Windstream 2015 Annual Report Download - page 73

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Appendix A
RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
In addition to financial results reported in accordance with generally accepted accounting principles (“GAAP”),
we utilize certain unaudited results of operations in this Proxy Statement which are not calculated in accordance with
GAAP. A “non-GAAP measure” is defined as a numerical measure of a company’s financial performance, financial
position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly
comparable measure calculated and presented in accordance with GAAP in a company’s financial statements.
Adjusted OIBDA, which is a non-GAAP measure, is operating income before depreciation and amortization adjusted
for the impact of restructuring charges, merger and integration expense, pension expense, share-based compensation
and the annual cash rent payment due under the master lease agreement with Communications Sales & Leasing,
Inc. (“CS&L”). We also utilize adjusted OIBDAR, which is adjusted OIBDA before the annual cash rent payment
due under the master lease agreement with CS&L assuming the lease payments began on January 1, 2014. These
non-GAAP measures may not be comparable to similarly titled measures used by other companies and should not be
considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP.
UNAUDITED ADJUSTED CONSOLIDATED RESULTS (NON-GAAP)
(In millions)
2015 2014
Reconciliation of Service Revenues under GAAP to Pro forma Service Revenues (A):
Service revenues under GAAP $ 5,598.6 $ 5,647.6
Data center business service revenues (B) (119.4) (111.2)
Consumer CLEC service revenues (B) (10.2) (36.0)
Directory publishing service revenues (B) (1.6) (7.3)
Pro forma service revenues $ 5,467.4 $ 5,493.1
Reconciliation of Operating Income under GAAP to Pro forma adjusted OIBDA (A):
Operating income under GAAP $ 509.4 $ 507.1
Depreciation and amortization expense (C) 1,366.5 1,386.4
Pro forma adjustments:
Merger and integration costs (C) 95.0 40.4
Pension expense (C) 1.2 128.3
Restructuring charges (C) 20.7 35.9
Share-based compensation (C) 54.4 41.2
Actual adjusted OIBDAR 2,047.2 2,139.3
Data center business operating (income) loss (B) (2.6) 9.3
Data center business depreciation and amortization expense (B) (34.8) (41.7)
Consumer CLEC business operating income (B) (3.3) (12.3)
Consumer CLEC business amortization expense (B) (1.4) (4.6)
Directory publishing operating income (B) (0.8) (3.6)
Pro forma adjusted OIBDAR 2,004.3 2,086.4
Master lease rent payment (D) (650.0) (650.0)
Pro forma adjusted OIBDA $ 1,354.3 $ 1,436.4
Capital expenditures under GAAP $ 1,055.3 $ 786.5
Project Excel capital expenditures (E) (47.2) —
Capital expenditures funded by CS&L (E) (43.1) —
Adjusted capital expenditures $ 965.0 $ 786.5
(A) Pro forma results adjust operating results under GAAP to exclude the impacts of the disposed data center and
consumer CLEC businesses and directory publishing operations and all merger and integration costs related to
strategic transactions.