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SAP AG Q2 and H1 2003 Preliminary Results Release

New York, July 17, 2003

Werner BrandtCFO, SAP AG

SAP AG 2003, Q2 2003 preliminary results release, IR 3

Safe Harbor Statement

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.


Agenda

Outlook 2003

2nd Quarter 2003 Financials

First Half 2003 Financials


Q2 2002€ millions

Q2 2003€ millions

License revenues

%

Total revenues

Net income- Margin as a % of sales

Operating income - Margin as a % of sales

Income before income taxes

Key Figures – 2nd Quarter 2003

Earnings per share (in €)

- Margin as a % of sales

* percentage points

336 21

347

21913

0.71

21

1,638

431

1,778

320

-107

18

-232na

-0.74

na

496

-8

63*

na

nana

na

na

-13

340

2**

-5**

** % currency adjusted – actuals 2003 converted with the exchange rates of 2002


Q2 2002€ millions

Q2 2003€ millions

* percentage points

EBITDA(2)


Pro forma Operating income excl. stock-based comp. and acquisition-related charges(1)

Key Figures – 2nd Quarter 2003


na 37% na Effective tax rate

Pro forma EPS excluding stock-based compensation, acquisition-related charges, and impairment-related charges(1)

620.81 0.49

324 20

6* 18

388

24

%

377 4392 3* 21 24


Q2 2003€ millions

Q2 2002€ millions %

Group Sales by Revenue Type – 2nd Quarter 2003

Q2 2002% of revenue

Q2 2003% of revenue

Product 1,091 61-21,064 65

Maintenance 595 336633 39License 496 28-13431 26

660545

3731

-16-12

554479

3429

115 65

Other revenue

Total

Consulting Service

Training

20

1,638

75

27

1,778

-26

-8

-35

1 2


%currencyadjusted

7**

18**-5**

-7**-3**

-13**

2**

-28**


Maintenance Analysis* – 2nd Quarter 2003 – part I

** incl. sequential currency impact– in € millions

€ 600

€ 610

€ 620

€ 630

€ 640

€ 590

Q2 02 Q3 02 Q4 02 Q1 03 Q2 03

623**

644**

€ 580

595*

603*

628*

608*

633*

* actuals – in € millions


One time Effects

€ 608mill.

17% Maint. on SW Q1

Q1 2003 Q1 2003run rate

Calculated Maintenance Q2

Currency

SalesAllowance

Othereffects

€ 633mill.

Q2 2003

Maintenance Analysis – 2nd Quarter 2003 – part II

Transition Maintenance Revenue Q1 – Q2 2003


Q2 2002€ millions


Gross Margin Analysis – 2nd Quarter 2003

Product revenueCost of product

Product gross margin in % -205 -8-189

82 81

1,091 -21,064

1*

* in percentage points

Service revenueCost of service

Service gross margin in % -480 -14-411 660 -16554

2726 -1*

6163

1,751 -81,618 -685 -12-600

2*

Product / Service revenueProduct / Service cost

Gross margin in %


Q2 2003€ millions

Q2 2002€ millions

Cost Analysis – 2nd Quarter 2003 – part I

Total costs Total revenues

-1,2981,638

* In percentage points

% yoy

Research & Developm.as % of sales

Sales & Marketingas % of sales

3

-8

-358

-99

0 -100

22

56

0

-3*

1*

0*

-24115

-438

-231

-96

13

25-18

4 2*

General & Admin.as % of sales

Other income/expensesas % of sales 0

% yoyexcl. SBC/AC

-12

-100

-21

2

-1,458 -11 1,778 -8

-14


Q2 2003€ millions

Q1 2003€ millions

Cost Analysis – 2nd Quarter 2003 – part II

Operating Expenses

SBC & AC

Operating Expenses excl. SBC&AC

Q2 2002€ millions

-1,222-1,298 -1,458

648 4

-1,216-1,250 -1,454

% seq.

3

6

% yoy

-14

-11

-6

-3

% atconst. curr.


