Lumen Investor Day Presentation Deck
Non-GAAP Measures
This presentation includes certain historical and forward-looking non-GAAP financial measures, including but not limited to adjusted EBITDA, adjusted EBITDA margin, net debt, net-debt-to-adjusted-EBITDA and free
cash flow, each excluding the effects of special items, and adjustments to GAAP and other non-GAAP measures to exclude the effect of special items. In addition to providing key metrics for management to evaluate the
company's performance, we believe these measurements assist investors in their understanding of period-to-period operating performance and in identifying historical and prospective trends.
Reconciliations of non-GAAP financial measures to the most comparable GAAP measures and additional non-GAAP historical financial measures that may be discussed during the presentation, along with further
descriptions of non-GAAP financial measures, are available in the Investor Relations portion of the company's website at http://ir.lumen.com. Non-GAAP measures are not presented to be replacements or alternatives to
the GAAP measures, and investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. Lumen may present or calculate its non-
GAAP measures differently from other companies.
Description of Non-GAAP Metrics
Pursuant to Regulation G, the company is hereby providing definitions of non-GAAP financial metrics..
We use the term Special Items as a non-GAAP measure to describe items that impacted a period's statement of operations for which investors may want to give special consideration due to their magnitude, nature or
both. We do not call these items non-recurring because, while some are infrequent, others may recur in future periods.
Adjusted EBITDA ($) is defined as net income (loss) from the Statements of Operations before income tax (expense) benefit, total other income (expense), depreciation and amortization, stock-based compensation
expense and impairments.
Adjusted EBITDA Margin (%) is defined as Adjusted EBITDA divided by total revenue.
Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures as disclosed in the Statements of Cash Flows. Management believes that Free Cash Flow is a relevant metric to
provide to investors, as it is an indicator of our ability to generate cash to service our debt. Free Cash Flow excludes cash used for acquisitions, principal repayments and the impact of exchange rate changes on cash
and cash equivalents balances.
Net Debt is defined as total long-term debt, excluding unamortized discounts, premiums and other, net and unamortized debt issuance costs, minus cash and cash equivalents.
Net Debt to LTM Adjusted EBITDA is defined as Net Debt, divided by Adjusted EBITDA derived over the last twelve-month period.
See the company's above-referenced website for additional information about the company's use of non-GAAP metrics, including certain limitations on their use.
We have not provided a reconciliation for our non-GAAP Adjusted EBITDA and Free Cash Flow forecast because the forecast is related to events that have not occurred and we believe it would be unreasonable and
burdensome to do so.
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