Exhibit 99.1
| For Release: February 24, 2011 | Contact: | Wesley B. Wampler | ||
| **Teleconference** | Director, Investor Relations |
February 25, 2011, 10:30 A.M. (ET)
Domestic dial in number: 1-877-317-6789
International dial in number: 1-412-317-6789
Canada dial in number: 1-866-605-3852
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Confirmation ID: 448762
Audio webcast: http://ir.ntelos.com/
NTELOS Holdings Corp. Reports Fourth Quarter and Year
2010 Operating Results
2010 Operating Revenues of $545.7 Million
Fourth Quarter 2010 Revenues 6% Over Fourth Quarter Last Year
NTELOS Net Income of $44.8 Million for 2010, or $1.07 per Share
Fourth Quarter 2010 Sprint Wholesale Revenues Reach a Six-Quarter High
WAYNESBORO, VA – February 24, 2011 – NTELOS Holdings Corp. (NASDAQ: NTLS), a leading provider of wireless and wireline communications services (branded as NTELOS) in seven Mid-Atlantic states, today announced operating results for its fourth quarter and year of 2010.
Operating highlights include:
| • | Adjusted EBITDA (a non-GAAP measure) for 2010 of $220.4 million, representing a 40% margin |
| • | Wireless postpay subscriber gross additions for fourth quarter 2010 up 12% from fourth quarter 2009 |
| • | Wireless postpay ARPU of $57.79, the highest in eight quarters |
| • | Wireline Adjusted EBITDA of $21.3 million for the quarter, including results of FiberNet commencing 12/1/10 |
| • | Wireless Sprint Wholesale Revenues exceed minimums at $29.2 million for fourth quarter 2010 |
| • | Adjusted EBITDA less capital expenditures for 2010 was $129.7 million, up 9% from 2009 |
“Our postpay subscriber gross additions continued to show strength in the fourth quarter and our sequential quarter growth rate in prepay gross additions was our best ever,” said James A. Hyde, CEO of NTELOS Holdings Corp. “Our improved distribution model is gaining momentum and we continue to add higher quality prepay customers in greater numbers. The closing of the FiberNet acquisition is a major milestone for our company and we are delighted to welcome the FiberNet employees to the NTELOS team.”
Recent Developments
Declaration of Dividend: The Board of Directors of NTELOS Holdings Corp. today declared a quarterly cash dividend on its common stock in the amount of $0.28 per share to be paid on April 14, 2011 to stockholders of record on March 15, 2011.
FiberNet Acquisition:The Company closed on the acquisition of the FiberNet business from One Communications Corp. on December 1, 2010. The purchase includes approximately 30,000 customer accounts in West Virginia, Ohio, Maryland, Pennsylvania, Virginia and Kentucky. The purchase price for the transaction was $169 million, less working capital and other adjustments to date of approximately $6 million, for a net cash consideration at closing of approximately $163 million.
Wireless and Wireline Separation:On December 7, 2010, the Company’s board of directors unanimously approved a proposed plan to create separate wireless and wireline businesses by spinning off the wireline business into a publicly traded company (“The New Wireline Company”). Pursuant to the plan, the transaction will be structured as a tax-free distribution of The New Wireline Company shares to stockholders of NTELOS Holdings Corp. at a time and exchange rate to be determined during the second half of 2011. Consummation of the spin-off transaction is subject to final approval by the NTELOS Holdings Corp. board of directors. It also is subject to satisfaction of several conditions, including confirmation of the tax-free treatment, receipt of Nasdaq listing, Federal and State telecommunications regulatory approvals, and the filing and effectiveness of a registration statement on Form 10 with the Securities and Exchange Commission.
Market Expansion of Wireline Triple-Play Offerings:In the fourth quarter, construction began on the fiber-to-the-home initiative in Alleghany County, Virginia. Partially funded by a Federal stimulus grant, work is scheduled over three years and will pass approximately 4,200 homes at completion. Customer trials are underway with approximately 450 pre-orders to date.
Business Segment Highlights
Wireless
| • | Wireless operating revenues for the fourth quarter 2010 were $102.4 million, up 2% from third quarter 2010 due primarily to a $1.8 million increase in wholesale revenues. Subscriber revenues were $66.3 million in fourth quarter 2010 compared to $66.0 million in the previous quarter. Adjusted EBITDA for Wireless was $35.1 million for the fourth quarter 2010. Revenues from the Sprint wholesale agreement were $29.2 million for fourth quarter 2010, exceeding the $9.0 million per month minimum for the first time since a scheduled travel data rate reset became effective July 1, 2009. |
| • | Retail wireless subscribers were 432,433 at December 31, 2010. Postpay subscriber net additions were 1,030, positive for the third consecutive quarter, increasing postpay subscribers at quarter-end to 306,769. Wireless postpay gross subscriber additions for fourth quarter 2010 were 21,289, up 12% from fourth quarter 2009. Prepay gross subscriber additions were 22,899, up 31% from the previous quarter. Fourth quarter 2010 total subscriber churn was 3.5% and postpay monthly subscriber churn was 2.2%. Prepay subscribers at year-end totaled 125,664. |
| • | Postpay ARPU was $57.79 for the fourth quarter of 2010, the highest in eight quarters, with postpay data ARPU continuing solid growth, increasing $3.87, or 36%, from $10.74 in fourth quarter 2009 to $14.61 in fourth quarter 2010. Sequentially, postpay data ARPU was up 4%, or $0.55, compared to third quarter 2010. |
“We are encouraged by our fourth quarter subscriber and revenue development results,” said Hyde. “Postpay sales and net additions were strong again for the quarter and prepay results began to show similar improvement. Both reflect the impact from expanded and improved distribution and our relentless focus on the customer experience.”
