Delaware | 001-32422 | 20-0792300 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
4001 Rodney Parham Road, Little Rock, Arkansas | 72212 | |||
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
• | Pro forma adjusted OIBDA, defined as pro forma OIBDA adjusted to exclude the impacts of pension expense (benefit), restructuring charges and shared-based compensation. Pro forma adjusted OIBDA is included to provide investors with useful information about the Company’s operating performance before the impacts of certain non-cash items and to enhance the comparability of operating results for the periods presented. |
• | Adjusted free cash flow, defined as operating income plus depreciation and amortization, merger and integration costs, pension expense (benefit), share-based compensation, and restructuring charges, less adjusted capital expenditures, interest paid, and income taxes paid, net of refunds. Management believes that adjusted free cash flow provides investors with useful information about the ability of the Company’s core operations to generate cash flow. Adjusted capital expenditures are defined as capital expenditures, less integration capital expenditures. |
(d) | Exhibits |
Exhibit Number | Description | |
Exhibit 99(a) | Windstream Press Release dated August 8, 2013 |
WINDSTREAM CORPORATION | ||
By: | /s/ Anthony W. Thomas | |
Name: | Anthony W. Thomas | |
Title: | Chief Financial Officer and Treasurer |
Exhibit Number | Description | |
Exhibit 99(a) | Windstream Press Release dated August 8, 2013 |
• | Business service revenues were $913 million, a 2 percent increase year-over-year |
• | Consumer broadband service revenues were $120 million, a 6 percent increase year-over-year |
• | Total revenues and sales were $1.51 billion, a decline of 2 percent year-over-year |
• | Adjusted OIBDA was $582 million, a decline of 1 percent year-over-year |
• | Total enterprise customers grew 6 percent year-over-year |
• | further adverse changes in economic conditions in the markets served by Windstream; |
• | the extent, timing and overall effects of competition in the communications business; |
• | the impact of new, emerging or competing technologies; |
• | for certain operations where Windstream leases facilities from other carriers, adverse effects on the availability, quality of service, price of facilities and services provided by other carriers on which Windstream's services depend; |
• | the uncertainty regarding the implementation of the Federal Communications Commission's ("FCC") rules on intercarrier compensation adopted in 2011, and the potential for the adoption of further rules by the FCC or Congress on intercarrier compensation and/or universal service reform proposals that result in a significant loss of revenue to Windstream; |
• | unfavorable rulings by state public service commissions in proceedings regarding universal service funds, inter-carrier compensation or other matters that could reduce revenues or increase expenses; |
• | material changes in the communications industry that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers; |
• | earnings on pension plan investments significantly below Windstream's expected long term rate of return for plan assets or a significant change in the discount rate; |
