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4th Quarter 2013 Earnings Conference Call

February 27, 2014

Safe Harbor Statement


Safe Harbor Statement
Windstream claims the protection of the safe-harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are subject to uncertainties that could cause actual future events and results to
differ materially from those expressed in the forward-looking statements. Forward-looking
statements include, but are not limited to, Windstreams 2014 guidance for revenue,
adjusted OBIDA, adjusted capital expenditures, adjusted free cash flow, dividend payout
ratio, and cash tax payments for 2014 and 2015. These statements, along with other
forward-looking statements, including statements regarding Windstreams business outlook,
current capital allocation strategy, capital expenditure levels in future periods, its current
dividend practice, and the companys ability to generate, and amount of, cash flows in
future periods, are based on estimates, projections, beliefs, and assumptions that
Windstream believes are reasonable but are not guarantees of future events and results. For
risk factors that could cause actual results and events to differ materially from those
expressed, refer to Windstreams filings with the Securities and Exchange Commission.
Regulation G Disclaimer
This presentation includes certain non-GAAP financial measures. Reconciliations of these
non-GAAP
non
GAAP financial measures to the most directly comparable GAAP financial measures are
available on our website at www.windstream.com/investors.
2

Adjusted EPS Excludes Non-Operational Items

Reported EPS

4Q13

2013

$.20

$.40

$.02

$.13

(($.13))

(($.13))

$.09

$.40

Non-operational items(1):
M&I, Restructuring expense and
Other(2)
Non-cash p
pension income

Adjusted EPS

Excluding non-operational items, Adj. EPS was $.09 in 4Q and $.40 for 2013

(1)
(2)

Presented on an after-tax basis


Includes early debt extinguishment fee ($65M for 2013) and an adjustment related to expense associated with the formation of
Windstream Holdings, Inc. ($4M in 4Q13 and $9M in 2013)

Windstream Participants
Jeff Gardner
Chief Executive Officer

Tony Thomas
Chi
i
i l Offi
Chieff Financial
Officer

Brent Whittington
Chief Operating Officer

Bob Gunderman
SVP & Treasurer

2013 Highlights

Growing strategic revenue

Strategic revenue now 73% of

total revenue and grew 2%


Stable adjusted OIBDA

Maintaining margins

margins of 39%
Invested ~ 2/3 of capex on

Investing capital for


growth
Improving balance sheet

growth initiatives
Improved maturity profile,

lowered cash interest by $45M


and reduced debt by $210M
Generated $891M in 2013 FCF

Returning
g capital
p
to
shareholders

Returned $594M (67% of FCF)

to shareholders
5

2014 Strategic Priorities

Improve business sales

Become ONE Windstream across all


enterprise systems

Invest in strategic capital initiatives

Goal: Drive revenue growth with stable, sustainable free cash flow
6

Windstream Year-over-Year Revenue Change


As strategic growth revenues become a greater percentage of our business and
ICC reform impact becomes smaller, we expect improved financial trends
Expect significant improvement in switched
access / USF revenues beginning in 2014
$6,140

FY 2012 Revenue

$68

($103)
($63)

Strategic Growth
Revenue (1)

Switched Access / Consumer Voice &


USF Revenue
Other

($54)

All Other (2)

$5,988

FY 2013 Revenue

L
Largest
t iimpactt from
f
ICC reform
f
iis b
behind
hi d us; going
i fforward
d th
the
intercarrier rate step-downs are much smaller
(1) Strategic growth areas include total business and consumer broadband revenue
(2) All Other includes wholesale voice, data and miscellaneous, Other revenues and product sales excluding business and consumer broadband sales.

Business Strategy Delivering Solid Revenue and ARPU


Business Channel Highlights
Business Service Revenues

Key Drivers

($ in millions)

$917

$914

$913

$916

$398

$400

$405

$407

$165

$167

$920

Nationwide,
Nationwide advanced IP solutions
$412

$166

$169

$167

$354

$347

$342

$341

$341

4Q12

1Q13

2Q13

3Q13

4Q13

Voice/Misc.

