ROSEVILLE, Calif., Feb. 29, 2012/PRNewswire/ -- SureWest Communications (NASDAQ: SURW) today announced operating results for the fourth quarterfull year ended December 31, 2011.
Steve Oldham, SureWest's presidentchief executive officer, said, "Our strong 2011 results were highlighted by top-line businessresidential services revenue growth, driving an increase in adjusted EBITDA. Our core Broadband segment now accounts for 77% of the company's total revenues54% of total adjusted EBITDA. SureWest's business services revenues continue to be an important part of delivering long-term, sustainable growth due to positive trends in Kansas Cityincreased bandwidth demands for backhaul services to wireless carriers. We continue to increase the take rates of our residential products like Advanced Digital TV, high-speed InternetBroadband Voice over IP. During the year, we also added 15,400 new fiber homes in Kansas Citythat we are aggressively targeting.
"The investments we've made over the last several years to expand our extensive fiber-to-the-home networkenhance our suite of services have delivered excellent returnsoffer many opportunities for additional value creation. Our knowledgeinnovation is what drives SureWest's strong continued growthunderscores the strategic benefits of the recently announced acquisition of our company by Consolidated Communications. The combination with Consolidated is highly accretivebrings together Consolidated's strong cash flow with SureWest's proven broadband growth strategy. Customersshareholders alike will benefit from the combined company's greater scale, scopefinancial resources."
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The following table highlights financial results for continuing operations on a consolidated basis (dollars are in thousands):
Y-O-Y comparison | Full Year comparison | |||||||||||||||
Consolidated | Q4'11 | Q4'10 | Change | % | 2011 | 2010 | Change | % | ||||||||
Broadband Revenue | $ 49,010 | $ 45,032 | $ 3,978 | 9% | $188,366 | $ 174,546 | $ 13,820 | 8% | ||||||||
Telecom Revenue | 14,529 | 16,614 | (2,085) | (13%) | 59,687 | 68,953 | (9,266) | (13%) | ||||||||
Total Revenue | 63,539 | 61,646 | 1,893 | 3% | 248,053 | 243,499 | 4,554 | 2% | ||||||||
Adjusted EBITDA | 21,602 | 21,780 | (178) | (1%) | 84,431 | 82,511 | 1,920 | 2% | ||||||||
Net Income | 1,483 | 1,951 | (468) | (24%) | 1,802 | 3,355 | (1,553) | (46%) | ||||||||
Capital Expenditures | 21,747 | 13,289 | 8,458 | 64% | 72,528 | 52,560 | 19,968 | 38% | ||||||||
Net Cash Provided by Operating Activities | 20,259 | 17,044 | 3,215 | 19% | 81,448 | 63,553 | 17,895 | 28% | ||||||||
Free Cash Flow | (4,241) | 4,439 | (8,680) | (196%) | (6,761) | 12,620 | (19,381) | (154%) | ||||||||
Adjusted Free Cash Flow | 3,281 | 4,465 | (1,184) | (27%) | 16,651 | 13,931 | 2,720 | 20% | ||||||||
Net Debt | 200,167 | 202,472 | (2,305) | (1%) | 200,167 | 202,472 | (2,305) | (1%) | ||||||||
See Non-GAAP measure notes near end of release,Adjusted EBITDA, Free Cash Flow, Adjusted Free Cash FlowNet Debt reconciliations for adjustments. | ||||||||||||||||
Fourth Quarter Financial Results
Consolidated revenues increased 3% year-over-year to $63.5 millionas Broadband revenues grew by $4 million, or 9%, more than offsetting Telecom revenue declines of $2.1 million, or 13%. Adjusted EBITDA declined 1% year-over-year to $21.6 million, with Broadband adjusted EBITDA increasing 8% to account for 54% of total adjusted EBITDA, offsetting most of the Telecom adjusted EBITDA decline of 10%. SureWest expects to continue increasing its Broadband revenuesadjusted EBITDA through expansion of both residentialbusiness product offerings. The long-term strategy remains growing the Broadband segment while continuing to successfully offset industry-wide structural declines in the traditional Telecom segment.
Operating expenses, exclusive of depreciationamortization, increased 5% year-over-year to $43.0 milliondue primarily to increases in residential video license feestransport charges associated with commercial services growthadvertising expense offset slightly by office consolidation savings.
Net income for the quarter was $1.48 millioncompared to net income of $1.95 millionin the same period last year. Earnings per share from continuing operations were $0.11compared to $0.14in the fourth quarter 2010$0.05in the third quarter 2011.
Capital expenditures totaled $21.7 millionfor the fourth quarter$72.5 millionfor the full year 2011, an increase from $52.6 millionin 2010. During the quarter, SureWest added 5,800 new marketable homes on its fiber-to-the-home (FTTH) network in Kansas Citya total of 15,400 new fiber homes for the full year 2011. Also during the quarter, the company upgraded 2,800 ILEC territory copper homes with Advanced Digital TV servicecompleted 8,600 upgrades during 2011. These upgrades increased the percentage of fibercopper triple-play marketable homes in the ILEC to 66%, up from 57% in the fourth quarter of 2010. The 2012 capital plan prioritizes spending where the company has experienced the greatest return on investment. This includes continued business sales growth opportunities, residential RGU growthincreased residential penetration. The company plans to pass 11,000 additional fiber homes during 2012 in Kansas Citywhere it has experienced superior penetration levels. SureWest is reiterating projected capital expenditures of $60-70 millionin 2012.
Free cash flow, defined as income from continuing operations plus depreciationamortization less capital expenditures, was negative $4.2 millionfor the quarternegative $6.8 millionfor the full year 2011, compared to positive $12.6 millionin 2010. This decline was expected as a result of the $23.4 millioninvestment in network expansion in 2011 compared to $1.3 millionin 2010. Adjusted free cash flow, defined as free cash flow excluding capital investments in network expansion, increased 20% year-over-year to $16.7 million.
Cashcash equivalents increased year-over-year to $4.2 millionfrom $2.9 million. Total debt net of cashcash equivalents (net debt) was $200.2 million, resulting in a net debt to adjusted EBITDA ratio of 2.37x.
Broadband Segment Results
Broadband revenues increased 9% year-over-yearaccounted for 77% of the company's total revenues, compared to 73% in the fourth quarter 2010. Broadband adjusted EBITDA increased 8% year-over-yearnow represents 54% of the company's total adjusted EBITDA. Broadband adjusted EBITDA will be impacted in the first quarter when the company incurs increases in video license fees that do not coincide with a customer price increase, which in 2012, is scheduled for the second quarter.
Broadband Residential:
Broadband Residential revenues increased 7% year-over-year to $34 millionas a result of 5% growth in average revenue per user (ARPU)a 4% increase in RGUs. To illustrate growth trends, Broadband RGUs, subscriber countsARPU are detailed both year-over-yearsequentially in the tabletext below:
Q4 '11 vs. Q4 '10 Change | Q4 '11 vs. Q3 '11 Change | |||||||||||
Sacramento Market | Kansas City Market | Total | Sacramento Market | Kansas City Market | Total | |||||||
Broadband Residential RGUs | 3% | 5% | 4% | 1% | 2% | 1% | ||||||
Data RGUs | 0% | 8% | 3% | 0% | 3% | 1% | ||||||
Video RGUs | 9% | 7% | 7% | 2% | 3% | 2% | ||||||
Voice RGUs | 4% | (1%) | 2% | 0% | 0% | 0% | ||||||
Total Residential Subscribers | 0% | 7% | 3% | 0% | 3% | 1% | ||||||
The Sacramentoregion's Advanced Digital TV product continued to drive growth, helping to increase net video RGUs by 2,230 year-over-year530 sequentially. SureWest had 21,662 Advanced Digital TV subscribers through the fourth quarter, representing 78% of the company's overall video RGUs in the Sacramentomarket. Approximately 98% of the Advanced Digital TV subscribers bundle Internet79% subscribe to a triple-play with ARPU of $148.
ARPU for customers on SureWest's FTTHhybrid fiber coaxial (HFC) networks increased 2% year-over-year to $117due to videodata price increases in July 2011.
Residential customer churn improved year-over-yearsequentially in the fourth quarter from 1.6% to 1.4% as a result of churn reduction programs such as Advanced Digital TV video upgrades on the copper network, as well as ongoing superior customer servicevalue-added features like additional HD channelsincreased Internet speeds.
Broadband Business:
Broadband Business revenues increased by $1.8 million, or 15%, year-over-year to $14.2 million. Business customers increased 3% year-over-year to 8,000ARPU grew 11% from the prior year to $592. The Kansas Citymarket grew ARPU by 11% year-over-year while increasing customer counts by 3%. The Sacramentomarket grew customers by 4% while ARPU increased by 11% driven by wireless carrier backhaulexisting customers taking additional products. Broadband Business growth expectations remain high in both SacramentoKansas City.