• | the availability and cost of financing in the corporate debt markets; |
• | the potential for adverse changes in the ratings given to Windstream's debt securities by nationally accredited ratings organizations; |
• | the risks associated with non-compliance by Windstream with regulations or statutes applicable to government programs under which Windstream receives material amounts of end user revenue and government subsidies, or non-compliance by Windstream, its partners, or its subcontractors with any terms of its government contracts; |
• | the risks associated with the integration of acquired businesses or the ability to realize anticipated synergies, cost savings and growth opportunities; |
• | unfavorable results of litigation or intellectual property infringement claims asserted against Windstream; |
• | the effects of federal and state legislation, and rules and regulations governing the communications industry; |
• | continued loss of consumer voice lines; |
• | the impact of equipment failure, natural disasters or terrorist acts; |
• | the effects of work stoppages by Windstream employees or employees of other communications companies on whom Windstream relies for service; and |
• | those additional factors under "Risk Factors" in Item 1A of Part I of Windstream's Annual Report on Form 10-K for the year ended December 31, 2012, and in subsequent filings with the Securities and Exchange Commission at www.sec.gov. |
WINDSTREAM CORPORATION | |||||||||||||||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||||||||||||
(In millions, except per share amounts) | THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||||||||||||||||
Increase | Increase | ||||||||||||||||||||||||||||||
June 30, | June 30, | (Decrease) | June 30, | June 30, | (Decrease) | ||||||||||||||||||||||||||
2013 | 2012 | Amount | % | 2013 | 2012 | Amount | % | ||||||||||||||||||||||||
UNDER GAAP (A): | |||||||||||||||||||||||||||||||
Revenues and sales: | |||||||||||||||||||||||||||||||
Service revenues | $ | 1,449.8 | $ | 1,469.1 | $ | (19.3 | ) | (1 | ) | $ | 2,905.0 | $ | 2,955.4 | $ | (50.4 | ) | (2 | ) | |||||||||||||
Product sales | 56.3 | 65.3 | (9.0 | ) | (14 | ) | 101.5 | 117.3 | (15.8 | ) | (13 | ) | |||||||||||||||||||
Total revenues and sales | 1,506.1 | 1,534.4 | (28.3 | ) | (2 | ) | 3,006.5 | 3,072.7 | (66.2 | ) | (2 | ) | |||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||||||||||
Cost of services (exclusive of depreciation and amortization included below) | 646.8 | 655.7 | (8.9 | ) | (1 | ) | 1,288.1 | 1,315.9 | (27.8 | ) | (2 | ) | |||||||||||||||||||
Cost of products sold | 50.4 | 57.6 | (7.2 | ) | (13 | ) | 93.8 | 102.5 | (8.7 | ) | (8 | ) | |||||||||||||||||||
Selling, general and administrative | 239.3 | 238.0 | 1.3 | 1 | 479.1 | 490.1 | (11.0 | ) | (2 | ) | |||||||||||||||||||||
Depreciation and amortization | 332.4 | 320.0 | 12.4 | 4 | 661.9 | 632.1 | 29.8 | 5 | |||||||||||||||||||||||
Merger and integration costs | 6.8 | 19.4 | (12.6 | ) | (65 | ) | 11.9 | 41.7 | (29.8 | ) | (71 | ) | |||||||||||||||||||
Restructuring charges | 2.7 | 10.3 | (7.6 | ) | (74 | ) | 7.6 | 11.2 | (3.6 | ) | (32 | ) | |||||||||||||||||||
Total costs and expenses | 1,278.4 | 1,301.0 | (22.6 | ) | (2 | ) | 2,542.4 | 2,593.5 | (51.1 | ) | (2 | ) | |||||||||||||||||||