Carrier

Business service ARPU of $642, up 8% y/y

Differentiated, personalized service


27 data centers
Cloud, managed hosting, colocation
Carrier revenue up 1% due to fiber-tothe-tower installations

Data & Integrated Services

(1) Average business service revenue excluding carrier revenue per customer per month

Consumer Strategy Balances Profitability & Unit Growth


Consumer Channel Highlights
Consumer Service Revenues
($ in millions)

$334

$328

$327

Strong demand for faster speeds and


vertical services

$324

$
$318

$191

$184

$180

$177

$173

$116

$117

$120

$119

$119

$27

$27

$27

$27

$26

4Q12

1Q13

2Q13

3Q13

4Q13

Video / Misc

Broadband

Key Drivers

65% of 4Q13 sales purchased faster


speeds
~34% of 4Q13 sales purchased a
vertical
i l service
i ((security,
i virus
i
protection, back-up, tech-help)
Consumer BB ARPU increased 6% y/y
Future
F t
b
broadband
db d growth
th d
drivers:
i

Voice & LD

(1) Average consumer high speed Internet revenue per Internet customer per month

Increasing addressable market by


~75k homes
CAF-1
CAF 1 investments
i
t
t expand
d BB
availability and improve BB speeds
9

Consistent Margins Even With Shifting Revenue Mix


Consistent Adjusted OIBDA Margins
40%

38.6%

35%
30%
25%
20%
15%
10%
5%

2010

0%

2011

2012

2013

Total Cash Expenses


$917

$924

4Q12

3Q13

$915
$

4Q13

Windstreams culture of
disciplined expense
management has led to
consistent OIBDA
margins of 38 40%

Adjusted OIBDA
Cost structure
C
improvements led
to sequential
improvement in
Adj t d OIBDA
Adjusted

$617

$575

$576

4Q12

3Q13

4Q13
10

Capital Efficient Investing for Long-Term Success


Results of 2013 Capital Investments of $812M
Fiber network now spans 118,000 route miles
Built 3 new data centers; Windstream now has 27 data centers
Enhanced broadband network speeds and capabilities
Deployed fiber to over 2,000 towers during 2013; have completed 4,500 towers to date
and
d have
h
400 currently
tl under
d construction
t ti

$80

$62
$161

$187

$93

$80

$197

$190

$66
$168

$50
$170

$38
$150

Capex
p declining
g as
non-recurring
projects decrease
$36
$134

Non-Recurring
(FttT / Stimulus)
Recurring Capex

(in millions)

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

Long-term expectation for recurring capex to be within a range of


11-13% of revenue, inclusive of growth initiatives
(1) Adjusted capex excludes the impact of integration capital expenditures which were $5M in 4Q13 and $29M in FY 2013

11

Strong FCF Supports Capital Needs and Dividends


Q413 Free Cash Flow of $213M
$576
$170
$192

$1

$213
Q413
Adj.
OIBDA

Adj. Capex(1)

Cash
Interest

Cash Taxes

Free Cash
Flow

$64

$149

Cash
Dividends

Free Cash
Flow After
Dividends

FY 2013 Free Cash Flow of $891M; Payout Ratio of 67%


$2,318
$
$812
$609

$6
$891

FY 2013
Adj.
OIBDA

Adj. Capex(1)

Cash
Interest

Cash Taxes

Free Cash
Flow

(1) Adjusted capex excludes the impact of integration capital expenditures which were $5M in 4Q13 and $29M in FY 2013

$594

$298

Cash
Dividends

Free Cash
Flow After
Dividends
12

Continuing to Improve the Balance Sheet


Debt maturity profile is well-positioned with $660M in revolver availability
DebtMaturityProfile(asof12/31/13)
$1.25B revolver with
$660M in availability

$2,032
$700

$1,378
$660
Avail
$590
2013

2014

2015

$1,100

$1,332
$850

$387
2016

TermLoan

$1,300
$950

$590

$502

$278
2017

2018

2019

2020

2021

UndrawnRevolver

2022

$100
2023

Thereafter

SrNotes

Reduced outstanding debt by $210M;


$
ended the quarter with a revolver balance of $
$590M
Extended near-term maturities and improved liquidity position
Generated cash interest savings of $45M going forward

