Market Overview

Hudson Group Reports Fourth Quarter and Full Year 2017 Results

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Hudson Ltd. (NYSE:HUD) ("Hudson Group"), a leader in North American
travel retail, announced today its results for the fourth quarter and
full year ended December 31, 2017.

Highlights for 2017 and Recent Events

  • Fourth quarter turnover of $450 million, a year-over-year increase of
    8.5%; record full year turnover of $1.8 billion, a 6.8% year-over-year
    increase.
  • Full year organic sales growth of 8.8%; like-for-like sales growth of
    4.8%.
  • Fourth quarter adjusted EBITDA of $41 million, a year-over-year
    increase of 9.2%; record full year adjusted EBITDA of $173 million, a
    10.4% year-over-year increase.
  • Successfully won, extended or expanded thirteen concession contracts
    during 2017.
  • Completed initial public offering on the New York Stock Exchange in
    February 2018.

"Our strong performance in 2017, highlighted by increased like-for-like
and organic sales growth, underscores our ability to drive value and
productivity from our existing portfolio of stores, while simultaneously
executing new business opportunities," stated Joe DiDomizio, President
and CEO of Hudson Group. "During the year, we expanded our breadth and
scale by winning RFP processes in five new locations, extending or
expanding operations in eight existing airports and increasing our
overall footprint. As a newly public company, I am energized by the
prospect for continued growth and believe we are well-positioned to
drive long-term shareholder value through our core purpose of being the
Traveler's Best Friend."

Fourth Quarter & Full Year 2017 Summary

  • Turnover increased $35.3 million or 8.5% to $450.4 million for
    the fourth quarter compared to $415.1 million in the fourth quarter
    2016. Full year turnover increased $115.3 million or 6.8% to $1,802.5
    million compared to $1,687.2 million in the prior year.
    • Fourth quarter net sales increased $34.9 million or 8.6% from the
      year-ago period. Full year net sales increased $110.7 million or
      6.7% to $1,760.8 million compared to $1,650.1 million in 2016.
    • Fourth quarter organic sales growth was 9.4%, compared to 10.1% in
      the year-ago period. Full year organic sales growth was 8.8%
      during the year compared to 5.4% in 2016.
    • Fourth quarter like-for-like sales growth was 5.6% (4.5% in
      constant currency), compared to 6.5% (6.5% in constant currency)
      in the year-ago period. Full year like-for-like sales growth was
      4.8% (4.4% in constant currency) compared to 3.9% (4.3% in
      constant currency) in 2016.
  • Gross profit increased $22.2 million or 8.6% to $281.5 million
    in the fourth quarter compared to $259.3 million in the year-ago
    period. For the full year, gross profit increased $80.3 million or
    7.7% to $1,122.2 million versus $1,041.9 million in the year-ago
    period. Gross margin increased 50 bps to 62.3% in 2017 due to sales
    mix shift to higher margin categories, as well as improved supply
    chain synergies related to the integration of acquired World Duty Free
    stores.
  • Selling expenses increased $8.3 million or 8.5% to $105.8
    million in the fourth quarter as compared to the year-ago period. For
    the full year, selling expenses increased $25.5 million or 6.4% over
    the prior year to $421.2 million. Concession fees, which comprise the
    majority of this item, is a variable expense driven by net sales. For
    2017, selling expenses as a percentage of turnover totaled 23.4%
    compared to 23.5% in 2016.
  • Personnel expenses increased $10.1 million or 11.8% to $95.6
    million in the fourth quarter as compared to the year-ago period. For
    the full year, personnel expenses increased $33.9 million or 10.0%
    over the prior year to $371.3 million primarily due to opening new
    store locations. As a percentage of turnover, personnel expenses
    increased from 20.0% in 2016 to 20.6% in 2017.
  • General and administrative expenses increased $1.0 million or
    2.7% to $38.7 million in the fourth quarter as compared to the
    year-ago period. For the full year, general and administrative
    expenses increased $5.0 million or 3.3% to $156.9 million. As a
    percentage of turnover, this item decreased from 9.0% to 8.7% due to
    lower franchise fees resulting from the integration of acquired World
    Duty Free stores into Dufry's1 franchise fee structure.
  • Adjusted EBITDA increased $3.5 million or 9.2% to $41.4 million
    in the fourth quarter as compared to the prior year quarter. For the
    full year, adjusted EBITDA increased $16.3 million or 10.4% to $172.5
    million.
  • Reported net earnings decreased $68.9 million to a loss of
    $34.8 million in the fourth quarter primarily due to a one-time net
    loss of $40.2 million on our deferred tax assets and liabilities
    related to recent tax reform legislation, while reported diluted
    earnings per share decreased from $0.31 to a loss per share of $0.45.
    For the full year, reported net earnings decreased $60.4 million to a
    loss of $10.6 million due to the one-time write down of our tax assets
    described above, while reported diluted earnings per share decreased
    from $0.25 to a loss per share of $0.44.
  • Adjusted net earnings decreased $68.0 million to a loss of
    $28.2 million in the fourth quarter due to the one-time write down of
    our tax assets described above, while adjusted earnings per share
    decreased from $0.43 to a loss per share of $0.30. Adjusted net
    earnings decreased $66.5 million to $1.1 million for the full year due
    to the one-time write down of our tax assets described above, while
    adjusted earnings per share decreased from $0.73 to a loss per share
    of $0.01.

