EX-99.2 4 d606734dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

ICG Group, Inc. (“ICG”) announced that Procurian Inc. (“Procurian”) has signed a definitive agreement to be acquired by an affiliate of Accenture plc (“Accenture”) (such transaction, the “Transaction”). ICG expects the Transaction to close in the quarter ended December 31, 2013. In anticipation of the Transaction, ICG is providing the following items:

 

(1) Pro forma financial information with respect to (a) ICG’s consolidated balance sheet as of June 30, 2013, (b) ICG’s consolidated statements of operations for the six months ended June 30, 2013 and June 30, 2012 and (c) ICG’s consolidated statement of operations for the year ended December 31, 2012. This pro forma financial information reflects, among other things, the removal of Procurian’s results from ICG’s consolidated results. Additionally, the pro forma consolidated balance sheet as of June 30, 2013 reflects, among other things, (i) ICG’s receipt of its share of the estimated cash proceeds in the Transaction, as well as the estimated resultant gain, and (ii) ICG’s payment of its share of the estimated costs associated with the Transaction.

 

(2) A schedule that reconciles ICG’s (a) GAAP revenue previously furnished for prior periods with (b) ICG’s GAAP revenue excluding Procurian for the same periods.

 

(3) A “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” table and related notes that have been revised from the table and related notes provided with ICG’s earnings press releases for the periods from the quarter ended March 31, 2012 through the quarter ended June 30, 2013. The revised table and related notes reflect, among other things, (a) the removal of Procurian from previously reported amounts and (b) certain changes to the definitions set forth therein.


ICG GROUP, INC.

PRO FORMA CONSOLIDATED BALANCE SHEETS

As of June 30, 2013

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc. (4)
    Sale of
Procurian
    Pro Forma
ICG Group, Inc.
 

Assets

      

Current Assets

      

Cash and cash equivalents

   $ 89,034      $ 288,850 (1),(2)    $ 377,884   

Restricted cash

     1,278        (896 )(2)      382   

Accounts receivable, net of allowance

     49,695        (39,805 )(2)      9,890   

Deferred tax assets

     348        (348 )(2)      —     

Prepaid expenses and other current assets

     5,714        (2,863 )(2)      2,851   
  

 

 

   

 

 

   

 

 

 

Total current assets

     146,069        244,938        391,007   

Fixed assets, net

     13,123        (6,254 )(2)      6,869   

Ownership interests

     14,685        —          14,685   

Goodwill

     119,845        (30,510 )(2)      89,335   

Intangibles, net

     67,231        (11,281 )(2)      55,950   

Deferred tax assets – non-current

     30,164        (30,164 )(2)      —     

Cost method companies

     15,008        —          15,008   

Other assets, net

     1,686        (484 )(2)      1,202   
  

 

 

   

 

 

   

 

 

 

Total Assets

   $ 407,811      $ 166,245      $ 574,056   
  

 

 

   

 

 

   

 

 

 

Liabilities

      

Current Liabilities

      

Current maturities of long-term debt

   $ 8,648      $ (5,167 )(2)    $ 3,481   

Accounts payable

     7,328        (4,821 )(2)      2,507   

Accrued expenses

     9,232        (6,489 )(2)      2,743   

Accrued compensation and benefits

     10,375        (5,636 )(2)      4,739   

Deferred revenue

     20,828        (2,362 )(2)      18,466   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     56,411        (24,475     31,936   

Long-term debt

     26,274        (16,004 )(2)      10,270   

Deferred revenue

     197        —          197   

Other liabilities

     4,164        (2,028 )(2)      2,136   
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     87,046        (42,507     44,539   
  

 

 

   

 

 

   

 

 

 

Redeemable noncontrolling interest (Note 4)

     3,851        —          3,851   
  

 

 

   

 

 

   

 

 

 

Equity

      

ICG Group, Inc.’s Stockholders’ Equity

      

Preferred stock, $0.01 par value; 10,000 shares authorized, none issued or outstanding

     —          —          —     

Common stock, $0.001 par value; 2,000,000 shares authorized, 42,376 shares (2013) issued

     42        —          42   

Treasury stock, at cost, 4,853 shares (2013)

     (36,409     —          (36,409

Additional paid-in capital

     3,554,678        —          3,554,678   

Accumulated deficit

     (3,242,534     219,393 (3)      (3,023,141

Accumulated other comprehensive income

     90        (51 )(2)      39   
  

 

 

   

 

 

   

 

 

 

Total ICG Group, Inc.’s Stockholders’ Equity

     275,867        219,342        495,209   

Noncontrolling Interest

     41,047        (10,590 )(2)      30,457   
  

 

 

   

 

 

   

 

 

 

Total Equity

     316,914        208,752        525,666   
  

 

 

   

 

 

   

 

 

 

Total Liabilities, Redeemable noncontrolling interest and Equity

   $ 407,811      $ 166,245      $ 574,056   
  

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited pro forma financial statements.


