tw telecom Reports Fourth Quarter and Full Year 2011 Results
LITTLETON, Colo., Feb. 8, 2012 /PRNewswire/ -- tw telecom inc. (NASDAQ: TWTC), a leading national provider of managed services, including Business Ethernet, converged and IP VPN solutions to enterprises across the U.S. and to global locations, today announced its fourth quarter 2011 financial results, including $351.5 million of revenue, $128.1 million of Modified EBITDA(1) ("M-EBITDA"), $25.6 million of levered free cash flow(3) and net income of $16.4 million. For the year, the Company reported $1.367 billion in revenue, $497.7 million of M-EBITDA, $91.3 million of levered free cash flow and net income of $57.9 million.
(Logo: http://photos.prnewswire.com/prnh/20080626/LATH527LOGO)
"We delivered another strong annual performance, as we significantly expanded our revenue growth rate, maintained an impressive Modified EBITDA margin and produced continued strong cash flow," said Larissa Herda, tw telecom's Chairman, CEO and President. "At the same time we strategically invested in the business to advance our network capabilities, deliver new product features and reach more customer locations. For 2012, we expect to continue to innovate and take market share as we focus on delivering better, faster and easier network solutions for our customers' dynamic network needs. This includes further advancing our new Intelligent Network capabilities and enabling customers' changing consumption models that drive data center and cloud demand."
Highlights for the Year - 2011 compared to 2010
-- Grew total revenue 7.4% year over year compared to 5.1% for 2010
-- Grew enterprise revenue 9.4% year over year compared to 6.3% for 2010
-- Grew data and Internet revenue 18.2% year over year compared to 15.8%
for 2010, driven primarily by a 28% increase in strategic Ethernet and
VPN-based product revenue
-- Grew M-EBITDA by 7.4% to $497.7 million representing a 36.4% M-EBITDA
margin(1)
-- Delivered $91.3 million of levered free cash flow, representing 6.7% of
revenue
-- Completed a $50 million share repurchase plan announced in February 2011
and commenced a new $300 million plan announced in November 2011
-- Grew cash, equivalents and short term investments to $484.9 million,
while returning $58.6 million to shareholders in the form of share
repurchases
Business Trends
"In 2011, we excelled financially, operationally and strategically through a balanced approach to the business that yielded a strong and consistent performance highlighted by our 29th consecutive quarter of revenue growth, ongoing strong margins and continued strong cash flow," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer. "In 2011, we were able to invest in our operations and also return value to our shareholders in the form of share repurchases. Our plans for 2012 will be similar to 2011, and include our goals to continue to further expand our revenue growth rate, deliver strong margins and grow cash flow, with a balanced approach and disciplined capital plan."
Operational Metrics
Revenue churn(4) was 0.8% for the current quarter, reflecting the lowest churn in over 10 years, down from 1% for both the prior quarter and the same quarter last year. Full year 2011 revenue churn improved to 0.9% from 1.0% in 2010. As a component of revenue churn, revenue lost from customers fully disconnecting service was 0.2% for both the current quarter and the same quarter last year, down from 0.3% for the prior quarter, indicative of a loyal customer base, strong customer experience strategy and competitive product portfolio.
The Company had approximately 27,500 customers as of December 31, 2011. Customer churn(4) was 1.0% for both the current quarter and prior quarter and 1.1% for the same quarter last year. The Company ended the fourth quarter with approximately 27,000 fiber route miles (of which approximately 21,000 were metro miles).
Capital Expenditures
Capital expenditures of $86.6 million for the quarter were nearly flat compared to $86.0 million for the prior quarter and increased from $78.1 million for the same period last year. The increase over the same quarter last year primarily reflects greater strategic product and technology investments, as well as increased success-based investments primarily for managed services. For the year, capital expenditures were $342.7 million compared to $321.8 million for 2010, primarily reflecting increases in success-based capital.
The Company expects capital investments for 2012 to be approximately $345 to $355 million with the majority tied to new sales opportunities.
Other Trends
The Company continues to expect business fluctuations to impact sequential trends in revenue, margins and cash flow. This includes the timing, as well as any seasonal nature of sales and installations(5), usage, rate changes, taxes and fees, disputes, repricing for contract renewals and fluctuations in revenue churn, expenses and capital expenditures.
The Company expects the first quarter of 2012 may be affected by historical trends, including seasonal revenue fluctuations and cost increases. The Company anticipates approximately a $3 million sequential cost increase in the first quarter of 2012 due to the annual resetting of payroll taxes.