Balance Sheet and Cash Flow Highlights

  • Cash flows from operating activities for the year were $130.8 million
    compared to $169.8 million in 2016. Current year cash flows were
    impacted by the timing of franchise fee payments to Dufry in order to
    optimize the Company's tax expense.
  • At December 31, 2017, the Company's net debt was $463.7 million
    resulting in net debt leverage of 2.7 times, compared to net debt of
    $289.1 million and net debt leverage of 1.9 times at December 31,
    2016. The increase over the prior year was due to the timing of
    certain payments to Dufry as described above.
  • Capital expenditures in 2017 totaled $84.5 million compared to $98.1
    million in 2016.

Operational Update

As of December 31, 2017, Hudson Group operated 996 stores, across 88
locations, totaling 1.1 million square feet of retail space.

During 2017, the Company retained and expanded business through RFP wins
in Jackson, Raleigh, Chicago Midway, Ontario (CA), Phoenix, Grand
Rapids, LAX and Dallas Ft. Worth.

Additionally, the Company won concession contracts in two new airports
in Tulsa and Des Moines.

The Company also successfully extended existing contracts in Norfolk,
Las Vegas and San Jose.

Recent Developments

On February 5, 2018, the Company completed its initial public offering
of common stock ("IPO") on the New York Stock Exchange in which its
parent company, Dufry International AG, sold 39,417,765 shares of common
stock. The shares of the Company's common stock were sold at an IPO
price of $19.00 per share, which generated net proceeds of approximately
$714.4 million after deducting underwriting discounts and commissions
and other offering expenses for Dufry International AG, the selling
shareholder. Hudson Group did not receive any of the proceeds from the
offering.

Earnings Conference Call Information

Hudson Group will host a conference call to review its 2017 financial
performance today, March 15, at 11 a.m. ET. Participants can
pre-register for the conference by navigating to http://dpregister.com/10117342.
The conference call also will be available in listen-only mode via our
investor relations website: https://investors.hudsongroup.com/.
To participate in the live call, interested parties may dial
1-866-777-2509 (toll free) or 1-412-317-5413. A web replay will be
available at https://services.choruscall.com/links/hson180315.html
for three months following the call.

Website Information:

We routinely post important information for investors on the Investor
Relations section of our website, investors.hudsongroup.com. We intend
to use this website as a means of disclosing material information.
Accordingly, investors should monitor the Investor Relations section of
our website, in addition to following our press releases, SEC filings,
public conference calls, presentations and webcasts. The information
contained on, or that may be accessed through, our website is not
incorporated by reference into, and is not a part of, this document.

Non-IFRS and Other Measures:

Adjusted EBITDA is a non-IFRS measure and is not a uniformly or legally
defined financial measure. Adjusted EBITDA is not a substitute for IFRS
measures in assessing our overall financial performance. Because
Adjusted EBITDA is not determined in accordance with IFRS, and is
susceptible to varying calculations, Adjusted EBITDA may not be
comparable to other similarly titled measures presented by other
companies. We believe that Adjusted EBITDA is useful to investors
because it is frequently used by securities analysts, investors and
other interested parties in their evaluation of the operating
performance of companies in industries similar to ours. We also believe
Adjusted EBITDA is useful to investors as a measure of comparative
operating performance from period to period as it is reflective of
changes in pricing decisions, cost controls and other factors that
affect operating performance, and it removes the effect of our capital
structure (primarily interest expense), asset base (depreciation and
amortization) and non-recurring transactions, impairments of financial
assets and changes in provisions (primarily relating to costs associated
with the closing or restructuring of our operations). Our management
also uses Adjusted EBITDA for planning purposes, including financial
projections. Adjusted EBITDA has limitations as an analytical tool, and
you should not consider it in isolation, or as a substitute for an
analysis of our results as reported under IFRS as issued by IASB. A
reconciliation of Adjusted EBITDA to net earnings is provided in the
attached schedules.