06/2003 12/2002

Worldwide Headcount* as of June 30, 2003

seq. Q2/03

Group

EMEA

Americas

APA

156

-25176

307

* in FTE

net new hires

28,961

19,379

6,0973,485

Q22003307

R&D

Service & Support

Sales & Marketing

G&A

41

67

3

1968,391

12,473

5,108

2,989

28,797

19,235

6,3113,251

7,966

12,753

5,067

3,011

Q12003-143

03/2003

28,654

19,223

6,1223,309

8,195

5,041

2,986

yoy Q2/03

-75

-544226

-393

-715

-180

-117

619

06/2002

29,354

19,454

6,6413,259

7,772

13,188

5,288

3,106

12,432


Agenda

Outlook 2003

2nd Quarter 2003 Financials

First Half 2003 Financials


H1 2002€ millions

H1 2003€ millions

License revenues

%

Total revenues

Net income- Margin as a % of sales

Operating income - Margin as a % of sales

Income before income taxes

Key Figures – First Half 2003

Earnings per share (in €)


* percentage points

336 20

658

40513

1.31

21

3,158

783

3,436

506

20

15

-167na

-0.53

1

898

-8

265*

3190

nana

na

20*

-13

638

1**

-5**



H1 2002€ millions

H1 2003€ millions

* percentage points

EBITDA(2)


Pro forma operating income excl. stock-based comp. and acquisition-related charges(1)

Key Figures – First Half 2003


na 38% naEffective tax rate

Pro forma EPS excluding stock-based compensation, acquisition-related charges, and impairment-related charges(1)

711.45 0.84

562 23

6* 16

692

22

%

617 20740 5* 18 23


Shareholders‘ Equity & LiabilitiesAssets

Consolidated Balance Sheet as of June 30, 2003

Other assets

Liquid assets

Inventories/Accountsreceivable

Fixed assets

Other liabilities

Deferred income

Shareholders‘ equity

TOTAL TOTAL

Dec 31, 02Jun 30, 03

436

1,782

1,925

1,588

5,731

in € millions

Reserves, accrued liabilities

Minority interest

Jun 30, 03

699

833

3,014

5,731

1,130

55

Dec 31, 02

490

1,239

2,242

1,639

5,610

758

362

2,872

1,562

56

5,610


Dec 31, 02

H1 2002

Jun 30, 03

H1 2003

%

Balance Sheet & Cash Flow Analysis

* percentage points** days

Operating Cash Flow CapExFree Cash FlowFree Cash Flow as a % of Revenue

739 9807 -126 -29-90 613 17717

18% 5*23%

in € mill.

DSO -7**80**

%

87**


Agenda

License Revenue Analysis

1st Quarter 2003 Financials

Outlook 2003


Outlook 2003

SAP continues to expect pro forma earnings per share for 2003, excluding stock-based compensation, acquisition-related charges and impairment-related charges, to be in the range of €3.45 per share to €3.60 per share. The Company has slightly increased its target for pro forma operating margin, excluding stock-based compensation and acquisition-related charges. Previously, the Company expected its 2003 pro forma operating margin to increase by around 1 percentage point compared to 2002. The Company now expects its 2003 pro forma operating margin to be between 1 and 1.5 percentage points higher than the level achieved in 2002. While the Company continued to not provide revenue expectations, it expects to achieve its pro forma operating margin and pro forma earnings per share targets through continued market share gains and cost containment amid the current business environment and business seasonality in line with historical patterns.


Outlook 2003 cont‘d

Management does not provide its guidance on operating margin and earnings per share based on US GAAP measures because these measures include expenses like stock based compensation, impairment related charges and acquisition related charges. Management deems these expenses as either not being meaningful to fully assess the financial performance of our core operations or as highly dependent on the movement of SAP’s share price, or the share price of companies we acquire or in which we invest.

