tw telecom Reports Third Quarter 2009 Results
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Tue, 03 Nov 2009 21:44:20 GMT |
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- Strong and Steady Financial Performance - Grew Revenue, M-EBITDA, Net Income and Cash Flow
LITTLETON, Colo., Nov. 3 /PRNewswire-FirstCall/ -- tw telecom inc. (Nasdaq: TWTC), a leading provider of managed voice, Internet and data networking solutions for business customers, today announced its third quarter 2009 financial results, including $304.8 million of revenue, $109.4 million in Modified EBITDA(1) ("M-EBITDA"), $33.8 million in levered free cash flow(3) and net income of $7.7 million, or $0.05 per share.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080626/LATH527LOGO)
"We grew revenue, achieved strong margins and generated increased cash flow, while maintaining healthy liquidity, demonstrating the strength of our model and our ability to execute," said Larissa Herda, tw telecom's Chairman, CEO and President. "We believe our continued investment in our people, products and infrastructure has been instrumental to maintaining growth throughout this recession and positions us well for when the economy recovers."
Highlights for the Third Quarter 2009
- Grew total revenue 5% year over year and 1% sequentially
- Grew enterprise revenue 7% year over year and 2% sequentially
- Grew data and Internet revenue 17% year over year and 4% sequentially
- Grew M-EBITDA 7% year over year and up slightly sequentially
- Achieved a 35.9% M-EBITDA margin, a 70 basis point improvement year over year
- Grew EPS to $0.05 per share, a $0.05 improvement year over year
- Delivered $33.8 million of levered free cash flow, representing 11% of revenue
Business Trends
"Overall business trends remained steady as we continue to evolve our product capabilities and optimize our operations with ongoing cost efficiency initiatives to grow and scale the business," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer. The Company's sales efforts allowed it to outsell the continued pressure of elevated churn and repricing for contract renewals. Customer demand remained solid as bookings(7) for the quarter were the same level as last year.
The Company continues in a strong liquidity position with no significant debt maturities until 2013, $432 million in cash and equivalents, an undrawn revolver, and no financial maintenance covenants unless it draws its revolver(4).
Churn
Reflecting the current economic environment, revenue churn(5) was 1.2% for the current quarter, 1.3% for the prior quarter, and 1.2% for the same quarter last year. The Company expects elevated revenue churn to continue to pressure revenue growth.
Customer churn(5) was 1.2% for the current quarter, a decrease from 1.4% in the prior quarter, and down from 1.5% for the same period last year. The majority of the turnover was from small customers and the Company expects this churn will continue.
Other items for 2009
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, usage, disputes, repricing for contract renewals, ongoing revenue churn and fluctuations in expenses and capital expenditures. Given the current economic environment, seasonal and other trends may differ from historical experience.
Capital Expenditures
Capital expenditures were $59.9 million for the quarter compared to $69.2 million for the prior quarter and $75.9 million for the same period last year.
The year over year decrease reflects $12 million for prior year expansions of co-location facilities, capacity expansions and regional networks, as well as IT enhancements that automated certain provisioning functions, which were lower or did not recur in the current period. Additionally, the Company incurred $2.6 million in branding and integration investments last year, which did not recur.
The sequential decrease in capital investments primarily reflects timing of infrastructure and IT projects. The Company continues to expect total capital investments for the full year 2009 to be approximately $275 million. The Company also expects the majority of the full year capital investments to be tied to new sales opportunities.
Year over Year Results -Third Quarter 2009 compared to Third Quarter 2008
Revenue
Revenue for the quarter was $304.8 million compared to $291.6 million for the third quarter last year, representing a year over year increase of $13.2 million, or 5%. Key changes in revenue included:
- $15.9 million increase in revenue from enterprise customers, or 7% year over year, representing 29 consecutive quarters of enterprise growth
- $1.2 million decrease in revenue from carriers. Growth in new sales was outpaced by churn and repricing for contract renewals
- $1.5 million decrease in intercarrier compensation related primarily to fluctuations in volume and disputes as well as rate changes
By product line, the percentage change in revenue year over year was as follows:
- 17% increase for data and Internet services, primarily due to continued success with Ethernet and IP-based product sales, partially offset by churn and repricing for contract renewals
- Voice services were flat, reflecting ongoing sales of bundled and other local product sales offset by churn
- 3% decrease for network services, due to churn and repricing for contract renewals that outpaced sales, partially offset by growth in co-location and high capacity services
M-EBITDA and Margins
M-EBITDA grew to $109.4 million for the quarter, an increase of 7%, or $6.8 million from the same period last year. The growth in M-EBITDA represents the contribution from revenue growth and cost efficiencies from network and other optimization efforts, partially offset with a fluctuation in settlements and an increase in employee costs.