Adjusted net earnings attributable to equity holders of parent is a
non-IFRS measure. We define Adjusted net earnings attributable to equity
holders of parent as net earnings attributable to equity holders of
parent adjusted for the items set forth in the table below. Adjusted net
earnings attributable to equity holders of parent is a non-IFRS measure
and is not a uniformly or legally defined financial measure. Adjusted
net earnings attributable to equity holders of parent is not a
substitute for IFRS measures in assessing our overall operating
performance. Because Adjusted net earnings attributable to equity
holders of parent is not determined in accordance with IFRS, and is
susceptible to varying calculations, Adjusted net earnings attributable
to equity holders of parent may not be comparable to other similarly
titled measures presented by other companies. Adjusted net earnings
attributable to equity holders of parent is included in this prospectus
because it is a measure of our operating performance and we believe that
Adjusted net earnings attributable to equity holders of parent is useful
to investors because it is frequently used by securities analysts,
investors and other interested parties in their evaluation of the
operating performance of companies in industries similar to ours. We
also believe Adjusted net earnings attributable to equity holders of
parent is useful to investors as a measure of comparative operating
performance from period to period as it removes the effects of purchase
accounting for acquired intangible assets (primarily concessions),
non-recurring transactions, impairments of financial assets and changes
in provisions (primarily relating to costs associated with the closing
or restructuring of our operations). Management does not consider such
costs for the purpose of evaluating the performance of the business and
as a result uses Adjusted net earnings attributable to equity holders of
parent for planning purposes. Adjusted net earnings attributable to
equity holders of parent has limitations as an analytical tool, and you
should not consider it in isolation, or as a substitute for an analysis
of our results as reported under IFRS as issued by IASB. A
reconciliation of Adjusted net earnings attributable to equity holders
of parent to net earnings attributable to equity holders of parent is
provided in the attached schedules.

Organic sales growth represents the combination of growth in aggregate
monthly sales from (i) like-for-like sales growth and (ii) net new
stores and expansions. Like-for-like sales growth represents the growth
in aggregate monthly net sales in the applicable period at stores that
have been operating for at least 12 months. Like-for-like sales growth
excludes growth attributable to (i) net new stores and expansions until
such stores have been part of our business for at least 12 months, (ii)
acquired stores until such stores have been part of our business for at
least 12 months and (iii) acquired wind-down stores, consisting of eight
stores acquired in the 2014 acquisition of The Nuance Group AG
("Nuance") and 46 stores acquired in the 2015 acquisition of World Duty
Free S.p.A. ("World Duty Free Group") that management expected, at the
time of the applicable acquisition, to wind down. Net new stores and
expansions consists of growth from (i) changes in the total number of
our stores (other than acquired stores), (ii) changes in the retail
space of our existing stores and (iii) modification of store retail
concepts through rebranding. Net new stores and expansions excludes
growth attributable to (i) acquired stores until such stores have been
part of our business for at least 12 months and (ii) acquired wind-down
stores. Like-for-like sales growth in constant currency is calculated by
keeping exchange rates constant for each month being compared from
period to period. We believe that the presentation of like-for-like
sales growth in constant currency basis assists investors in comparing
period to period operating results as it removes the effect of
fluctuations in foreign exchange rates.

Net debt leverage represents total debt less cash at December 31, 2017
divided by Adjusted EBITDA for the twelve months ended December 31, 2017.