Operating income | 227.7 | 233.4 | (5.7 | ) | (2 | ) | 464.1 | 479.2 | (15.1 | ) | (3 | ) | |||||||||||||||||||
Other (expense) income, net | (1.7 | ) | 3.2 | (4.9 | ) | * | 0.6 | 9.8 | (9.2 | ) | (94 | ) | |||||||||||||||||||
(Loss) gain on early extinguishment of debt | — | — | — | * | (13.8 | ) | 1.9 | (15.7 | ) | * | |||||||||||||||||||||
Interest expense | (162.0 | ) | (153.5 | ) | (8.5 | ) | (6 | ) | (330.9 | ) | (310.0 | ) | (20.9 | ) | (7 | ) | |||||||||||||||
Income from continuing operations before income taxes | 64.0 | 83.1 | (19.1 | ) | (23 | ) | 120.0 | 180.9 | (60.9 | ) | (34 | ) | |||||||||||||||||||
Income taxes | 24.3 | 31.6 | (7.3 | ) | (23 | ) | 28.0 | 68.9 | (40.9 | ) | (59 | ) | |||||||||||||||||||
Income from continuing operations | 39.7 | 51.5 | (11.8 | ) | (23 | ) | 92.0 | 112.0 | (20.0 | ) | (18 | ) | |||||||||||||||||||
Discontinued operations | — | (0.5 | ) | 0.5 | * | — | (0.6 | ) | 0.6 | * | |||||||||||||||||||||
Net income | $ | 39.7 | $ | 51.0 | $ | (11.3 | ) | (22 | ) | $ | 92.0 | $ | 111.4 | $ | (19.4 | ) | (17 | ) | |||||||||||||
Weighted average common shares | 588.6 | 584.6 | 4.0 | 1 | 587.7 | 584.1 | 3.6 | 1 | |||||||||||||||||||||||
Common stock outstanding | 592.8 | 588.1 | 4.7 | 1 | |||||||||||||||||||||||||||
Basic and diluted earnings per share: | |||||||||||||||||||||||||||||||
Net income | $.06 | $.09 | ($.03 | ) | (33 | ) | $.15 | $.19 | ($.04 | ) | (21 | ) | |||||||||||||||||||
PRO FORMA RESULTS OF OPERATIONS (B): | |||||||||||||||||||||||||||||||
Revenues and sales | $ | 1,506.1 | $ | 1,534.4 | $ | (28.3 | ) | (2 | ) | $ | 3,006.5 | $ | 3,072.7 | $ | (66.2 | ) | (2 | ) | |||||||||||||
OIBDA (C) | $ | 566.9 | $ | 572.8 | $ | (5.9 | ) | (1 | ) | $ | 1,137.9 | $ | 1,153.0 | $ | (15.1 | ) | (1 | ) | |||||||||||||
Adjusted OIBDA (D) | $ | 582.3 | $ | 590.6 | $ | (8.3 | ) | (1 | ) | $ | 1,169.4 | $ | 1,178.0 | $ | (8.6 | ) | (1 | ) | |||||||||||||
Adjusted capital expenditures (E) | $ | 220.5 | $ | 267.1 | $ | (46.6 | ) | (17 | ) | $ | 454.4 | $ | 490.4 | $ | (36.0 | ) | (7 | ) |
* Not meaningful | |
(A) | We have revised the first three quarters of 2012 to reflect a change in the accounting for certain promotional credits for new consumer customers. Previously, these credits were deferred and amortized as a reduction of revenue over the length of the contract with the customer, whereas they should have been recognized in the month the credits were issued. We have determined that these corrections were not material to the periods affected. |
(B) | 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 energy business acquired as part of PAETEC. For further details on these adjustments, see the Notes to Unaudited Reconciliation of Operating Income and Capital Expenditures Under GAAP to Pro Forma Adjusted OIBDA and Pro Forma Adjusted Capital Expenditures. |
(C) | OIBDA is operating income before depreciation and amortization and merger and integration costs. |
(D) | Adjusted OIBDA adjusts OIBDA for the impact of restructuring charges, pension expense and share-based compensation. For further details on these adjustments, see the Notes to Unaudited Reconciliation of Operating Income and Capital Expenditures Under GAAP to Pro Forma Adjusted OIBDA and Pro Forma Adjusted Capital Expenditures. |