Operating costs for the quarter increased primarily due to increased network access costs associated with net growth in customer installations of service, higher employee costs and fluctuation in settlements, partially offset by network and other cost efficiencies. Operating costs as a percent of revenue were 42% for both the current period and the same period last year.
Selling, general and administrative costs ("SG&A") increased year over year, primarily reflecting a favorable tax settlement in the same period last year that did not recur, and higher employee costs partially offset by a decrease in bad debt. Bad debt expense was $1.8 million for the quarter and $3.1 million for the same period last year, representing 0.6% of quarterly revenue for the current quarter and 1.1% for the same period last year. SG&A costs as a percent of revenue were 24% for both the current quarter and for the same period last year.
Modified gross margin(6) was 58.6% for the current quarter compared to 58.1% for the same period last year, a 50 basis point improvement. M-EBITDA margin for the quarter was 35.9% as compared to 35.2% for the same period last year, a 70 basis point improvement.
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 Income and Loss
For the quarter, the Company achieved net income of $7.7 million, or $0.05 per share compared to a net loss of $0.2 million, or $0.00 per share, for the same period last year. The increase year over year in net income reflects strong M-EBITDA growth and an impairment loss on long term investments for the same period last year that did not recur, partially offset by an increase in depreciation.
Sequential Results -Third Quarter 2009 compared to Second Quarter 2009
Revenue
Revenue for the quarter was $304.8 million, as compared to $301.1 million for the second quarter of 2009, an increase of $3.7 million, or 1%. Key changes in revenue included:
- $3.4 million increase in enterprise revenue, representing 2% sequential growth
- $0.9 million increase in revenue from carrier customers primarily reflecting new sales and an increase in contract termination fees partially offset by churn and the repricing of renewed customer contracts
- $0.6 million decrease in intercarrier compensation for fluctuations in volume and disputes
By product line, the percentage change in revenue sequentially was as follows:
- 4% increase for data and Internet services, primarily due to continued success with Ethernet and IP-based product sales partially offset by churn and repricing
- Voice services were flat, reflecting ongoing sales of bundled and other local products offset by churn
- Network services were flat, primarily due to sales and an increase in contract termination fees offset by churn and repricing for customer contract renewals
M-EBITDA and Margins
M-EBITDA was $109.4 million for the quarter, compared to $108.9 million for the prior quarter. The growth in M-EBITDA represents cost efficiencies from network and other optimization efforts, and a decrease in certain employee costs, partially offset by increased bad debt costs and seasonal growth in certain field expenses.
Operating costs increased primarily reflecting increased network access costs associated with net growth in customer installations of service and a seasonal increase in field costs for such items as utilities, partially offset by network optimization efforts. Operating costs were 42% of revenue for the quarter compared to 41% for the prior quarter.
SG&A costs decreased primarily reflecting decreases in property tax and certain employee related costs, including commissions and payroll taxes, offset by higher bad debt expense. Bad debt expense increased to $1.8 million from $0.7 million sequentially, representing 0.6% and 0.2% of quarterly revenue, respectively. SG&A was 24% of revenue for the current period as compared to 25% for the prior quarter.
Modified gross margin was 58.6% compared to 59.3% for the prior quarter, a 70 basis point reduction. M-EBITDA margin was 35.9% for the quarter, compared to 36.2% for the prior quarter, a 30 basis point reduction.
Net Income
For the quarter, the Company reported net income of $7.7 million, or $0.05 per share, compared to net income of $5.9 million, or $0.04 per share for the prior quarter. The increase in net income sequentially primarily reflects M-EBITDA growth and a decrease in income taxes.
Summary
"We are focused on continuing to leverage our enterprise business by executing both financially and operationally, investing in growth opportunities and positioning the business for the future," said Herda.
tw telecom plans to conduct a webcast conference call to discuss its earnings results on November 4 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 "Investor Relations."
(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 gains 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.
(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 and 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 does not have any maintenance debt covenants on its current debt instruments unless it draws its unused revolver. Please see the Company's Form 10-K and other SEC filings for further details.