13

2014 Guidance

2014 Guidance
Total Revenues

Expect revenue within the range of


(2.5%) to 1% versus 2013 revenue

Capital Expenditures

$800M - $850M

Adjusted Free Cash Flow


Payout ratio

$775M - $885M
68% - 78%

Notes:
$ in millions
Expect 2014 cash taxes of less than $30 million
Adjusted Free Cash Flow defined as Adjusted OIBDA minus adjusted capex, cash interest and cash taxes
14

Appendix

15

Supplemental Financial Information


WINDSTREAM HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED RESULTS (NON-GAAP) (A)
QUARTERLY SUPPLEMENTAL INFORMATION
for the quarterly periods in the years 2013 and 2012
(In millions)

FINANCIAL RESULTS:
Service revenues:
Business
Consumer
Wholesale
Other
Total service revenues
Product sales
Total revenues and sales

Total
$

3,663.4
1,296.4
593.5
222.2
5,775.5
212.6
5,988.1

2013
3rd Qtr.

4th Qtr.
$

920.1
317.7
143.1
55.0
1,435.9
55.4
1,491.3

916.2
323.6
147.8
55.3
1,442.9
55.7
1,498.6

2nd Qtr.
$

912.8
327.0
150.7
54.9
1,445.4
56.3
1,501.7

1st Qtr.
$

914.3
328.1
151.9
57.0
1,451.3
45.2
1,496.5

Total
$

3,611.4
1,339.5
708.0
249.4
5,908.3
231.2
6,139.5

2012
3rd Qtr.

4th Qtr.
$

916.6
334.3
169.0
59.8
1,479.7
54.4
1,534.1

906.4
333.6
181.9
59.6
1,481.5
59.5
1,541.0

2nd Qtr.
$

892.2
335.7
173.6
63.5
1,465.0
65.3
1,530.3

1st Qtr.
$

896.2
335.9
183.5
66.5
1,482.1
52.0
1,534.1

Costs and expenses:


Cost of services
Cost of products sold
Selling, general and administrative
Costs and expenses excluding pension and share-based compensation

2,571.2
,
183.9
914.9
3,670.0

645.3
45.7
224.4
915.4

643.2
46.2
234.7
924.1

643.1
49.4
227.8
920.3

639.6
42.6
228.0
910.2

2,630.9
,
206.6
918.2
3,755.7

643.0
49.9
223.8
916.7

672.1
56.0
222.2
950.3

654.8
56.4
229.4
940.6

661.0
44.3
242.8
948.1

Adjusted OIBDA (B)


Pension (benefit) expense
Share-based compensation
Restructuring charges
OIBDA (C)
Depreciation and amortization
Operating income

2,318.1
(115.3)
44.7
9.6
2,379.1
1,340.9
1,038.2

575.9
(115.3)
10.8
0.5
679.9
341.2
338.7

574.5
(1.1)
11.2
1.5
562.9
338.2
224.7

581.4
2.3
10.4
2.7
566.0
332.2
233.8

586.3
(1.2)
12.3
4.9
570.3
329.3
241.0

2,383.8
67.4
43.0
27.2
2,246.2
1,296.9
949.3

617.4
68.7
23.7
4.1
520.9
338.7
182.2

590.7
(1.4)
5.6
11.9
574.6
326.1
248.5

589.7
1.2
6.3
10.3
571.9
320.0
251.9

586.0
(1.1)
7.4
0.9
578.8
312.1
266.7

Margins (D):
Adjusted OIBDA margin
OIBDA margin
Operating income margin
SUPPLEMENTAL INFORMATION:
Revenues from business and broadband:
Business service revenue
B i
Business
product
d t sales
l
Consumer broadband service
Consumer broadband product sales
Business and broadband revenues
Business and broadband as a percent of total revenues
CAPITAL EXPENDITURES:
Recurring capital expenditures
Fiber to the tower and broadband stimulus projects
Adjusted capital expenditures (E)
Recurring capital expenditures as a percent of total revenues