(E) | Adjusted capital expenditures exclude the impact of integration capital expenditures. For further details on these adjustments, see the Notes to Unaudited Reconciliation of Operating Income and Capital Expenditures Under GAAP to Pro Forma Adjusted OIBDA and Pro Forma Adjusted Capital Expenditures. |
WINDSTREAM CORPORATION | ||||||||||||||||||||||||
UNAUDITED SUPPLEMENTAL OPERATING INFORMATION | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||||||||||
Increase | Increase | |||||||||||||||||||||||
June 30, | June 30, | (Decrease) | June 30, | June 30, | (Decrease) | |||||||||||||||||||
2013 | 2012 | Amount | % | 2013 | 2012 | Amount | % | |||||||||||||||||
Business operating metrics: | ||||||||||||||||||||||||
Customers (A) | ||||||||||||||||||||||||
Enterprise (B) | 185.2 | 174.0 | 11.2 | 6 | ||||||||||||||||||||
Small business (C) | 435.5 | 473.5 | (38.0 | ) | (8 | ) | ||||||||||||||||||
Total customers | 620.7 | 647.5 | (26.8 | ) | (4 | ) | ||||||||||||||||||
Net customer losses | 6.3 | 4.8 | 1.5 | 31 | 26.8 | 26.3 | 0.5 | 2 | ||||||||||||||||
Carrier special access circuits (D) | 103.0 | 113.8 | (10.8 | ) | (9 | ) | ||||||||||||||||||
Consumer operating metrics: | ||||||||||||||||||||||||
Voice lines | 1,783.3 | 1,887.5 | (104.2 | ) | (6 | ) | ||||||||||||||||||
Net voice line losses | 29.6 | 24.0 | 5.6 | 23 | 104.2 | 86.1 | 18.1 | 21 | ||||||||||||||||
High-speed Internet | 1,194.5 | 1,210.7 | (16.2 | ) | (1 | ) | ||||||||||||||||||
Net high-speed Internet (losses) additions | (11.4 | ) | (4.6 | ) | (6.8 | ) | * | (16.2 | ) | 20.0 | (36.2 | ) | * | |||||||||||
Digital television customers | 414.9 | 436.4 | (21.5 | ) | (5 | ) | ||||||||||||||||||
Total consumer connections | 3,392.7 | 3,534.6 | (141.9 | ) | (4 | ) |
* Not meaningful | |
(A) | Business customers include each individual business customer location to which we provide service and exclude carrier special access circuits. |
(B) | Enterprise customers generate $750 or more in revenue per month. |
(C) | Small business customers generate less than $750 in revenue per month. |
(D) | 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. |
WINDSTREAM CORPORATION | |||||||||||||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS UNDER GAAP | |||||||||||||||||||
(In millions) | |||||||||||||||||||
ASSETS | LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||
June 30, | December 31, | June 30, | December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
CURRENT ASSETS: | CURRENT LIABILITIES: | ||||||||||||||||||
Cash and cash equivalents | $ | 78.3 | $ | 132.0 | Current maturities of long-term debt | $ | 76.8 | $ | 866.0 | ||||||||||
Restricted cash | 15.1 | 26.5 | Current portion of interest rate swaps | 29.5 | 29.0 | ||||||||||||||
Accounts receivable (less allowance for | Accounts payable | 329.9 | 363.7 | ||||||||||||||||
doubtful accounts of $37.7 and | Advance payments and customer deposits | 226.0 | 223.3 | ||||||||||||||||
$42.6, respectively) | 613.5 | 614.1 | Accrued dividends | 149.6 | 148.9 | ||||||||||||||
Inventories | 69.9 | 75.0 | Accrued taxes | 103.3 | 104.3 | ||||||||||||||
Deferred income taxes | 124.9 | 249.5 | Accrued interest | 129.2 | 113.6 | ||||||||||||||
Prepaid income taxes | 23.1 | 23.3 | Other current liabilities | 288.1 | 319.6 | ||||||||||||||
Prepaid expenses and other | 189.0 | 179.7 | |||||||||||||||||
