CenturyLink, Inc. (NYSE:CTL) Q4 2018 Earnings Conference Call - Final Transcript
Feb 13, 2019 • 05:00 pm ET
Ladies and gentlemen, thank you for standing by. Welcome to the CenturyLink Fourth Quarter and Full Year 2018 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded Wednesday, February 13th, 2019.
I would now like to turn the conference over to Valerie Finberg, CenturyLink's VP of Investor Relations. Please, go ahead ma'am.
Thank you, Melody. Good afternoon, everyone, and thank you for joining us for the CenturyLink fourth quarter and full year 2018 earnings call. With us on the call today are Jeff Storey, President and Chief Executive Officer; and Neel Dev, Executive Vice President and Chief Financial Officer. Unless otherwise noted, prior periods are provided on a pro forma basis, assuming both the sales of the legacy CenturyLink datacenters and colocation business and the acquisition of Level 3 occurred as of January 1, 2017.
To provide clear comparability with prior periods, out discussion of revenue results excludes the effect of the revenue recognition accounting change we adopted at the beginning of 2018. Adjusted EBITDA, capital expenditures, free cash flow, and net debt to adjusted EBITDA discussed on the call today exclude integration-related expense and other special items as noted in our earnings materials.
Let me now refer you to slide two of our 4Q'18 presentation, which contains our safe harbor disclaimer and remind you that this conference call may include forward-looking statements subject to risks and certain uncertainties. In addition, on this call, we will refer to certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measures, which can be found on our Investor Relations website.
With that, I'll turn the call over to Jeff.
Thanks, Valerie, and thank you to everyone for joining us. On the call today, I'll provide a high-level overview of our significant accomplishments in 2018 and discuss our updated capital allocation approach and how we are positioned for 2019 and beyond. I'll then turn it over to Neel for a detailed review of our 2018 results and outlook for this year. After that, we'll open it up for your questions.
As a quick recap, 2018 was a critical year for CenturyLink. At the beginning of the year, we shared our outlook with you, including expectations for EBITDA and free cash flow. During the year, we significantly raised that outlook. The actual results for EBITDA were solidly within and free cash flow slightly exceeded the updated ranges we provided. CenturyLink closes the acquisition of Level 3 at the end of 2017 and we spent most of 2018 focused on integrating the companies, but we still have more to do. We are ahead of where we expected to be at the end of our first full year.
During the year, we continued to implement a disciplined approach to managing the business for profitable revenue. We've moved quickly away form non-core, less profitable products, and customer contracts, and instead have focused more on