Léo ApothekerPresident Global Field Operations,Member of the Executive BoardSAP AG


License Revenue by Region – 2nd Quarter 2003

License Revenue Q2 2003: €431 mill.-13%* | -5%**

of which US €86 m-14%* | +6%**

Americas €112 m-12%* | +9%**

of which Japan €25 m-26%* | -12%**

APA €58 m0%* | +16%**

EMEA €261 m-16%* | -15%**

of which Germany €97 m-4%* | -4%**

* y-o-y growth ** % currency adjusted – actuals 2003 converted with the exchange rates of 2002


Group Sales by Region – 2nd Quarter 2003

Total Revenue Q2 2003: €1,638 mill.-8%* | +2%**

of which US €397 m-15%* | +5%**

Americas €506 m-15%* | +6%**

of which Japan €91 m-23%* | -10%**

APA €190 m-9%* | +5%**

EMEA €942 m-3%* | -2%**




Customer Wins in Q2 2003

AMERICAS Colgate-Palmolive Fender Sony Pictures Univ. of Cincinnati Wrigley‘s

EMEA Allied Irish Bank European Central Bank Ferrero Swisscom Telecom Italia Vattenfall

ASIA / PACIFIC Australia Department of Defense J-Oil Mills Sharp Shougang Toyota Tsusho


Highlights Q2 2003

Continued license growth in the US (currency adjusted)

Strong results from APA – specifically China SAPPHIRE Orlando - demonstration of clear

leadership with the mySAP CRM 4.0 Launch, SAP NetWeaver, SAP xApps

SMB momentum with key partnerships announced and US launch of Business One


Market Conditions Q2 2003

Decreasing average deal size Higher volume of deals Sales team better aligned to exploit all opportunities

at lower cost Shifting competitive environment

Creates price pressures Continued uncertainty in the market


US – Relative Market Shares

Source: CMI Analysis based on Company Data and Financial Analysts Estimates* Forecast by Company Data and Financial Analysts (I2, JDE, PSFT, SEBL)** Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. Oracle Q3)

Q2 2000-Q1 2001

Q3 2000-Q2 2001

Q4 2000-Q3 2001

Q1 2001-Q4 2001

Q2 2001-Q1 2002

Q4 2001-Q3 2002

Q1 2002-Q4 2002

Q2 2002-Q1 2003

Q3 2001-Q2 2002

SAP

Siebel*Oracle **PeopleSoft*

I2*

JDE**

Q3 2002-Q2 2003E

0%

5%

10%

15%

20%

25%

30%

35%

2526

30

25 25

20

8

6 65 5

67 7

8 8

20

1918

17 1819

23 23

21

2320

2121

242525

12

16 16

1410

87

6 6

2020

1816

14

2423

2221

181818

5

8

1917

2019

31

(rolling 4 quarters; based on license revenues)


mySAP SCM and mySAP CRM Momentum 2003

mySAP SCM as % of i2 & Manugistics

300%

200%

100%

Q1/02 Q2/02 Q3/02 Q4/020%

Q1/03 Q2/03

mySAP CRM as % of Siebel

0%

20%

40%

60%

80%

100%

163%140%113%

188%

241% 231%

41%48% 54%

67%

86% 96%

Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03

D023479

updated numbers from IR , or do you want me to double check with the Darcs and Christians of the world..


Industry Expertise

Customers want more than CRM or SCM – they want solutions for their unique business needs

mySAP CRM 4.0 – more than 280 end-to-end industry-specific processes Leasing for the High Tech industry Basel ll and IAS for Banking industry Maintenance repair and overhaul for Aerospace industry Sarbanes-Oxley for Financial Services industry Service parts management for Automotive and heavy equipment

manufactures RFID for smart shelves for the Retail industry


License Revenue Analysis – by Industry Q2 2003

* Compared to FY 2002

Service Industries25% | 0%*

Financial Services10% | 2%*

Consumer Industries18% | 0%*Discrete Industries

22% | 1%*

Process Industries15% | -5%*

Public Services10% | 2%*

Henning KagermannCEOSAP AG


First Half 2003 Business Environment I

Customer spending environment remains challenging, but SAP benefits through market share gains

Deal sizes continue to decline as customers prefer smaller deals with a quick ROI, providing advantages for SAP

SAP’s integration platform, SAP NetWeaver, combined with open standards help to integrate isolated projects, ensure interoperability of the systems and provides lower TCO

Pressure on CIOs to reduce TCO leads to: Consolidation and simplification of IT landscapes (e.g. Novartis) Strategic projects with SAP (e.g. Ford/Caterpillar etc.)


