in line with other hemp/CBD beverages. We will distribute this new product through our existing base Reed’s distribution partners in mainstream (where possible) and health/ natural food channels.

Our goal is to deliver therapeutic effects of hemp to create a balanced functional beverage unlike any existing offerings. We are utilizing Nano Biologics – a proprietary broad spectrum hemp extract, water soluble nano emulsification technology that delivers superior bioavailability, faster absorption and higher potency than standard hemp extracts.

Hemp based beverages appeal to a large and growing consumer base demanding innovative, functional, health & wellness beverages. Hemp/CBD is non-psychoactive and has claimed therapeutic benefits including pain relief, reduced inflammation, reduced anxiety, sleep aid.

The US functional beverages market is over $30 billion4:

 This category includes range of fortified/enhanced products (i.e., energy/sports/probiotic) and is the fastest growing segment within global non-alcoholic beverages projected to grow 8-10%.
 The Hemp/CBD market is projected to be $2 billion by 2020, with Hemp-infused (non-THC) beverages projected to be a $260 million category by 2022.

Ready to Drink Mule

We expect to launch the pilot test of our ready to drink Mule in Southern California and the Pacific Northwest by the end of the second quarter of 2019. Packaging will be consistent with our new base brand design with tie to iconic copper Mule imagery. Pricing is expected to be $9.99 4-Pack SRP. We will distribute this new product through our existing distribution partners that are also leading beer and spirit distributors in mainstream and liquor channels.

Source: Future Market Insights, Hemp Business Journal 2018

The ready to drink Mule represents an incremental, high margin $3 billion category for Reed’s. Consumer demand for craft alcoholic beverages is growing5:

 Growth of craft segment across all alcohol categories, craft beer sales over $20 billion
 Flavored Malt Beverage (FMB) segment sales of about $3 billion, growing double digit, with shift to “healthier” products such as emerging hard teas and seltzers ($500 million+, growing 200%)
 Dominated by national strategies and newly created brands
 Expect halo from fast growing non-alcoholic ginger beer segment ($100m+, fastest growing craft CSD flavor segment), similar to impact from sparkling water, kombucha and tea
 Booming popularity of ginger beer based Mule cocktails on- premise (sales growing 30% YOY, now ranks #4 most popular cocktail tied with Martini)

Full Annual Report on Reed’s Inc FY 2018 and 2019 Expectations here.

DE Deere & Co Annual Report and Company Outlook

NEWS RELEASE

Ken Golden, 309-765-5678 [Director, Global Public Relations, Deere & Company]

Deere Reports First-Quarter Income of $498 Million

·                  Net sales rise 16% to $6.94 billion.

·                  Construction & Forestry results move strongly higher.

·                  Forecast for 2019 calls for net income of approximately $3.6 billion on sales gain of about 7%.

MOLINE, Illinois (February 15, 2019) — Deere & Company reported net income of $498.5 million for the first quarter ended January 27, 2019, or $1.54 per share, compared with a net loss of $535.1 million, or $1.66 per share, for the quarter ended January 28, 2018. Affecting first-quarter 2018 results were charges to the provision for income taxes due to U.S. tax reform legislation (tax reform).  Without these tax reform charges, first-quarter 2018 net income results would have been $442.1 million, or $1.35 per share. (Information on non-GAAP financial measures is included in the appendix.)

“Although Deere has continued to make solid progress on a number of fronts and reported higher earnings for the quarter, our results were hurt by higher costs for raw materials and logistics as well by customer concerns over tariffs and trade policies,” said Samuel R. Allen, chairman and chief executive officer. “These latter issues have weighed on market sentiment and caused farmers to become more cautious about making major purchases. At the same time, sales of John Deere construction and forestry machinery have continued at a strong pace. We believe cost pressures should abate as the year progresses and are hopeful we will soon have more clarity around trade issues. As a result, we remain cautiously optimistic about our prospects for the year ahead.”

Company Outlook & Summary

Company equipment sales are projected to increase by about 7 percent for fiscal 2019 compared with 2018. Included in the forecast are Wirtgen results for the full fiscal year of 2019 compared with 10 months of the prior year. This adds about 1 percent to the company’s net sales forecast for the current year. Also included in the forecast is a negative foreign-currency translation effect of about 2 percent for the year. Net sales and revenues are projected to increase by about 7 percent for fiscal 2019. Net income attributable to Deere & Company is forecast to be about $3.6 billion.

“Despite unsettled conditions in some of our key markets, Deere expects to achieve strong financial results in 2019,” commented Allen. “This is a testament to the success of our actions to create a more flexible cost structure, expand our global customer base, and develop leadership in the latest precision technologies. Customers are responding with great enthusiasm to the advanced features and technology in our new products. We are confident Deere is well-positioned to achieve its financial goals and firmly believe the company remains on track for delivering solid operating performance and significant value to customers and investors in the future.”

Slides from the 15 February 2019 Earnings Call:

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Full Annual Report for DE 2018 [8-K].