The Company recorded a higher effective tax rate in 2011 than in 2010 as the prior year included a reversal of a valuation allowance for its deferred tax assets. The Company expects an effective tax rate in 2012 similar to 2011. Due to its approximate $1 billion federal net operating loss carry forward, as well as bonus depreciation, the Company expects that cash taxes in 2012 will be similar to 2011.
Intercarrier compensation revenue represented 2% of total revenue in 2011. Due to a recent FCC order, the Company expects about half of this revenue will be eliminated over a six-year period ending July 2018 with approximately $2 million of this reduction occurring in the last half of 2012.
Year over Year Results - Fourth Quarter 2011 compared to Fourth Quarter 2010
Revenue
Revenue for the quarter was $351.5 million compared to $324.8 million for the fourth quarter last year, representing a year over year increase of $26.7 million, or 8.2%. Revenue grew primarily due to ongoing strong enterprise revenue growth. Key changes in revenue included:
-- $27.6 million increase in revenue from enterprise customers, or 11.2%
year over year, driven primarily by data and Internet services
-- $0.2 million decrease in revenue from carriers, primarily due to churn
and repricing for contract renewals offset by Ethernet services provided
to wireline and wireless carriers to serve their end users
-- $0.7 million decrease in intercarrier compensation primarily due to
fluctuations in disputes and rate reductions
By product line, the percentage change in revenue year over year was as follows:
-- 18.3% increase for data and Internet services, primarily driven by an
increase in strategic Ethernet and IP-based products. Data and Internet
revenue represents 49% of total revenue for the quarter compared to 45%
a year ago
-- 4.5% decrease in network services, primarily reflecting churn and
repricing for contract renewals largely in transport services, which
outpaced growth in high capacity and colocation services
-- 6.0% increase in voice services primarily reflecting sales of converged
and other voice solutions as well as an increase in both the volume and
rate of certain taxes and fees, partially offset by churn
M-EBITDA and Margins
M-EBITDA grew to $128.1 million for the quarter, an increase of 7.3%, from the same period last year, primarily reflecting the contribution from revenue growth, partially offset by an increase in employee costs. M-EBITDA margin for the quarter was 36.4% as compared to 36.7% for the same period last year.
Operating costs for the quarter grew year over year, primarily due to increased network access costs, certain taxes and fees and employee costs. Operating costs as a percent of revenue were 41.6% for the quarter and 41.4% for the same period last year. Modified gross margin(6) as a percentage of revenue was 58.5% in the current quarter compared to 58.9% in the same period last year largely driven by increased network access costs and an increase in both the volume and rate of certain taxes and fees. These increased costs were primarily to support higher revenue growth particularly for new product offerings.
The Company utilizes a fully burdened modified gross margin, including network costs, and personnel costs for customer care, provisioning, network maintenance, technical field and network operations, excluding non-cash, stock-based compensation expense, net of costs capitalized for labor and overhead on capital projects.
Selling, general and administrative costs ("SG&A") increased year over year primarily reflecting an increase in employee costs, largely from sales and sales support personnel, and an increase in bad debt expense. SG&A costs as a percent of revenue improved to 23.9% for the quarter from 24.0% for the same period last year.
Net Income
The Company reported growth of 40.3% in pre-tax income to $26.9 million in the current quarter from $19.2 million in the same period last year. This increase was primarily driven by M-EBITDA growth somewhat offset by higher interest expense.
Net income was $16.4 million for the quarter, compared to $17.5 million for the same period last year. Net income was impacted primarily by an increase in income tax expense associated with a higher effective tax rate, largely offset by M-EBITDA growth.