First Half 2003 Business Environment II

Operational efficiency – one of the top priorities of CEOs Demand for ERP solutions remains strong, in particular in EMEA

and APA Announcement of mySAP ERP was well received in the market

Recent industry consolidation increases customer confusion in the short term

Competitors discount heavily with pricing pressure on software licenses and consulting


Customer Feedback

“The successful implementation in 2001 of our new Enterprise Resource Planning System, SAP, has provided a very effective tool for managing changes in demand.“

“When faced with a choice between stand-alone systems or a suite solution, the added value, scalability, and flexibility of mySAP Business Suite made SAP the clear choice.“

Peter Sany, CIO, Novartis

Sir John Rose, Chief Executive, Rolls-Royce (2002 annual report)


Strategic Focus in 2003

In a challenging market environment, SAP is focused on:

Improving productivity

Increasing market share

Adapting to the new environment


Second Quarter 2003 Summary

Pro forma operating income increased 20% representing a strong performance given an 8% revenue decline and more than 300 new employees

Software revenues down 5% currency adjusted – SAP continued to gain market share

Deal size was down significantly, but SAP signed more deals with lower cost of sales

Deal size based on order entry shifted significantly >€3 mill. 27% (Q2 2002: 42%) <€1 mill. 44% (Q2 2002: 33%)

Strengthened long-term partnerships with clients


0%

10%

20%

30%

40%

50%

60%

SAP*

Siebel*

Oracle **

PeopleSoft*

I2*

JDE**

36%

20%20%19%

41%39%

37%

9% 10% 10%

13% 12%

8%10%

12%17% 16% 17% 16%

19%

6% 5% 4% 4%

Total license revenue - Relative Market Shares (rolling 4 quarters; based on license revenues)

43%45%

47%

51%

19% 18% 17%15%16% 15% 15% 14%

12% 12% 12%

11%6% 5%

4% 3%4% 5%5% 5%

Q2 2000-Q1 2001

Q3 2000-Q2 2001

Q4 2000-Q3 2001

Q1 2001-Q4 2001

Q2 2001-Q1 2002

Q3 2001-Q2 2002

Q4 2001-Q3 2002

Q1 2002-Q4 2002

SAP is still gaining market share from key competitors

54%

13%14%12%

3%

5%

Q2 2002-Q1 2003

55%

12%14%

3%

5%11%

Q3 2002-Q2 2003E

Source: CMI Analysis based on Company Data and Financial Analysts Estimates* Forecast by Company Data, Financial Analysts (SEBL, PSFT, I2, JDE) and latest SAP internal estimate** Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. Oracle Q3)


Source: NFO Infratest

Overall Satisfaction with SAP

6.67.2 6.97.0 6.7

7.57.07.1 7.0

7.5 7.16.9

GLOBAL Asia/Pacific The Americas Europe/MiddleEast/Africa

2000 2001 H1 2003

Customer Satisfaction Survey H1 2003

7.2

2002

7.17.6

7.1


SAP Blueprint for Sustainable Success

EnterpriseServices

Architecture

23 industry solutions

New releases:mySAP CRM 4.0and mySAP SCM 4.0

New user interface for mySAP ERP announced

First demo of Master Data Management

Adaptive ComputingInfrastructure announced


Shared Quality Commitment

Joint Business Solutions(e.g. Midmarket)

SAP NetWeaver & SAP xApps Partner Programs

Joint TCO Reduction Program

The Best Partner to Deliver


2003 Looking Ahead

Economic environment remains challenging until year-end Confusion in the market due to industry consolidation leads to

increased price pressure in the short-term, but SAP should benefit in the medium-term

2003 pro forma EPS target confirmed; pro forma operating margin target increased slightly

Comprehensive product portfolio combined with strong technology offering enables SAP to capture a larger “share of wallet”

Further industry focus will enhance SAP’s leading position SAP xApps provide additional opportunities for cross-functional &

vertical solutions


Market Shares by Industry in 2002*

*Based on product revenues (license & maintenance) /preliminarySources: SAP Analysis 2003, IDC 2002 & 2003, Company filings

Discrete Process Consumer Services Financial Serv.

12%

8.4

31%

3.3

15%

4.9

20%

5.8

14%

2.3

20%

1.9

Public Serv.