As of December 31, 2011, SureWest was billing for 322 wireless backhaul access points at annualized revenues of $3.6 million. The company is now scheduled to bill for over 398 backhaul connections by third quarter 2012 with over $4.5 millionin annualized revenues when those sites become active. Opportunities continue to be pursued to serve additional connections in both the SacramentoKansas Citymarkets.
Telecom Segment Results
Telecom revenues declined $2.1 million, or 12.5%, year-over-year to $14.5 million, consistent with the industry-wide trend of declines in access lines, minutes of useaccess revenues. This was partially due to the decrease of $1 millionin regulatory support revenues that were reduced as scheduled in the first quarter 2011. The company's scheduled state regulatory support declines began in 2006will be fully phased out in the first quarter 2012.
The Telecom segment has consistently generated adjusted EBITDA margins over 40%continues to generate significant free cash flow, which is utilized to reduce debtfund Broadband segment expansion. As the company focuses on growing its Broadband segment, the Telecom segment will continue to account for a smaller percentage of total revenues. For the fourth quarter 2011, Telecom revenues were 23% of total company revenues compared to 27% in the fourth quarter of 2010.
Additionally, voice line loss is decliningis having less of an impact on overall financial performance. Fourth quarter 2011 year-over-year consolidated ILEC voice RGU loss was 3,800, compared to a loss of 4,800 in the fourth quarter 2010. In addition, fourth quarter 2011 consolidated year-over-year loss in ILECCLEC voice RGUs combined was 4,400, compared to a loss of 6,000 in the fourth quarter 2010.
Telecom Residential:
Telecom Residential revenues declined 21% year-over-year to $3.1 millionresulting from a 20% decline in Telecom voice RGUs. However, of the 5,900 year-over-year Telecom Residential voice RGU losses, 2,600, or 44%, migrated to the SureWest Broadband Voice over IP service. The migration of existing Telecom ILEC access lines to Broadband VoIP enables the continued preservation of voice revenues on a consolidated basis.
Telecom Business:
Telecom Business revenues declined 2% year-over-year to $8.4 millionas a result of a 3% decrease in business customers in the ILEC territory. The company is experiencing competitive pressure in the very small business customer segments; however mediumlarge ILEC business customers remain stable.
Telecom Access:
Telecom Access revenues decreased $1.1 millionyear-over-year to $3.0 millionprimarily due to the scheduled reduction in the California High Cost Fund (CHCF) subsidy, the elimination of the transport interconnection charge (TIC)the decline in switched access revenues related to access line lossdeclining minutes of use. The combined annual regulatory support related to CHCFTIC declined roughly $4.0 millionin 2011 from $6.1 millionin 2010 to $2.0 millionin 2011 -will be zero in 2012. In the first quarter of 2012, the company will have an expected quarterly revenue decline of $500 thousandrelated to the final phase out of the CHCF.
Merger Update
As previously announced on February 6, 2012, SureWest entered into a definitive merger agreement under which Consolidated Communications (Nasdaq: CNSL) will acquire all the outstanding shares of SureWest in a cashstock transaction valued at $23.00per share, or a total of approximately $340.9 million, exclusive of debt. The consideration represents a 47% premium to SureWest's stock price as of the close on February 3, 2012. Subject to the satisfaction of customary closing conditions, including federalstate regulatory approvalsthe approval by both ConsolidatedSureWest shareholders, the transaction is expected to close in the second half of 2012. The transaction was unanimously approved by the boards of directors of both companies.
The merger agreement is attached as Exhibit 2.1 to the Current Report on Form 8-K that SureWest filed with the SecuritiesExchange Commission on February 8, 2012.
Non-GAAP Measures
In addition to the results presented in accordance with generally accepted accounting principles (GAAP) throughout this press release, the company has presented non-GAAP financial measures such as adjusted EBITDA, free cash flow, adjusted free cash flownet debt. Adjusted EBITDA represents net income (loss) excluding amounts for income taxes, depreciationamortization, non-cash pensioncertain post-retirement benefits, non-cash stock compensation, severanceother related termination costs,all other non-operating income/expenses. Free cash flow represents net income (loss) plus depreciationamortization less capital expenditures. Adjusted free cash flow represents free cash flow as defined above, excluding the network expansion capital investments. Free cash flowadjusted free cash flow are a measure of operating cash flows available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity. Net debt represents total long-term debt (including current maturities) less cashcash equivalents. Net debt can be used as a component in measuring leverage. The company believes these non-GAAP measures, viewed in addition to but not in lieu of its reported GAAP results, provide useful information to investors as they are an integral part of the internal evaluation of operating performance. In addition, they are measures that the company uses to evaluate management's effectiveness. Reconciliations to the comparable GAAP measures are provided in the accompanying financialoperating summaries. SureWest's non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies.
Conference CallWebcast
SureWest Communications will not host an investor call with respect to the financial results.
Additional InformationWhere to Find It
In connection with the proposed transaction, Consolidated will file a registration statement on Form S-4 with the SEC, which will include the proxy statementalso constitute a prospectus with respect to the Consolidated common stock. SureWest will mail the proxy statement/prospectus to its shareholders once the Form S-4 has been declared effective. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Once filed with the SEC, investors may obtain free copies of the registration statementproxy statement/prospectus, as well as other filings containing information about ConsolidatedSureWest, without charge, at the SEC's website (http://www.sec.gov/). These documents may also be obtained free of charge from SureWest's Investor Relations website (http://www.surw.com/) or by directing a request to: SureWest Investor Relations, P.O. Box 969, Roseville, CA95678 or by calling 916.786.1831. Copies of Consolidated's filings may be obtained free of charge from Consolidated's Investor Relations website (http://ir.consolidated.com/) or by directing a request to: Consolidated Investor Relations, 121 South 17th Street, Mattoon, IL61938.
SureWest, Consolidatedtheir respective officersdirectors may be deemed, under SEC rules, to be participants in the solicitation of proxies from shareholders with respect to the proposed Merger. Information regarding the officersdirectors of SureWest is included in its definitive proxy statement for its 2011 annual meeting filed with the SEC on April 7, 2011. Information regarding the officersdirectors of Consolidated is included in its definitive proxy statement for its 2011 annual meeting filed with the SEC on March 30, 2011. More detailed information regarding the identity of potential participants in the solicitation,their direct or indirect interests, by securities, holdings or otherwise, which interests may be different from those of the company's shareholders generally, will be set forth in the proxy statement/prospectusother materials to be filed with the SEC in connection with the proposed transaction.
About SureWest
SureWest Communications is a leading integrated communications providerthe bandwidth leader in the markets it serves. Headquartered in Northern Californiafor more than 95 years, SureWest offers bundled residentialcommercial services in the greater SacramentoKansas Cityregions that include IP-based digitalhigh-definition television, high-speed Internet, Voice over IP,locallong distance telephone. SureWest was the nation's first provider to launch residential HDTV over an IP networkoffers one of the nation's fastest symmetrical Internet services with speeds of up to 50 Mbps in each direction on its fiber-to-the-home network. For up-to-date information on productsservices, visit the company on .
Safe Harbor Statement
Statements made in this news release that are not historical facts are forward-looking statementsare made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements may be identified by the use of words such as "may," "will," "should," "expect," "plan," "anticipate" or "project," or the negative of those words or other comparable words. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-looking statements are subject to a number of risks, assumptionsuncertainties that could cause the company's actual results to differ from those projected in such forward-looking statements. Important factors that could cause actual results to differ from those set forth in the forward-looking statements include, but are not limited to, advances in telecommunications technology, changes in the telecommunications regulatory environment, changes in the financial stability of other telecommunications providers who are customers of the company, changes in competition in markets in which the company operates, adverse circumstances affecting the economy in California, KansasMissouriin general,in the greater Sacramento, Californiagreater Kansas City, KansasMissouriareas in particular, the availability of future financing, changes in the demand for servicesproducts, new productservice developmentintroductions,pendingfuture litigation.