Total current liabilities | 1,332.4 | 2,168.4 | |||||||||||||||||
Total current assets | 1,113.8 | 1,300.1 | |||||||||||||||||
Goodwill | 4,340.9 | 4,340.9 | Long-term debt | 8,867.9 | 8,099.8 | ||||||||||||||
Other intangibles, net | 2,163.0 | 2,311.3 | Deferred income taxes | 1,827.0 | 1,896.3 | ||||||||||||||
Net property, plant and equipment | 5,835.4 | 5,862.7 | Other liabilities | 665.5 | 712.7 | ||||||||||||||
Other assets | 185.8 | 167.0 | Total liabilities | 12,692.8 | 12,877.2 | ||||||||||||||
SHAREHOLDERS' EQUITY: | |||||||||||||||||||
Common stock | 0.1 | 0.1 | |||||||||||||||||
Additional paid-in capital | 921.5 | 1,098.3 | |||||||||||||||||
Accumulated other comprehensive income | 24.5 | 6.4 | |||||||||||||||||
Retained earnings | — | — | |||||||||||||||||
Total shareholders' equity | 946.1 | 1,104.8 | |||||||||||||||||
TOTAL LIABILITIES AND | |||||||||||||||||||
TOTAL ASSETS | $ | 13,638.9 | $ | 13,982.0 | SHAREHOLDERS' EQUITY | 13,638.9 | 13,982.0 |
WINDSTREAM CORPORATION | |||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS UNDER GAAP | |||||||||||||||
(In millions) | |||||||||||||||
THREE MONTHS ENDED | SIX MONTHS ENDED | ||||||||||||||
June 30, | June 30, | June 30, | June 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Cash Provided from Operations: | |||||||||||||||
Net income | $ | 39.7 | $ | 51.0 | $ | 92.0 | $ | 111.4 | |||||||
Adjustments to reconcile net income to net cash provided from operations: | |||||||||||||||
Depreciation and amortization | 332.4 | 320.0 | 661.9 | 632.1 | |||||||||||
Provision for doubtful accounts | 16.9 | 10.6 | 33.0 | 25.3 | |||||||||||
Share-based compensation expense | 10.4 | 6.3 | 22.8 | 13.7 | |||||||||||
Deferred income taxes | 17.1 | 28.2 | 44.0 | 64.0 | |||||||||||
Unamortized net premium on retired debt | — | — | (38.7 | ) | (16.2 | ) | |||||||||
Amortization of unrealized losses on de-designated interest rate swaps | 12.4 | 10.5 | 25.6 | 21.6 | |||||||||||
Plan curtailment and other, net | (0.2 | ) | (11.2 | ) | (22.8 | ) | (24.3 | ) | |||||||
Changes in operating assets and liabilities, net: | |||||||||||||||
Accounts receivable | (36.3 | ) | (12.1 | ) | (32.4 | ) | (22.0 | ) | |||||||
Income tax receivable | (0.3 | ) | 0.9 | (0.3 | ) | 122.0 | |||||||||
Prepaid income taxes | 3.7 | (3.4 | ) | 0.4 | (4.4 | ) | |||||||||
Prepaid expenses and other | 1.4 | 5.9 | (24.2 | ) | (51.0 | ) | |||||||||
Accounts payable | 35.4 | (26.1 | ) | (33.8 | ) | (3.3 | ) | ||||||||
Accrued interest | (31.6 | ) | (38.4 | ) | 15.6 | (28.4 | ) | ||||||||
Accrued taxes | 7.1 | 6.9 | (1.0 | ) | (7.8 | ) | |||||||||
Other current liabilities | 8.5 | 46.6 | (23.1 | ) | 4.3 | ||||||||||
Other liabilities | 3.2 | 4.0 | (12.9 | ) | (2.3 | ) | |||||||||
Other, net | (11.8 | ) | (1.7 | ) | 6.5 | 2.1 | |||||||||
Net cash provided from operations | 408.0 | 398.0 | 712.6 | 836.8 | |||||||||||
Cash Flows from Investing Activities: | |||||||||||||||
Additions to property, plant and equipment | (228.7 | ) | (276.0 | ) | (472.2 | ) | (502.1 | ) | |||||||
Broadband network expansion funded by stimulus grants | (8.2 | ) | (25.8 | ) | (20.1 | ) | (37.8 | ) | |||||||
Changes in restricted cash | 3.8 | (2.2 | ) | 11.4 | (6.1 | ) | |||||||||
Grant funds received for broadband stimulus projects | 22.4 | 12.9 | 35.7 | 19.6 | |||||||||||