Divall Insured Income Properties 2018 Annual Report – Property Uncertainties Resolved

DiVall Insured Income Properties 2, L.P. Quarterly News
PROPERTY UNCERTAINTIES RESOLVED
The New Year has begun with good news for three properties that caused uncertainties last year for the portfolio of DiVall Insured Income Properties 2 L.P. (the Partnership”): Applebee’s: The Applebee’s franchisee has been in Chapter 11 bankruptcy since May 2018. In January 2019 the franchisee filed with the court to “accept” our lease without modification. Although the Partnership was pressured to modify the lease as a condition of “acceptance” (including reduced fixed rents and the elimination of percentage rent participation in growing sales), the Partnership endured the pressure and did not modify the lease terms.
Wendy’s Destroyed By Fire (3013 Peach Orchard Road. Augusta. GA): The very expensive code requirements in Columbia County has added unanticipated permitting delays and unique compliance requirements for the project. Construction has commenced, and the new Wendy’s design prototype should be open by mid-May 2019. The tenant had hoped for a March 2019 opening. Although we had negotiated for a continuation of fixed rent throughout the closed period, the Partnership is projected to lose significant percentage rents from this tenant in 2018 (approximately $62,000) and 2019 (approximately $60,000). Brakes4Less (Martinez. GA): This former Wendy’s store is also in Columbia County and has been subjected to costly code upgrades for existing utilities; building renovations and expansions, as well as extensive landscaping demands. The tenant now expects to invest in excess of $275,000. The Partnership agreed to contribute $60,000 through abated rent in Year 1 in exchange for waiving the inspection period and an extension of the original ten-year term to eleven years. The tenant has waived all contingencies, all permits have been approved by the city and county, and renovation is underway. Due to abated rent, (in lieu of a one-time cash contribution to tenant), rent will not commence for distribution until 2020.
The resolution of the above uncertainties is expected to again stabilize the Partnership with all properties leased.

EXPECTED 2019 DISTRIBUTIONS
The Partnership invested significantly in updating decades-old environmental, survey and title costs during 2018 in connection with testing the sale market. These costs will not need to be duplicated again even for a future portfolio sale. Accordingly, we expect to distribute $800,000 ($17.28 per unit) from 2019 operations as compared to $650,000 ($14.04 per unit) from 2018 operations.

STABILIZED DISTRIBUTIONS PROJECTED FOR 2020
The full impact of eliminating the uncertainties for the three properties noted above including reconstruction, renovation, expiration of abated rent and restoration of sales subject to percentage rents (without any individual property sales) should result in approximately an additional $3.00 per unit annual distribution or an 80 basis point increase in yield on our $380 NUV.

2018 DISTRIBUTION

As budgeted, $500,000 ($10.80 per unit) will be distributed for the fourth quarter of 2018 on or about February 15, 2019, representing the percentage rents noted below.

EARLIER PERCENTAGE RENT DISTRIBUTION

Unlike prior years when we paid the annual percentage rent distribution with the first quarter distribution in May, we plan to pay the 2018 percentage rent distribution on or about February 15, 2019 instead of May 15, 2019. Although we will receive about $62,000 less percentage rent in 2018 on the Wendy’s destroyed by fire (compared to 2017 for this store), we still expect to distribute $500,000 ($10.80 per unit) from available percentage rents.
Access to Additional Financial Information For further quarterly 2018 unaudited financial information, see the Partnership’s interim financial reports filed as part of the Partnership’s Form 10-Q. A copy of this filing and other public reports can be viewed and printed free of charge at the Partnership’s website at www.divalloroperties.com or at the SEC’s website at www.sec.gov. The Partnership’s 2017 Annual Report on Form 10-K was filed with the SEC on March 23, 2018, which also can be accessed via the websites listed.

QUESTIONS & ANSWERS

Q. When can I expect to receive my next distribution mailing? Your distribution correspondence for the First Quarter of 2019 is scheduled to be mailed on or about May 15, 2019.
Q. When will the Partnership mail the 2018 S-1’s? We plan to mail the 2018 K-1’s during the first week of March, 2019.
Q. What was the estimated December 31, 2018 Net Unit Value (“NUV”)? Management has estimated the December 31, 2018 Net Unit Value of each interest of the Partnership to approximate $380. Please note that the estimated year-end NUV should be adjusted (reduced) for any subsequent property sale(s) or applicable impairment write-downs during the following year. As with any valuation methodology, the independent third-party appraisal valuation methodology was based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated NUV. Accordingly, with respect to the estimated NUV, the Partnership can give no assurance that:

  • an investor would be able to resell his or her Units at this estimated NUV;
  • an investor would ultimately realize distributions per Unit equal to the Partnership’s estimated NUV per Unit upon the liquidation of all of the Partnership’s assets and settlement of its liabilities;
  • the Units would trade at the estimated NUV in a secondary market; or
  • the methodology used to estimate the Partnership’s NUV would be acceptable under ERISA for compliance with its reporting requirements.


Q. How can I obtain hard copies of Quarterly and Annual Reports or other SEC filings? Please visit the Investor Relations page at the Partnership website at www.divallproperties.com or the SEC website at www.sec.gov to print a copy of the report(s) or contact Investor Relations. C.