Sequential Results - Fourth Quarter 2011 compared to Third Quarter 2011
Revenue
Revenue for the quarter was $351.5 million, as compared to $344.5 million for the third quarter of 2011, an increase of $7.0 million, or 2.0%, representing the 29th consecutive quarter of sequential growth. Revenue grew primarily due to enterprise revenue. Key changes in revenue included:
-- $6.8 million increase in enterprise revenue, representing 2.5%
sequential growth driven primarily by data and Internet services
-- $0.3 million increase in revenue from carrier customers, primarily
reflecting growth in Ethernet services provided to wireline and wireless
carriers to serve their end users, offset by churn and repricing for
contract renewals largely in network services
By product line, the percentage change in revenue sequentially was as follows:
-- 4.2% increase for data and Internet services, primarily driven by an
increase in strategic Ethernet and IP-based product sales
-- 1.7% decrease in network services, primarily reflecting churn, repricing
for contract renewals largely in transport services and a decrease in
taxes and fees, which outpaced growth in high capacity and colocation
services
-- 1.8% increase in voice services, primarily reflecting sales of converged
solutions and an increase in both the volume and rate of certain taxes
and fees, partially offset by churn
M-EBITDA and Margins
M-EBITDA was $128.1 million for the quarter, an increase of 2.4% from the prior quarter, primarily reflecting contribution from revenue growth. M-EBITDA margin was 36.4% for the quarter compared to 36.3% for the prior quarter.
Operating costs increased primarily due to higher network access costs and fluctuations in disputes, partially offset by seasonally lower utility costs and a reduction in contract labor. Operating costs were 41.6% of revenue for the quarter and 41.9% for the prior quarter. Modified gross margin for the quarter as a percentage of revenue was 58.5% compared to 58.3% in the prior quarter.
SG&A costs increased primarily reflecting an increase in employee-related costs. SG&A was 23.9% of revenue for the quarter and 23.8% for the prior quarter.
Net Income
The Company reported net income of $16.4 million for the quarter, compared to $14.6 million in the prior quarter, a 12.3% sequential increase that primarily reflected M-EBITDA growth, partially offset by an increase in depreciation expense.
tw telecom plans to conduct a webcast conference call to discuss its earnings results on February 9, 2012 at 9:00 a.m. MST (11:00 a.m. EST). To access the webcast and the financial and other information to be discussed in the webcast, visit www.twtelecom.com under "Investors."
(1) The Company uses a modified definition of EBITDA to eliminate certain non-cash and non-operating income or charges to earnings to enhance the comparability of its financial performance from period to period. Modified EBITDA (or "M-EBITDA") is defined as net income or loss before depreciation, amortization, accretion, impairment charges and other income and losses, interest expense, debt extinguishment costs, interest income, income tax expense or benefit, cumulative effect of change in accounting principle, and non-cash stock-based compensation expense. The Company defines Modified EBITDA margin as M-EBITDA divided by total revenue.
(2) The Company defines unlevered free cash flow as Modified EBITDA less capital expenditures. Unlevered free cash flow is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website.
(3) The Company defines levered free cash flow as Modified EBITDA less capital expenditures and net interest expense from operations (but excludes debt extinguishment costs, non-cash interest expense and deferred debt costs). Levered free cash flow is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website.
(4) The Company defines revenue churn as the average lost recurring monthly billing for the period from a customer's partial or complete disconnection of services (excluding repricing impacts and usage) compared to reported revenue for the period. Customer churn is defined as the average monthly customer turnover for the period compared to the average monthly customer count for the period.
(5) Installations reflect services from signed customer sales that are installed and recognized as revenue from the date of installation.
(6) The Company defines modified gross margin as total revenue less operating costs excluding non-cash stock-based compensation expense.
Financial Measures
The Company provides financial measures using U.S. generally accepted accounting principles ("GAAP") as well as adjustments to GAAP measures to describe its business trends, including Modified EBITDA. Management believes that its definition of Modified EBITDA (see above) is a standard measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures, as well as non-cash and non-operating income or charges to earnings. Modified EBITDA is not intended to replace operating income (loss), net income (loss), cash flow, and other measures of financial performance and liquidity reported in accordance with GAAP. Management uses Modified EBITDA internally to assess on-going operations and it is the basis for various financial covenants contained in the Company's debt agreements and for operating performance and liquidity. Modified EBITDA is reconciled to Net Income (Loss), the most comparable GAAP measure for operating performance within the Consolidated Operations Highlights and in the supplemental information posted on the Company's website. Modified EBITDA, as a measure of liquidity, is also reconciled to Net Cash provided by operating activities on the Company's website.
In addition, management uses unlevered and levered free cash flow, which measure the ability of M-EBITDA to cover capital expenditures. The Company uses these cash flow definitions to eliminate certain non-cash costs. Levered and unlevered free cash flow are reconciled to Net Cash provided by operating activities and also to Modified EBITDA in the supplemental information posted on the Company's website. The Company also provides an adjustment to the measure gross margin by eliminating the impact of non-cash stock-based compensation expense. Management uses modified gross margin internally to assess on-going operations. Modified gross margin is reconciled to gross margin in the financial tables.