ICG GROUP, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

For six months ended June 30, 2013

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc. (6)
    Sale of
Procurian (7)
    Pro Forma
ICG Group, Inc.
 

Revenue

   $ 95,001      $ (69,551   $ 25,450   

Operating expenses

      

Cost of revenue

     60,215        (51,096     9,119   

Sales and marketing

     17,092        (4,994     12,098   

General and administrative

     20,664        (4,201     16,463   

Research and development

     6,297        (2,833     3,464   

Amortization of intangible assets

     4,825        (790     4,035   

Impairment related and other

     772        (475     297   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     109,865        (64,389     45,476   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (14,864     (5,162     (20,026

Other income (loss), net

     (912     802        (110

Interest income

     93        (6     87   

Interest expense

     (947     241        (706
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes, equity loss and noncontrolling interest

     (16,630     (4,125     (20,755

Income tax (expense) benefit

     (1,276     1,132        (144

Equity loss

     (1,624     —          (1,624
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (19,530     (2,993     (22,523

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

     (1,650     (410     (2,060
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations attributable to ICG Group, Inc.

   $ (17,880   $ (2,583   $ (20,463
  

 

 

   

 

 

   

 

 

 

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

   $ (0.49   $ (0.07   $ (0.56
  

 

 

   

 

 

   

 

 

 

Shares used in computation of basic income (loss) per share

     36,590        36,590        36,590   
  

 

 

   

 

 

   

 

 

 

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

   $ (0.49   $ (0.07   $ (0.56
  

 

 

   

 

 

   

 

 

 

Shares used in computation of diluted income (loss) per share

     36,590        36,590        36,590   
  

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited pro forma financial statements.


ICG GROUP, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

For six months ended June 30, 2012

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group, Inc. (6)
    Sale of
Procurian (7)
    Pro Forma
ICG Group, Inc.
 

Revenue

   $ 77,520      $ (67,909   $ 9,611   

Operating expenses

      

Cost of revenue

     48,354        (44,333     4,021   

Sales and marketing

     9,408        (4,834     4,574   

General and administrative

     18,015        (4,934     13,081   

Research and development

     5,854        (3,414     2,440   

Amortization of intangible assets

     1,860        (53     1,807   

Impairment related and other

     287        (146     141   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     83,778        (57,714     26,064   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (6,258     (10,195     (16,453

Other income (loss), net

     1,451        176        1,627   

Interest income

     230        (24     206   

Interest expense

     (196     177        (19
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes, equity loss and noncontrolling interest

     (4,773     (9,866     (14,639

Income tax (expense) benefit

     (932     902        (30

Equity loss

     (5,539     —          (5,539
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (11,244     (8,964     (20,208

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

     1,008        (1,112     (104
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations attributable to ICG Group, Inc.

   $ (12,252   $ (7,852   $ (20,104
  

 

 

   

 

 

   

 

 

 

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

   $ (0.34   $ (0.22   $ (0.56
  

 

 

   

 

 

   

 

 

 

Shares used in computation of basic income (loss) per share

     36,037        36,037        36,037   
  

 

 

   

 

 

   

 

 

 

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

   $ (0.34   $ (0.22   $ (0.56
  

 

 

   

 

 

   

 

 

 

Shares used in computation of diluted income (loss) per share

     36,037        36,037        36,037   
  

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited pro forma financial statements.


ICG GROUP, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

For twelve months ended December 31, 2012

(In Thousands, Except Per Share Data)

(Unaudited)

 

     Historical
ICG Group,
Inc.(5)
    Sale of
Procurian (7)
    Pro Forma
ICG Group, Inc.
 