Contacts:
Ron Rogers
Corporate Communications
916-746-3123
r.rogers@surewest.com
Misty Wells
Investor Relations
916-786-1799
m.wells@surewest.com
SUREWEST COMMUNICATIONS | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
(Unaudited; Amounts in thousands, except per share amounts) | ||||||||||
Quarters Ended | ||||||||||
December 31, | September 30, | $ | % | |||||||
2011 | 2011 | Change | Change | |||||||
Operating revenues: | ||||||||||
Broadband | $ 49,010 | $ 48,018 | $ 992 | 2% | ||||||
Telecom | 14,529 | 14,979 | (450) | (3%) | ||||||
Total operating revenues | 63,539 | 62,997 | 542 | 1% | ||||||
Operating expenses: | ||||||||||
Cost of servicesproducts (exclusive of depreciationamortization) | 28,919 | 28,566 | 353 | 1% | ||||||
Customer operationsselling | 7,631 | 7,771 | (140) | (2%) | ||||||
Generaladministrative | 6,496 | 6,879 | (383) | (6%) | ||||||
Depreciationamortization | 16,023 | 15,810 | 213 | 1% | ||||||
Total operating expenses | 59,069 | 59,026 | 43 | 0% | ||||||
Income from operations | 4,470 | 3,971 | 499 | 13% | ||||||
Other income (expense): | ||||||||||
Investment income | 3 | 4 | (1) | (25%) | ||||||
Interest expense | (2,074) | (2,497) | 423 | 17% | ||||||
Other, net | 208 | (546) | 754 | 138% | ||||||
Total other income (expense), net | (1,863) | (3,039) | 1,176 | 39% | ||||||
Income from operations before income taxes | 2,607 | 932 | 1,675 | 180% | ||||||
Income tax expense | 1,124 | 289 | 835 | 289% | ||||||
Net income | $ 1,483 | $ 643 | $ 840 | 131% | ||||||
Basicdiluted earnings per share | $ 0.11 | $ 0.05 | $ 0.06 | |||||||
Shares of common stock used to calculate earnings per share: | ||||||||||
Basic | 13,948 | 13,918 | 30 | |||||||
Diluted | 14,035 | 14,023 | 12 | |||||||
Dividends per share | $ 0.10 | $ 0.08 | $ 0.02 | |||||||
SUREWEST COMMUNICATIONS | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
(Unaudited; Amounts in thousands, except per share amounts) | ||||||||||
Quarters Ended December 31, | $ | % | ||||||||
2011 | 2010 | Change | Change | |||||||
Operating revenues: | ||||||||||
Broadband | $ 49,010 | $ 45,032 | $ 3,978 | 9% | ||||||
Telecom | 14,529 | 16,614 | (2,085) | (13%) | ||||||
Total operating revenues | 63,539 | 61,646 | 1,893 | 3% | ||||||
Operating expenses: | ||||||||||
Cost of servicesproducts (exclusive of depreciationamortization) | 28,919 | 26,948 | 1,971 | 7% | ||||||
Customer operationsselling | 7,631 | 7,095 | 536 | 8% | ||||||
Generaladministrative | 6,496 | 6,828 | (332) | (5%) | ||||||
Depreciationamortization | 16,023 | 15,777 | 246 | 2% | ||||||
Total operating expenses | 59,069 | 56,648 | 2,421 | 4% | ||||||
Income from operations | 4,470 | 4,998 | (528) | (11%) | ||||||
Other income (expense): | ||||||||||
Investment income | 3 | 15 | (12) | (80%) | ||||||
Interest expense | (2,074) | (2,157) | 83 | 4% | ||||||
Other, net | 208 | 107 | 101 | 94% | ||||||
Total other income (expense), net | (1,863) | (2,035) | 172 | 8% | ||||||
Income from operations before income taxes | 2,607 | 2,963 | (356) | (12%) | ||||||
Income tax expense | 1,124 | 1,012 | 112 | 11% | ||||||
Net income | $ 1,483 | $ 1,951 | $ (468) | (24%) | ||||||
Basicdiluted earnings per share | $ 0.11 | $ 0.14 | $ (0.03) | |||||||
Shares of common stock used to calculate earnings per share: | ||||||||||
Basic | 13,948 | 13,694 | 254 | |||||||
Diluted | 14,035 | 13,694 | 341 | |||||||
Dividends per share | $ 0.10 | $ - | $ 0.10 | |||||||
SUREWEST COMMUNICATIONS | ||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||
(Unaudited; Amounts in thousands, except per share amounts) | ||||||||||
Years Ended December 31, | $ | % | ||||||||
2011 | 2010 | Change | Change | |||||||
Operating revenues: | ||||||||||
Broadband | $ 188,366 | $ 174,546 | $ 13,820 | 8% | ||||||
Telecom | 59,687 | 68,953 | (9,266) | (13%) | ||||||
Total operating revenues | 248,053 | 243,499 | 4,554 | 2% | ||||||
Operating expenses: | ||||||||||
Cost of servicesproducts (exclusive of depreciationamortization) | 110,271 | 105,719 | 4,552 | 4% | ||||||
Customer operationsselling | 29,777 | 29,637 | 140 | 0% | ||||||
Generaladministrative | 29,315 | 31,124 | (1,809) | (6%) | ||||||
Depreciationamortization | 63,965 | 61,825 | 2,140 | 3% | ||||||
Total operating expenses | 233,328 | 228,305 | 5,023 | 2% | ||||||
Income from operations | 14,725 | 15,194 | (469) | (3%) | ||||||
Other income (expense): | ||||||||||
Investment income | 39 | 77 | (38) | (49%) | ||||||
Interest expense | (11,586) | (8,346) | (3,240) | (39%) | ||||||
Other, net | (41) | (216) | 175 | 81% | ||||||
Total other income (expense), net | (11,588) | (8,485) | (3,103) | (37%) | ||||||
Income from operations before income taxes | 3,137 | 6,709 | (3,572) | (53%) | ||||||
Income tax expense | 1,335 | 3,354 | (2,019) | (60%) | ||||||
Net income | $ 1,802 | $ 3,355 | $ (1,553) | (46%) | ||||||
Basicdiluted earnings per share | $ 0.13 | $ 0.24 | $ (0.11) | |||||||
Shares of common stock used to calculate earnings per share: | ||||||||||
Basic | 13,876 | 13,836 | 40 | |||||||
Diluted | 13,936 | 13,836 | 100 | |||||||
Dividends per share | $ 0.26 | $ - | $ 0.26 | |||||||
SureWest Communications | |||||||||||||||||||||||||||||||||
Quarterly Selected Financial Results & Reconciliations of Non-GAAP Measures | |||||||||||||||||||||||||||||||||
(on a consolidateda segment basis) | |||||||||||||||||||||||||||||||||
(Unaudited; Amounts in thousands) | |||||||||||||||||||||||||||||||||
Consolidated Results of Operations | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Operating revenues (1) | |||||||||||||||||||||||||||||||||
Broadband | $ 42,577 | $ 43,076 | $ 43,861 | $ 45,032 | $ 174,546 | $ 45,379 | $ 45,959 | $ 48,018 | $ 49,010 | $ 188,366 | $ 13,820 | 8% | $ 3,978 | 9% | $ 992 | 2% | |||||||||||||||||
Telecom | 17,611 | 17,472 | 17,256 | 16,614 | 68,953 | 15,176 | 15,003 | 14,979 | 14,529 | 59,687 | (9,266) | (13%) | (2,085) | (13%) | (450) | (3%) | |||||||||||||||||
Total operating revenues | 60,188 | 60,548 | 61,117 | 61,646 | 243,499 | 60,555 | 60,962 | 62,997 | 63,539 | 248,053 | 4,554 | 2% | 1,893 | 3% | 542 | 1% | |||||||||||||||||
Operating expenses(1) | 41,940 | 43,249 | 40,420 | 40,871 | 166,480 | 42,792 | 40,309 | 43,216 | 43,046 | 169,363 | 2,883 | 2% | 2,175 | 5% | (170) | (0%) | |||||||||||||||||