Wireline
| • | Wireline operating revenues for the fourth quarter 2010 were $39.0 million, up 26% from fourth quarter 2009 and up 15% from the previous quarter. With the closing effective on December 1, 2010, these results reflect one month of FiberNet results. Adjusted EBITDA for Wireline was $21.3 million for the fourth quarter 2010, up 19% from the same quarter last year. |
| • | Competitive Wireline: Revenues from Wireline strategic products increased approximately $8.0 million, or 55% from fourth quarter 2009 to $22.4 million in fourth quarter 2010. This improvement is due to increases related to the FiberNet acquisition, as well as customer growth and continued growth in data connectivity and bandwidth demand. Adjusted EBITDA for Competitive Wireline was $11.5 million for the fourth quarter 2010, an increase of 50% over fourth quarter 2009, reflecting the revenue growth and continued margin strength at 45%. |
| • | RLEC: RLEC revenues for the fourth quarter of 2010 were $13.3 million, down 4% from fourth quarter 2009 as an increase in access revenues only partially offset revenue losses related to a decline in access lines. Broadband growth within the RLEC footprint continued increasing customer penetration to 59% as of December 31, 2010. RLEC adjusted EBITDA, with a margin of 74%, was $9.8 million for fourth quarter 2010, compared to $10.2 million in fourth quarter 2009. |
“Our wireline business continues to deliver industry-leading performance on all fronts and our FiberNet acquisition accelerates the growth potential of our high-bandwidth data product offerings,” stated Hyde. “The strategic opportunities provided to both our wireline and wireless operations by the planned separation of the wireline business are truly exciting.”
###
Business Outlook
The Company will provide 2011 financial guidance updates on the Fourth Quarter 2010 Earnings Conference Call scheduled for February 25, 2011 at 10:30 A.M. ET.
Statements made will be based on management’s current expectations. These statements are forward-looking and actual results may differ materially. Please see “Special Note from the Company Regarding Forward-Looking Statements.”
Non-GAAP Measures
Adjusted EBITDA is defined as net income attributable to NTELOS Holdings Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, gain/loss on derivatives, net income attributable to noncontrolling interests, other expenses/income, equity based compensation charges, acquisition related charges, charges from voluntary early retirement and workforce reduction plans and costs related to the planned separation of the wireless and wireline companies.
ARPU, or average monthly revenues per subscriber/unit with service, is computed by dividing service revenues per period by the weighted average number of subscribers with service during that period. Please see the footnotes in the exhibits for a complete definition of this measure.
Adjusted EBITDA and ARPU are non-GAAP financial performance measures. They should not be considered in isolation or as an alternative to measures determined in accordance with GAAP. Please refer to the exhibits and materials posted on the Company’s website for a reconciliation of these non-GAAP financial performance measures to the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability and use of such financial performance measures.
About NTELOS
NTELOS Holdings Corp. (NASDAQ: NTLS) is an integrated communications provider with headquarters in Waynesboro, VA. NTELOS provides products and services to customers in Virginia, West Virginia, Pennsylvania, Kentucky, Ohio, Tennessee, Maryland and North Carolina, including nationwide wireless voice and data services, local and long distance telephone, high capacity transport, networking and high-speed Broadband data services and IPTV-based video products. Detailed information about NTELOS is available atwww.ntelos.com.
SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “targets,” “projects,” “should,” “may,” “will” and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include, but are not limited to: rapid development and intense competition in the telecommunications industry; our ability to successfully integrate the operations of the FiberNet business; the failure to realize synergies and cost savings from the acquisition of the FiberNet business or delay in realization thereof; adverse economic conditions; operating and financial restrictions imposed by our senior credit facility; our cash and capital requirements; declining prices for our services; the potential to experience a high rate of customer turnover; our dependence on our affiliation with Sprint Nextel (“Sprint”); a potential increase in our roaming rates and wireless handset subsidy costs; the potential for Sprint to build networks in our markets; federal and state regulatory fees, requirements and developments; loss of our cell sites; the rates of penetration in the wireless telecommunications industry; our reliance on certain suppliers and vendors; Failure to complete the business separation of the wireless and wireline operations in an orderly fashion as currently structured and other unforeseen difficulties that may occur. These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our Annual Reports filed on Forms 10-K.
