Cincinnati Bell 2015 Annual Report Download - page 5

Use of Non-GAAP Financial Measures
This report contains information about adjusted
earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA), free cash flow and
net debt. These non-GAAP financial measures are used
by Cincinnati Bell management when evaluating results
of operations. Management believes these measures also
provide users of the financial statements with additional
and useful comparisons of current results of operations
with past and future periods. Non-GAAP financial
measures should not be construed as being more
important than comparable GAAP measures. Detailed
reconciliations of these measures to comparable GAAP
financial measures are available at
http://investor.cincinnatibell.com (see Fourth Quarter
2015 Earnings Release Tables).
1Adjusted EBITDA provides a useful measure of operational
performance. The Company defines Adjusted EBITDA as
GAAP operating income plus depreciation, amortization,
transaction-related compensation, restructuring charges,
(gain) loss on sale or disposal of assets, transaction costs,
curtailment gain, asset impairments, components of pension
and other retirement plan costs (including interest costs,
asset returns, and amortization of actuarial gains and losses),
and other special items. Adjusted EBITDA should not be
considered as an alternative to comparable GAAP measures
of profitability and may not be comparable with the
measure as defined by other companies.
2Free cash flow provides a useful measure of operational
performance, liquidity and financial health. The company
defines free cash flow as cash provided by (used in)
operating, financing and investing activities, adjusted for the
issuance and repayment of debt, debt issuance costs, the
repurchase of common stock, and the proceeds from the sale
or the use of funds from the purchase of business operations,
including transaction costs. Free cash flow should not be
considered as an alternative to net income (loss), operating
income (loss), cash flow from operating activities, or the
change in cash on the balance sheet and may not be
comparable with free cash flow as defined by other
companies. Although the company feels that there is no
comparable GAAP measure for free cash flow, the attached
financial information reconciles free cash flow to the net
increase (decrease) in cash and cash equivalents.
3Net debt provides a useful measure of liquidity and financial
health. The company defines net debt as the sum of the face
amount of short-term and long-term debt and unamortized
premium and/or discount, offset by cash and cash
equivalents. Net debt should not be considered as an
alternative to comparable GAAP measures of liquidity and
may not be comparable with the measure as defined by
other companies.
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