Radio Shack 2011 Annual Report Download - page 90

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EXPLANATION OF NON-GAAP
FINANCIAL MEASURES
Management measures and reports RadioShack’s
financial results in accordance with U.S. generally accepted
accounting principles (“GAAP”). In this annual report,
RadioShack highlights certain items that have significantly
impacted the Company’s financial results and uses
non-GAAP financial measures to help readers understand
the financial impact of these items. These non-GAAP
financial measures are not intended to be a substitute for
the corresponding GAAP measures and should be read
only in conjunction with our consolidated financial statements
prepared in accordance with GAAP. Information concerning
the reconciliation of non-GAAP financial measures to their
comparable GAAP financial measures is included in the
adjacent tables.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Net Income
12 Months Ended Dec. 31, 2011
(in millions)
Excluding one-time items $ 98.4
T-Mobile charge (14.4)
T-Mobile inventory costs (1.6)
China plant closing costs (7.7)
Early retirement of debt (2.5)
As reported according to GAAP $ 72.2
Net Cash Provided by Operating Activities
12 Months Ended Dec. 31, 2011
(in millions)
Free cash flow $ 86.2
Additions to property, plant & equipment 82.1
Dividends paid 49.6
As reported according to GAAP $217.9
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements,
as referenced in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements reflect
management’s current views and projections regarding
economic conditions, the retail industry environment and
Company performance. These statements can be identified
by the fact that they include words like “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “project,”
“guidance,” “plan,” “outlook” and other words with similar
meaning. We specifically disclaim any duty to update any
of the information set forth in this annual report, including
any forward-looking statements. These statements involve
a number of risks and uncertainties that could cause our
actual results to differ materially from the results discussed in
our forward-looking statements. Factors that could cause our
actual results to differ materially from the results discussed in
our forward-looking statements include, but are not limited
to, our ability to execute and the effectiveness of our 2012
initiatives; the underperformance or loss of certain of our
important vendors, such as our wireless carrier providers, or
breaches by them of our agreements with them; difficulties
associated with our transition to an outsourced arrangement
for the production of products we previously manufactured
at our Chinese manufacturing plant; an adverse impact
on our sales or profitability due to our transition to such an
outsourced arrangement; an adverse impact on our sales
or profitability due to changes wireless carrier providers
make to their customer credit requirements, frequency of
upgrade eligibility, or other operational matters, and the
timing, completeness, and accuracy of information we
receive about such changes; a decline in our gross margin
due to customer demand for lower margin mobile devices,
such as smartphones and tablets; difficulties associated with
profitably operating our new Target Mobile centers; overall
sales performance; economic conditions; product demand;
expense levels; competitive activity; interest rates; changes
in the Company’s financial condition; availability of products
and services and other risks associated with the Company’s
vendors and service providers; the regulatory environment;
and other factors affecting the retail category in general. In
addition, the declaration of dividends and the dividend rate
are at the sole discretion of RadioShack Corporation’s board
of directors, and plans for future dividends may be revised
by the board at any time. RadioShack’s dividend could
be adversely affected by, among other things, changes in
RadioShack’s financial position, results of operations, capital
expenditures, cash flows, and applicable tax laws. Additional
information regarding these and other factors is included in
the Company’s filings with the SEC, including its most recent
Annual Report on Form 10-K for the year ended Dec. 31, 2011.
82 2011 ANNUAL REPORT