Exhibits:
| • | Condensed Consolidated Balance Sheets |
| • | Condensed Consolidated Statements of Operations |
| • | Summary of Operating Results |
| • | Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Operating Income |
| • | Reconciliation of Operating Income to Adjusted EBITDA |
| • | Customer Summary |
| • | Wireless Customer Detail |
| • | Wireless Key Performance Indicators (KPI) |
| • | Wireless ARPU Reconciliation |
NTELOS Holdings Corp.
Condensed Consolidated Balance Sheets
| December 31, 2010 | December 31, 2009 | |||||||
| (in thousands) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 15,676 | $ | 51,097 | ||||
Restricted cash1 | 9,210 | — | ||||||
Accounts receivable, net | 55,988 | 45,767 | ||||||
Inventories and supplies | 7,120 | 10,870 | ||||||
Other receivables | 2,390 | 1,705 | ||||||
Income tax receivable | 11,008 | 4,368 | ||||||
Prepaid expenses and other | 12,193 | 10,196 | ||||||
| 113,585 | 124,003 | |||||||
Securities and investments | 1,236 | 1,023 | ||||||
Property, plant and equipment, net | 570,358 | 500,975 | ||||||
Other Assets | ||||||||
Goodwill | 195,915 | 113,041 | ||||||
Franchise rights | 32,000 | 32,000 | ||||||
Other intangibles, net | 83,237 | 64,360 | ||||||
Radio spectrum licenses in service | 115,449 | 115,449 | ||||||
Radio spectrum licenses not in service | 16,859 | 16,850 | ||||||
Deferred charges and other assets | 15,474 | 12,845 | ||||||
| 458,934 | 354,545 | |||||||
Total Assets | $ | 1,144,113 | $ | 980,546 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Current portion of long-term debt | $ | 8,567 | $ | 6,876 | ||||
Accounts payable | 32,004 | 30,756 | ||||||
Dividends payable | 11,749 | 11,604 | ||||||
Advance billings and customer deposits | 23,227 | 20,006 | ||||||
Accrued compensation | 8,799 | 5,583 | ||||||
Accrued interest | 3,727 | 30 | ||||||
Accrued operating taxes | 3,195 | 3,070 | ||||||
Other accrued liabilities | 7,068 | 4,802 | ||||||
| 98,336 | 82,727 | |||||||
Long-Term Liabilities | ||||||||
Long-term debt | 740,640 | 622,032 | ||||||
Other long-term liabilities | 125,886 | 99,678 | ||||||
| 866,526 | 721,710 | |||||||
Equity | 179,251 | 176,109 | ||||||
Total Liabilities and Equity | $ | 1,144,113 | $ | 980,546 | ||||
| 1 | During 2010, the Company received Federal stimulus awards, providing 50% funding, to bring broadband services and infrastructure to Alleghany County, Virginia and to provide wireless broadband service and infrastructure to Hagerstown, Maryland. The Company was required to deposit 100% of its portion for both grants ($9.2 million) into pledged accounts in advance of any reimbursements, to be drawn down ratably following reimbursement approvals. |
NTELOS Holdings Corp.
Condensed Consolidated Statements of Operations
| Three months ended: | Year ended: | |||||||||||||||
(in thousands, except per share amounts) | December 31, 2010 | December 31, 2009 | December 31, 2010 | December 31, 2009 | ||||||||||||
Operating Revenues | $ | 141,544 | $ | 133,349 | $ | 545,684 | $ | 549,700 | ||||||||
Operating Expenses1 | ||||||||||||||||
Cost of sales and services (exclusive of items shown separately below) | 46,889 | 42,401 | 174,975 | 176,707 | ||||||||||||
Customer operations | 32,868 | 30,717 | 121,697 | 117,916 | ||||||||||||
Corporate operations2,3 | 10,537 | 9,837 | 37,714 | 32,929 | ||||||||||||
Depreciation and amortization | 24,052 | 22,730 | 89,381 | 91,657 | ||||||||||||
Accretion of asset retirement obligations | 225 | (187 | ) | 781 | 773 | |||||||||||
| 114,571 | 105,498 | 424,548 | 419,982 | |||||||||||||
Operating Income | 26,973 | 27,851 | 121,136 | 129,718 | ||||||||||||
Other Income (Expenses) | ||||||||||||||||
Interest expense | (11,848 | ) | (9,123 | ) | (43,086 | ) | (29,570 | ) | ||||||||
Loss (gain) on derivatives | (147 | ) | — | (147 | ) | 2,100 | ||||||||||
Other expense (income) | 248 | 69 | (366 | ) | (864 | ) | ||||||||||
| 15,226 | 18,797 | 77,537 | 101,384 | |||||||||||||
Income Tax Expense | 6,183 | 4,299 | 31,192 | 37,209 | ||||||||||||
Net Income | 9,043 | 14,498 | 46,345 | 64,175 | ||||||||||||
Net Income Attributable to Noncontrolling Interests | (391 | ) | (221 | ) | (1,537 | ) | (890 | ) | ||||||||
Net Income Attributable to NTELOS Holdings Corp. | $ | 8,652 | $ | 14,277 | $ | 44,808 | $ | 63,285 | ||||||||
| Basic and Diluted Earnings per Common Share Attributable to NTELOS Holdings Corp. Stockholders: | ||||||||||||||||
Income per share - basic | $ | 0.21 | $ | 0.34 | $ | 1.08 | $ | 1.50 | ||||||||
Income per share - diluted | $ | 0.21 | $ | 0.34 | $ | 1.07 | $ | 1.50 | ||||||||
Weighted average shares outstanding - basic | 41,391 | 41,757 | 41,322 | 42,061 | ||||||||||||
Weighted average shares outstanding - diluted | 41,813 | 42,009 | 41,695 | 42,300 | ||||||||||||
Cash Dividends Declared per Share - Common Stock | $ | 0.28 | $ | 0.28 | $ | 1.12 | $ | 1.06 | ||||||||
Note: The fourth quarter and year 2010 include operating results of FiberNet, commencing on December 1, 2010.
