Asset Write-offs – Linked to revenue from Indemnities, in which the amount corresponds to the cost of writing off the indemnified asset in our property, plant and equipment account.
Adjusted Operating Cash Flow – According to the Company’s Consolidated Financial Statements, this is the result of net cash generated from operating activities minus interest and net asset and liability monetary variations, acquisitions of property, plant and equipment for lease, and interest paid.
Capex (Capital Expenditure) – Acquisition of tangible and intangible assets for non-current assets.
Cost of Sales – Costs linked to revenue arising from new sales. Costs arising from sales of used assets are linked to revenue from said used assets and corresponds to the write-off of these assets from the Company’s balance sheet (residual cost).
EBITDA – This is a non-accounting measure prepared by the Company, reconciled with is financial statements and in compliance with CVM Circular Letter 01/2007, as applicable. The Company calculates EBITDA as operating profit before financial results, depreciation of leased assets and equipment, and the amortization of intangible assets. EBITDA is not a measure recognized by Accounting Practices Adopted in Brazil, IFRS or US GAAP and does not have a standard meaning, therefore it may not be comparable to calculations with similar names provided by other companies. The Company discloses EBITDA as a way to measure its performance. EBITDA should not be considered individually or as a substitute for net income or operating income, nor should it substitute indicators such as operating performance or cash flow, or to measure liquidity or debt payment capacity.
General and Administrative Expenses – (i) The Selling, General and Administrative expenses consists of current expenses, such as salaries, benefits, travel and representations for several departments, including Commercial, Marketing, and Engineering, as well as administrative back office areas, such as HR and Financial; (ii) General Services includes expenses of the Company’s headquarters and several of its units (mainly for rentals, fees, security, and cleaning); and (iii) Other Expenses are mostly non-cash items, such as provisions for stock option programs, contingencies, and slow-moving inventories, in addition to certain non-recurring disbursements.
Invested Capital – The Company defines invested capital as the sum of equity (shareholders’ equity) plus third-party capital (including all onerous debts, bank and non-bank), both of which refer to their average amounts in the period. In terms of business segment, the average amount of the Company’s invested capital in the period is weighted by the average assets corresponding to each segment (net working capital plus fixed assets). The asset base for the year is calculated as the average asset base during the last thirteen (13) months.
IFRS 16 – Effective as of January 2019, known as accounting standard IFRS 16/CPC 06 (R2). With this standard, usage rights (such as property and vehicle rental contracts) are now recognized in assets, and leases are now recognized in liabilities, similar to financial leases. With the adoption of IFRS 16, the Company no longer recognizes property and vehicle rentals as costs and expenses in the income statement for the period and now recognizes: (i) the effects of depreciation of the usage rights on leased assets; and (ii) the financial expense and exchange variation calculated based on the financial liabilities of lease contracts. In order to simplify the comparative analysis with previous periods, this report provides tables that exclude the effect of IFRS 16, whenever indicated.
Lease cost (maintenance, personnel, warehouses, etc.) – Includes: (i) personnel to supervise works and technical assistance; (ii) personnel to assemble and disassemble material, when performed by Mills’ workforce; (iii) freight for transportation of equipment, when this is performed by Mills; (iv) cost of materials used in equipment maintenance; and (v) rental of third-party equipment.
Net Debt – Gross debt minus cash and cash equivalents.
ROIC (Return on Invested Capital) – This amount is expressed as a percentage earned over a company’s total capital (shareholders’ equity) plus net debt, and is calculated by dividing net operating earnings before interest payments over total capital.
Rental Rate – The profitability rate for leasing equipment. It is calculated by the rental price of the equipment divided by its estimated replacement price.
Rental Rate: (Gross rental revenue/replacement value) / utilization rate
Utilization rate – Can be calculated by the amount of assets or fleet amount.
By the number of assets: Divides the number of leased machines over the total fleet amount.
By asset value – Value of the leased machines divided by the total fleet amount.
Utilization Rate = number of platforms in use divided by the number of total platforms
Unavailability Rate – Value of machines unavailable divided by the total fleet amount.
DU – Fleet profitability rate. Calculated by the total revenue amount divided by the total fleet amount.
Warehouse Cost – Consists of expenses directly related to warehouse management, storage, handling, and maintenance for the lease and resale of assets, including expenses with labor, PP&E used in warehouse activities (handling, storage and maintenance), supplies (forklift gas, welding gases, plywood, paints, wooden battens, among others) and maintenance of machinery and equipment (forklifts, welding machines, waterjets, hoists and tools in general).
Last update: November 17, 2021