Forward Looking Statements
The statements in this press release and related conference call concerning the outlook for 2012 and beyond, including statements regarding product and platform plans, growth prospects, market opportunities, sales momentum, operational improvements, customer opportunities, network capabilities, sales and installations timing, demand, revenue growth, margins, the impact of regulatory changes, expected cost increases, churn, business trends and fluctuations, seasonality, taxes and expected capital expenditures are forward-looking statements that reflect management's views with respect to future events and financial performance. These statements are based on management's current expectations and are subject to risks and uncertainties. Important factors that could cause actual results to differ materially from those in the forward looking statements include the risks disclosed in the Company's SEC filings, especially the section entitled "Risk Factors" in its 2010 Annual Report on Form 10-K/A and in its subsequent quarterly reports on Forms 10-Q/A and 10-Q. tw telecom undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About tw telecom
tw telecom, headquartered in Littleton, Colo., provides managed network services, specializing in converged services, Ethernet and data networking, Internet access, voice, VPN, VoIP and network security, to enterprise organizations and communications services companies throughout the U.S. including their global locations. As a leading provider of integrated and converged network solutions, tw telecom delivers customers overall economic value, quality service, and improved business productivity. For more information please visit www.twtelecom.com.
tw
telecom
inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited
(1)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2011 2010 Growth % 2011 2010 Growth %
---- ---- -------- ---- ---- --------
Revenue
Data and Internet services $171,657 $145,107 18.3% $646,682 $547,218 18.2%
Network services 85,422 89,470 -4.5% 350,709 359,169 -2.4%
Voice services 86,775 81,891 6.0% 338,655 332,870 1.7%
------ ------ --- ------- ------- ---
Service Revenue 343,854 316,468 8.7% 1,336,046 1,239,257 7.8%
Intercarrier compensation 7,653 8,349 -8.3% 30,845 33,914 -9.0%
----- ----- ---- ------ ------ ----
Total Revenue 351,507 324,817 8.2% 1,366,891 1,273,171 7.4%
------- ------- --- --------- --------- ---
Expenses
Operating costs 146,320 134,554 571,461 528,965
------- ------- ------- -------
Gross Margin 205,187 190,263 795,430 744,206
Selling, general and administrative
costs 83,854 78,106 325,538 308,470
Depreciation, amortization, and
accretion 72,572 72,534 283,329 289,564
------ ------ ------- -------
Operating Income 48,761 39,623 186,563 146,172
Interest expense (15,944) (15,057) (64,246) (59,535)
Debt extinguishment costs - - - (17,070)
Non-cash interest expense and
deferred debt costs (6,027) (5,571) (23,472) (21,417)
Interest income 102 170 545 608
Other
income - - - 825
--- --- --- ---
Income before income taxes 26,892 19,165 99,390 49,583
Income tax expense (benefit) (2) 10,500 1,671 41,479 (291,295)
------ ----- ------ --------
Net Income $16,392 $17,494 $57,911 $340,878
======= ======= ======= ========
SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN
AND MODIFIED EBITDA
-----------------------------------------------------------
Gross Margin $205,187 $190,263 $795,430 $744,206
Add back non-cash stock-based
compensation expense 590 929 2,327 3,261
--- --- ----- -----
Modified Gross Margin 205,777 191,192 7.6% 797,757 747,467 6.7%
==== ====
Selling, general and administrative
costs 83,854 78,106 325,538 308,470
Add back non-cash stock-based
compensation expense 6,133 6,270 25,490 24,571
----- ----- ------ ------
Modified EBITDA 128,056 119,356 7.3% 497,709 463,568 7.4%
==== ====
Non-cash stock-based compensation
expense 6,723 7,199 27,817 27,832
Depreciation, amortization, and
accretion 72,572 72,534 283,329 289,564
Net interest expense 15,842 14,887 63,701 58,927
Debt extinguishment costs - - - 17,070
Non-cash interest expense and
deferred debt costs 6,027 5,571 23,472 21,417
Other
income - - - (825)
Income tax expense (benefit) (2) 10,500 1,671 41,479 (291,295)
------ ----- ------ --------
Net Income $16,392 $17,494 $57,911 $340,878
======= ======= ======= ========
Modified Gross Margin % 58.5% 58.9% 58.4% 58.7%
==== ==== ==== ====
Modified EBITDA Margin % 36.4% 36.7% 36.4% 36.4%
==== ==== ==== ====
Free
Cash
Flow:
Modified EBITDA $128,056 $119,356 7.3% $497,709 $463,568 7.4%
Less: Capital Expenditures 86,637 78,118 10.9% 342,731 321,844 6.5%
------ ------ ---- ------- ------- ---
Unlevered Free Cash Flow 41,419 41,238 0.4% 154,978 141,724 9.4%
Less: Net interest expense 15,842 14,887 6.4% 63,701 58,927 8.1%
------ ------ --- ------ ------ ---
Levered Free Cash Flow $25,577 $26,351 -2.9% $91,277 $82,797 10.2%
======= ======= ==== ======= ======= ====
(1) For complete financials and related footnotes, please
refer to the Company's SEC filings.