| 1 | Includes equity based compensation charges related to all of the Company’s share-based awards and the Company’s 401(k) matching contributions (commencing June 1, 2009) of $1.5 million for the fourth quarter and $5.7 million for the year 2010, and $0.2 million for the fourth quarter and $3.5 million for the year 2009. |
| 2 | First quarter 2010 included a $0.9 million charge related to severance benefits pursuant to an executive employment agreement. Please see Form 8-K filed with the SEC on March 12, 2010 for additional information. First quarter 2009 included a one-time cash payment of $1.0 million to James A. Hyde, NTELOS’ then newly hired president and COO. |
| 3 | Includes acquisition related charges representing legal and professional fees related to the acquisition of FiberNet of $2.8 million for the fourth quarter and $3.0 million for the year 2010. Fourth quarter 2010 also includes $0.4 million of legal and consulting services costs in connection with plans to separate the wireless and wireline operations. |
NTELOS Holdings Corp.
Summary of Operating Results
| (in thousands) | Three months ended: | Year ended: | ||||||||||||||
| December 31, 2009 | December 31, 2010 | December 31, 2009 | December 31, 2010 | |||||||||||||
Operating Revenues | ||||||||||||||||
Wireless PCS Operations | $ | 102,388 | $ | 102,376 | $ | 424,678 | $ | 406,396 | ||||||||
Subscriber Revenues | 67,754 | 66,273 | 280,191 | 266,193 | ||||||||||||
Wholesale/Roaming Revenues, net | 28,396 | 30,559 | 118,266 | 115,619 | ||||||||||||
Equipment Revenues | 5,887 | 5,177 | 24,832 | 23,126 | ||||||||||||
Other Revenues | 351 | 367 | 1,389 | 1,458 | ||||||||||||
Wireline Operations | ||||||||||||||||
RLEC | 13,761 | 13,276 | 57,304 | 54,871 | ||||||||||||
Competitive Wireline | 17,083 | 25,737 | 67,237 | 83,885 | ||||||||||||
Wireline Total | 30,844 | 39,013 | 124,541 | 138,756 | ||||||||||||
Other | 117 | 155 | 481 | 532 | ||||||||||||
| $ | 133,349 | $ | 141,544 | $ | 549,700 | $ | 545,684 | |||||||||
Operating Expenses |
| |||||||||||||||
| (before depreciation & amortization, asset impairment charges, accretion of asset retirement obligations, equity based compensation, acquisition related charges, charges from voluntary early retirement and workforce reduction plans and costs related to the planned separation of the wireless and wireline companies, a non-GAAP Measure of operating expenses) | ||||||||||||||||
Wireless PCS Operations | $ | 66,523 | $ | 67,270 | $ | 262,886 | $ | 258,360 | ||||||||
Cost of Sales and Services | ||||||||||||||||
Cost of Sales - Equipment | 8,118 | 8,043 | 35,440 | 29,665 | ||||||||||||
Cost of Sales - Access & Other | 10,575 | 8,749 | 43,804 | 37,032 | ||||||||||||
Maintenance and Support | 15,079 | 16,399 | 59,084 | 62,665 | ||||||||||||
Customer Operations | 27,435 | 28,301 | 102,451 | 104,818 | ||||||||||||
Corporate Operations | 5,316 | 5,778 | 22,107 | 24,180 | ||||||||||||
Wireline Operations | ||||||||||||||||
RLEC | 3,611 | 3,488 | 14,403 | 14,516 | ||||||||||||
Competitive Wireline | 9,416 | 14,269 | 38,545 | 45,938 | ||||||||||||
Wireline Total | 13,027 | 17,757 | 52,948 | 60,454 | ||||||||||||