About Hudson Group

Hudson Group, one of the largest travel retailers in North America, is
committed to enhancing the travel experience for over 300,000 travelers
every day in the continental United States and Canada. The Company is
anchored by its iconic Hudson, Hudson News and Hudson Bookseller brands
and operates nearly 1,000 duty-paid and duty-free stores in 88
locations, including airports, commuter terminals, hotels and some of
the most visited landmarks and tourist destinations in the world. Our
wide range of store concepts include travel essentials and convenience
stores, bookstores, duty-free shops, branded specialty stores,
electronics stores, and quick-service food and beverage outlets. For
more information, visit www.hudsongroup.com
and www.dufry.com

Forward-Looking Statements

This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (Reform
Act). Forward-looking statements are based on our beliefs and
assumptions and on information currently available to us, and include,
without limitation, statements regarding our business, financial
condition, strategy, results of operations, certain of our plans,
objectives, assumptions, expectations, prospects and beliefs and
statements regarding other future events or prospects. Forward-looking
statements include all statements that are not historical facts and can
be identified by the use of forward-looking terminology such as the
words "believe," "expect," "plan," "intend," "seek," "anticipate,"
"estimate," "predict," "potential," "assume," "continue," "may," "will,"
"should," "could," "shall," "risk" or the negative of these terms or
similar expressions that are predictions of or indicate future events
and future trends. By their nature, forward-looking statements involve
risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. We caution you
that forward-looking statements are not guarantees of future performance
and that our actual results of operations, financial condition and
liquidity, the development of the industry in which we operate and the
effect of acquisitions on us may differ materially from those made in or
suggested by the forward looking statements contained in this press
release. In addition, even if our results of operations, financial
condition and liquidity, the development of the industry in which we
operate and the effect of acquisitions on us are consistent with the
forward-looking statements contained in this press release, those
results or developments may not be indicative of results or developments
in subsequent periods. Forward-looking statements speak only as of the
date they are made, and we do not undertake any obligation to update
them in light of new information or future developments or to release
publicly any revisions to these statements in order to reflect later
events or circumstances or to reflect the occurrence of unanticipated
events. Factors that may cause our actual results to differ materially
from those expressed or implied by the forward-looking statements in
this press release, or that may impact our business and results more
generally, include, but are not limited to, the risks described under
"Item 3. Key Information—D. Risk factors" of our Annual Report on Form
20-F for the year ended December 31, 2017 which may be accessed through
the SEC's website at https://www.sec.gov/edgar.
You should read these risk factors before making an investment in our
shares.

1 Dufry International AG (SIX:DUFN) is the global parent and
controlling shareholder of Hudson, Ltd.

         
CONSOLIDATED
INCOME
STATEMENT
 
FOR THE YEAR ENDED DECEMBER 31, 2017
 
QUARTER ENDED QUARTER ENDED YEAR ENDED YEAR ENDED
IN MILLIONS OF USD (EXCEPT PER SHARE DATA)   12/31/2017   12/31/2016 12/31/2017   12/31/2016
               
Turnover   450.4     415.1   1,802.5     1,687.2  
Cost of sales   (168.9 )   (155.8 ) (680.3 )   (645.3 )
Gross profit   281.5     259.3   1,122.2     1,041.9  
Selling expenses   (105.8 )   (97.5 ) (421.2 )   (395.7 )
Personnel expenses   (95.6 )   (85.5 ) (371.3 )   (337.4 )
General expenses   (38.7 )   (37.7 ) (156.9 )   (151.9 )
Share of result of associates   -     (0.7 ) (0.3 )   (0.7 )
Depreciation, amortization and impairment   (29.4 )   (31.2 ) (108.7 )   (103.7 )
Other operational result   (4.6 )   (1.6 ) (3.7 )   (9.3 )
Operating Profit (EBIT)   7.4     5.1   60.1     43.2  
Interest expenses   (7.5 )   (7.5 ) (30.2 )   (29.8 )
Interest income   0.5     0.4   1.9     2.1  
Foreign exchange gain / (loss)   (0.3 )   0.1   0.5     -  
Earnings before taxes (EBT)   0.1     (1.9 ) 32.3     15.5  
Income tax   (34.9 )   36.0   (42.9 )   34.3  
Net earnings   (34.8 )   34.1   (10.6 )   49.8  
 
OTHER COMPREHENSIVE INCOME
Exchange differences on translating foreign operations   (0.4 )   (6.8 ) 26.8     12.9  
Items to be reclassified to net income in subsequent periods, net
of tax
  (0.4 )   (6.8 ) 26.8     12.9  
Total other comprehensive income / (loss), net of tax   (0.4 )   (6.8 ) 26.8     12.9  
Total comprehensive income / (loss), net of tax   (35.2 )   27.3   16.2     62.7  
 