(5) The Company defines revenue churn as the average lost recurring monthly billing from a customer's partial or complete disconnection of services (excluding repricing impacts and usage) compared to reported revenue for the quarter. Customer churn is defined as the average monthly customer turnover compared to the average monthly customer count.
(6) The Company defines modified gross margin as Total Revenue less operating costs excluding non-cash stock-based compensation expense. Modified gross margin is reconciled to gross margin in the financial tables.
(7) Bookings reflects customer sales signed in the quarter. The timing of when these sales are installed and recognized as revenue varies based on the underlying contract, which may or may not occur in the quarter executed.
Financial Measures
The Company provides financial measures using 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 (used in) operating activities in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 filed with the SEC and posted 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 (used in) 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 Consolidated Operations Highlights.
Forward Looking Statements
The statements in this press release concerning the outlook for 2009 and beyond, including expansion plans, growth prospects, market opportunities, bookings, sales activity, sales and installations timing, revenue growth, churn, repricing for contract renewals, business trends and fluctuations, seasonality, expense trends, margins and cash flow trends, 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 2008 Annual Report on Form 10-K and in its quarterly report on Form 10-Q for the quarter ended September 30, 2009. 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 Ethernet and data networking, Internet access, local and long distance 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. Please visit www.twtelecom.com for more information.
tw telecom inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited (1)
Three Months Ended Nine Months Ended
Sept 30 Sept 30
-------- --------
Growth Growth
2009 2008 % 2009 2008 %
---- ---- ------ ---- ---- ------
Revenue
Data and Internet
services $119,977 $102,282 17% $347,848 $292,390 19%
Network services 93,233 96,152 -3% 280,396 291,762 -4%
Voice services 83,799 83,927 0% 250,414 251,707 -1%
------ ------ --- ------- ------- ---
Service
Revenue 297,009 282,361 5% 878,658 835,859 5%
Intercarrier
compensation 7,757 9,258 -16% 24,798 28,514 -13%
----- ----- --- ------ ------ ---
Total Revenue 304,766 291,619 5% 903,456 864,373 5%
------- ------- --- ------- ------- ---
Expenses
Operating costs 127,155 123,051 374,105 365,146
------- ------- ------- -------
Gross Margin 177,611 168,568 529,351 499,227
Selling, general
and administrative
costs 74,611 71,408 225,935 221,371
Depreciation,
amortization, and
accretion 74,280 71,537 221,877 212,315
------ ------ ------- -------
Operating
Income 28,720 25,623 81,539 65,541
Interest expense (3) (15,852) (18,212) (48,768) (56,634)
Non cash interest
expense and
deferred debt
costs (2) (3) (4,880) (4,546) (14,449) (13,397)
Interest income 116 1,518 327 5,742
Other loss - (3,672) - (7,767)
--- ------ --- ------
Income (Loss)
before
income taxes 8,104 711 18,649 (6,515)
Income tax expense 406 897 2,159 1,650
--- --- ----- -----
Net Income
(Loss) $7,698 ($186) $16,490 ($8,165)
====== ===== ======= =======
SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND
MODIFIED EBITDA
---------------------------------------------------------------
Gross Margin $177,611 $168,568 $529,351 $499,227
Add back non-cash
stock-based
compensation
expense 961 824 2,464 2,552
--- --- ----- -----
Modified Gross
Margin 178,572 169,392 5% 531,815 501,779 6%
=== ===
Selling, general
and administrative
costs 74,611 71,408 225,935 221,371
Add back non-cash
stock-based
compensation
expense 5,465 4,646 16,911 14,359
----- ----- ------ ------
Modified EBITDA 109,426 102,630 7% 322,791 294,767 10%
=== ===
Non-cash stock-
based compensation
expense 6,426 5,470 19,375 16,911
Depreciation,
amortization, and
accretion 74,280 71,537 221,877 212,315
Net Interest
expense (3) 15,736 16,694 48,441 50,892
Non cash interest
expense and
deferred debt
costs (2) (3) 4,880 4,546 14,449 13,397
Other loss - 3,672 - 7,767
Income tax expense 406 897 2,159 1,650
--- --- ----- -----
Net Income
(Loss) $7,698 ($186) $16,490 ($8,165)
====== ===== ======= =======
Modified Gross
Margin % 58.6% 58.1% 58.9% 58.1%
==== ==== ==== ====
Modified EBITDA
Margin % 35.9% 35.2% 35.7% 34.1%
==== ==== ==== ====
Free Cash Flow:
Modified EBITDA $109,426 $102,630 7% $322,791 $294,767 10%
Less: Capital
Expenditures 59,931 75,947 -21% 202,543 203,989 -1%
------ ------ --- ------- ------- ---
Unlevered Free Cash
Flow 49,495 26,683 85% 120,248 90,778 32%
Less: Net interest
expense (3) 15,736 16,694 -6% 48,441 50,892 -5%
------ ------ --- ------ ------ ---
Levered Free Cash
Flow (3) $33,759 $9,989 238% $71,807 $39,886 80%
======= ====== === ======= ======= ===
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Effective 1/1/09, the Company adopted ASC 470-20 (formerly referred to
as FSP APB 14-1 Accounting for Convertible Debt Instruments), which
requires retrospective application. Included above is $4.3 million
and $4.0 million for the quarter ended Sept. 30, 2009 and 2008,
respectively, and $12.7 million and $11.7 million for the nine months
ended September 30, 2009 and 2008, respectively, for adoption of this
pronouncement.