Depreciationamortization | 15,106 | 15,262 | 15,680 | 15,777 | 61,825 | 15,775 | 16,357 | 15,810 | 16,023 | 63,965 | 2,140 | 3% | 246 | 2% | 213 | 1% | |||||||||||||||||
Income from operations | $ 3,142 | $ 2,037 | $ 5,017 | $ 4,998 | $ 15,194 | $ 1,988 | $ 4,296 | $ 3,971 | $ 4,470 | $ 14,725 | $ (469) | (3%) | $ (528) | (11%) | $ 499 | 13% | |||||||||||||||||
Consolidated Reconciliation of Adjusted EBITDA to Net Income (Loss) | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Net income (loss) | $ 527 | $ (527) | $ 1,404 | $ 1,951 | $ 3,355 | $ (1,644) | $ 1,320 | $ 643 | $ 1,483 | $ 1,802 | $ (1,553) | (46%) | $ (468) | (24%) | $ 840 | 131% | |||||||||||||||||
Add: income tax expense | 824 | 190 | 1,328 | 1,012 | 3,354 | (562) | 484 | 289 | 1,124 | 1,335 | (2,019) | (60%) | 112 | 11% | 835 | 289% | |||||||||||||||||
Less: other (income)/expense | 1,791 | 2,374 | 2,285 | 2,035 | 8,485 | 4,194 | 2,492 | 3,039 | 1,863 | 11,588 | 3,103 | 37% | (172) | (8%) | (1,176) | (39%) | |||||||||||||||||
Income from operations | 3,142 | 2,037 | 5,017 | 4,998 | 15,194 | 1,988 | 4,296 | 3,971 | 4,470 | 14,725 | (469) | (3%) | (528) | (11%) | 499 | 13% | |||||||||||||||||
Add (subtract): | |||||||||||||||||||||||||||||||||
Depreciationamortization | 15,106 | 15,262 | 15,680 | 15,777 | 61,825 | 15,775 | 16,357 | 15,810 | 16,023 | 63,965 | 2,140 | 3% | 246 | 2% | 213 | 1% | |||||||||||||||||
Non-cash pension expense | 420 | 341 | 371 | 371 | 1,503 | 313 | 394 | 351 | 346 | 1,404 | (99) | (7%) | (25) | (7%) | (5) | (1%) | |||||||||||||||||
Non-cash stock compensation expense | 800 | 1,144 | 267 | 634 | 2,845 | 1,645 | 1,182 | 747 | 763 | 4,337 | 1,492 | 52% | 129 | 20% | 16 | 2% | |||||||||||||||||
Severanceother related costs (3) | - | 1,144 | - | - | 1,144 | - | - | - | - | - | (1,144) | (100%) | - | - | - | - | |||||||||||||||||
Adjusted EBITDA (2) | $ 19,468 | $ 19,928 | $ 21,335 | $ 21,780 | $ 82,511 | $ 19,721 | $ 22,229 | $ 20,879 | $ 21,602 | $ 84,431 | $ 1,920 | 2% | $ (178) | (1%) | $ 723 | 3% | |||||||||||||||||
Adjusted EBITDA margin | 32% | 33% | 35% | 35% | 34% | 33% | 36% | 33% | 34% | 34% | |||||||||||||||||||||||
Consolidated Free Cash FlowAdjusted Free Cash Flow | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Net income (loss) | $ 527 | $ (527) | $ 1,404 | $ 1,951 | $ 3,355 | $ (1,644) | $ 1,320 | $ 643 | $ 1,483 | $ 1,802 | $ (1,553) | (46%) | $ (468) | (24%) | $ 840 | 131% | |||||||||||||||||
Add: Depreciationamortization | 15,106 | 15,262 | 15,680 | 15,777 | 61,825 | 15,775 | 16,357 | 15,810 | 16,023 | 63,965 | 2,140 | 3% | 246 | 2% | 213 | 1% | |||||||||||||||||
Less: Capital expenditures | (12,536) | (13,878) | (12,857) | (13,289) | (52,560) | (11,452) | (20,671) | (18,658) | (21,747) | (72,528) | (19,968) | (38%) | (8,458) | (64%) | (3,089) | (17%) | |||||||||||||||||
Free cash flow (4) | 3,097 | 857 | 4,227 | 4,439 | 12,620 | 2,679 | (2,994) | (2,205) | (4,241) | (6,761) | (19,381) | (154%) | (8,680) | (196%) | (2,036) | (92%) | |||||||||||||||||
Add: Capital expenditures for network expansion | 368 | 588 | 329 | 26 | 1,311 | 1,415 | 7,020 | 7,455 | 7,522 | 23,412 | 22,101 | 1686% | 7,496 | na | 67 | 1% | |||||||||||||||||
Adjusted free cash flow (4) | $ 3,465 | $ 1,445 | $ 4,556 | $ 4,465 | $ 13,931 | $ 4,094 | $ 4,026 | $ 5,250 | $ 3,281 | $ 16,651 | $ 2,720 | 20% | $ (1,184) | (27%) | $ (1,969) | (38%) | |||||||||||||||||
Consolidated Net Debt Ratio | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | For 2011 Quarters Ended: | Quarter | Sequential | ||||||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | March 31 | June 30 | September 30 | December 31 | $ chg | % | $ chg | % | ||||||||||||||||||||||
Net Debt: | |||||||||||||||||||||||||||||||||
Long-term debt, including current maturities | $ 215,045 | $ 219,045 | $ 209,045 | $ 205,409 | $ 210,000 | $ 210,000 | $ 206,250 | $ 204,375 | $ (1,034) | (1%) | $ (1,875) | (1%) | |||||||||||||||||||||
Less: Cashcash equivalents | (6,982) | (6,154) | (3,215) | (2,937) | (12,881) | (11,047) | (8,932) | (4,208) | (1,271) | (43%) | 4,724 | 53% | |||||||||||||||||||||
Net Debt (5) | $ 208,063 | $ 212,891 | $ 205,830 | $ 202,472 | $ 197,119 | $ 198,953 | $ 197,318 | $ 200,167 | $ (2,305) | (1%) | $ 2,849 | 1% | |||||||||||||||||||||
Ratio of Net Debt to Adjusted EBITDA: | |||||||||||||||||||||||||||||||||
Net Debt | $ 208,063 | $ 212,891 | $ 205,830 | $ 202,472 | $ 197,119 | $ 198,953 | $ 197,318 | $ 200,167 | |||||||||||||||||||||||||
Divided by: Adjusted EBITDA (TTM) | $ 77,873 | $ 77,942 | $ 80,316 | $ 82,511 | $ 82,764 | $ 85,065 | $ 84,609 | $ 84,431 | |||||||||||||||||||||||||
Ratio of net debt to Adjusted EBITDA (6) | 2.67 | 2.73 | 2.56 | 2.45 | 2.38 | 2.34 | 2.33 | 2.37 | |||||||||||||||||||||||||
Broadband Results of Operations | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Data (7) | $ 12,073 | $ 11,921 | $ 11,844 | $ 12,116 | $ 47,954 | $ 12,184 | $ 12,281 | $ 13,260 | $ 13,480 | $ 51,205 | $ 3,251 | 7% | $ 1,364 | 11% | $ 220 | 2% | |||||||||||||||||
Video (7) | 12,409 | 12,453 | 12,515 | 12,987 | 50,364 | 13,312 | 13,466 | 14,039 | 14,178 | 54,995 | 4,631 | 9% | 1,191 | 9% | 139 | 1% | |||||||||||||||||
Voice (7) | 6,492 | 6,537 | 6,596 | 6,535 | 26,160 | 6,335 | 6,341 | 6,361 | 6,331 | 25,368 | (792) | (3%) | (204) | (3%) | (30) | (0%) | |||||||||||||||||
Total residential revenues | 30,974 | 30,911 | 30,955 | 31,638 | 124,478 | 31,831 | 32,088 | 33,660 | 33,989 | 131,568 | 7,090 | 6% | 2,351 | 7% | 329 | 1% | |||||||||||||||||
Business | 10,570 | 11,253 | 11,979 | 12,407 | 46,209 | 12,614 | 12,999 | 13,557 | 14,223 | 53,393 | 7,184 | 16% | 1,816 | 15% | 666 | 5% | |||||||||||||||||
Access | 727 | 541 | 481 | 486 | 2,235 | 556 | 504 | 509 | 476 | 2,045 | (190) | (9%) | (10) | (2%) | (33) | (6%) | |||||||||||||||||
Other | 306 | 371 | 446 | 501 | 1,624 | 378 | 368 | 292 | 322 | 1,360 | (264) | (16%) | (179) | (36%) | 30 | 10% | |||||||||||||||||
Total operating revenues from external customers | 42,577 | 43,076 | 43,861 | 45,032 | 174,546 | 45,379 | 45,959 | 48,018 | 49,010 | 188,366 | 13,820 | 8% | 3,978 | 9% | 992 | 2% | |||||||||||||||||
Intersegment revenues | 168 | 145 | 110 | 141 | 564 | 160 | 155 | 152 | 177 | 644 | 80 | 14% | 36 | 26% | 25 | 16% | |||||||||||||||||
Total operating revenues | 42,745 | 43,221 | 43,971 | 45,173 | 175,110 | 45,539 | 46,114 | 48,170 | 49,187 | 189,010 | 13,900 | 8% | 4,014 | 9% | 1,017 | 2% | |||||||||||||||||