Q. What is the meaning of the word “Insured” in the name of this investment? In the offering materials from the late 1980’s, sponsored by the former general partners, there was a representation (but no “guarantee”) that the Partnership would seek to insure rents from vacant properties. Although, there was some initial availability of very restrictive and limited (one year) insurance, that availability vanished in the early 1990’s. In other words, the former general partners were “fast and loose” with professing the concept of “Insured” and the next and final partnership they sold did not use the term in the investment’s name.
CONTACT INVESTOR RELATIONS TO UPDATE PERSONAL INFORMATION (ADDRESS. TELEPHONE. ETC.):
MAIL:
DiVall Investor Relations do Phoenix American Financial Services Inc 2401 Kerner Blvd. San Rafael, CA 94901
PHONE: 1-800-547-7686 FAX: 1-415-4854553
(Please mail or fax a signed letter stating your new address and telephone number. Updates cannot be accepted over the telephone or via voicemail messages.)


FORTFARD LOOKING STATEMENTS Forward-looking statements may differ materially from actual results. Investors are cautioned not to place undue reliance on forward-looking statements, such as “intends,” ‘plan,” “anticipates,” “believes,” “could,” “should,” “estimate,” “expect,” “projects,” “aim,” or other variations on these terms, which reflect the Partnership’s management’s view only as of February 15, 2019, the date this newsletter was sent for printing and mail assembly. The Partnership undertakes no obligation to update or revise forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

Full disclosure and details available form the 2018 SEC Annual Report

PepsiCo Reports 2018 Results; 2019 Outlook

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PepsiCo Reports Fourth-Quarter and Full-Year 2018 Results; Provides 2019 Financial OutlookReported (GAAP) Fourth Quarter and Full-Year 2018 Results

 Fourth QuarterFull-Year
Net revenue change—%1.8%
Foreign exchange impact on net revenue(4)%(1)%
Earnings per share (EPS)$4.83$8.78
EPS changeNot meaningful*160%
Foreign exchange impact on EPS(3)%(1)%

* EPS change not meaningful as fourth quarter 2018 earnings per share of $4.83 compares to fourth quarter 2017 loss per share of $(0.50). Fourth quarter 2017 results include a provisional net tax expense ($1.73 per share) as a result of the U.S. Tax Cuts and Jobs Act (TCJ Act) passed on December 22, 2017 and fourth quarter 2018 results include net tax benefits of $3.71 per share described on pages A-7 and A-8.Organic/Core (non-GAAP)1 Fourth Quarter and Full-Year 2018 Results

 Fourth QuarterFull-Year
Organic revenue growth4.6%3.7%
Core EPS$1.49$5.66
Core constant currency EPS growth17%9%

PURCHASE, N.Y. – February 15, 2019 – PepsiCo, Inc. (NASDAQ: PEP) today reported results for the fourth quarter and full year 2018.“We are pleased with our results for the fourth quarter and the full year 2018.  For the year we met or exceeded each of the financial objectives we set out at the beginning of the year.  Frito-Lay North America and each of our international sectors performed very well, and our North America Beverages sector made progress throughout the year,” said Chairman and CEO Ramon Laguarta.  “While adverse foreign exchange translation negatively impacted reported net revenue performance, our underlying organic revenue growth accelerated in the second half, and we ended the year with 4.6% organic revenue growth in the fourth quarter.  Furthermore, we are excited about the outlook for our business.  We are well positioned in large, growing categories and have developed strong and relevant capabilities over the years.  In 2019, we aim to capitalize on the momentum we have as we enter the year, and to continue to invest in the capabilities that will better position us for success for years to come.“For 2019, we expect 4% organic revenue growth and approximately 1% decline in core constant currency EPS.  Our 2019 EPS performance is expected to be impacted by incremental investments that are intended to further strengthen the business, lapping a number of 2018 strategic asset-sale and refranchising gains and an increased core effective tax rate in 2019.  Importantly, we expect to return to high-single-digit core constant currency EPS growth in 2020.”1 Please refer to the Glossary for the definitions of non-GAAP financial measures including “Organic,” “Core,” “Constant Currency,” and “Free Cash Flow (excluding certain items).” Please refer to “2019 Guidance and Outlook” for additional information regarding PepsiCo’s full-year 2019 growth objectives and targets. PepsiCo provides guidance on a non-GAAP basis as the Company cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange and commodity mark-to-market adjustments.