NET EARNINGS ATTRIBUTABLE TO
Equity holders of the parent   (41.4 )   29.0   (40.4 )   23.5  
Non-controlling interests   6.6     5.1   29.8     26.3  
 
 
EARNINGS/LOSS PER SHARE(1)
Basic   (0.45 )   0.31   (0.44 )   0.25  
Diluted   (0.45 )   0.31   (0.44 )   0.25  
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (000's)
Basic   92,511     92,511   92,511     92,511  
Diluted   92,511     92,511   92,511     92,511  
(1)   Gives effect to our Class A and Class B common shares outstanding
following the completion of our initial public offering on February
5, 2018.
 
   
CONSOLIDATED
STATEMENT OF
FINANCIAL POSITION
 
AT DECEMBER 31, 2017
 
DECEMBER 31, DECEMBER 31,
IN MILLIONS OF USD 2017   2016
 
ASSETS
Property, plant and equipment 264.9   256.3
Intangible assets 685.8   691.2
Investments in associates 3.1   2.4
Deferred tax assets 90.3   153.0
Other non-current assets 24.9   31.1
Non-current assets 1,069.0   1,134.0
 
Inventories 186.0   161.4
Trade and credit card receivables 4.6   8.2
Other accounts receivable 59.4   47.3
Income tax receivables 1.4   4.5
Cash and cash equivalents 137.4   187.6
Current assets 388.8   409.0
 
Total assets 1,457.8   1,543.0
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Equity attributable to equity holders of the parent 493.7   658.2
Non-controlling interests 78.7   72.2
Total equity 572.4   730.4
 
Financial debt 520.4   475.2
Deferred tax liabilities 50.1   71.8
Other non-current liabilities 0.9   1.1
Non-current liabilities 571.4   548.1
 
Trade payables 97.1   91.3
Financial debt 80.7   1.5
Income tax payables 4.1   3.8
Other liabilities 132.1   167.9
Current liabilities 314.0   264.5
 
Total liabilities 885.4   812.6
Total liabilities and shareholders' equity 1,457.8   1,543.0
 
   
CONSOLIDATED
STATEMENT OF
CASH FLOWS
 
FOR THE YEAR ENDED DECEMBER 31, 2017
 
YEAR ENDED YEAR ENDED
IN MILLIONS OF USD 12/31/2017   12/31/2016
 
CASH FLOWS FROM OPERATING ACTIVITIES
Total earnings before taxes (EBT) 32.3     15.5  
 
ADJUSTMENTS FOR
Depreciation, amortization and impairment 108.7     103.7  
Loss / (gain) on sale of non-current assets 3.3     1.9  
Increase / (decrease) in allowances and provisions 5.0     (2.0 )
Loss / (gain) on unrealized foreign exchange differences (0.5 )   6.4  
Other non-cash items 4.6     1.2  
Share of result of associates 0.3     0.7  
Interest expense 30.2     29.8  
Interest income (1.9 )   (2.1 )
Cash flow before working capital changes 182.0     155.1  
 
Decrease / (increase) in trade and other accounts receivable 6.2     (9.1 )
Decrease / (increase) in inventories (26.9 )   (14.2 )
Increase / (decrease) in trade and other accounts payable (26.9 )   41.3  
Dividends received from associates -     0.2  
Cash generated from operations 134.4     173.3  
Income taxes paid (3.6 )   (3.5 )
Net cash flows from operating activities 130.8     169.8  
 
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (79.6 )   (88.3 )
Purchase of intangible assets (8.2 )   (5.7 )
Net purchase of interest in associates (1.0 )   -  
Proceeds from sale of property, plant and equipment 0.6     0.4  
Interest received 2.1     1.2  
Net cash flows used in investing activities (86.1 )   (92.4 )
 
CASH FLOW FROM FINANCING ACTIVITIES
Proceed from financial debt 15.0     -  
Repayment of financial debt (43.0 )   (7.3 )
Repayments of financial debt (28.0 )   (7.3 )
Proceeds from / (repayment of) 3rd party loans (3.3 )   12.8  
Dividends paid to non-controlling interest (34.3 )   (27.4 )
Net contributions from / (purchase of) non-controlling interests -     (0.1 )
Interest paid (30.2 )   (29.3 )
Net cash flows (used in) / from financing activities (95.8 )   (51.3 )
Currency translation on cash 0.9     1.1  
(Decrease) / increase in cash and cash equivalents (50.2 )   27.2  
 