Operating expenses without depreciation | 35,137 | 36,003 | 34,304 | 34,838 | 140,282 | 36,337 | 35,624 | 37,179 | 38,062 | 147,202 | 6,920 | 5% | 3,224 | 9% | 883 | 2% | |||||||||||||||||
Depreciationamortization | 12,180 | 12,140 | 12,609 | 12,692 | 49,621 | 12,688 | 13,098 | 12,574 | 12,759 | 51,119 | 1,498 | 3% | 67 | 1% | 185 | 1% | |||||||||||||||||
Loss from operations | $ (4,572) | $ (4,922) | $ (2,942) | $ (2,357) | $ (14,793) | $ (3,486) | $ (2,608) | $ (1,583) | $ (1,634) | $ (9,311) | $ 5,482 | 37% | $ 723 | 31% | $ (51) | (3%) | |||||||||||||||||
Broadband Reconciliation of Adjusted EBITDA to Net Loss | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Net loss | $ (3,720) | $ (4,269) | $ (3,082) | $ (1,802) | $ (12,873) | $ (4,405) | $ (3,006) | $ (2,801) | $ (3,654) | $ (13,866) | $ (993) | (8%) | $ (1,852) | (103%) | $ (853) | (30%) | |||||||||||||||||
Add: income tax benefits | (2,504) | (2,867) | (2,066) | (2,456) | (9,893) | (2,928) | (1,998) | (1,867) | (36) | (6,829) | 3,064 | 31% | 2,420 | 99% | 1,831 | 98% | |||||||||||||||||
Less: other (income)/expense | 1,652 | 2,214 | 2,206 | 1,901 | 7,973 | 3,847 | 2,396 | 3,085 | 2,056 | 11,384 | 3,411 | 43% | 155 | 8% | (1,029) | (33%) | |||||||||||||||||
Loss from operations | (4,572) | (4,922) | (2,942) | (2,357) | (14,793) | (3,486) | (2,608) | (1,583) | (1,634) | (9,311) | 5,482 | 37% | 723 | 31% | (51) | (3%) | |||||||||||||||||
Add (subtract): | |||||||||||||||||||||||||||||||||
Depreciationamortization | 12,180 | 12,140 | 12,609 | 12,692 | 49,621 | 12,688 | 13,098 | 12,574 | 12,759 | 51,119 | 1,498 | 3% | 67 | 1% | 185 | 1% | |||||||||||||||||
Non-cash pension expense | 205 | 162 | 181 | 179 | 727 | 153 | 187 | 173 | 167 | 680 | (47) | (6%) | (12) | (7%) | (6) | (3%) | |||||||||||||||||
Non-cash stock compensation expense | 386 | 560 | 160 | 343 | 1,449 | 978 | 720 | 457 | 469 | 2,624 | 1,175 | 81% | 126 | 37% | 12 | 3% | |||||||||||||||||
Severanceother related costs (3) | - | 469 | - | - | 469 | - | - | - | - | - | (469) | (100%) | - | - | - | - | |||||||||||||||||
Adjusted EBITDA (2) | $ 8,199 | $ 8,409 | $ 10,008 | $ 10,857 | $ 37,473 | $ 10,333 | $ 11,397 | $ 11,621 | $ 11,761 | $ 45,112 | $ 7,639 | 20% | $ 904 | 8% | $ 140 | 1% | |||||||||||||||||
Adjusted EBITDA margin | 19% | 19% | 23% | 24% | 21% | 23% | 25% | 24% | 24% | 24% | |||||||||||||||||||||||
Broadband Free Cash FlowAdjusted Free Cash Flow | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Net loss | $ (3,720) | $ (4,269) | $ (3,082) | $ (1,802) | $ (12,873) | $ (4,405) | $ (3,006) | $ (2,801) | $ (3,654) | $ (13,866) | $ (993) | (8%) | $ (1,852) | (103%) | $ (853) | (30%) | |||||||||||||||||
Add: Depreciationamortization | 12,180 | 12,140 | 12,609 | 12,692 | 49,621 | 12,688 | 13,098 | 12,574 | 12,759 | 51,119 | 1,498 | 3% | 67 | 1% | 185 | 1% | |||||||||||||||||
Less: Capital expenditures | (8,723) | (11,805) | (11,370) | (12,046) | (43,944) | (9,574) | (16,706) | (16,677) | (17,661) | (60,618) | (16,674) | (38%) | (5,615) | (47%) | (984) | (6%) | |||||||||||||||||
Free cash flow (4) | (263) | (3,934) | (1,843) | (1,156) | (7,196) | (1,291) | (6,614) | (6,904) | (8,556) | (23,365) | (16,169) | (225%) | (7,400) | (640%) | (1,652) | (24%) | |||||||||||||||||
Add: Capital expenditures for network expansion | 31 | 57 | 176 | 2 | 266 | 1,013 | 6,492 | 6,500 | 7,044 | 21,049 | 20,783 | 7813% | 7,042 | na | 544 | 8% | |||||||||||||||||
Adjusted free cash flow (4) | $ (232) | $ (3,877) | $ (1,667) | $ (1,154) | $ (6,930) | $ (278) | $ (122) | $ (404) | $ (1,512) | $ (2,316) | $ 4,614 | 67% | $ (358) | (31%) | $ (1,108) | (274%) | |||||||||||||||||
Telecom Results of Operations | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Residential | $ 4,868 | $ 4,479 | $ 4,086 | $ 3,843 | $ 17,276 | $ 3,592 | $ 3,393 | $ 3,196 | $ 3,048 | $ 13,229 | $ (4,047) | (23%) | $ (795) | (21%) | $ (148) | (5%) | |||||||||||||||||
Business | 8,418 | 8,400 | 8,750 | 8,592 | 34,160 | 8,394 | 8,294 | 8,122 | 8,390 | 33,200 | (960) | (3%) | (202) | (2%) | 268 | 3% | |||||||||||||||||
Access | 4,160 | 4,408 | 4,274 | 4,053 | 16,895 | 3,054 | 3,148 | 3,559 | 2,999 | 12,760 | (4,135) | (24%) | (1,054) | (26%) | (560) | (16%) | |||||||||||||||||
Other | 165 | 185 | 146 | 126 | 622 | 136 | 168 | 102 | 92 | 498 | (124) | (20%) | (34) | (27%) | (10) | (10%) | |||||||||||||||||
Total operating revenues from external customers | 17,611 | 17,472 | 17,256 | 16,614 | 68,953 | 15,176 | 15,003 | 14,979 | 14,529 | 59,687 | (9,266) | (13%) | (2,085) | (13%) | (450) | (3%) | |||||||||||||||||
Intersegment revenues | 4,919 | 5,091 | 5,275 | 5,352 | 20,637 | 5,296 | 5,052 | 5,231 | 5,373 | 20,952 | 315 | 2% | 21 | 0% | 142 | 3% | |||||||||||||||||
Total operating revenues | 22,530 | 22,563 | 22,531 | 21,966 | 89,590 | 20,472 | 20,055 | 20,210 | 19,902 | 80,639 | (8,951) | (10%) | (2,064) | (9%) | (308) | (2%) | |||||||||||||||||
Operating expenses without depreciation | 11,890 | 12,482 | 11,501 | 11,526 | 47,399 | 11,911 | 9,892 | 11,420 | 10,534 | 43,757 | (3,642) | (8%) | (992) | (9%) | (886) | (8%) | |||||||||||||||||
Depreciationamortization | 2,926 | 3,122 | 3,071 | 3,085 | 12,204 | 3,087 | 3,259 | 3,236 | 3,264 | 12,846 | 642 | 5% | 179 | 6% | 28 | 1% | |||||||||||||||||
Income from operations | $ 7,714 | $ 6,959 | $ 7,959 | $ 7,355 | $ 29,987 | $ 5,474 | $ 6,904 | $ 5,554 | $ 6,104 | $ 24,036 | $ (5,951) | (20%) | $ (1,251) | (17%) | $ 550 | 10% | |||||||||||||||||
Telecom Reconciliation of Adjusted EBITDA to Net Income | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Net income | $ 4,247 | $ 3,742 | $ 4,486 | $ 3,753 | $ 16,228 | $ 2,761 | $ 4,326 | $ 3,444 | $ 5,137 | $ 15,668 | $ (560) | (3%) | $ 1,384 | 37% | $ 1,693 | 49% | |||||||||||||||||
Add: income tax expense | 3,328 | 3,057 | 3,394 | 3,468 | 13,247 | 2,366 | 2,482 | 2,156 | 1,160 | 8,164 | (5,083) | (38%) | (2,308) | (67%) | (996) | (46%) | |||||||||||||||||
Less: other (income)/expense | 139 | 160 | 79 | 134 | 512 | 347 | 96 | (46) | (193) | 204 | (308) | (60%) | (327) | (244%) | (147) | (320%) | |||||||||||||||||
Income from operations | 7,714 | 6,959 | 7,959 | 7,355 | 29,987 | 5,474 | 6,904 | 5,554 | 6,104 | 24,036 | (5,951) | (20%) | (1,251) | (17%) | 550 | 10% | |||||||||||||||||
Add (subtract): | |||||||||||||||||||||||||||||||||