(3) Includes $0.6 million and $1.7 million reclassification from Interest
Expense to Non Cash Interest Expense and Deferred Debt Costs for
the three and nine months ended September 30, 2008, respectively.
tw telecom inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited (1)
Three Months Ended
----------------------------------------
Sept 30, June 30,
2009 2009 Growth %
---- ---- --------
Revenue
Data and Internet
services $119,977 $115,829 4%
Network services 93,233 93,297 0%
Voice services 83,799 83,538 0%
------ ------ ---
Service Revenue 297,009 292,664 1%
Intercarrier
compensation 7,757 8,395 -8%
----- ----- ---
Total Revenue 304,766 301,059 1%
------- ------- ---
Expenses
Operating costs 127,155 123,219
------- -------
Gross Margin 177,611 177,840
Selling, general
and administrative
costs 74,611 75,504
Depreciation,
amortization, and
accretion 74,280 74,406
------ ------
Operating
Income 28,720 27,930
Interest expense (15,852) (16,235)
Non cash interest
expense and
deferred debt costs
(2) (4,880) (4,792)
Interest income 116 81
--- ---
Income before
income taxes 8,104 6,984
Income tax expense 406 1,072
--- -----
Net Income $7,698 $5,912 30%
====== ====== ===
SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN
AND MODIFIED EBITDA
-----------------------------------------------------------
Gross Margin $177,611 $177,840
Add back non-cash
stock-based
compensation
expense 961 778
--- ---
Modified Gross
Margin 178,572 178,618 0%
===
Selling, general
and administrative
costs 74,611 75,504
Add back non-cash
stock-based
compensation
expense 5,465 5,809
----- -----
Modified EBITDA 109,426 108,923 0%
===
Non-cash stock-
based compensation
expense 6,426 6,587
Depreciation,
amortization, and
accretion 74,280 74,406
Net Interest expense 15,736 16,154
Non cash interest
expense and
deferred debt costs
(2) 4,880 4,792
Income tax expense 406 1,072
--- -----
Net Income $7,698 $5,912
====== ======
Modified Gross
Margin % 58.6% 59.3%
==== ====
Modified EBITDA
Margin % 35.9% 36.2%
==== ====
Free Cash Flow
Modified EBITDA $109,426 $108,923 0%
Less: Capital
Expenditures 59,931 69,187 -13%
------ ------ ---
Unlevered Free Cash
Flow 49,495 39,736 25%
Less: Net interest
expense 15,736 16,154 -3%
------ ------ ---
Levered Free Cash
Flow $33,759 $23,582 43%
======= ======= ===
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Effective 1/1/09, the Company adopted ASC 470-20 (formerly referred to
as FSP APB 14-1 Accounting for Convertible Debt Instruments), which
requires retrospective application. Included above is $4.3 million
and $4.2 million for the quarters ended September 30, 2009 and June
30, 2009, for adoption of this pronouncement.
tw telecom inc.