Other1 | 1,685 | 1,200 | 6,726 | 6,474 | ||||||||||||
| $ | 81,235 | $ | 86,227 | $ | 322,560 | $ | 325,288 | |||||||||
Adjusted EBITDA (a non-GAAP Measure)1 |
| |||||||||||||||
Wireless PCS Operations | $ | 35,865 | $ | 35,106 | $ | 161,792 | $ | 148,036 | ||||||||
Wireline Operations | ||||||||||||||||
RLEC | 10,150 | 9,788 | 42,901 | 40,355 | ||||||||||||
Competitive Wireline | 7,667 | 11,468 | 28,692 | 37,948 | ||||||||||||
Wireline Total | 17,817 | 21,256 | 71,593 | 78,303 | ||||||||||||
Other1 | (1,568 | ) | (1,045 | ) | (6,245 | ) | (5,943 | ) | ||||||||
| $ | 52,114 | $ | 55,317 | $ | 227,140 | $ | 220,396 | |||||||||
Capital Expenditures |
| |||||||||||||||
Wireless PCS Operations | $ | 8,369 | $ | 9,433 | $ | 50,747 | $ | 39,187 | ||||||||
Wireline Operations | ||||||||||||||||
RLEC | 819 | 4,616 | 11,316 | 12,522 | ||||||||||||
Competitive Wireline | 4,754 | 5,802 | 26,023 | 28,230 | ||||||||||||
Wireline Total | 5,573 | 10,418 | 37,339 | 40,752 | ||||||||||||
Other | 2,943 | 3,311 | 19,805 | 10,754 | ||||||||||||
| $ | 16,885 | $ | 23,162 | $ | 107,891 | $ | 90,693 | |||||||||
Adjusted EBITDA less Capital Expenditures (a non-GAAP measure) |
| |||||||||||||||
Wireless PCS Operations | $ | 27,496 | $ | 25,673 | $ | 111,045 | $ | 108,849 | ||||||||
Wireline Operations | ||||||||||||||||
RLEC | 9,331 | 5,172 | 31,585 | 27,833 | ||||||||||||
Competitive Wireline | 2,913 | 5,666 | 2,669 | 9,718 | ||||||||||||
Wireline Total | 12,244 | 10,838 | 34,254 | 37,551 | ||||||||||||
Other1 | (4,511 | ) | (4,356 | ) | (26,050 | ) | (16,697 | ) | ||||||||
| $ | 35,229 | $ | 32,155 | $ | 119,249 | $ | 129,703 | |||||||||
| 1 | First quarter 2010 includes a $0.9 million charge related to severance benefits pursuant to an executive employment agreement. Please see Form 8-K filed with the SEC on March 12, 2010 for additional information. First quarter 2009 includes a one-time cash payment of $1.0 million to James A. Hyde, NTELOS’ then newly hired president and COO. |
NTELOS Holdings Corp.
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Operating Income
(in thousands)
| Three months ended: | Year ended: | |||||||||||||||
| December 31, 2009 | December 31, 2010 | December 31, 2009 | December 31, 2010 | |||||||||||||
Net income attributable to NTELOS Holdings Corp. | $ | 14,277 | $ | 8,652 | $ | 63,285 | $ | 44,808 | ||||||||
Net income attributable to noncontrolling interests | 221 | 391 | 890 | 1,537 | ||||||||||||
Net Income | 14,498 | 9,043 | 64,175 | 46,345 | ||||||||||||
Interest expense | 9,123 | 11,848 | 29,570 | 43,086 | ||||||||||||
(Loss) gain on derivatives | — | 147 | (2,100 | ) | 147 | |||||||||||
Income taxes | 4,299 | 6,183 | 37,209 | 31,192 | ||||||||||||
Other expense | (69 | ) | (248 | ) | 864 | 366 | ||||||||||
Operating income | $ | 27,851 | $ | 26,973 | $ | 129,718 | $ | 121,136 | ||||||||
Wireless | $ | 20,089 | $ | 19,752 | $ | 96,464 | $ | 88,596 | ||||||||
RLEC | 6,160 | 6,138 | 27,694 | 25,878 | ||||||||||||
Competitive Wireline | 3,453 | 5,757 | 14,944 | 20,447 | ||||||||||||
Other | (1,851 | ) | (4,674 | ) | (9,384 | ) | (13,785 | ) | ||||||||
Operating income | $ | 27,851 | $ | 26,973 | $ | 129,718 | $ | 121,136 | ||||||||
NTELOS Holding Corp.