(2) Includes a non-cash income tax benefit of $299.0
million for the twelve months ended December 31, 2010.
tw
telecom
inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited
(1)
Three Months Ended
------------------
Sept.
Dec. 31 30
2011 2011 Growth %
---- ---- --------
Revenue
Data and Internet services $171,657 $164,670 4.2%
Network services 85,422 86,878 -1.7%
Voice services 86,775 85,220 1.8%
------ ------ ---
Service Revenue 343,854 336,768 2.1%
Intercarrier compensation 7,653 7,688 -0.5%
----- ----- ----
Total Revenue 351,507 344,456 2.0%
------- ------- ---
Expenses
Operating costs 146,320 144,161
------- -------
Gross Margin 205,187 200,295
Selling, general and administrative
costs 83,854 82,085
Depreciation, amortization, and
accretion 72,572 70,940
------ ------
Operating Income 48,761 47,270
Interest expense (15,944) (16,012)
Non-cash interest expense and deferred
debt costs (6,027) (5,918)
Interest income 102 126
--- ---
Income before income taxes 26,892 25,466
Income tax expense 10,500 10,873
------ ------
Net Income $16,392 $14,593
======= =======
SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND
MODIFIED EBITDA
---------------------------------------------------------------
Gross Margin $205,187 $200,295
Add back non-cash stock-based
compensation expense 590 565
--- ---
Modified Gross Margin 205,777 200,860 2.4%
====
Selling, general and administrative
costs 83,854 82,085
Add back non-cash stock-based
compensation expense 6,133 6,248
----- -----
Modified EBITDA 128,056 125,023 2.4%
====
Non-cash stock-based compensation
expense 6,723 6,813
Depreciation, amortization, and
accretion 72,572 70,940
Net Interest expense 15,842 15,886
Non-cash interest expense and deferred
debt costs 6,027 5,918
Income tax expense 10,500 10,873
------ ------
Net Income $16,392 $14,593
======= =======
Modified Gross Margin % 58.5% 58.3%
==== ====
Modified EBITDA Margin % 36.4% 36.3%
==== ====
Free
Cash
Flow
Modified EBITDA $128,056 $125,023 2.4%
Less: Capital Expenditures 86,637 85,957 0.8%
------ ------ ---
Unlevered Free Cash Flow 41,419 39,066 6.0%
Less: Net interest expense 15,842 15,886 -0.3%
------ ------ ----
Levered Free Cash Flow $25,577 $23,180 10.3%
======= ======= ====
(1) For complete financials and related footnotes,
please refer to the Company's SEC filings.
tw
telecom
inc.
Highlights of
Results Per
Share
Unaudited
(1) (2)
Twelve Months
Three Months Ended Ended
------------------ --------------
Dec. Sept. Dec. Dec. Dec.
31 30 31 31 31
2011 2011 2010 2011 2010
Weighted Average Shares Outstanding
(thousands)
Basic 146,416 147,084 148,267 147,247 149,156
======= ======= ======= ======= =======
Diluted
(2) 148,125 148,999 150,490 149,349 171,456
======= ======= ======= ======= =======
Basic Income per Common Share
Prior to impacts of debt
extinguishment
and recognition of the value of
tax assets $0.11 $0.10 $0.12 $0.39 $0.39
Debt
extinguishment
costs - - - - ($0.11)
Recognition of the value of tax
assets - - - - $1.98
--- --- --- --- -----
Total $0.11 $0.10 $0.12 $0.39 $2.26
===== ===== ===== ===== =====
Diluted Income per Common Share $0.11 $0.10 $0.11 $0.38 $2.12
===== ===== ===== ===== =====
As of
-----
Dec. Sept. Dec.
