Confidential 2009 2009 Pro Forma Actual Actual Statistics Frontier SpinCo Sub-Total Synergies Total Revenue $2,118 $3,953 $6,071 $0 $6,071 Adjusted EBITDA (1) 1,149 1,819 2,968 500 3,468 % EBITDA Margin 54.3% 46.0% 48.9% 57.1% Bridge to Free Cash Flow: Interest Expense (378) (280) (659) - (659) Cash Taxes (60) (243) (303) (190) (493) Capital Expenditures (231) (558) (789) - (789) Other 11 - 11 - 11 Free Cash Flow $491 $738 $1,229 $310 $1,539 Net Debt / Adj. EBITDA 3.9x 1.9x 2.6x 2.3x Adj. EBITDA / Interest Exp. 3.0x 6.5x 4.5x 5.3x Dividend ($0.75 / share) (2) $0 $0 $742 $0 $742 FCF Dividend Payout Ratio – – 60% – 48% 2009 Key Pro Forma Financial Data Notes (1) See adjustments in Appendix, Reconciliation of Non-GAAP Financial Measures. (2) Based on share price at the $7.75 mid-point of the collar. (3) Assumes $3.4 billion of debt with blended interest rate of 8.25%. (4) Adjusted to exclude $52 million of non-cash pension and OPEB expense at SpinCo. (5) Includes assumed $65M of financing for deal costs. (4) (3) (5) Exhibit 99.4 |
Confidential Non-GAAP Information Use of Non-GAAP Information This presentation contains non-GAAP financial information. For a reconciliation of these measures to the most comparable measure prepared in accordance with GAAP, see the Appendix. Neither Verizon nor Verizon’s Separate Telephone Operations have historically used Adjusted EBITDA in connection with the management of Verizon’s Separate Telephone Operations. All information regarding Adjusted EBITDA in this presentation has been prepared by Frontier. |
Confidential Reconciliation of Non-GAAP Financial Measures Verizon's Separate Pro Forma Total ($ in millions) Frontier Telephone Operations Adjustments Pro Forma EBITDA Operating Income 606 $ 542 $ 219 $ 1,367 $ Add back: Depreciation and amortization 477 781 253 1,511 EBITDA, as reported 1,083 $ 1,323 $ 472 $ 2,878 $ Add/(subtract): 34 52 - 86 Severance and early retirement costs 4 - - 4 Acquisition and integration costs 28 - (28) - Adjusted EBITDA 1,149 $ 1,375 $ 444 $ 2,968 $ For the year ended December 31, 2009 Non-cash pension and other postretirement costs |