Reconciliation of Operating Income to Adjusted EBITDA
(dollars in thousands) | 2009 | 2010 | ||||||||||||||||||||||||||||||||||||||
| Wireless PCS | RLEC | Competitive Wireline | Other | Total | Wireless PCS | RLEC | Competitive Wireline | Other | Total | |||||||||||||||||||||||||||||||
For The Three Months Ended December 31 | ||||||||||||||||||||||||||||||||||||||||
Operating Income | $ | 20,089 | $ | 6,160 | $ | 3,453 | $ | (1,851 | ) | $ | 27,851 | $ | 19,752 | $ | 6,138 | $ | 5,757 | $ | (4,674 | ) | $ | 26,973 | ||||||||||||||||||
Depreciation and amortization | 14,579 | 3,891 | 4,190 | 70 | 22,730 | 15,001 | 3,547 | 5,476 | 28 | 24,052 | ||||||||||||||||||||||||||||||
Sub-total: | 34,668 | 10,051 | 7,643 | (1,781 | ) | 50,581 | 34,753 | 9,685 | 11,233 | (4,646 | ) | 51,025 | ||||||||||||||||||||||||||||
Accretion of asset retirement obligations | (198 | ) | 5 | 15 | (9 | ) | (187 | ) | 188 | 6 | 30 | 1 | 225 | |||||||||||||||||||||||||||
Equity based compensation | 64 | 35 | 9 | 76 | 184 | 165 | 97 | 21 | 1,261 | 1,544 | ||||||||||||||||||||||||||||||
Voluntary early retirement and workforce reduction plans | 1,331 | 59 | — | 146 | 1,536 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Acquisition related charges1 | — | — | — | — | — | — | — | 184 | 1,987 | 2,171 | ||||||||||||||||||||||||||||||
Proposed business separation charges 2 | — | — | — | — | — | — | — | — | 352 | 352 | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 35,865 | $ | 10,150 | $ | 7,667 | $ | (1,568 | ) | $ | 52,114 | $ | 35,106 | $ | 9,788 | $ | 11,468 | $ | (1,045 | ) | $ | 55,317 | ||||||||||||||||||
Adjusted EBITDA Margin | 35.0 | % | 73.8 | % | 44.9 | % | NM | 39.1 | % | 34.3 | % | 73.7 | % | 44.6 | % | NM | 39.1 | % | ||||||||||||||||||||||
For The Year Ended December 31 | ||||||||||||||||||||||||||||||||||||||||
Operating Income | $ | 96,464 | $ | 27,694 | $ | 14,944 | $ | (9,384 | ) | $ | 129,718 | $ | 88,596 | $ | 25,878 | $ | 20,447 | $ | (13,785 | ) | $ | 121,136 | ||||||||||||||||||
Depreciation and amortization | 62,906 | 14,940 | 13,654 | 157 | 91,657 | 57,982 | 14,082 | 17,231 | 86 | 89,381 | ||||||||||||||||||||||||||||||
Sub-total: | 159,370 | 42,634 | 28,598 | (9,227 | ) | 221,375 | 146,578 | 39,960 | 37,678 | (13,699 | ) | 210,517 | ||||||||||||||||||||||||||||
Accretion of asset retirement obligations | 704 | 20 | 58 | (9 | ) | 773 | 768 | 22 | (11 | ) | 2 | 781 | ||||||||||||||||||||||||||||
Equity based compensation | 387 | 188 | 36 | 2,845 | 3,456 | 690 | 373 | 75 | 4,588 | 5,726 | ||||||||||||||||||||||||||||||
Voluntary early retirement and workforce reduction plans | 1,331 | 59 | — | 146 | 1,536 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Acquisition related charges1 | — | — | — | — | — | — | — | 206 | 2,814 | 3,020 | ||||||||||||||||||||||||||||||
Proposed business separation charges 2 | — | — | — | — | — | — | — | — | 352 | 352 | ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 161,792 | $ | 42,901 | $ | 28,692 | $ | (6,245 | ) | $ | 227,140 | $ | 148,036 | $ | 40,355 | $ | 37,948 | $ | (5,943 | ) | $ | 220,396 | ||||||||||||||||||
Adjusted EBITDA Margin | 38.1 | % | 74.9 | % | 42.7 | % | NM | 41.3 | % | 36.4 | % | 73.5 | % | 45.2 | % | NM | 40.4 | % | ||||||||||||||||||||||
| 1 | Acquisition related charges represent legal and professional fees related to the acquisition of FiberNet that closed on December 1, 2010. |
| 2 | Fourth quarter 2010 includes $0.4 million of legal and consulting services costs in connection with plans to separate the wireless and wireline operations. |
NTELOS Holdings Corp.
Customer Summary Table
Quarter Ended: | 12/31/2009 | 3/31/2010 | 6/30/2010 | 9/30/2010 | 12/31/2010 | |||||||||||||||
Wireless Subscribers | 438,529 | 445,277 | 439,348 | 433,698 | 432,433 | |||||||||||||||
RLEC Total Access Lines | 38,237 | 37,718 | 37,075 | 36,233 | 35,422 | |||||||||||||||
CLEC Access Lines1 | 49,694 | 49,522 | 49,357 | 49,474 | 134,071 | |||||||||||||||
RLEC Broadband Customers2 | 14,372 | 14,647 | 14,706 | 14,728 | 14,706 | |||||||||||||||
Total Broadband Connections2 | 23,478 | 24,166 | 24,802 | 25,302 | 32,994 | |||||||||||||||
Video Subscribers | 2,040 | 2,203 | 2,345 | 2,669 | 2,849 | |||||||||||||||
| 1 | Includes customer Primary Rate Interface (PRI) line equivalents at 23 lines per PRI. Excludes intercompany PRI lines. |
| 2 | Includes customers or customer equivalents for DSL, dedicated Internet access, wireless portable broadband, broadband over fiber and metro Ethernet. All revenues from broadband products, including RLEC broadband, are recorded in the operating revenues of the Competitive Wireline segment. |
NTELOS Holdings Corp.