Depreciationamortization | 2,926 | 3,122 | 3,071 | 3,085 | 12,204 | 3,087 | 3,259 | 3,236 | 3,264 | 12,846 | 642 | 5% | 179 | 6% | 28 | 1% | |||||||||||||||||
Non-cash pension expense | 215 | 179 | 190 | 192 | 776 | 160 | 207 | 178 | 179 | 724 | (52) | (7%) | (13) | (7%) | 1 | 1% | |||||||||||||||||
Non-cash stock compensation expense | 414 | 584 | 107 | 291 | 1,396 | 667 | 462 | 290 | 294 | 1,713 | 317 | 23% | 3 | 1% | 4 | 1% | |||||||||||||||||
Severanceother related costs (3) | - | 675 | - | - | 675 | - | - | - | - | - | (675) | (100%) | - | - | - | - | |||||||||||||||||
Adjusted EBITDA (2) | $ 11,269 | $ 11,519 | $ 11,327 | $ 10,923 | $ 45,038 | $ 9,388 | $ 10,832 | $ 9,258 | $ 9,841 | $ 39,319 | $ (5,719) | (13%) | $ (1,082) | (10%) | $ 583 | 6% | |||||||||||||||||
Adjusted EBITDA margin | 50% | 51% | 50% | 50% | 50% | 46% | 54% | 46% | 49% | 49% | |||||||||||||||||||||||
Telecom Free Cash FlowAdjusted Free Cash Flow | |||||||||||||||||||||||||||||||||
For 2010 Quarters Ended: | Twelve Months Ended | For 2011 Quarters Ended: | Twelve Months Ended | Twelve Months | Quarter | Sequential | |||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | December 31, 2010 | March 31 | June 30 | September 30 | December 31 | December 31, 2011 | $ chg | % | $ chg | % | $ chg | % | ||||||||||||||||||
Net income | $ 4,247 | $ 3,742 | $ 4,486 | $ 3,753 | $ 16,228 | $ 2,761 | $ 4,326 | $ 3,444 | $ 5,137 | $ 15,668 | $ (560) | (3%) | $ 1,384 | 37% | $ 1,693 | 49% | |||||||||||||||||
Add: Depreciationamortization | 2,926 | 3,122 | 3,071 | 3,085 | 12,204 | 3,087 | 3,259 | 3,236 | 3,264 | 12,846 | 642 | 5% | 179 | 6% | 28 | 1% | |||||||||||||||||
Less: Capital expenditures | (3,218) | (1,729) | (1,442) | (897) | (7,286) | (1,704) | (2,598) | (1,971) | (3,394) | (9,667) | (2,381) | (33%) | (2,497) | (278%) | (1,423) | (72%) | |||||||||||||||||
Free cash flow (4) | 3,955 | 5,135 | 6,115 | 5,941 | 21,146 | 4,144 | 4,987 | 4,709 | 5,007 | 18,847 | (2,299) | (11%) | (934) | (16%) | 298 | 6% | |||||||||||||||||
Add: Capital expenditures for network expansion | 337 | 531 | 153 | 24 | 1,045 | 402 | 528 | 955 | 478 | 2,363 | 1,318 | 126% | 454 | 1892% | (477) | (50%) | |||||||||||||||||
Adjusted free cash flow (4) | $ 4,292 | $ 5,666 | $ 6,268 | $ 5,965 | $ 22,191 | $ 4,546 | $ 5,515 | $ 5,664 | $ 5,485 | $ 21,210 | $ (981) | (4%) | $ (480) | (8%) | $ (179) | (3%) | |||||||||||||||||
(1)External customers only. | |||||||||||||||||||||||||||||||||
(2) Adjusted EBITDA represents net income (loss) excluding amounts for income taxes; depreciationamortization; non-cash pensioncertain post-retirement benefits; non-cash stock compensation; severanceother related termination costs;all other non-operating income/expenses. Adjusted EBITDA is a common measure of operating performance in the telecommunications industry. Adjusted EBITDA is not a measure of financial performance under United States generally accepted accounting principlesshould not be considered in isolation or as a substitute for consolidated net income (loss) as a measure of performance. | |||||||||||||||||||||||||||||||||
(3)Severanceother related termination costs related to the workforce reduction initiative implemented during the quarter ended June 30, 2010. Amounts exclude the termination costs related to stock compensation expense, which are included in non-cash stock compensation expense of the adjusted EBITDA reconciliation. | |||||||||||||||||||||||||||||||||
(4)Free cash flow is a measure of operating cash flows available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity. Consolidated free cash flow includes capital expenditures for our corporate operating unit. Adjusted free cash flow represents free cash flow excluding capital expenditures for network expansion. Free cash flowadjusted free cash flow are not measures of financial performance under United States generally accepted accounting principlesshould not be considered in isolation or as a substitute for consolidated net income (loss) as a measure of performancenet cash provided by operating activities as a measure of liquidity. | |||||||||||||||||||||||||||||||||
(5) Net debt represents total long-term debt (including current maturities) less cashcash equivalents. Net debt can be a component in measuring leverage. Net debt is not a measure determined in accordance with United States generally accepted accounting principlesshould not be considered as a substitute for total long-term debt. | |||||||||||||||||||||||||||||||||
(6) The ratio of net debt to adjusted EBITDA is calculated as net debt divided by adjusted EBITDA based on a trailing twelve month (TTM) period. This measure provides useful information to our investors about our debt level relative to our performanceabout our ability to meet our financial obligations. | |||||||||||||||||||||||||||||||||
(7) Operating revenues in the Broadband segment have been reclassified for a change during the fourth quarter of 2011 in the classification of promotional discounts between residential voice, videodata revenue. Prior period revenues have been reclassified to conform to the current period presentation. | |||||||||||||||||||||||||||||||||
SUREWEST COMMUNICATIONS | ||||||||||||||||||
SELECTED OPERATING METRICS | ||||||||||||||||||
As offor the Quarters Ended | ||||||||||||||||||
BROADBAND | 12/31/2011(1) | 12/31/2010(1) | Change | % Change | 9/30/2011(1) | Change | % Change | |||||||||||
Residential | ||||||||||||||||||
Video | ||||||||||||||||||
Marketable Homes (2) | 296,700 | 271,800 | 24,900 | 9% | 287,900 | 8,800 | 3% | |||||||||||
RGUs | 66,400 | 61,800 | 4,600 | 7% | 64,900 | 1,500 | 2% | |||||||||||
Penetration (2) | 22.4% | 22.7% | -0.4% | (2%) | 22.5% | -0.2% | (1%) | |||||||||||
ARPU | $72 | $70 | $2 | 2% | $73 | ($1) | (1%) | |||||||||||
Voice | ||||||||||||||||||
Marketable Homes | 327,700 | 311,300 | 16,400 | 5% | 321,700 | 6,000 | 2% | |||||||||||
RGUs | 76,400 | 74,900 | 1,500 | 2% | 76,100 | 300 | 0% | |||||||||||
Penetration | 23.3% | 24.1% | -0.7% | (3%) | 23.7% | -0.3% | (1%) | |||||||||||
ARPU | $28 | $29 | ($1) | (5%) | $28 | $0 | (1%) | |||||||||||
Data | ||||||||||||||||||
Marketable Homes | 327,700 | 311,300 | 16,400 | 5% | 321,700 | 6,000 | 2% | |||||||||||
RGUs | 102,600 | 99,400 | 3,200 | 3% | 101,300 | 1,300 | 1% | |||||||||||
Penetration | 31.3% | 31.9% | -0.6% | (2%) | 31.5% | -0.2% | (1%) | |||||||||||