Summary of Fourth Quarter Financial Performance:

  • Reported fourth-quarter and year-ago results were impacted by the following items which are excluded from core results. See A-6 to A-8 for further details.
    • ◦Merger and integration charges,
    • ◦charges related to bond cash tender and exchange offers,
    • ◦2018 net tax benefit and 2017 provisional net tax expense related to the TCJ Act,
    • ◦other net tax benefits resulting from the reorganization of our international operations,
    • ◦a non-cash state tax benefit resulting from our resolution with the Internal Revenue Service of all open matters related to the audits of taxable years 2012 and 2013 (the 2012 and 2013 audit resolution),
    • ◦restructuring charges, and
    • ◦commodity mark-to-market net impacts.
  • Reported net revenue was even with the prior year. Foreign exchange translation had a 4-percentage-point unfavorable impact on reported net revenue performance and acquisitions and divestitures had an unfavorable impact of 1 percentage point. Organic revenue, which excludes the impacts of foreign exchange translation, acquisitions, divestitures, structural and other changes, grew 4.6 percent.
  • Reported gross margin expanded 75 basis points and core gross margin expanded 90 basis points. Reported operating margin contracted 70 basis points and core operating margin expanded 55 basis points.
  • Reported operating profit decreased 5 percent and core constant currency operating profit increased 7 percent. Commodity mark-to-market net impacts and restructuring charges negatively impacted reported operating profit performance by 5 percentage points and 1 percentage point, respectively. The impact of merger and integration charges related to the acquisition of SodaStream International Ltd. (SodaStream) and the prior year gain from the refranchising of a portion of our bottling operations in Jordan negatively impacted reported operating profit performance by 3 percentage points and 5 percentage points, respectively. A gain from the refranchising of our entire beverage bottling operations and snack distribution operations in Czech Republic, Hungary and Slovakia (CHS) positively impacted reported operating profit performance by 2 percentage points. Unfavorable foreign exchange translation reduced reported operating profit performance by 3 percentage points.
  • The reported effective tax rate in the fourth quarter of 2018 was (254.8) percent and the core effective tax rate was 17.9 percent. The reported and core effective tax rates in the fourth quarter of 2017 were 129.8 and 25.0 percent, respectively. The fourth quarter 2018 reported effective tax rate reflects net tax benefits of $5.3 billion, collectively, associated with net tax benefits resulting from the reorganization of our international operations, a net tax benefit related to the TCJ Act and a non-cash state tax benefit from the 2012 and 2013 audit resolution. The fourth quarter 2017 reported effective tax rate reflects the impact of the provisional net tax expense of $2.5 billion as a result of the TCJ Act.
  • Reported EPS was $4.83, an increase from the $0.50 loss per share in the fourth quarter of 2017. Foreign exchange translation negatively impacted reported EPS growth by 3 percentage points.
  • Core EPS was $1.49. Excluding the impact of foreign exchange translation, core constant currency EPS increased 17 percent (see schedule A-11 for a reconciliation to reported EPS, the comparable GAAP measure).
  • Net cash provided by operating activities was $4.7 billion.

Discussion of Fourth Quarter 2018 Reported Division Results:

Frito-Lay North America (FLNA): Operating profit grew 8%, reflecting net revenue growth and productivity savings, partially offset by certain operating cost increases.

Quaker Foods North America (QFNA): Operating profit grew 5%, reflecting productivity savings and lower advertising and marketing expenses, partially offset by certain operating cost increases and a 5-percentage-point impact of higher commodity costs.

North America Beverages (NAB): Operating profit declined 12%, reflecting certain operating cost increases, including increased transportation costs, a 9-percentage-point impact of higher commodity costs and higher advertising and marketing expenses. These impacts were partially offset by net revenue growth, productivity savings and a 4-percentage-point impact of prior-year hurricane-related costs.

Latin America: Operating profit grew 9%, reflecting effective net pricing and productivity savings, partially offset by certain operating cost increases, a 20-percentage-point impact of primarily foreign exchange-driven higher commodity costs and higher advertising and marketing expenses. Unfavorable foreign exchange reduced operating profit growth by 6 percentage points.

Europe Sub-Saharan Africa (ESSA): Operating profit grew 23%, reflecting effective net pricing, productivity savings, volume growth, a 15-percentage-point net impact of refranchising our entire beverage bottling operations and snack distribution operations in CHS and a 6-percentage-point impact of the sale of a portion of our water business in Russia. These impacts were partially offset by certain operating cost increases and a 19-percentage-point impact of primarily foreign exchange-driven higher commodity costs. Unfavorable foreign exchange reduced operating profit growth by 15 percentage points.

Asia, Middle East and North Africa (AMENA): Operating profit declined 46%, reflecting a 45-percentage-point impact of refranchising a portion of our Jordan beverage business in 2017, certain operating cost increases, higher advertising and marketing expenses and a 4-percentage-point impact of higher commodity costs. These impacts were partially offset by productivity savings and effective net pricing.