CASH AND CASH EQUIVALENTS AT THE
– beginning of the period 187.6     160.4  
– end of the period 137.4     187.6  
 
         
NON-IFRS RECONCILIATIONS
 
ADJUSTED EBITDA TO NET EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2017
 
QUARTER ENDED QUARTER ENDED YEAR ENDED YEAR ENDED
IN MILLIONS OF USD   12/31/2017   12/31/2016 12/31/2017   12/31/2016
               
Net earnings   (34.8 )   34.1   (10.6 )   49.8  
Income tax expense   34.9     (36.0 ) 42.9     (34.3 )
Earnings before taxes (EBT)   0.1     (1.9 ) 32.3     15.5  
Foreign exchange gain / (loss)   0.3     (0.1 ) (0.5 )   -  
Interest income   (0.5 )   (0.4 ) (1.9 )   (2.1 )
Interest expenses   7.5     7.5   30.2     29.8  
Operating Profit (EBIT)   7.4     5.1   60.1     43.2  
Depreciation, amortization and impairment   29.4     31.2   108.7     103.7  
Other operational result (1)   4.6     1.6   3.7     9.3  
Adjusted EBITDA   41.4     37.9   172.5     156.2  
(1)   For the year ended December 31, 2017, other operational result
consisted of $9.4 million of other operating income resulting from a
related party loan waiver due to Dufry and other operating expenses
including $3.4 million of audit and consulting costs related to
preparatory work in connection with our initial public offering,
$4.1 million of restructuring expenses associated with the World
Duty Free Group acquisition and $5.5 million of other operating
expenses including restructuring and non-recurring items. For the
year ended December 31, 2016, other operational result consisted
primarily of $8.3 million of restructuring expenses associated with
the World Duty Free Group acquisition. See note 13 to our audited
Combined Financial Statements.
 
       
NET EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT TO
ADJUSTED NET EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
FOR THE YEAR ENDED DECEMBER 31, 2017
 
QUARTER ENDED QUARTER ENDED YEAR ENDED YEAR ENDED
IN MILLIONS OF USD (EXCEPT PER SHARE DATA)   12/31/2017   12/31/2016 12/31/2017   12/31/2016
               
Net earnings attributable to equity holders of the parent   (41.4 )   29.0   (40.4 )   23.5  
Amortization related to acquisitions (1)   10.4     9.8   39.2     38.4  
Other operational result (2)   4.6     1.6   3.7     9.3  
Income tax adjustment (3)   (1.8 )   (0.6 ) (1.4 )   (3.6 )
Adjusted net earnings attributable to equity holders of the parent   (28.2 )   39.8   1.1     67.6  
 
Diluted earnings / (loss) per share   (0.45 )   0.31   (0.44 )   0.25  
Adjusted diluted earnings / (loss) per share to equity holders of
the parent
  (0.30 )   0.43   0.01     0.73  
Weighted average number of shares outstanding (000's)
(4)
  92,511     92,511   92,511     92,511  
(1)   Although the values assigned to the concession rights during the
purchase price allocation are fair values, we believe that their
additional amortization doesn't allow a fair comparison with our
existing business previous to the business combination, as the costs
of self-generated intangible assets have been expended.
 
(2) For the year ended December 31, 2017, other operational result
consisted of $9.4 million of other operating income resulting from a
related party loan waiver due to Dufry and other operating expenses
including $3.4 million of audit and consulting costs related to
preparatory work in connection with our initial public offering,
$4.1 million of restructuring expenses associated with the World
Duty Free Group acquisition and $5.5 million of other operating
expenses including restructuring and non-recurring items. For the
year ended December 31, 2016, other operational result consisted
primarily of $8.3 million of restructuring expenses associated with
the World Duty Free Group acquisition. See note 13 to our audited
Combined Financial Statements.
 
(3) Income tax adjustment represents the impact in income taxes we
actually accrued during the applicable period attributable to other
operational result. This assumption uses an income tax rate of 39.0%
for the adjustment. Amortization expenses related to acquisitions
did not reduce the amount of taxes we paid during the applicable
periods, and therefore there are no corresponding income tax
adjustments in respect of the amortization expense adjustment.
 
(4) Gives effect to our Class A and Class B common shares outstanding
following the completion of our initial public offering on February
5, 2018.
 

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