Revenue

   $ 166,593      $ (139,953   $ 26,640   

Operating expenses

      

Cost of revenue

     105,762        (95,404     10,358   

Sales and marketing

     21,920        (9,770     12,150   

General and administrative

     38,805        (9,682     29,123   

Research and development

     14,175        (6,777     7,398   

Amortization of intangible assets

     5,590        (753     4,837   

Impairment related and other

     1,548        (418     1,130   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     187,800        (122,804     64,996   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (21,207     (17,149     (38,356

Other income (loss), net

     57,879        (59     57,820   

Interest income

     442        (45     397   

Interest expense

     (526     542        16   
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes, equity loss and noncontrolling interest

     36,588        (16,711     19,877   

Income tax (expense) benefit

     (1,336     1,228        (108

Equity loss

     (8,672     —          (8,672
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     26,580        (15,483     11,097   

Less: Income (loss) from continuing operations attributable to the noncontrolling interest

     368        (1,961     (1,593
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations attributable to ICG Group, Inc.

   $ 26,212      $ (13,522   $ 12,690   
  

 

 

   

 

 

   

 

 

 

Basic income (loss) from continuing operations per share attributable to ICG Group, Inc.:

   $ 0.73      $ (0.38   $ 0.35   
  

 

 

   

 

 

   

 

 

 

Shares used in computation of basic income (loss) per share

     35,890        35,890        35,890   
  

 

 

   

 

 

   

 

 

 

Diluted income (loss) from continuing operations per share attributable to ICG Group, Inc.:

   $ 0.72      $ (0.37   $ 0.35   
  

 

 

   

 

 

   

 

 

 

Shares used in computation of diluted income (loss) per share

     36,543        36,543        36,543   
  

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited pro forma financial statements.


ICG Group, Inc.

Notes to the Pro Forma Consolidated Financial Statements

(Unaudited)

 

(1) Gross proceeds from the sale of Procurian (including an anticipated adjustment to the purchase price through a working capital adjustment) are expected to be approximately $390 million, approximately $19.5 million of which would be held in escrow for one year following closing to satisfy indemnification claims. ICG’s escrowed proceeds of approximately $16.5 million are not taken into account for purposes of calculating the gain below in Note (3); additional gains would be recorded at such time and to the extent that escrowed amounts are released. At closing, ICG expects to receive approximately $307 million, after certain adjustments related to working capital, cash, debt, fees and other items.
(2) Represents adjustments to eliminate assets and liabilities of the Procurian business and the non-controlling interest portion of Procurian.
(3) To record the gain on the sale of ICG’s Procurian stock.

 

The reconciliation of estimated net gain is as follows:

  

Estimated proceeds received

   $ 314,322,000   

Estimated net assets sold

     (88,082,000

Estimated transaction expenses, net

     (6,847,000
  

 

 

 

Estimated net gain

   $ 219,393,000   
  

 

 

 

 

(4) Represents the Consolidated Balance Sheet included in ICG’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013.
(5) Represents the Consolidated Statements of Operations included in ICG’s Annual Report on Form 10-K for the year ended December 31, 2012.
(6) Represents the Consolidated Statements of Operations included in ICG’s Quarterly Report on Form 10-Q for the year-to-date periods ended June 30, 2012 and 2013, as applicable.
(7) Represents adjustments to eliminate Procurian’s results of operations; these adjustments result in the elimination of income from continuing operations of $2.6 million, $7.9 million and $13.5 million from ICG’s consolidated statements of operations for the six-month interim periods ended June 30, 2013 and June 30, 2012 and the year ended December 31, 2012, respectively. Transaction costs are also excluded.


ICG Group, Inc.

Reconciliation of GAAP Revenue, as reported, to GAAP Revenue (excluding Procurian)

(In thousands)

(Unaudited)

 

     2012     2013  
   Q1     Q2     Q3     Q4     Q1     Q2  

GAAP Revenue, as reported:

   $ 34,698      $ 42,822      $ 45,489      $ 43,584      $ 46,339      $ 48,662   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Procurian revenue*

     (30,487     (37,422     (37,491     (34,553     (34,365     (35,186
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP Revenue (excluding Procurian):

   $ 4,211      $ 5,400      $ 7,998      $ 9,031      $ 11,974      $ 13,476   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ICG Group, Inc.