Summary of Full-Year 2018 Financial Performance:

Reported full-year 2018 and 2017 results were impacted by the following items which are excluded from core results. See A-6 to A-8 for further details.
Merger and integration charges,
charges related to bond cash tender and exchange offers,
2018 net tax benefit and 2017 provisional net tax expense related to the TCJ Act,
other net tax benefits resulting from the reorganization of our international operations,
non-cash tax benefits resulting from the conclusion of certain international tax audits and the 2012 and 2013 audit resolution,
restructuring charges, and
commodity mark-to-market net impacts.
Reported net revenue increased 2 percent. Foreign exchange translation and acquisitions and divestitures each had an unfavorable impact of 1 percentage point. Organic revenue, which excludes the impacts of foreign exchange translation, acquisitions, divestitures, structural and other changes, grew 4 percent.
Reported gross margin contracted 10 basis points and core gross margin expanded 5 basis points. Reported operating margin contracted 55 basis points and core operating margin contracted 10 basis points.
Reported operating profit decreased 2 percent and core constant currency operating profit increased 2 percent. Commodity mark-to-market net impacts and merger and integration charges related to our acquisition of SodaStream negatively impacted reported operating profit performance by 2 percentage points and 1 percentage point, respectively. Restructuring charges had a nominal impact. Foreign exchange translation negatively impacted reported operating profit performance by 0.5 percentage points.
The reported effective tax rate in 2018 was (36.7) percent and core effective tax rate was 18.8 percent. The reported and core effective tax rates in 2017 were 48.9 and 23.3 percent, respectively. The 2018 reported effective tax rate reflects the impacts of $4.3 billion of net tax benefits resulting from the reorganization of our international operations, $717 million of non-cash tax benefits resulting from both the favorable conclusion of certain international tax audits and the 2012 and 2013 audit resolution and a $28 million net tax benefit related to the TCJ Act.
Reported EPS was $8.78, an increase of 160 percent. Foreign exchange translation negatively impacted reported EPS growth by 1 percentage point.
Core EPS was $5.66, an increase of 8 percent. Excluding the impact of foreign exchange translation, core constant currency EPS increased 9 percent (see schedule A-12 for a reconciliation to reported EPS, the comparable GAAP measure).
Net cash provided by operating activities was $9.4 billion. Free cash flow (excluding certain items) was $7.6 billion.

More details available from the SEC filing: 2018 Annual Report by PepsiCo



Hawaiian Electric Industries Reports 2018 Results, Dividend Increase, New Directors Nominated

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 NEWS RELEASE February 15, 2019

Contact:
Julie R. Smolinski
Telephone: (808) 543-7300

Director, Investor Relations
E-mail: [email protected]

HAWAIIAN ELECTRIC INDUSTRIES REPORTS 2018 RESULTS,INCREASES DIVIDEND AND NOMINATES NEW DIRECTORS
Full year net income and diluted earnings per share (EPS)1 grew 22%Core net income and EPS rose 12%. Dividend increase of 3%. Three new independent directors nominated for election at the 2019 Annual Meeting
2018 Highlights:

  • Strong consolidated earnings include record bank earnings and improved utility earnings
  • Reported net income of $201.8 million in 2018 versus $165.3 million in 2017
  • Reported EPS of $1.85 in 2018 versus $1.52 in 2017
  • Reported return on equity of 9.5% versus 7.9% in 2017
  • Quarterly dividend increase of 1 cent, from $0.31 to $0.32 per share
  • Increase reflects Board’s view of the strength of the Company’s performance and prospects
  • Hawaiian Electric Company (Hawaiian Electric2)delivered on key priorities:
  • Completed first full cycle of rate cases for our three utilities in six years
  • Committed to $244 million in customer savings over twelve years from successful implementation of enterprise system
  • On track to beat 2020 goal of 30% electricity sales from renewable sources; achieved 27% in 2018
  • Reduced fossil fuel use and greenhouse gas emissions by almost 20% over last ten years
  • Led state’s largest renewable energy and storage procurement, resulting in filed power purchase agreements at lowest prices to date in Hawaii, pending Hawaii Public Utilities Commission (PUC) approval
  • Invested more than $400 million to increase reliability and resilience and integration of additional renewable energy
  • Recognized as 2018 Investor-Owned Utility of the Year by Smart Electric Power Alliance for its grid modernization initiative
  • American Savings Bank (American) achieved record earnings and improved efficiency:
  • Disciplined approach to growth in the healthy Hawaii economy, building upon the benefits of a lower tax rate from tax reform
  • Improved efficiency ratio by 2.2%, with a 2018 efficiency ratio of 59.4% compared to 61.6% in 2017
  • Completion of innovative new campus enables further efficiency opportunities
  • Three new independent, uniquely qualified directors with diverse and relevant experience – Celeste Connors, Mary Powell and Jim Scilacci – nominated for election at the 2019 Annual Meeting
  • Admiral Thomas Fargo to be named Vice Chair of the Board and Peggy Fowler named Chair of the Nominating and Corporate Governance Committee of the Board

1 Unless otherwise indicated, throughout this release earnings per share (EPS) refers to diluted earnings per share.2 Hawaiian Electric, unless otherwise defined, refers to the three utilities, Hawaiian Electric Company, Inc. on Oahu, Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc.