Highlights of Results Per Share
Unaudited (1) (2)
Three Months Ended
------- ------------------ -------
9/30/09 6/30/09 9/30/08
------- ------- -------
Weighted Average Shares Outstanding (thousands)
Basic 148,082 147,970 147,443
======= ======= =======
Diluted (2) 149,952 149,557 147,443
======= ======= =======
EPS prior to impacts of
convertible debt
accounting $0.08 $0.07 $0.03
Adoption of Accounting
for Convertible Debt
Instruments (3) (0.03) (0.03) (0.03)
----- ----- -----
Basic & Diluted Income
per Common Share $0.05 $0.04 $0.00
===== ===== =====
As Of
------- ----- -------
9/30/09 6/30/09 9/30/08
------- ------- -------
Common shares (thousands)
Actual Shares
Outstanding 149,335 149,224 147,519
======= ======= =======
Unvested Restricted Stock Units
and Restricted Stock
Awards (thousands) 2,827 2,912 1,494
===== ===== =====
Options (thousands)
Options Outstanding 13,033 13,293 12,028
====== ====== ======
Options Exercisable 8,161 8,291 7,151
===== ===== =====
Options Exercisable and
In-the-Money 1,781 1,808 1,519
===== ===== =====
(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.
(3) Effective 1/1/09, the Company adopted ASC 470-20 (formerly
referred to as FSP APB 14-1 Accounting for Convertible Debt
Instruments), which requires retrospective application. Adoption
of this pronouncement included $4.3 million, $4.2 million and $4.0
million for the quarters ended Sept. 30, 2009, June 30, 2009 and
Sept. 30, 2008, respectively, for Non Cash Interest Expense and
Deferred Debt Costs.
tw telecom inc.
Condensed Consolidated Balance Sheet Highlights
(Dollars in thousands)
Unaudited (1)
September 30, June 30, September 30,
2009 2009 2008
---- ---- ----
ASSETS
Cash and equivalents $432,331 $391,801 $333,687
Receivables 86,324 86,013 83,331
Less: allowance (11,011) (11,214) (9,723)
------- ------- ------
Net receivables 75,313 74,799 73,608
Other current assets 22,800 23,196 21,675
Property, plant and
equipment 3,443,554 3,389,653 3,221,218
Less: accumulated
depreciation (2,149,487) (2,084,625) (1,921,960)
---------- ---------- ----------
Net property, plant and
equipment 1,294,067 1,305,028 1,299,258
Other Assets (2) 510,037 513,320 524,565
------- ------- -------
Total $2,334,548 $2,308,144 $2,252,793
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities (3)
Accounts payable $45,999 $41,997 $32,613
Deferred revenue 33,110 32,359 29,183
Accrued taxes, franchise
and other fees 67,160 65,337 69,378
Accrued interest 9,462 16,577 9,604
Accrued payroll and
benefits 43,612 33,072 42,641
Accrued carrier costs 30,502 34,321 30,580
Current portion of debt
and lease obligations 8,264 8,114 7,275
Other current liabilities 39,590 36,935 32,826
------ ------ ------
Total current
liabilities 277,699 268,712 254,100
Long-Term Debt and Capital Lease Obligations
2 3/8% convertible senior
debentures, due 4/1/2026 (2) 373,750 373,750 373,750
Unamortized Discount (2) (69,094) (73,289) (85,354)
------- ------- -------
Net 304,656 300,461 288,396
Floating rate senior
secured debt - Term Loan
B, due 1/7/2013 583,500 585,000 589,500
9 1/4% senior unsecured
notes, due 2/15/2014 400,243 400,257 400,299
Capital lease obligations 17,706 17,857 10,890
Less: current portion (8,264) (8,114) (7,275)
------ ------ ------
Total long-term debt
and capital lease
obligations 1,297,841 1,295,461 1,281,810
Long-Term Deferred Revenue 16,506 16,908 18,254
Other Long-Term Liabilities 30,197 29,514 25,345
Stockholders' Equity (2) 712,305 697,549 673,284
------- ------- -------
Total $2,334,548 $2,308,144 $2,252,793
========== ========== ==========
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Effective January 1, 2009 the Company adopted ASC 470-20 (formerly
referred to as FSP APB 14-1 Accounting for Convertible Debt
Instruments). For further details see the Company's SEC filings
and the Company's supplemental earnings slides.
(3) Certain prior period liabilities have been reclassified to conform
with the presentation for all periods.
tw telecom inc.
Unaudited
tw telecom's Strong Liquidity
(Photo: http://www.newscom.com/cgi-bin/prnh/20091103/LA03177)
(1) The Company has no financial maintenance covenants as of September 30,
2009. There are financial maintenance covenants in the Company's
undrawn revolver which would only apply if drawn.
(2) Annualized amount based on the quarter ended September 30, 2009.
(3) Excludes the impact of adoption of ASC 470-20 (formerly referred to
as FSP APB 14-1) which decreased debt and increased non cash
interest expense.