Wireless Customer Detail
| Year ended: | ||||||||||||||||||||||||||||
Quarter Ended: | 12/31/2009 | 3/31/2010 | 6/30/2010 | 9/30/2010 | 12/31/2010 | 12/31/2009 | 12/31/2010 | |||||||||||||||||||||
Total Wireless Subscribers | ||||||||||||||||||||||||||||
Beginning Subscribers | 438,303 | 438,529 | 445,277 | 439,348 | 433,698 | 435,008 | 438,529 | |||||||||||||||||||||
Prepay | 130,184 | 131,783 | 142,427 | 136,289 | 128,018 | 123,999 | 131,783 | |||||||||||||||||||||
Postpay | 308,119 | 306,746 | 302,850 | 303,059 | 305,680 | 311,009 | 306,746 | |||||||||||||||||||||
Gross Additions | 44,376 | 48,047 | 33,477 | 38,935 | 44,188 | 176,119 | 164,647 | |||||||||||||||||||||
Prepay | 25,427 | 31,062 | 16,825 | 17,484 | 22,899 | 98,726 | 88,270 | |||||||||||||||||||||
Postpay | 18,949 | 16,985 | 16,652 | 21,451 | 21,289 | 77,393 | 76,377 | |||||||||||||||||||||
Disconnections | 44,150 | 41,299 | 39,406 | 44,585 | 45,453 | 172,598 | 170,743 | |||||||||||||||||||||
Prepay | 23,587 | 20,222 | 22,760 | 25,539 | 25,194 | 89,030 | 93,715 | |||||||||||||||||||||
Postpay | 20,563 | 21,077 | 16,646 | 19,046 | 20,259 | 83,568 | 77,028 | |||||||||||||||||||||
Net Additions (Losses) | 226 | 6,748 | (5,929 | ) | (5,650 | ) | (1,265 | ) | 3,521 | (6,096 | ) | |||||||||||||||||
Prepay | 1,840 | 10,840 | (5,935 | ) | (8,055 | ) | (2,295 | ) | 9,696 | (5,445 | ) | |||||||||||||||||
Postpay | (1,614 | ) | (4,092 | ) | 6 | 2,405 | 1,030 | (6,175 | ) | (651 | ) | |||||||||||||||||
Ending Subscribers | 438,529 | 445,277 | 439,348 | 433,698 | 432,433 | 438,529 | 432,433 | |||||||||||||||||||||
Prepay | 131,783 | 142,427 | 136,289 | 128,018 | 125,664 | 131,783 | 125,664 | |||||||||||||||||||||
Postpay | 306,746 | 302,850 | 303,059 | 305,680 | 306,769 | 306,746 | 306,769 | |||||||||||||||||||||
Note: Postpay subscriber gain for second quarter 2010 of 1,089 consists of net gains of 1,030 and conversions of prepay customers to postpay of 59. Please refer to previous earnings releases for comparable information for prior quarters.
NTELOS Holdings Corp.
Wireless Key Performance Indicators
| Three months ended: | Year ended: | |||||||||||||||
| December 31, 2009 | December 31, 2010 | December 31, 2009 | December 31, 2010 | |||||||||||||
Average Subscribers (weighted monthly) | 436,970 | 431,151 | 440,207 | 437,735 | ||||||||||||
Gross Subscriber Revenues ($000) | $ | 67,480 | $ | 66,741 | $ | 281,006 | $ | 267,092 | ||||||||
Revenue Accruals & Deferrals | 346 | (390 | ) | (542 | ) | (597 | ) | |||||||||
Eliminations & Other Adjustments | (72 | ) | (78 | ) | (273 | ) | (302 | ) | ||||||||
Net Subscriber Revenues ($000) | $ | 67,754 | $ | 66,273 | $ | 280,191 | $ | 266,193 | ||||||||
Average Monthly Revenue per Subscriber/Unit (ARPU) 1 | $ | 51.48 | $ | 51.60 | $ | 53.20 | $ | 50.85 | ||||||||
Average Monthly Revenue per Postpay Subscriber/Unit (ARPU) 1 | $ | 56.23 | $ | 57.79 | $ | 56.98 | $ | 56.99 | ||||||||
Average Monthly Data Revenue per Subscriber/Unit (ARPU) 1 | $ | 9.84 | $ | 13.56 | $ | 9.23 | $ | 12.08 | ||||||||
Average Monthly Data Revenue per Postpay Subscriber/Unit (ARPU) 1 | $ | 10.74 | $ | 14.61 | $ | 10.06 | $ | 13.43 | ||||||||
Strategic Network Alliance Revenues ($000) | ||||||||||||||||
Home Voice | $ | 13,861 | $ | 15,805 | $ | 52,354 | $ | 59,560 | ||||||||
Travel Voice | 4,442 | 4,837 | 16,743 | 18,074 | ||||||||||||
Total Voice | 18,303 | 20,642 | 69,097 | 77,634 | ||||||||||||
Home Data | 3,319 | 4,100 | 13,157 | 15,147 | ||||||||||||
Travel Data | 1,662 | 4,418 | 21,744 | 10,910 | ||||||||||||
Total Data | 4,981 | 8,518 | 34,901 | 26,057 | ||||||||||||
Revenue Minimum Adjustment | 3,772 | — | 8,832 | 6,657 | ||||||||||||
Total | $ | 27,056 | $ | 29,160 | $ | 112,830 | $ | 110,348 | ||||||||
Monthly Postpay Subscriber Churn | 2.2 | % | 2.2 | % | 2.2 | % | 2.1 | % | ||||||||
Monthly Blended Subscriber Churn | 3.4 | % | 3.5 | % | 3.3 | % | 3.3 | % | ||||||||
Total Cell Sites (period ending) | 1,247 | 1,313 | ||||||||||||||
EV-DO Rev. A Cell Sites (period ending; sub-set of Total Cell Sites above) | 1,065 | 1,092 | ||||||||||||||
Cell Sites under the Strategic Network Alliance Agreement(period ending; sub-set of Total Cell Sites above) | 762 | 771 | ||||||||||||||
| 1 | Average monthly revenues per subscriber/unit in service, or ARPU, is an industry metric that measures service revenues per period divided by the weighted average number of handsets in service during that period. ARPU as defined may not be similar to ARPU measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company’s statement of operations. The Company closely monitors the effects of new rate plans and service offerings on ARPU in order to determine their effectiveness. ARPU provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company’s performance in attracting and retaining high value customers. |
NTELOS Holdings Corp.