31 30 31
2011 2011 2010
---- ---- ----
Common shares
(thousands)
Actual Shares
Outstanding 149,044 149,332 149,246
======= ======= =======
Unvested
Restricted Stock
Units
and Restricted Stock Awards
(thousands) 4,182 4,300 3,162
===== ===== =====
Options
(thousands)
Options
Outstanding 6,674 6,824 9,154
===== ===== =====
Options
Exercisable 4,974 4,950 6,051
===== ===== =====
Options Exercisable and In-the-
Money 3,114 1,533 2,417
===== ===== =====
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Stock options, restricted stock units/awards and convertible debt
subject to conversion, are excluded from the computation of
diluted weighted average shares outstanding if inclusion would be anti-
dilutive. See the Company's SEC filings for more details.
tw
telecom
inc.
Condensed Consolidated Balance Sheet Highlights
(Dollars in
thousands)
Unaudited
(1)
Dec. 31 Sept. 30 Dec. 31
2011 2011 2010
---- ---- ----
ASSETS
Cash, equivalents, and short term investments $484,919 $469,093 $475,594
Receivables 104,374 99,914 89,496
Less: allowance (8,192) (7,660) (7,898)
------ ------ ------
Net receivables 96,182 92,254 81,598
Prepaid expenses and other current assets 17,340 22,842 16,935
Deferred income
taxes 65,008 40,428 40,428
------ ------ ------
Total other current assets 82,348 63,270 57,363
Property, plant and equipment 4,026,134 3,958,489 3,732,050
Less: accumulated depreciation (2,598,922) (2,541,885) (2,375,438)
---------- ---------- ----------
Net property, plant and equipment 1,427,212 1,416,604 1,356,612
Deferred income
taxes 162,535 194,081 224,795
Goodwill 412,694 412,694 412,694
Intangible assets, net of accumulated
amortization 17,742 19,417 24,444
Other assets, net of accumulated amortization 24,594 25,290 17,854
------ ------ ------
Total other non-current assets 617,565 651,482 679,787
Total $2,708,226 $2,692,703 $2,650,954
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current
Liabilities
Accounts
payable $52,739 $66,356 $53,436
Deferred
revenue 42,253 41,724 37,888
Accrued taxes, franchise and other fees 66,880 68,708 68,663
Accrued
interest 13,934 7,459 15,208
Accrued payroll and benefits 44,284 39,738 41,772
Accrued carrier
costs 32,760 28,816 35,049
Current portion of debt and lease obligations 7,733 7,742 7,202
Other current
liabilities 31,361 37,404 42,570
------ ------ ------
Total current liabilities 291,944 297,947 301,788
Long-Term Debt and Capital Lease Obligations
2 3/8% convertible senior debentures, due
4/1/2026 373,744 373,744 373,744
Unamortized
Discount (27,057) (32,133) (46,732)
------- ------- -------
Net 346,687 341,611 327,012
Floating rate senior secured debt -Term Loan B,
due 1/7/2013 102,055 102,324 103,130
Floating rate senior secured debt -Term Loan B,
due 12/30/2016 467,946 469,176 472,870
8% senior unsecured notes, due 3/1/2018 (2) 427,614 427,518 427,227
Capital lease obligations 16,251 16,594 15,260
Less: current portion (7,733) (7,742) (7,202)
------ ------ ------
Total long-term debt and capital lease
obligations 1,352,820 1,349,481 1,338,297
Long-Term Deferred Revenue 22,296 22,330 14,864
Other Long-Term Liabilities 35,445 33,636 29,364
Stockholders'
Equity 1,005,721 989,309 966,641
--------- ------- -------
Total $2,708,226 $2,692,703 $2,650,954
(1) For complete financials and related
footnotes, please refer to the Company's SEC
filings.
(2) Net of unamortized discount
tw telecom inc.
Condensed Consolidated Statements of
Cash Flows
(Dollars in thousands)
Unaudited (1)
Twelve Months
Three Months Ended Ended
------------------ --------------
Sept.