(4) See the Company's SEC filings for a full description of the debt
instruments.
tw telecom inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
Unaudited (1)
Three Months Ended Nine Months Ended
------------------ -----------------
Sept 30, June 30, Sept 30, Sept 30, Sept 30,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Cash flows from
operating
activities:
Net Income (loss) $7,698 $5,912 ($186) $16,490 (8,165)
Adjustments to
reconcile net
income (loss) to
net cash provided
by operating
activities:
Depreciation,
amortization,
and accretion 74,280 74,406 71,537 221,877 212,315
Stock-based
compensation 6,426 6,587 5,470 19,375 16,911
Discount on debt,
investment
impairment, deferred
debt issue costs
and other 4,902 4,944 9,318 15,044 22,311
Changes in operating
assets and liabilities:
Receivables, prepaid
expense and other
assets 232 (3,128) 3,248 5,785 2,762
Accounts payable,
deferred revenue,
and other
liabilities 14,237 17,881 (9,996) (368) (36,090)
------ ------ ------ ---- -------
Net cash provided
by operating
activities 107,775 106,602 79,391 278,203 210,044
------- ------- ------ ------- -------
Cash flows from
investing
activities:
Capital
expenditures (59,931) (68,560) (75,169) (194,650) (201,651)
Proceeds from sale
of assets
and other investing
activities (6,080) 1,845 4,060 914 2,918
------ ----- ----- --- -----
Net cash used
in investing
activities (66,011) (66,715) (71,109) (193,736) (198,733)
------- ------- ------- -------- --------
Cash flows from
financing
activities:
Net proceeds from
issuance of
common stock
upon exercise of
stock options,
vesting of restricted stock
awards and units, and
employee stock
purchase plan 576 946 2,170 1,390 6,243
Payment of debt and
capital lease
obligations (1,810) (2,244) (1,921) (5,702) (5,398)
------ ------ ------ ------ ------
Net cash provided
by (used in)
financing
activities (1,234) (1,298) 249 (4,312) 845
------ ------ --- ------ ---
Increase in cash
and cash
equivalents 40,530 38,589 8,531 80,155 12,156
Cash and cash
equivalents at
the beginning of
the period 391,801 353,212 325,156 352,176 321,531
------- ------- ------- ------- -------
Cash and cash
equivalents at
the end of the
period $432,331 $391,801 $333,687 $432,331 $333,687
======== ======== ======== ======== ========
Supplemental
disclosures of cash
flow information:
Cash paid for
interest $23,643 $9,890 $25,991 $58,667 $65,380
======= ====== ======= ======= =======
Cash paid for
income taxes $618 $2,180 $71 $2,826 $1,061
==== ====== === ====== ======
Addition of capital
lease obligation $0 $627 $778 $7,893 $2,338
=== ==== ==== ====== ======
Supplemental
information to
reconcile capital
expenditures:
Capital
expenditures
per cash flow
statement $59,931 $68,560 $75,169 $194,650 $201,651
Addition of
capital lease
obligation 0 627 778 7,893 2,338
--- --- --- ----- -----
Total capital
expenditures $59,931 $69,187 $75,947 $202,543 $203,989
======= ======= ======= ======== ========
(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
------------------
2008 2009
---------------------------------- ------------------------
Mar. 31 Jun. 30 Sept. 30 Dec. 31 Mar. 31 Jun. 30 Sept. 30
------- -------- -------- -------- ------- ------- --------
Operating Metrics:
------------------
Route Miles
Metro 19,009 19,235 19,477 19,843 20,039 20,219 20,190
Regional 6,921 6,921 6,922 6,922 6,922 6,922 6,922
----- ----- ----- ----- ----- ----- -----
Total 25,930 26,156 26,399 26,765 26,961 27,141 27,112
Buildings (2)
Fiber
connected
buildings,
on-net 8,587 8,810 9,109 9,422 9,685 9,934 10,170
Networks
Class 5
Switches 70 69 69 68 68 68 68
Soft Switches 36 36 36 36 36 36 36
Headcount
Total
Headcount 2,883 2,890 2,827 2,844 2,853 2,861 2,849
Sales
Associates 511 517 485 485 486 494 503
Customers
Total
Customers 31,200 30,663 30,006 29,672 29,256 28,676 28,347
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Fiber connected buildings (e.g. "on-net") represents locations to
which the Company's fiber network is directly connected.
SOURCE tw telecom inc.
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