HONOLULU – Hawaiian Electric Industries, Inc. (NYSE – HE) (HEI) today reported 2018year-end consolidated net income for common stock of $201.8 million and EPS of $1.85 compared to $165.3 million and EPS of $1.52 for 2017. Excluding 2017 one-time impacts from the implementation of federal tax reform, principally to adjust deferred tax assets for the lower tax rate, 2017 core net income was $179.5 million and core EPS was $1.65, and 2018 net income and EPS growth over the prior year core amounts was 12.4% and 12.1%, respectively.For the fourth quarter of 2018, consolidated net income for common stock was $49.6 million and EPS was $0.45 compared to $32.4 million and EPS of $0.30 for the fourth quarter of 2017. Excluding the previously referenced one-time 2017 federal tax reform impacts, core net income for the fourth quarter of 2017 was $46.5 million and core EPS was $0.43, and fourth quarter 2018 net income and EPS growth over the fourth quarter 2017 core amounts was 6.7% and 4.7%, respectively.“We are making substantial progress across HEI, as demonstrated by our strong 2018 financial, operational and environmental results. We delivered solid earnings growth over the prior year, with particularly strong results from American Savings Bank. In light of our 2018 earnings and our future prospects, our Board of Directors yesterday approved a 3% dividend increase, enhancing our record of uninterrupted dividends since 1901,” said Constance H. Lau, President and CEO of HEI.“Our electric company generated 27% of its sales from renewable energy, despite the lava-related shutdown of a third-party owned geothermal plant in 2018, and invested more than $400 million to strengthen the resilience of our electric systems across the islands we serve. Hawaiian Electric continues to lead the nation in the efficient integration of renewable resources, and in 2018 we were again number one in the nation in rooftop solar adoption.”


Hawaiian Electric Industries, Inc.February 15, 2019Page 3
“American Savings Bank delivered record earnings in 2018, and finished the year with a very strong fourth quarter. The bank is well positioned to continue to grow in 2019 and achieve even greaterefficiency as it brings its team together into its new, state-of-the-art campus and works continually to deliver value to customers, our consolidated company and shareholders,” said Lau.
HAWAIIAN ELECTRICFull Year Results:Hawaiian Electric’s full-year 2018 net income was $143.7 million, compared to $120.0 million in 2017. The $23.7 million increase in reported net income over the prior year was primarily driven by the following after-tax items:

Resetting of base rates through the rate case cycle, resulting in a net income impact of $31 million, and recovery under the rate adjustment mechanism (RAM) and major projects interim recovery (MPIR) mechanisms, resulting in $26 million of net income impact;
$5 million in net income from the previously announced pole ownership agreement with Hawaiian Telcom, which resulted in attachment fees and a one-time impact from the release of reserves due to the settlement of receivables from Hawaiian Telcom; the arrangement will reduce the cost of this critical infrastructure to our customers by bringing in third party revenues;
$9 million lower 2017 net income reflecting the aforementioned one-time 2017 impact of federal tax reform; and
$2 million higher net income from net favorable tax adjustments, largely related to favorable adjustments made in connection with filing of the 2017 tax return, partially offset by the difference between the reduction to revenue requirements to return tax reform benefits to customers and actual 2018 tax savings.

These items were partially offset by the following after-tax items:

$37 million higher operations and maintenance (O&M) expenses3 compared to 2017, primarily due to the reset of pension costs for the first time in six years as part of rate case decisions, the write-off of costs incurred during the merger time period related to Smart Grid planning and the evaluation of importing LNG, higher consultant costs related to implementation of the new enterprise resource system, higher costs for preventative maintenance on underground circuits to ensure reliability, generating station operation and maintenance (including $2 million net income impact from the newly commissioned Schofield Generating Station), and workers’ compensation claims;

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3 Excludes net income neutral expenses covered by surcharges or by third parties. See “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and related reconciliation accompanying this release.


$8 million higher depreciation expense as a result of increasing investments for the integration of more renewable energy, improved customer reliability and greater system efficiency; and
$3 million higher interest expense from higher interest rates and increased borrowings to fund utility capital investments.

Fourth Quarter Results:Fourth quarter 2018 net income of $35 million was $10 million higher than the fourth quarter of 2017, primarily driven by a $15 million (post-tax) net revenue increase from rate relief and recovery through the RAM and MPIR mechanisms, the previously mentioned impact from the pole ownership agreement with Hawaiian Telcom (the impacts of which were experienced in the fourth quarter), and lower fourth quarter 2017 earnings due to the aforementioned $9 million one-time impact of federal tax reform. These amounts were partially offset by higher depreciation and O&M impacts totaling $3 million and $13 million post-tax, respectively. The higher O&M expenses included a $2 million post-tax write off of the previously mentioned LNG expenses and a $5 million impact from above-described pension reset. Lower allowance for funds used during construction also partially offset net income by $1 million.
AMERICAN SAVINGS BANKFull Year Results:American’s full-year 2018 net income was $82.5 million compared to $67.0 million in 2017. The 23% increase from the prior year resulted from $18.8 million higher net interest income, driven primarily by growth in interest earning assets and an improved interest rate environment. This was partially offset by $3.8 million higher provision for loan losses, as well as lower noninterest income. While noninterest income for the year was $5.5 million lower than 2017, $4.2 million of such amount resulted from the reclassification of $4.2 million of debit card expenses in 2018 from noninterest expense to noninterest income due to a new accounting standard and thus did not impact net income.