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)

 

GAAP Net income (loss) attributable to ICG, as reported:

   ($ 7,020   ($ 5,994   $ 21,341      $ 14,662      $ 19,068      ($ 6,858
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Add back:

            

Share-based compensation

     1,638        1,739        1,811        1,738        2,282        2,324   

Amortization of intangibles

     424        1,436        1,829        1,901        2,899        1,926   

Impairment related and other

     127        160        739        521        489        283   

Other (income) loss, net

     (397     (1,054     (31,570     (24,858     973        (61

Acquired businesses’ deferred revenue

     —          2,537        1,593        1,062        753        605   

Equity loss

     2,303        3,236        1,608        1,525        701        923   

Income tax expense (benefit) - deferred

     279        71        5        (222     20        257   

Impact of discontinued operations

     1        204        1,854        423        (29,990     (100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss), as reported

   ($ 2,645   $ 2,335      ($ 790   ($ 3,248   ($ 2,805   ($ 701
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Removal of Procurian’s contribution to Non-GAAP net income (loss) items above (excluding the income tax expense (benefit) - deferred line item)

     (85     (612     (195     (898     (1,855     (659

Removal of historical income tax expense (benefit) - deferred previously reported

     (279     (71     (5     222        (20     (257

Removal of impact of discontinued operations previously reported

     (1     (204     (1,854     (423     29,990        100   

Inclusion of discontinued operations - historical and Procurian impact*

     (1,636     (6,382     (2,345     (2,120     (28,226     (2,448

Inclusion of non-controlling interest (NCI) impact for discontinued operations - historical and Procurian impact

     191        717        380        897        (2,267     283   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss), as revised**

   ($ 4,455   ($ 4,217   ($ 4,809   ($ 5,570   ($ 5,183   ($ 3,682
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP Net income (loss) per diluted share:

   ($ 0.19   ($ 0.17   $ 0.59      $ 0.40      $ 0.52      ($ 0.19
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Add back:

            

Share-based compensation

   $ 0.05      $ 0.05      $ 0.05      $ 0.05      $ 0.06      $ 0.06   

Amortization of intangibles

   $ 0.01      $ 0.04      $ 0.05      $ 0.05      $ 0.08      $ 0.05   

Impairment related and other

   $ 0.00      $ 0.00      $ 0.02      $ 0.01      $ 0.01      $ 0.00   

Other (income) loss, net

   ($ 0.01   ($ 0.03   ($ 0.89   ($ 0.69   $ 0.03      ($ 0.00

Acquired businesses’ deferred revenue

   $ 0.00      $ 0.07      $ 0.04      $ 0.03      $ 0.02      $ 0.02   

Equity loss

   $ 0.06      $ 0.09      $ 0.05      $ 0.04      $ 0.02      $ 0.03   

Income tax expense (benefit) - deferred

   $ 0.01      $ 0.00      $ 0.00      ($ 0.01   $ 0.00      $ 0.01   

Impact of discontinued operations

   $ 0.00      $ 0.01      $ 0.05      $ 0.01      ($ 0.82   ($ 0.00
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss) per diluted share, as reported

   ($ 0.07   $ 0.06      ($ 0.03   ($ 0.10   ($ 0.08   ($ 0.02
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Removal of Procurian’s contribution to Non-GAAP net income (loss) items above (excluding the income tax expense (benefit) - deferred line item)

   ($ 0.00   ($ 0.01   ($ 0.00   ($ 0.03   ($ 0.05   ($ 0.02

Removal of historical income tax expense (benefit) - deferred previously reported

   ($ 0.01   ($ 0.00   ($ 0.00   $ 0.01      ($ 0.00   ($ 0.01

Removal of impact of discontinued operations previously reported

   ($ 0.00   ($ 0.01   ($ 0.05   ($ 0.01   $ 0.82      $ 0.00   

Inclusion of discontinued operations - historical and Procurian impact*

   ($ 0.05   ($ 0.18   ($ 0.06   ($ 0.06   ($ 0.77   ($ 0.06

Inclusion of NCI impact for discontinued
operations - historical and Procurian impact

   $ 0.01      $ 0.02      $ 0.01      $ 0.03      ($ 0.06   $ 0.01   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss) per diluted share, as revised***

   ($ 0.12   ($ 0.12   ($ 0.13   ($ 0.16   ($ 0.14   ($ 0.10
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in calcuation of GAAP net income (loss) per share attributable to ICG:

            

Basic

     36,156        35,917        35,650        35,840        36,713        36,468   

Diluted

     36,156        35,917        36,273        36,912        36,713        36,468   

Shares used in calcuation of non-GAAP net income (loss) per share attributable to ICG:

            

Basic

     36,156        35,917        35,650        35,840        36,713        36,468   

Diluted

     36,156        35,917        35,650        35,840        36,713        36,468   

 

* It is anticipated that Procurian will be treated as discontinued operations when ICG releases its earnings and files its Form 10-Q for the quarter ended September 30, 2013.
** See Item 1 of “About ICG’s Non-GAAP Financial Measures” below.
*** See Item 2 of “About ICG’s Non-GAAP Financial Measures” below.