38.7%
39.7%
17.3%

$
$

3,663.4
152 4
152.4
476.2
12.8
4,304.8
71.9%

622.3
189.4
811.7
10 4%
10.4%

38.6%
45.6%
22.7%

$
$

920.1
40 1
40.1
119.3
5.1
1,084.6
72.7%

134.2
35.7
169.9
9 0%
9.0%

38.3%
37.6%
15.0%

$
$

38.7%
37.7%
15.6%

916.2
41 0
41.0
119.4
4.1
1,080.7
72.1%

149.9
37.5
187.4
10 0%
10.0%

912.8
40 8
40.8
120.1
2.2
1,075.9
71.6%

170.3
50.2
220.5
11 3%
11.3%

39.2%
38.1%
16.1%

$
$

38.8%
36.6%
15.5%

914.3
30 5
30.5
117.4
1.4
1,063.6
71.1%

167.9
66.0
233.9
11 2%
11.2%

40.2%
34.0%
11.9%

3,611.4
160 5
160.5
456.6
7.9
4,236.4
69.0%

735.2
314.6
1,049.8
12 0%
12.0%

38.3%
37.3%
16.1%

916.6
40 0
40.0
116.3
2.8
1,075.7
70.1%

190.4
80.0
270.4
12 4%
12.4%

38.5%
37.4%
16.5%

906.4
43 2
43.2
114.5
0.7
1,064.8
69.1%

196.5
92.5
289.0
12 8%
12.8%

38.2%
37.7%
17.4%

892.2
40 3
40.3
113.8
2.8
1,049.1
68.6%

187.3
79.8
267.1
12 2%
12.2%

896.2
37 0
37.0
112.0
1.6
1,046.8
68.2%

161.0
62.3
223.3
10 5%
10.5%

(A) Pro forma results adjusts results of operations under GAAP to exclude all merger and integration costs related to strategic transactions and the results of operations of the software and energy businesses acquired as part of the
PAETEC acquistion.
(B) Adjusted OIBDA is OIBDA before restructuring charges, pension (benefit) expense and share-based compensation.
(C) OIBDA is operating income before depreciation and amortization.
(D) Margins are calculated by dividing the respective profitability measures by total revenues and sales.
(E) Adjusted capital expenditures exclude the impact of integration-related capital expenditures.

16

Supplemental Financial Information (cont.)


WINDSTREAM HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED RESULTS (NON-GAAP) (A)
QUARTERLY SUPPLEMENTAL INFORMATION
for the quarterly periods in the years 2013 and 2012
(In millions)

REVENUE SUPPLEMENT
Service revenues:
Voice and long distance
Data and integrated services
Carrier
Miscellaneous
Business
Voice and long distance
Broadband
Video and miscellaneous
Consumer
Switched access
USF supportt
Voice and long distance
Data and integrated services
Miscellaneous
Wholesale
Pass through taxes and surcharges
Miscellaneous
Other
Total service revenues
Product sales:
Business
Consumer
Other
Product sales
Total revenues and sales

Total
$ 1,226.3
1,623.6
668.5
145.0
3,663.4
,

2013
3rd Qtr.

4th Qtr.
$

304.4
411.5
167.3
36.9
920.1

304.5
406.5
168.5
36.7
916.2

2nd Qtr.
$

306.4
405.2
165.9
35.3
912.8

1st Qtr.
$

Total

311.0
400.4
166.8
36.1
914.3

$ 1,282.8
1,535.4
653.2
140.0
3,611.4
,

2012
3rd Qtr.