ARPU | $44 | $41 | $3 | 8% | $44 | $0 | 0% | |||||||||||
Total | ||||||||||||||||||
RGUs | 245,400 | 236,100 | 9,300 | 4% | 242,300 | 3,100 | 1% | |||||||||||
Subscriber totals | ||||||||||||||||||
Subscribers (3) | 107,100 | 104,100 | 3,000 | 3% | 105,800 | 1,300 | 1% | |||||||||||
Penetration | 32.7% | 33.4% | -0.8% | (2%) | 32.9% | -0.2% | (1%) | |||||||||||
ARPU (4) | $106 | $101 | $5 | 5% | $107 | ($1) | (0%) | |||||||||||
Triple Play ARPU (5) | $117 | $115 | $2 | 2% | $118 | ($1) | (1%) | |||||||||||
Triple Play RGUs per Subscriber (5) | 2.49 | 2.53 | (0.04) | (2%) | 2.50 | (0.01) | (1%) | |||||||||||
Churn | 1.4% | 1.6% | -0.2% | (10%) | 1.6% | -0.2% | (11%) | |||||||||||
Business (6) | ||||||||||||||||||
Customers | 8,000 | 7,800 | 200 | 3% | 8,000 | 0 | 0% | |||||||||||
ARPU | $592 | $535 | $57 | 11% | $570 | $22 | 4% | |||||||||||
TELECOM | 12/31/2011 | 12/31/2010 | Change | % Change | 9/30/2011 | Change | % Change | |||||||||||
Residential | ||||||||||||||||||
Voice | ||||||||||||||||||
Marketable Homes | 91,900 | 91,500 | 400 | 0% | 91,800 | 100 | 0% | |||||||||||
RGUs (7) | 23,000 | 28,900 | (5,900) | (20%) | 24,200 | (1,200) | (5%) | |||||||||||
Cumulative Migration to Broadband Voice (8) | 18,000 | 15,400 | 2,600 | 17% | 17,500 | 500 | 3% | |||||||||||
Penetration | 25.0% | 31.6% | -6.6% | (21%) | 26.4% | -1.3% | (5%) | |||||||||||
ARPU | $43 | $43 | ($0) | (0%) | $43 | $0 | 1% | |||||||||||
Churn (9) | 1.6% | 2.0% | -0.3% | (18%) | 1.8% | -0.2% | (10%) | |||||||||||
Business(6) | ||||||||||||||||||
Customers | 7,700 | 7,900 | (200) | (3%) | 7,700 | 0 | 0% | |||||||||||
ARPU | $363 | $359 | $4 | 1% | $351 | $12 | 3% | |||||||||||
CONSOLIDATED RESIDENTIAL VOICE RGUs | 12/31/2011 | 12/31/2010 | Change | % Change | 9/30/2011 | Change | % Change | |||||||||||
ILEC Voice RGUs | ||||||||||||||||||
Broadband | 23,100 | 21,000 | 2,100 | 10% | 22,700 | 400 | 2% | |||||||||||
Telecom | 23,000 | 28,900 | (5,900) | (20%) | 24,200 | (1,200) | (5%) | |||||||||||
Total ILEC Voice RGUs (10) | 46,100 | 49,900 | (3,800) | (8%) | 46,900 | (800) | (2%) | |||||||||||
CLEC Residential Voice RGUs (11) | 53,300 | 53,900 | (600) | (1%) | 53,400 | (100) | (0%) | |||||||||||
TOTAL Residential Voice RGUs (12) | 99,400 | 103,800 | (4,400) | (4%) | 100,300 | (900) | (1%) | |||||||||||
TOTAL RESIDENTIAL BROADBAND & TELECOM RGUs | 268,400 | 265,000 | 3,400 | 1% | 266,500 | 1,900 | 1% | |||||||||||
NETWORK METRICS | 12/31/2011 | 12/31/2010 | Change | % Change | 9/30/2011 | Change | % Change | |||||||||||
Marketable Homes - Fiber | 164,500 | 148,500 | 16,000 | 11% | 158,500 | 6,000 | 4% | |||||||||||
Marketable Homes - HFC | 94,000 | 93,600 | 400 | 0% | 94,000 | 0 | 0% | |||||||||||
Marketable Homes - Copper 2-Play | 31,000 | 39,600 | (8,600) | (22%) | 33,800 | (2,800) | (8%) | |||||||||||
Marketable Homes - Copper 3-Play | 38,200 | 29,600 | 8,600 | 29% | 35,400 | 2,800 | 8% | |||||||||||
Total | 327,700 | 310,400 | 17,300 | 6% | 321,700 | 6,000 | 2% | |||||||||||
Note: The calculation of certain metrics have been revised over time to reflect the current view of our business. Where necessary prior period metric calculations have been revised to conform with current practice. All amounts rounded to the nearest 100s, except percentsdollars. | ||||||||||||||||||
(1) During the fourth quarter of 2011, we revised our methodology for allocating subscriber discounts to video, voicedata revenue. The revised methodology facilitates the consistent application of discountsARPU calculation between both our residential markets. Accordingly, the ARPU metrics previously reported for 2009, 20102011 have been revised to conform to current practice. | ||||||||||||||||||
(2) Marketable Homes - Prior to Q110, video marketable homespenetration rate included serviceable homes in SacramentoKansas City fiberhybrid fiber coax (HFC) networks only. With launch of ADTV in Q110, certain copper homes became video serviceable3-play capableare included in marketable home counts. Penetration rates prior to Q110 were not adjusted for small number of video customers on copper network prior to ADTV. | ||||||||||||||||||
(3) A residential subscriber is a customer who subscribes to one or more residential RGUs. | ||||||||||||||||||
(4) ARPU is the total residential revenue per average subscriber. | ||||||||||||||||||
(5) Triple play ARPU includes the total residential revenue per average subscriberTriple play RGUs per Subscriber includes ending RGUs per ending subscriber, for the triple play markets, excluding the ILEC market. | ||||||||||||||||||
(6) A business customer is a customer who subscribes to business data, voice or videorepresents a unique customer account. ARPU is the total business revenue per average customer. | ||||||||||||||||||
(7) A voice RGU is a residential customer who subscribes to one or more voice access lines. | ||||||||||||||||||
(8) Telecom Voice RGU Migration to Broadband Voice are residential Telecom voice RGUs in Line (7) that have ported their Telecom primary access line service to Broadband VoIP. | ||||||||||||||||||
(9) Telecom Churn excludes disconnects in Line (8) that have ported their Telecom primary access line service to Broadband VoIP. | ||||||||||||||||||
(10) ILEC Voice RGUs are the total residential voice RGUs in the ILEC franchise market area that are either a Telecom primary access line or Broadband VoIP subscriber. | ||||||||||||||||||
(11) CLEC Voice RGUs are the total residential voice RGUs in the Kansas CitySacramento markets, excluding the ILEC market. | ||||||||||||||||||
(12) Total Voice RGUs are the total of ILECCLEC residential voice RGUs,represent the total company residential voice RGUs of both the BroadbandTelecom Segments. | ||||||||||||||||||
SUREWEST COMMUNICATIONS | ||||||||||||||||||||||||||||
SELECTED OPERATING METRICS | ||||||||||||||||||||||||||||
As offor the Quarters Ended | ||||||||||||||||||||||||||||
BROADBAND | 3/31/2009(1) | 6/30/2009(1) | 9/30/2009(1) | 12/31/2009(1) | 3/31/2010(1) | 6/30/2010(1) | 9/30/2010(1) | 12/31/2010(1) | 3/31/2011 (1) | 6/30/2011 (1) | 9/30/2011 (1) | 12/31/2011(1) | ||||||||||||||||
Residential | ||||||||||||||||||||||||||||
Video | ||||||||||||||||||||||||||||
Marketable Homes (2) | 236,500 | 239,800 | 240,000 | 240,500 | 261,900 | 265,100 | 268,500 | 271,800 | 272,600 | 281,200 | 287,900 | 296,700 | ||||||||||||||||
