Non-GAAP Measures

Accelleron uses certain non-GAAP financial measures and alternative performance measures that are not required by, or presented in accordance with, US GAAP. Accelleron presents non-GAAP financial measures and alternative performance measures because they are used by management in monitoring the business and because Accelleron believes that these non-GAAP financial measures and similar measures are frequently used by securities analysts, investors and other interested parties in evaluating companies in its industry.

The definitions of the non-GAAP financial measures and alternative performance measures are as follows:

Performance measureDefinition

Organic revenue growth (on a constant currency basis)

Revenue growth at constant currency and adjusted for M&A-related effects. The organic growth rate measures growth on a constant currency basis

Operational EBIT

Operational EBIT represents income from operations excluding costs related to acquisition and divestment, one-time items in income statements, non-operational integration costs, special non-operational projects, restructuring costs and temporary unrealized timing differences in the context of foreign exchange transactions (FX)

Operational EBITDA

Operational EBITDA represents Operational EBIT excluding depreciation and amortization

Operational EBITA

Operational EBITA represents Operational EBIT excluding acquisition-related amortization

Operational EBITA margin

Operational EBITA as a percentage of revenues

Free cash flow

Net cash provided by operating activities adjusted for net investments in property, plant and equipment and intangible assets

Free cash flow conversion

Free cash flow divided by reported net income, expressed as a percentage

Net leverage

Interest-bearing liabilities (including finance leases) net of cash and cash equivalents, divided by last twelve months operational EBITDA

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