4th Qtr.
$

316.9
397.9
165.0
36.8
916.6

321.3
388.3
161.8
35.0
906.4

2nd Qtr.
$

317.1
376.9
164.0
34.2
892.2

1st Qtr.
$

327.5
372.3
162.4
34.0
896.2

713.6
476.2
106.6
1,296.4

172.8
119.3
25.6
317.7

177.2
119.4
27.0
323.6

179.9
120.1
27.0
327.0

183.7
117.4
27.0
328.1

777.0
456.6
105.9
1,339.5

191.2
116.3
26.8
334.3

192.5
114.5
26.6
333.6

196.0
113.8
25.9
335.7

197.3
112.0
26.6
335.9

210.1
272.88
272
63.7
44.2
2.7
593.5

47.5
69.22
69
14.6
11.2
0.6
143.1

51.6
69.88
69
14.6
11.2
0.6
147.8

56.1
66.11
66
16.9
10.9
0.7
150.7

54.9
67.77
67
17.6
10.9
0.8
151.9

337.2
248.99
248
75.6
42.8
3.5
708.0

70.2
67.55
67
19.6
10.9
0.8
169.0

83.9
67.22
67
19.2
10.7
0.9
181.9

86.3
57.22
57
18.6
10.7
0.8
173.6

96.8
57.00
57
18.2
10.5
1.0
183.5

153.1
69.1
222.2
5,775.5

39.0
16.0
55.0
1,435.9

38.5
16.8
55.3
1,442.9

37.1
17.8
54.9
1,445.4

38.5
18.5
57.0
1,451.3

161.0
88.4
249.4
5,908.3

41.2
18.6
59.8
1,479.7

37.8
21.8
59.6
1,481.5

40.7
22.8
63.5
1,465.0

41.3
25.2
66.5
1,482.1

152.4
15.8
44.4
212 6
212.6
$ 5,988.1

40.1
6.0
9.3
55 4
55.4
$ 1,491.3

41.0
4.7
10.0
55 7
55.7
$ 1,498.6

40.8
2.9
12.6
56 3
56.3
$ 1,501.7

30.5
2.2
12.5
45 2
45.2
$ 1,496.5

160.5
13.3
57.4
231 2
231.2
$ 6,139.5

40.0
3.6
10.8
54 4
54.4
$ 1,534.1

43.2
1.6
14.7
59 5
59.5
$ 1,541.0

40.3
5.4
19.6
65 3
65.3
$ 1,530.3

37.0
2.7
12.3
52 0
52.0
$ 1,534.1

(A) Pro forma results adjusts results of operations under GAAP to exclude all merger and integration costs related to strategic transactions and the results of operations of the software and energy businesses acquired
as part of the PAETEC acquisition.

17

Supplemental Financial Information (cont.)


WINDSTREAM HOLDINGS, INC.
UNAUDITED PRO FORMA OPERATING METRICS (NON-GAAP)
QUARTERLY SUPPLEMENTAL INFORMATION
for the quarterly periods in the years 2013 and 2012
(Units in thousands, Dollars in millions, except per unit amounts)

Total

2013
3rd Qtr.

4th Qtr.

2nd Qtr.

1st Qtr.

Total

2012
3rd Qtr.

4th Qtr.

2nd Qtr.

1st Qtr.

KEY OPERATING METRICS:


Business:
Customer Locations (A)
Enterprise (B)
Small business (C)
Total Customer Locations
YOY change in enterprise locations
YOY change in small business locations
YOY change in total customer locations

210.4
395.3
605.7
2.8%
-8.2%
-4.7%

210.4
395.3
605.7
2.8%
-8.2%
-4.7%

208.8
403.7
612.5
2.8%
-8.2%
-4.7%

206.5
414.1
620.6
2.3%
-7.7%
-4.6%

207.0
421.5
628.5
3.3%
-8.0%
-4.6%

204.6
430.7
635.3
2.8%
-8.0%
-4.8%

204.6
430.7
635.3
2.8%
-8.0%
-4.8%

203.2
439.6
642.8
2.7%
-8.0%
-4.8%

201.8
448.8
650.6
2.7%
-8.0%
-4.9%

200.4
458.3
658.7
2.7%
-8.0%
-5.0%

Total Business Customers


YOY change in total customers

388.3
-7.0%

388.3
-7.0%

393.9
-7.3%

401.2
-6.7%

409.4
-5.4%

417.6
-5.6%

417.6
-5.6%

425.2
-4.4%

429.8
-4.2%

432.7
-5.1%

Business service revenue, excluding carrier revenue


Average service revenue per customer per month

$
$

Carrier special access circuits (D)


YOY change in carrier special access circuits
Carrier service revenue
Average revenue per circuit per month
Consumer:
Voice lines
High-speed Internet
Digital television customers
Total consumer connections
YOY change in voice lines
YOY change in high-speed internet
YOY change in digital television customers

(A)
(B)
(C)
(D)