About ICG’s Non-GAAP Financial Measures

The accompanying materials contain non-GAAP financial measures. The tables above reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. ICG strongly urges investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release.

ICG’s management believes that its non-GAAP financial measures provide useful information to investors because they allow investors to view the business through the eyes of management and provide meaningful supplemental information regarding ICG’s operating results, as they exclude amounts that ICG excludes as part of its monitoring of operating results and assessment of the performance of the business.

ICG presents the following non-GAAP financial measures in this release: (1) non-GAAP net income (loss) (also referred to as adjusted net income (loss)) and (2) non-GAAP net income (loss) per diluted share (also referred to as adjusted net income (loss) per diluted share). ICG excludes items from these non-GAAP financial measures as described below.

 

(1) Non-GAAP net income (loss), excludes the additional following items:

 

    Share-based compensation. ICG excludes share-based compensation expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that ICG does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of ICG’s results with results of other companies.

 

    Amortization of intangibles. ICG excludes amortization of acquired intangibles, primarily customer relationships and technology, because they are expenses that ICG does not consider part of ongoing operating results when assessing the performance of its business, and ICG believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.

 

    Impairment-related and other. ICG excludes the effect of impairment-related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, acquisition related costs, legal and settlement costs and other one-time costs, because ICG does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on ICG’s operations.

 

    Other income (loss), net. ICG excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses, as well as certain foreign currency impacts, because ICG does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on ICG’s operations.


    Acquired businesses’ deferred revenue. ICG includes acquired businesses’ previously deferred revenues that are not recognized under GAAP because ICG considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.

 

    Equity loss. In accordance with GAAP, ICG recognizes its share of the earnings or losses of each company accounted for under the equity method and adjusts the carrying amount for each such company for its share of the earnings or losses of the company. ICG excludes GAAP equity income (loss) because it is significantly impacted by factors outside its direct control.

 

    Inclusion of discontinued operations – historical and Procurian impact. ICG includes (a) the impact of discontinued operations (historical and Procurian-related) for 2012 periods as ICG believes it is useful for investors to understand the effect of discontinued operations for all periods presented as compared to what ICG has historically presented and (b) the impact of discontinued operations in 2013 as ICG does not consider discontinued operations (historical and Procurian-related) a part of ongoing operating results when assessing the performance of its business.

 

    Inclusion of non-controlling interest (NCI) on discontinued operations – historical and Procurian impact. ICG does not own 100% of the companies treated as discontinued operations (historical and Procurian-related). Therefore, ICG includes (a) the impact of the NCI on discontinued operations (historical and Procurian-related) for 2012 periods as ICG believes it is useful for investors to understand the effect of discontinued operations for all periods presented as compared to what ICG has historically presented and (b) the impact of the NCI on discontinued operations (historical and Procurian-related) in 2013 as ICG does not consider discontinued operations a part of ongoing operating results when assessing the performance of its business.

 

(2) Non-GAAP net income (loss) per diluted share is calculated as follows:

 

    Non-GAAP net income (loss) (as defined above) is the numerator.

 

    Shares used in calculation of non-GAAP net income (loss) per diluted share. For periods where GAAP and non-GAAP net income (loss) are both losses, ICG uses the same number of shares used to calculate GAAP and non-GAAP net loss per share. For periods where GAAP and non-GAAP net income (loss) are both income, ICG uses the same number of shares used to calculate GAAP and non-GAAP net income per diluted share. For periods where GAAP net income (loss) is a loss but non-GAAP net income (loss) is income, ICG includes the impact of incremental dilutive securities for the period to determine non-GAAP net income per diluted share. For periods where GAAP net income (loss) is income but non-GAAP net income (loss) is a loss, ICG excludes the impact of incremental dilutive securities for the period to determine non-GAAP net loss per diluted share.


ICG believes that the following considerations apply to the non-GAAP financial measures that it presents:

 

    ICG’s management uses non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share in internal reports used by management in monitoring and making decisions regarding ICG’s business, including in monthly financial reports prepared for management and in periodic reports to ICG’s Board of Directors.

 

    An important limitation of ICG’s non-GAAP financial measures is that they exclude expenses, some of which may be significant, that are required by GAAP to be recorded. In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges to exclude from the non-GAAP financial measures.

 

    To mitigate the limitations associated with non-GAAP financial measures, ICG reconciles its non-GAAP financial measures to the nearest comparable GAAP financial measures and recommends that investors and potential investors do not give undue weight to its non-GAAP financial measures.