Total deposits were $6.2 billion at December 31, 2018, an increase of 4.6% from December 31, 2017. The average cost of funds was 0.25% for the full year 2018, up 4 basis points from the prior year.Overall, American’s return on average equity4 for the full year increased to 13.5% compared to 11.2% in 2017, and the return on average assets for the full year grew to 1.20% in 2018 compared to 1.02% in 2017.
Fourth Quarter Results:Fourth quarter of 2018 net income of $21.8 million was $0.5 million higher than the third, or linked quarter and $4.9 million higher than the fourth quarter of 2017. Compared to the linked quarter of 2018, the $0.5 million net income increase was primarily driven by $2.3 million (pre-tax) higher net interest income primarily due to higher yields on interest earning assets, and a lower provision for loan losses principally related to the release of reserves in the commercial and commercial real estate loan portfolios due to improved credit quality and the payoff of a criticized commercial real estate construction loan. Compared to the fourth quarter of 2017, the $4.9 million higher net income in the fourth quarter of 2018 was primarily driven by $6.4 million (pre-tax) higher net interest income mainly due to higher yields and growth in earning assets.American’s fourth quarter of 2018 return on average equity was 14.1%, compared to 13.8% in the linked quarter and 11.1% in the fourth quarter of 2017. Return on average assets was 1.25% for the fourth quarter of 2018, compared to 1.22% in the linked quarter and 1.01% in the same quarter last year.Please refer to American’s news release issued on January 30, 2019 for additional information.
HOLDING AND OTHER COMPANIESThe holding and other companies’ net loss was $24.4 million in 2018 compared to $21.7 million in 2017. The $21.7 million net loss for 2017 included a $5.7 million one-time charge to adjust deferred tax assets due to federal tax reform. The higher 2018 net loss for the year was primarily driven by lower tax benefits on expenses and other tax impacts due to tax reform and higher interest and compensation expenses, partially offset by lower professional costs and earnings contributions from Pacific Current. Fourth quarter net losses were $2.3 million lower than the prior year quarter, at $7.5 million in 2018 compared to $9.8 million in the fourth quarter of 2017. The fourth quarter 2017 net loss included the aforementioned $5.7 million one-time charge related to tax reform. Excluding the 2017 one-time charge, the fourth quarter of 2018 net loss was $3.5 million greater than the fourth quarter of 2017, due largely to the same factors cited for the full year comparison.
BOARD DECLARES INCREASE IN QUARTERLY DIVIDENDOn February 14, 2019, the Board of Directors increased HEI’s quarterly cash dividend to $0.32 per share from the previous $0.31 per share. The dividend is payable on March 13, 2019, to shareholders of record at the close of business on February 26, 2019 (ex-dividend date is February 25, 2019). The dividend is equivalent to an annual rate of $1.28 per share. This dividend increase reflects HEI’s strong 2018 performance and solid foundation for future growth at both our bank and utility subsidiaries.HEI has paid dividends on an uninterrupted basis since 1901. At the indicated annual dividend rate and the closing price per share on February 14, 2019 of $37.68, HEI’s dividend yield is 3.4%.
THREE NEW INDEPENDENT DIRECTORS NOMINATED FOR ELECTION AT THE 2019 ANNUAL MEETINGCeleste Connors, Mary Powell and Jim Scilacci – each of whom has demonstrated a strong track record of stakeholder value creation – have been nominated for election at the 2019 Annual Meeting.
About Celeste Connors: Ms. Connors has extensive environmental, energy and economic policy experience spanning a 20-year career. Since 2015 she has served as Executive Director of Hawaii Green Growth, a public private partnership focused on identifying sustainable growth priorities within an island context. Hawaii Green Growth was recognized by the United Nations as a Local 2030 hub to help catalyze and scale island-led solutions to achieve global sustainability goals. Ms. Connors has served as Practitioner in Residence in the Energy, Resources and Environment Program at the Johns Hopkins University School of Advanced International Studies since 2012. She has also served as CEO of c.dots development, an organization that she co-founded to provide underserved communities with sustainable and resilient infrastructure and services, since 2012. Ms. Connors served as Director for Environment and Climate Change at the National Security Council and National Economic Council in the White House from 2008-2012, and served as a Foreign Service Officer with the U.S. Department of State from 2000-2012.

Ms. Connors has extensive environmental, energy and economic policy experience spanning a 20-year career. Since 2015 she has served as Executive Director of Hawaii Green Growth, a public private partnership focused on identifying sustainable growth priorities within an island context. Hawaii Green Growth was recognized by the United Nations as a Local 2030 hub to help catalyze and scale island-led solutions to achieve global sustainability goals. Ms. Connors has served as Practitioner in Residence in the Energy, Resources and Environment Program at the Johns Hopkins University School of Advanced International Studies since 2012. She has also served as CEO of c.dots development, an organization that she co-founded to provide underserved communities with sustainable and resilient infrastructure and services, since 2012. Ms. Connors served as Director for Environment and Climate Change at the National Security Council and National Economic Council in the White House from 2008-2012, and served as a Foreign Service Officer with the U.S. Department of State from 2000-2012.