2,994.9
626.74

$
$

100.1
-6.6%
$
$

668.5
545.89

1 722 3
1,722.3
1,170.9
402.3
3,295.5
-6.5%
-3.6%
-5.6%

752.8
641.57

$
$

100.1
-6.6%
$
$

167.3
553.24

1 722 3
1,722.3
1,170.9
402.3
3,295.5
-6.5%
-3.6%
-5.6%

747.7
626.91

$
$

101.5
-9.9%
$
$

168.5
549.31

11,752.7
752 7
1,183.4
409.5
3,345.6
-6.0%
-2.7%
-5.1%

746.9
614.28

$
$

103.0
-9.5%
$
$

165.9
535.33

11,783.3
783 3
1,194.5
414.9
3,392.7
-5.5%
-1.3%
-4.9%

747.5
602.55

$
$

103.6
-8.2%
$
$

166.8
527.51

11,812.9
812 9
1,205.9
421.1
3,439.9
-5.2%
-0.8%
-4.4%

2,958.2
578.24

$
$

107.2
-4.3%
$
$

653.2
487.23

11,841.9
841 9
1,214.5
426.1
3,482.5
-4.5%
0.6%
-4.4%

751.6
594.54

$
$

107.2
-4.3%
$
$

165.0
500.23

11,841.9
841 9
1,214.5
426.1
3,482.5
-4.5%
0.6%
-4.4%

744.6
580.58

$
$

112.7
2.7%
$
$

161.8
476.23

11,865.2
865 2
1,216.2
431.6
3,513.0
-4.4%
1.4%
-3.0%

728.2
562.84

$
$

113.8
5.1%
$
$

164.0
482.28

11,887.5
887 5
1,210.7
436.4
3,534.6
-4.4%
1.7%
-0.7%

733.8
559.11
112.9
7.6%

$
$

162.4
481.40

11,911.5
911 5
1,215.3
440.3
3,567.1
-4.3%
2.4%
1.0%

Business customer locations include each individual location to which we provide service and exclude carrier special access circuits.
Enterprise locations represent customer relationships that generate $750 or more in revenue per month.
Small business locations represent customer relationships that generate less than $750 in revenue per month.
Carrier special access circuits are dedicated circuits purchased by telecommunication carriers to transport traffic from wireless towers, between points on their network or from their network to a customer location.

18

Supplemental Financial Information (cont.)


UNAUDITED CONSOLIDATED RESULTS (NON-GAAP)
QUARTERLY SUPPLEMENTAL INFORMATION
for the quarterly periods in the years 2013 and 2012
(In millions)

Total
ADJUSTED FREE CASH FLOW:
Operating income under GAAP
Depreciation and amortization
As reported OIBDA
Merger and integration costs
Pension (benefit) expense
Restructuring charges
p
Share-based compensation
As reported adjusted OIBDA

$ 1,009.0
1,340.9
2,349.9
29.2
(115.3)
9.6
44.7
2,318.1

Adjustments:
Adjusted capital expenditures
Cash paid for interest
Cash (paid) refunded for taxes
Adjusted free cash flow

(811.7)
(609.4)
(5.7)
891.3

Dividends paid

593.6

Weighted average common shares


Common stock outstanding

DEBT LEVERAGE RATIO:


Long-term debt, including current maturities
Capital lease obligations
Total long-term debt and capital lease obligations
Cash and cash equivalents, including restricted cash
Net debt

Pro forma adjusted OIBDA


Pro forma leverage ratio
Pro forma net leverage ratio

2013
3rd Qtr.

4th Qtr.
$

326.5
341.2
667.7
12.2
(115.3)
0.5
10.8
575.9

(169.9)
(192.0)
(1.3)
212.7

149.0

219.6
338.2
557.8
5.1
(1.1)
1.5
11.2
574.5

(187.4)
(123.3)
(0.5)
263.3

148.3

2nd Qtr.
$

227.0
332.2
559.2
6.8
2.3
2.7
10.4
581.4

1st Qtr.
$

235.9
329.3
565.2
5.1
(1.2)
4.9
12.3
586.3

(220.5)
(188.9)
(3.4)
168.6

(233.9)
(105.2)
(0.5)
246.7

148.2

148.1

Total
$

883.9
1,296.9
2,180.8
65.4
67.4
27.2
43.0
2,383.8

(1,049.8)
(671.5)
100.7
$
763.2
$

588.0

2012
3rd Qtr.