SAP othersTotal

$26.5 bn

Ø SAP 17.5%

SAP AG Q2 and H1 2003 Preliminary Results Release

New York, July 17, 2003


Appendix

APPENDIX


Q2 2003€ millions

Q2 2002€ millions

Cost Analysis – 2nd Quarter 2003 – part I

Total costs Total revenues

-1,2981,638

* In percentage points

% yoyincl SBC/AC

Research & Developm.as % of sales

Sales & Marketingas % of sales

3

-8

-358

-99

0 -100

22

56

0

-3*

1*

0*

-24115

-438

-231

-96

13

25-18

4 2*

General & Admin.as % of sales

Other income/expensesas % of sales 0

% yoyexcl. SBC/AC

-12

-100

-21

2

-8

-441

-225

-101

-1,250

-348

-88

0

-229

incl SBC/AC

incl SBC/AC

excl. SBC/AC

excl. SBC/AC

-1,458 1,778

-1,454 -11-8

-14


Q2 2003*% of

license revenue

Q1 2003*% of

license revenue

License Revenue Analysis – by Order Entry

% mySAP Business Suite

% new customers mySAP BS

% new customers R/3, etc.

% new customers TOTAL

* Based on order entry

-4

3

-9

0

82%

32%

10%

28%

seq. in percentage

points

86%

29%

19%

28%

1

-2

-4

-2

YoY in percentage

points

Q2 2003 Q2 2003


0%

10%

20%

30%

40%

50%

60%

mySAP FI / HR

mySAP SCM

mySAP CRM

mySAP SRM /BI / Portals /MarketsmySAP PLM

Linie 6

36%

22%22%23%

39%38%38%

15%16%14%

8%

13%

7%7%7%

17% 18% 19%20%

22%

rolling last 4 quarters; as a % of license revenues

40% 39%

20% 21%

21% 21%

11% 12%

7% 7%

Q1 2001-Q4 2001

Q2 2001-Q1 2002

Q3 2001-Q2 2002

Q4 2001-Q3 2002

Q1 2002-Q4 2002

License Revenue Analysis – by Solution

Q2 2002-Q1 2003

Q3 2002-Q2 2003

39%

21%

21%

12%

7%


License Revenue Analysis – by Solution Q2 2003

Total License Revenue Q2 2003 : € 431 mill.

* Of license revenue** Y-o-Y growth in percentage points

mySAP SCM20%* (-1**)

mySAP Financials /mySAP HR41%* (+1**)

mySAP CRM20%* (0**)

mySAP BI/ mySAP Enterprise Portal/mySAP SRM/ Marketplaces11%* (-1**)

mySAP PLM8%* (+1**)


Q2 2003as % ofrevenue

Q2 2003€ millions

Q1 2003€ millions

License Revenue Analysis – by Solution Q2 2003

mySAP SCM

mySAP Financials /mySAP HR

mySAP PLM

mySAP BI / mySAP Enterprise Portal /mySAP SRM / Marketplaces

mySAP CRM 85

33

49

178

86

74

33

44

172

79

-16

-3

-16

-11

-17

20

8

11

41

20

Q1 2003as % ofrevenue

21

7

15

33

24

YoY in %

Q2 2003

15

0

11

4

9

seq. in %

Q2 2003


mySAP SCM as % of I2* and Manugistics** mySAP CRM as % of Siebel*

License Revenue breakdown by solution (rolling 4 quarters; based on License Revenues)

SCM & CRM – Relative Market Shares

0%

50%

100%

150%

200%

86%

163%

140%

113%

41%37%48%

54%

188%

241%

67%

86%

Q1 2001-Q4 2001

Q2 2001-Q1 2002

Q3 2001-Q2 2002

Q4 2001-Q3 2002

Q1 2002-Q4 2002

Q2 2002-Q1 2003

231%

96%

Q3 2002-Q2 2003E

250%

Source: CMI Analysis based on Company Data and Financial Analysts Estimates* Forecast by financial analysts (I2, SEBL)** Fiscal year is not calendar year - Comparison based on most recent quarter (e.g. SAP Q1 vs. MANU Q4)