About Mary Powell: Ms. Powell has significant experience in utilities and renewable energy, having served as President and CEO of Green Mountain Power since 2008. She serves on the Board of Sunrun Inc., where she is a member of the compensation committee. Ms. Powell also serves on the boards of the Vermont Electric Power Company, Blue Cross and Blue Shield of Vermont and The Solar Foundation. Her exceptional leadership has received national acclaim; she was named one of Fast Company’s “100 Most Creative People in Business” in 2016 and one of CEO Connection’s “2017 Most Influential Women of the Mid-Market,” among other recognitions.
About Jim ScilacciMr. Scilacci has considerable experience in the utilities space spanning a career of more than 30 years. He served as CFO of Edison International from 2008-2016, and previously as CFO of Edison Mission Energy (2005-2008) and CFO of Southern California Edison (2000-2005). Mr. Scilacci’s track record of success is highlighted by his recognition among the top CFOs in the electric utilities sector by a 2017 Institutional Investor survey of investors and sell-side analysts.
The Company also announced that it is continuing to evolve its Board leadership as it continues to execute its strategies to create value for its customers, communities and shareholders. As part of HEI’s planned Board leadership transition at its upcoming annual shareholder meeting, Jeff Watanabe, HEI Board Chair, has been nominated to stand for election to a one-year term, and Admiral Thomas Fargo, who has been nominated for re-election, will be named Vice Chair of the Board. Peggy Fowler has been appointed as Chair of the Nominating and Corporate Governance Committee.“We are very excited about nominating Celeste, Mary and Jim for election at this year’s Annual Meeting,” said Mr. Watanabe. “Their extensive experience and track records of success add to the strength of our talented Board as we continue our work to deliver long-term value for all of our stakeholders.


WEBCAST AND CONFERENCE CALLHEI TO ANNOUNCE 2019 EPS GUIDANCE IN EARNINGS CONFERENCE CALLHawaiian Electric Industries, Inc. will conduct a webcast and conference call to review its 2018 earnings on Friday, February 15, 2019, at 11:15 a.m. Hawaii time (4:15 p.m. Eastern time). HEI will announce 2019 EPS guidance during the scheduled webcast and conference call.Interested parties within the United States may listen to the conference by calling (844) 834-0652 and international parties may listen to the conference by calling (412) 317-5198 or by accessing the webcast on HEI’s website under the heading “Investor Relations,” sub-heading “News and Events-Events and Presentations.”  HEI and Hawaiian Electric intend to continue to use HEI’s website, www.hei.com, as a means of disclosing additional information. Such disclosures will be included on HEI’s website in the Investor Relations section. Accordingly, investors should routinely monitor such portions of HEI’s website, in addition to following HEI’s, Hawaiian Electric Company’s and American’s press releases, HEI’s and Hawaiian Electric Company’s Securities and Exchange Commission (SEC) filings and HEI’s public conference calls and webcasts. Investors may also sign up to receive e-mail alerts (based on each investor’s selected preferences) by visiting the “Investor Relations” section of the website, sub-heading “Email Notification.”  The information on HEI’s website is not incorporated by reference in this document or in HEI’s and Hawaiian Electric’s SEC filings, except to the extent specifically incorporated by reference. Investors may also wish to refer to the PUC website at dms.puc.hawaii.gov/dms in order to review documents filed with and issued by the PUC. No information on the PUC website is incorporated by reference in this document or in HEI’s and Hawaiian Electric’s SEC filings.An online replay of the webcast will be available at www.hei.com beginning about two hours after the event. Replays of the conference call will also be available approximately two hours after the event through March 1, 2019, by dialing (877) 344-7529 or (412) 317-0088 and entering passcode: 10127920.
HEI supplies power to approximately 95% of Hawaii’s population through its electric utilities, Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited; provides a wide array of banking and other financial services to consumers and businesses through American Savings Bank, one of Hawaii’s largest financial institutions; and helps advance Hawaii’s clean energy and sustainability goals through investments by its non-regulated subsidiary, Pacific Current, LLC.


NON-GAAP MEASURESSee “Explanation of HEI’s Use of Certain Unaudited Non-GAAP Measures” and related reconciliations on pages 13 to 14 of this release.
FORWARD-LOOKING STATEMENTSThis release may contain “forward-looking statements,” which include statements that are predictive in nature, depend upon or refer to future events or conditions, and usually include words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “predicts,” “estimates” or similar expressions. In addition, any statements concerning future financial performance, ongoing business strategies or prospects or possible future actions are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and the accuracy of assumptions concerning HEI and its subsidiaries, the performance of the industries in which they do business and economic and market factors, among other things. These forward-looking statements are not guarantees of future performance.Forward-looking statements in this release should be read in conjunction with the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” discussions (which are incorporated by reference herein) set forth in HEI’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 and HEI’s future periodic reports that discuss important factors that could cause HEI’s results to differ materially from those anticipated in such statements. These forward-looking statements speak only as of the date of the report, presentation or filing in which they are made. Except to the extent required by the federal securities laws, HEI, Hawaiian Electric, American and their subsidiaries undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.