4th Qtr.
$

171.2
338.7
509.9
11.0
68.7
4.1
23.7
617.4

(270.4)
(222.7)
(3.1)
121.2

147.5

235.8
326.1
561.9
12.7
(1.4)
11.9
5.6
590.7

(289.0)
(125.0)
(6.7)
170.0

147.0

2nd Qtr.
$

232.5
320.0
552.5
19.4
1.2
10.3
6.3
589.7

1st Qtr.
$

244.4
312.1
556.5
22.3
(1.1)
0.9
7.4
586.0

(267.1)
(184.8)
(9.6)
128.2

(223.3)
(139.0)
120.1
343.8

147.0

146.5

589.3
596.2
As of
12/31/2013
$ 8,707.2
79.2
$ 8,786.4
57.9
$ 8,728.5
Twelve
Months Ended
/3 / 0 3
12/31/2013
$ 2,318.1
3.79
3.77

19

Reconciliations of Non-Gaap Financial Measures


WINDSTREAM HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED RESULTS (NON-GAAP) (A)
QUARTERLY SUPPLEMENTAL INFORMATION
for the quarterly periods in the years 2013 and 2012
(In millions)

Total
Reconciliation of Operating Income under GAAP to
Pro forma adjusted OIBDA:
Operating income from continuing operations under GAAP
Pro forma adjustments:
Merger and integration costs
Pro forma operating income
Depreciation and amortization expense
Pro forma OIBDA (B)
Other adjustments:
Pension ((benefit)) expense
p
Restructuring charges
Share-based compensation
Pro forma adjusted OIBDA (C)
Reconciliation of Capital Expenditures under GAAP to
Pro forma Adjusted Capital Expenditures:
Capital expenditures under GAAP
Pro forma adjustments:
Less: Integration-related capital expenditures
Pro forma adjusted capital expenditures (D)

$ 1,009.0

2013
3rd Qtr.

4th Qtr.

326.5

219.6

2nd Qtr.

227.0

1st Qtr.

235.9

Total

883.9

2012
3rd Qtr.

4th Qtr.

171.2

235.8

2nd Qtr.

232.5

1st Qtr.

244.4

29.2
1,038.2

12.2
338.7

5.1
224.7

6.8
233.8

5.1
241.0

65.4
949.3

11.0
182.2

12.7
248.5

19.4
251.9

22.3
266.7

1,340.9
2,379.1

341.2
679.9

338.2
562.9

332.2
566.0

329.3
570.3

1,296.9
2,246.2

338.7
520.9

326.1
574.6

320.0
571.9

312.1
578.8

((115.3))
9.6
44.7
$ 2,318.1

((115.3))
0.5
10.8
575.9

( )
(1.1)
1.5
11.2
574.5

2.3
2.7
10.4
581.4

( )
(1.2)
4.9
12.3
586.3

67.4
27.2
43.0
$ 2,383.8

68.7
4.1
23.7
617.4

((1.4))
11.9
5.6
590.7

1.2
10.3
6.3
589.7

( )
(1.1)
0.9
7.4
586.0

841.0

175.0

193.8

228.7

243.5

$ 1,101.2

291.8

307.3

276.0

226.1

29.3
811.7

5.1
169.9

6.4
187.4

8.2
220.5

9.6
233.9

51.4
$ 1,049.8

21.4
270.4

18.3
289.0

8.9
267.1

2.8
223.3

(A) Pro forma results adjusts results of operations under GAAP to exclude all merger and integration costs related to strategic transactions and the results of operations of the software and energy businesses acquired
as part of the PAETEC acquisition.
(B) Pro forma OIBDA is pro forma operating income before depreciation and amortization.
(C) Pro forma adjusted OIBDA adjusts pro forma OIBDA for the impact of restructuring charges, pension (benefit) expense and share-based compensation.
(D) Pro forma adjusted capital expenditures exclude the impact of integration-related capital expenditures.

20

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