0%

5%

10%

15%

20%

25%

30%

Service

Discrete

Process

Consumer

Financial

Public

22%

24%

27%26%

15%15%

7% 7%

21%

22%

7%7%

rolling last 4 quarters; as a % of license revenues

26%25%

21% 21% 21%

20%19%

17%19% 19%

8% 8%

7%8%

Q1 2001-Q4 2001

Q2 2001-Q1 2002

Q3 2001-Q2 2002

Q4 2001-Q3 2002

Q1 2002-Q4 2002

License Revenue Analysis – by Industry

24%

19%

8%

8%

Q2 2002-Q1 2003

26%

22%

20%

19%

7%

8%

19%

20%

22%

24%

9%

7%

Q3 2002-Q2 2003


License Revenue Analysis – by Industry Q2 2003

* Compared to FY 2002

Service Industries25% | 0%*

Financial Services10% | 2%*

Consumer Industries18% | 0%*Discrete Industries

22% | 1%*

Process Industries15% | -5%*

Public Services10% | 2%*


License Revenue by Region – First Half 2003

License Revenue H1 2003: €783 mill.-13%* | -5%**

of which US €157 m-8%* | +13%**

Americas €200 m-8%* | +16%**

of which Japan €60 m+22%* | +38%**

APA €117 m+14%* | +30%**

EMEA €466 m-19%* | -18%**




Group Sales by Region – First Half 2003

Total Revenue H1 2003: €3,158 mill.-8%* | +1%**

of which US €772 m-17%* | +2%**

Americas €974 m-17%* | +4%**

of which Japan €202 m-2%* | +10%**

APA €388 m-2%* | +12%**

EMEA €1,796 m-4%* | -2%**




Q2 2002€ millions


Pro forma operating income excl. stock-based compensation and acquisition-related charges(1)

Key Figures – 2nd Quarter 2003 Analysis – Part I

Operating income as reported under US GAAP

Acquisition-related chargesStock-based compensation

Finance incomethereof impairment-related charges

324 20388

320 6340

-3 na42 7 -146

na-4555

EBITDA(2)

Operating income as reported under US GAAP

Depreciation & amortization

377 4392

320 6340 57 -952

na-390-2

LTI 2000/STAR -18 na41 Settlement of stock-based compensation prog. 15 -931


Q2 2002€ millons


Key Figures – 2nd Quarter 2003 Analysis – Part II

Pro forma EPS excluding stock-based compensation, acquisition-related charges, andimpairment-related charges(1)

Earnings per share (in €)as reported under US GAAPStock-based compensationAcquisition-related chargesImpairment-related charges

0.49 620.81

na-0.74 0.71na-0.01 0.09

00.01 0.01-1001.23 0.00

Pro forma Net income excluding stock-based compensation, acquisition-related charges, andimpairment-related charges(1)

Net income as reported under US GAAPStock-based compensation, net of tax Acquisition-related charges, net of taxImpairment-related charges, net of tax

155 62251

na-232 219na-227-294 3-99385 2


Pro forma information

(1) SAP has provided information in 2002 and 2001 using pro forma measures on a consolidated basis and released guidance based on these measures for 2003. Management believes that those pro forma measures provide supplemental meaningful information to the investor to fully assess our financial performance of the core operations. Management excludes stock-based compensation expenses because we have no direct influence over the actual expense of these awards once we enter into Stock-Based Compensation Plans.Eliminated expenses in the pro forma measures are defined as follows:- Acquisition-related charges include amortization of intangible assets acquired in acquisitions - Impairment-related charges include other than temporary impairment charges on minority equity investments. - Stock-based compensation includes expenses for stock-based compensation as defined under US GAAP (STAR and LTI 2000) as well as expenses related to the settlement of stock-based compensation plans in the context of mergers and acquisitions.However these measures should be considered in addition to, and not as a substitute for, or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with generally accepted accounting principles. The pro forma measures used by us may be different from pro forma measures used by other companies.


Pro forma information

(2) Management believes that EBITDA and free cash flow are widely accepted supplemental measures of evaluating operating performance and liquidity among companies. However these measures should be considered in addition to, and not as a substitute for, or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with generally accepted accounting principles.

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