Disposition of wireless assets | — | — | — | 57.0 | |||||||||||
Other, net | — | 3.5 | — | 6.1 | |||||||||||
Net cash used in investing activities | (210.7 | ) | (287.6 | ) | (445.2 | ) | (463.3 | ) | |||||||
Cash Flows from Financing Activities: | |||||||||||||||
Dividends paid on common shares | (148.2 | ) | (147.0 | ) | (296.3 | ) | (293.5 | ) | |||||||
Repayment of debt and swaps | (261.3 | ) | (229.5 | ) | (2,426.2 | ) | (1,003.9 | ) | |||||||
Proceeds of debt issuances | 240.0 | 245.0 | 2,435.0 | 750.0 | |||||||||||
Debt issuance costs | — | (0.2 | ) | (19.6 | ) | (2.4 | ) | ||||||||
Payment under capital lease obligations | (4.2 | ) | (4.9 | ) | (8.2 | ) | (10.3 | ) | |||||||
Other, net | 0.3 | (0.5 | ) | (5.8 | ) | (2.9 | ) | ||||||||
Net cash used in financing activities | (173.4 | ) | (137.1 | ) | (321.1 | ) | (563.0 | ) | |||||||
Increase (decrease) in cash and cash equivalents | 23.9 | (26.7 | ) | (53.7 | ) | (189.5 | ) | ||||||||
Cash and Cash Equivalents: | |||||||||||||||
Beginning of period | 54.4 | 64.2 | 132.0 | 227.0 | |||||||||||
End of period | $ | 78.3 | $ | 37.5 | $ | 78.3 | $ | 37.5 |
WINDSTREAM CORPORATION | |||||||||||||||||||
UNAUDITED RECONCILIATION OF OPERATING INCOME AND CAPITAL EXPENDITURES UNDER GAAP TO PRO FORMA (A) | |||||||||||||||||||
ADJUSTED OIBDA AND PRO FORMA ADJUSTED CAPITAL EXPENDITURES (NON-GAAP) | |||||||||||||||||||
(In millions) | |||||||||||||||||||
THREE MONTHS ENDED | SIX MONTHS ENDED | ||||||||||||||||||
June 30, | June 30, | June 30, | June 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Operating income from continuing operations under GAAP | $ | 227.7 | $ | 233.4 | $ | 464.1 | $ | 479.2 | |||||||||||
Pro forma adjustments: | |||||||||||||||||||
Merger and integration costs | (B) | 6.8 | 19.4 | (B) | 11.9 | 41.7 | |||||||||||||
Pro forma operating income | 234.5 | 252.8 | 476.0 | 520.9 | |||||||||||||||
Depreciation and amortization expense | (B) | 332.4 | 320.0 | (B) | 661.9 | 632.1 | |||||||||||||
Pro forma OIBDA | 566.9 | 572.8 | 1,137.9 | 1,153.0 | |||||||||||||||
Other adjustments: | |||||||||||||||||||
Pension expense | (B) | 2.3 | 1.2 | (B) | 1.1 | 0.1 | |||||||||||||
Restructuring charges | (B) | 2.7 | 10.3 | (B) | 7.6 | 11.2 | |||||||||||||
Share-based compensation | (B) | 10.4 | 6.3 | (B) | 22.8 | 13.7 | |||||||||||||
Pro forma adjusted OIBDA | $ | 582.3 | $ | 590.6 | $ | 1,169.4 | $ | 1,178.0 | |||||||||||
Capital expenditures under GAAP | $ | 228.7 | $ | 276.0 | $ | 472.2 | $ | 502.1 | |||||||||||
Pro forma adjustments: | |||||||||||||||||||
Integration capital expenditures | 8.2 | 8.9 | 17.8 | 11.7 | |||||||||||||||
Pro forma adjusted capital expenditures | (C) | $ | 220.5 | $ | 267.1 | (C) | $ | 454.4 | $ | 490.4 |
(A) | Pro forma results adjust results of operations under GAAP to exclude merger and integration costs related to strategic transactions. |
(B) | Represents applicable expense as reported under GAAP. |
(C) | Pro forma adjusted capital expenditures exclude the impact of integration capital expenditures. |
WINDSTREAM CORPORATION | ||||||||||||
NOTES TO UNAUDITED RECONCILIATION OF OPERATING INCOME AND CAPITAL EXPENDITURES UNDER GAAP TO PRO FORMA | ||||||||||||
ADJUSTED OIBDA, PRO FORMA ADJUSTED CAPITAL EXPENDITURES | ||||||||||||