RGUs | 59,900 | 59,000 | 59,000 | 58,900 | 58,500 | 60,200 | 61,200 | 61,800 | 63,100 | 64,100 | 64,900 | 66,400 | ||||||||||||||||
Quarterly change | (100) | (900) | 0 | (100) | (400) | 1,700 | 1,000 | 600 | 1,300 | 1,000 | 800 | 1,500 | ||||||||||||||||
Year-over-Year change | 4,800 | 2,000 | 600 | (1,100) | (1,400) | 1,200 | 2,200 | 2,900 | 4,600 | 3,900 | 3,700 | 4,600 | ||||||||||||||||
Penetration (2) | 24.4% | 23.7% | 23.8% | 23.7% | 22.3% | 22.7% | 22.8% | 22.7% | 23.1% | 22.8% | 22.5% | 22.4% | ||||||||||||||||
ARPU | $66 | $68 | $67 | $69 | $71 | $70 | $69 | $70 | $71 | $71 | $73 | $72 | ||||||||||||||||
Voice | ||||||||||||||||||||||||||||
Marketable Homes | 308,200 | 309,300 | 309,400 | 309,700 | 309,900 | 310,400 | 311,200 | 311,300 | 311,600 | 317,400 | 321,700 | 327,700 | ||||||||||||||||
RGUs | 66,000 | 67,700 | 70,000 | 71,300 | 71,800 | 73,900 | 74,900 | 74,900 | 75,600 | 75,900 | 76,100 | 76,400 | ||||||||||||||||
Quarterly change | 2,800 | 1,700 | 2,300 | 1,300 | 500 | 2,100 | 1,000 | 0 | 700 | 300 | 200 | 300 | ||||||||||||||||
Year-over-Year change | 12,500 | 11,400 | 10,300 | 8,100 | 5,800 | 6,200 | 4,900 | 3,600 | 3,800 | 2,000 | 1,200 | 1,500 | ||||||||||||||||
Penetration | 21.5% | 22.0% | 22.7% | 23.1% | 23.2% | 23.8% | 24.1% | 24.1% | 24.3% | 23.9% | 23.7% | 23.3% | ||||||||||||||||
ARPU | $32 | $33 | $31 | $30 | $30 | $30 | $30 | $29 | $28 | $28 | $28 | $28 | ||||||||||||||||
Data | ||||||||||||||||||||||||||||
Marketable Homes | 308,200 | 309,300 | 309,400 | 309,700 | 309,900 | 310,400 | 311,200 | 311,300 | 311,600 | 317,400 | 321,700 | 327,700 | ||||||||||||||||
RGUs | 97,800 | 97,400 | 97,600 | 98,300 | 97,500 | 98,900 | 99,200 | 99,400 | 100,300 | 100,600 | 101,300 | 102,600 | ||||||||||||||||
Quarterly change | 700 | (400) | 200 | 700 | (800) | 1,400 | 300 | 200 | 900 | 300 | 700 | 1,300 | ||||||||||||||||
Year-over-Year change | 6,300 | 3,700 | 2,200 | 1,200 | (300) | 1,500 | 1,600 | 1,100 | 2,800 | 1,700 | 2,100 | 3,200 | ||||||||||||||||
Penetration | 31.8% | 31.6% | 31.6% | 31.8% | 31.5% | 31.9% | 31.9% | 31.9% | 32.2% | 31.7% | 31.5% | 31.3% | ||||||||||||||||
ARPU | $36 | $38 | $38 | $40 | $41 | $40 | $40 | $41 | $41 | $41 | $44 | $44 | ||||||||||||||||
Total | ||||||||||||||||||||||||||||
RGUs | 223,700 | 224,100 | 226,600 | 228,500 | 227,800 | 233,000 | 235,300 | 236,100 | 239,000 | 240,600 | 242,300 | 245,400 | ||||||||||||||||
Quarterly change | 3,400 | 400 | 2,500 | 1,900 | (700) | 5,200 | 2,300 | 800 | 2,900 | 1,600 | 1,700 | 3,100 | ||||||||||||||||
Year-over-Year change | 23,600 | 17,100 | 13,100 | 8,200 | 4,100 | 8,900 | 8,700 | 7,600 | 11,200 | 7,600 | 7,000 | 9,300 | ||||||||||||||||
Subscriber totals | ||||||||||||||||||||||||||||
Subscribers (3) | 103,300 | 102,400 | 103,000 | 103,100 | 102,500 | 103,600 | 104,000 | 104,100 | 104,900 | 105,100 | 105,800 | 107,100 | ||||||||||||||||
Quarterly change | 300 | (900) | 600 | 100 | (600) | 1,100 | 400 | 100 | 800 | 200 | 700 | 1,300 | ||||||||||||||||
Year-over-Year change | 5,800 | 2,900 | 1,900 | 100 | (800) | 1,200 | 1,000 | 1,000 | 2,400 | 1,500 | 1,800 | 3,000 | ||||||||||||||||
Penetration | 33.5% | 33.1% | 33.3% | 33.3% | 33.1% | 33.4% | 33.4% | 33.4% | 33.7% | 33.1% | 32.9% | 32.7% | ||||||||||||||||
ARPU (4) | $93 | $97 | $95 | $99 | $101 | $100 | $99 | $101 | $102 | $102 | $107 | $106 | ||||||||||||||||
Triple Play ARPU (5) | $111 | $114 | $111 | $114 | $116 | $115 | $113 | $115 | $114 | $114 | $118 | $117 | ||||||||||||||||
Triple Play RGUs per Subscriber (5) | 2.56 | 2.55 | 2.54 | 2.54 | 2.53 | 2.54 | 2.53 | 2.53 | 2.52 | 2.51 | 2.50 | 2.49 | ||||||||||||||||
Churn | 1.4% | 1.7% | 1.8% | 1.5% | 1.6% | 1.6% | 1.7% | 1.6% | 1.4% | 1.5% | 1.6% | 1.4% | ||||||||||||||||
Business (6) | ||||||||||||||||||||||||||||
Customers | 6,900 | 7,000 | 7,200 | 7,300 | 7,400 | 7,500 | 7,700 | 7,800 | 7,800 | 7,900 | 8,000 | 8,000 | ||||||||||||||||
ARPU | $467 | $459 | $467 | $476 | $479 | $502 | $526 | $535 | $539 | $551 | $570 | $592 | ||||||||||||||||
TELECOM | 3/31/2009 | 6/30/2009 | 9/30/2009 | 12/31/2009 | 3/31/2010 | 6/30/2010 | 9/30/2010 | 12/31/2010 | 3/31/2011 | 6/30/2011 | 9/30/2011 | 12/31/2011 | ||||||||||||||||
Residential | ||||||||||||||||||||||||||||
Voice | ||||||||||||||||||||||||||||
Marketable Homes | 90,800 | 90,900 | 90,900 | 91,000 | 91,100 | 91,200 | 91,400 | 91,500 | 91,700 | 91,800 | 91,800 | 91,900 | ||||||||||||||||
RGUs (7) | 49,500 | 45,100 | 41,300 | 38,500 | 35,500 | 32,800 | 30,700 | 28,900 | 27,300 | 25,600 | 24,200 | 23,000 | ||||||||||||||||
Cumulative Migration to Broadband Voice (8) | 6,900 | 9,000 | 10,700 | 11,800 | 12,900 | 14,000 | 14,900 | 15,400 | 16,100 | 16,900 | 17,500 | 18,000 | ||||||||||||||||
Penetration | 54.5% | 49.6% | 45.4% | 42.3% | 39.0% | 36.0% | 33.6% | 31.6% | 29.8% | 27.9% | 26.4% | 25.0% | ||||||||||||||||
ARPU | $44 | $45 | $45 | $45 | $44 | $44 | $43 | $43 | $43 | $43 | $43 | $43 | ||||||||||||||||
Churn (9) | 2.1% | 2.3% | 2.3% | 2.0% | 2.3% | 2.1% | 2.1% | 2.0% | 1.8% | 1.8% | 1.8% | 1.6% | ||||||||||||||||
Business(6) | ||||||||||||||||||||||||||||
Customers | 9,000 | 8,900 | 8,700 | 8,500 | 8,300 | 8,200 | 8,000 | 7,900 | 7,800 | 7,700 | 7,700 | 7,700 | ||||||||||||||||
ARPU | $332 | $339 | $329 | $334 | $334 | $340 | $360 | $359 | $356 | $357 | $351 | $363 | ||||||||||||||||
CONSOLIDATED RESIDENTIAL VOICE RGUs | 3/31/2009(1) | 6/30/2009(1) | 9/30/2009(1) | 12/31/2009(1) | 3/31/2010(1) | 6/30/2010(1) | 9/30/2010 | 12/31/2010 | 3/31/2011 | 6/30/2011 | 9/30/2011 | 12/31/2011 | ||||||||||||||||
ILEC Voice RGUs | ||||||||||||||||||||||||||||
Broadband | 9,900 | 12,400 | 14,700 | 16,200 | 17,500 | 19,000 | 20,400 | 21,000 | 21,500 | 22,300 | 22,700 | 23,100 | ||||||||||||||||
Telecom | 49,500 | 45,100 | 41,300 | 38,500 | 35,500 | 32,800 | 30,700 | 28,900 | 27,300 | 25,600 | 24,200 | 23,000 | ||||||||||||||||
Total ILEC Voice RGUs (10) | 59,400 | 57,500 | 56,000 | 54,700 | 53,000 | 51,800 | 51,100 | 49,900 | 48,800 | 47,900 | 46,900 | 46,100 | ||||||||||||||||
Quarterly change | (1,700) | (1,900) | (1,500) | (1,300) | (1,700) | (1,200) | (700) | (1,200) | (1,100) | (900) | (1,000) | (800) | ||||||||||||||||
Year-over-Year change | (7,500) | (7,400) | (6,900) | (6,400) | (6,400) | (5,700) | (4,900) | (4,800) | (4,200) | (3,900) | (4,200) | (3,800) | ||||||||||||||||
SOURCE SureWest Communications