Wireless ARPU Reconciliation
| Three months ended: | Year ended: | |||||||||||||||
| December 31, 2009 | December 31, 2010 | December 31, 2009 | December 31, 2010 | |||||||||||||
Average Revenue per Handset/Unit (ARPU)1 | ||||||||||||||||
(amounts in thousands except for subscribers and ARPU) | ||||||||||||||||
Operating Revenues | $ | 133,349 | $ | 141,544 | $ | 549,700 | $ | 545,684 | ||||||||
Less: Wireline and other operating revenue | (30,961 | ) | (39,168 | ) | (125,022 | ) | (139,288 | ) | ||||||||
Wireless communications revenue | 102,388 | 102,376 | 424,678 | 406,396 | ||||||||||||
Less: Equipment revenue from sales to new customers | (1,972 | ) | (1,936 | ) | (6,379 | ) | (8,233 | ) | ||||||||
Less: Equipment revenue from sales to existing customers | (3,915 | ) | (3,240 | ) | (18,453 | ) | (14,893 | ) | ||||||||
Less: Wholesale revenue | (28,396 | ) | (30,559 | ) | (118,266 | ) | (115,619 | ) | ||||||||
Plus (Less): Other revenues, eliminations and adjustments | (625 | ) | 100 | (574 | ) | (559 | ) | |||||||||
Wireless gross subscriber revenue | $ | 67,480 | $ | 66,741 | $ | 281,006 | $ | 267,092 | ||||||||
Less: Paid in advance subscriber revenue | (16,190 | ) | (13,335 | ) | (67,974 | ) | (58,918 | ) | ||||||||
(Less) Plus: Adjustments | 387 | (427 | ) | (483 | ) | (276 | ) | |||||||||
Wireless gross postpay subscriber revenue | $ | 51,677 | $ | 52,979 | $ | 212,549 | $ | 207,898 | ||||||||
Average subscribers | 436,970 | 431,151 | 440,207 | 437,735 | ||||||||||||
Total ARPU | $ | 51.48 | $ | 51.60 | $ | 53.20 | $ | 50.85 | ||||||||
Average postpay subscribers | 306,361 | 305,556 | 310,852 | 303,986 | ||||||||||||
Postpay ARPU | $ | 56.23 | $ | 57.79 | $ | 56.98 | $ | 56.99 | ||||||||
Wireless gross subscriber revenue | $ | 67,480 | $ | 66,741 | $ | 281,006 | $ | 267,092 | ||||||||
Less: Wireless voice and other feature revenue | (54,585 | ) | (49,201 | ) | (232,271 | ) | (203,657 | ) | ||||||||
Wireless data revenue | $ | 12,895 | $ | 17,540 | $ | 48,735 | $ | 63,435 | ||||||||
Average subscribers | 436,970 | 431,151 | 440,207 | 437,735 | ||||||||||||
Total Data ARPU | $ | 9.84 | $ | 13.56 | $ | 9.23 | $ | 12.08 | ||||||||
Wireless gross postpay subscriber revenue | $ | 51,677 | $ | 52,979 | $ | 212,549 | $ | 207,898 | ||||||||
Less: Wireless postpay voice and other feature revenue | (41,803 | ) | (39,590 | ) | (175,031 | ) | (158,890 | ) | ||||||||
Wireless postpay data revenue | $ | 9,874 | $ | 13,389 | $ | 37,518 | $ | 49,008 | ||||||||
Average postpay subscribers | 306,361 | 305,556 | 310,852 | 303,986 | ||||||||||||
Postpay data ARPU | $ | 10.74 | $ | 14.61 | $ | 10.06 | $ | 13.43 | ||||||||
| 1 | Average monthly revenues per subscriber/unit with service, or ARPU, is an industry metric that measures service revenues per period divided by the weighted average number of subscribers with service during that period. ARPU as defined may not be similar to ARPU measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company’s statement of operations. The Company closely monitors the effects of new rate plans and service offerings on ARPU in order to determine their effectiveness. ARPU provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company’s performance in attracting and retaining high value customers. |