Dec. 31 30 Dec. 31 Dec. 31 Dec. 31
2011 2011 2010 2011 2010
---- ---- ---- ---- ----
Cash flows from operating activities:
Net Income $16,392 $14,593 $17,494 $57,911 $340,878
Adjustments to reconcile net income to
net cash
provided by operating activities:
Depreciation, amortization, and
accretion 72,572 70,940 72,534 283,329 289,564
Deferred income taxes 5,973 10,426 1,565 35,756 (293,529)
Stock-based compensation 6,723 6,813 7,200 27,817 27,832
Extinguishment costs, amortization of
discount on debt
and deferred debt costs and other 6,014 5,887 5,528 23,388 37,649
Changes in operating assets and
liabilities:
Receivables, prepaid expenses and other
assets 2,379 (18,769) 3,205 (22,211) (5,264)
Accounts payable, deferred revenue, and
other liabilities 1,752 (13,965) (17,346) (2,402) (11,378)
----- ------- ------- ------ -------
Net cash provided by operating
activities 111,805 75,925 90,180 403,588 385,752
------- ------ ------ ------- -------
Cash flows from investing activities:
Capital expenditures (86,637) (84,491) (78,118) (340,731) (321,844)
Purchase of
investments (28,327) (97,572) (78,714) (223,638) (246,575)
Proceeds from sale of investments 25,615 97,562 61,337 208,340 154,786
Other investing activities, net (646) 3,886 2,098 3,230 (4,416)
---- ----- ----- ----- ------
Net cash used in investing activities (89,995) (80,615) (93,397) (352,799) (418,049)
------- ------- ------- -------- --------
Cash flows from financing activities:
Net proceeds (tax withholdings) from
issuance of common
stock upon exercise of stock options
and vesting of
restricted stock awards and units 922 1,525 (1,153) 9,966 1,045
Purchases of treasury stock (8,562) (34,612) (38,206) (58,562) (49,911)
Excess tax benefits from stock-based
compensation 1,385 - - 1,385 -
Net (costs) proceeds from issuance of
debt - - (4,356) - 413,069
Retirement of debt obligations - - - - (413,683)
Payment of debt and capital lease
obligations (1,902) (1,713) (1,662) (7,106) (7,208)
------ ------ ------ ------ ------
Net cash used in financing activities (8,157) (34,800) (45,377) (54,317) (56,688)
------ ------- ------- ------- -------
Increase (decrease) in cash and cash
equivalents 13,653 (39,490) (48,594) (3,528) (88,985)
Cash and cash equivalents at the
beginning of the period 339,741 379,231 405,516 356,922 445,907
------- ------- ------- ------- -------
Cash and cash equivalents at the end of
the period $353,394 $339,741 $356,922 $353,394 $356,922
======== ======== ======== ======== ========
Supplemental disclosures cash,
equivalents
and short term investments
Cash and cash equivalents at the end of
the period $353,394 $339,741 $356,922 $353,394 $356,922
Short term investments 131,525 129,352 118,672 131,525 118,672
------- ------- ------- ------- -------
Total of cash, equivalents and short
term investments $484,919 $469,093 $475,594 $484,919 $475,594
======== ======== ======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid for interest $9,970 $23,079 $7,771 $67,566 $63,169
====== ======= ====== ======= =======
Cash paid for debt extinguishment costs - - - - $13,677
=== === === === =======
Cash paid for income taxes, net of
refunds $218 $575 $701 $3,231 $4,653
==== ==== ==== ====== ======
Addition of capital lease obligation - $1,466 - $2,000 -
=== ====== === ====== ===
Supplemental information to reconcile
capital expenditures:
Capital expenditures per cash flow
statement $86,637 $84,491 $78,118 $340,731 $321,844
Addition of capital lease obligation - 1,466 - 2,000 -
Total capital expenditures $86,637 $85,957 $78,118 $342,731 $321,844
======= ======= ======= ======== ========
(1) For complete financials and related
footnotes, please refer to the Company's SEC
filings.
tw telecom inc.
Selected Operating Statistics
Unaudited (1)
Three Months Ended
------------------
2010 2011
---- ----
Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec.
31 30 30 31 31 30 30 31
----- ----- ------ ----- ----- ----- ------ -----
Operating Metrics:
------------------
Buildings (2) 11,909 12,276 12,693 13,230 13,742 14,311 14,872 15,438
Headcount
Total Headcount 2,887 2,901 2,932 2,975 2,985 3,071 3,065 3,051
Sales Associates 523 528 545 555 564 553 564 555
Customers
Total
Customers 27,685 27,460 27,382 27,281 27,234 27,322 27,376 27,509
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Reflects on-net buildings and ILEC Local Serving Offices (LSOs)
directly served by the Company's fiber network.
SOURCE tw telecom