tw telecom Reports Fourth Quarter and Full Year 2012 Results

For 2012 grew revenue 7.6%, Net Income 32.8% and Modified EBITDA1 8.6% compared to 2011 and achieved 36.8% Modified EBITDA margin1 for the year

Delivers Ongoing Industry-Leading Innovation Through New Products and Capabilities

Feb 11, 2013, 16:01 ET from tw telecom

LITTLETON, Colo., Feb. 11, 2013 /PRNewswire/ -- tw telecom inc. (NASDAQ: TWTC), a leading national provider of managed services, including Business Ethernet, converged and IP VPN solutions to enterprises across the U.S. and to their global locations, today announced its fourth quarter 2012 financial results, including $377.9 million of revenue, $17.3 million of net income, $138.3 million of Modified EBITDA ("M-EBITDA"), $143.9 million of net cash provided by operating activities and $17.5 million of levered free cash flow3.  For the year, the Company reported $1.47 billion in revenue, $76.9 million of net income, $540.6 million of M-EBITDA, $463.7 million of net cash provided by operating activities and $129.7 million of levered free cash flow.

(Logo: http://photos.prnewswire.com/prnh/20080626/LATH527LOGO)

"In 2012, we achieved strong comprehensive financial results while rapidly deploying industry-leading Intelligent Network and advanced Ethernet capabilities," said Larissa Herda, tw telecom's Chairman, CEO and President. "In 2013, we're further advancing our long-term strategic vision which includes providing customers with unprecedented control and visibility of their network that we believe will accelerate the momentum in our business.  We're implementing several growth initiatives including investing in new technologies to drive ongoing innovative capabilities, expanding our sales resources for greater distribution and further automating network functionality for more dynamic customer connectivity.  These initiatives are all focused on further driving our revenue growth."

Highlights for the Year – 2012 compared to 2011

  • Grew total revenue 7.6% year over year compared to 7.4% for 2011
  • Grew enterprise revenue 10.5% year over year compared to 9.4% for 2011
  • Grew data and Internet revenue 15.4% year over year compared to 18.2% for 2011, driven primarily by a 22.4% increase in strategic Ethernet and VPN-based product revenue
  • Grew Net Income 32.8% to $76.9 million in 2012 vs. $57.9 million in 2011, and grew basic earnings per share to $0.51 in 2012 from $0.39 in 2011
  • Grew M-EBITDA 8.6% to $540.6 million representing a 36.8% M-EBITDA margin for 2012 compared to 36.4% in 2011
  • Delivered $129.7 million of levered free cash flow, or 8.8% of revenue in 2012 compared to 6.7% in 2011

Business Trends

"In 2012, we achieved substantial expansion of our cash flow and net income, and strong revenue and M-EBITDA growth coupled with efficient capital investment," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer.  "Our bookings7, or sales, for the quarter grew over both the prior quarter and the same period last year.  Sales also grew for the full year over the prior year, although at a lower pace than our 2012 total revenue growth rate.  Our focus going into 2013 is to make investments designed to increase our sales growth rate over time," said Peters.  

"Consistent with our comments last quarter, we began increasing the number of sales employees in the quarter to capture growing market demand and greater share.  A component of our growth initiatives in 2013 is to further expand our direct and indirect sales force and support resources, which naturally will dampen our M-EBITDA in the near-term as we position ourselves for these growing opportunities."

Product Innovation and Differentiation

"Our plans for 2013 include further differentiation of our product portfolio," said John Blount, tw telecom's Chief Operating Officer.  "After successfully launching two phases of our Intelligent Network in 2012, we started 2013 with the launch of a unique new Intelligent Network feature.  This feature provides proactive notification of network information based on parameters set by customers, which enables greater flexibility and unprecedented visibility to manage their networks.  For 2013 we expect to add additional industry-leading capabilities that will allow us to continue to better serve customers and help win market share."

Operational Metrics

Revenue churn4 was 0.9% for the current quarter, up from 0.8% in both the prior quarter and the same period last year.  Full year 2012 revenue churn was 0.9%, consistent with 2011.  As a component of revenue churn, revenue lost from customers fully disconnecting service remained low at 0.2% for the current quarter, which is consistent with both the prior quarter and the same quarter last year and indicative of a loyal customer base, strong customer experience strategy and competitive product portfolio.

The Company had nearly 28,000 customers as of December 31, 2012.  Customer churn4 was 0.9% for both the current quarter and prior quarter, down from 1.0% in the same quarter last year.  The Company ended the year with approximately 29,000 fiber route miles (of which over 22,000 were metro miles).  

The Company also ended the year with 17,948 buildings directly served by its fiber network, reflecting an increase of 497 from ongoing success-based investments as well as an increase of 532 previously connected buildings that were identified during an alignment of key operating systems in 2012.

Capital Investments

Capital investments were $99.6 million for the quarter as compared to the prior quarter of $83.9 million and for the same period last year of $86.6 million.  The increase in the fourth quarter over the other two periods primarily reflects timing of projects, including capacity-driven IP Backbone network upgrades to support data product demand, strategic fiber purchases to extend the Company's network reach and technology investments to enable future capabilities. 

For the year, the Company invested $343.4 million in 2012 compared to $342.7 million in 2011, or 23.4% and 25.1% of revenue for each period respectively, with success-based initiatives reflecting the majority of these investments.  The Company expects capital investments for 2013 to be approximately $360 to $370 million with the majority tied to new sales opportunities.

Trends and Other

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 seasonality of sales and installations5, usage, rate changes, disputes, settlements, repricing for contract renewals and fluctuations in revenue churn, expenses, capital expenditures and taxes and fees. 

The Company expects low first quarter sequential revenue growth due to a $2.2 million fourth quarter customer revenue settlement that will not recur, the negative impact of a first quarter rate decrease for certain taxes and fees billed to customers, and the timing of installations, seasonality, and other items referenced above.  The Company also expects M-EBITDA margin to temporarily decline due to the anticipated lower revenue growth rate combined with the impact from its growth initiatives and seasonal cost increases, which includes an estimated $4.0 million sequential cost increase due primarily to the annual resetting of payroll taxes. 

Intercarrier compensation revenue represented 2% of total revenue in 2012.  Under a November 2011 FCC Order, intercarrier compensation rates are declining over a six-year period that began in July 2012, with the next rate step down to occur in the third quarter of 2013.

On October 2, 2012, the Company completed a private offering of $480 million of 5.375% Senior Notes due 2022, priced at par.  The Company may use the net proceeds to settle any Convertible Debentures obligation or for general corporate purposes.

Year over Year Results – Fourth Quarter 2012 compared to Fourth Quarter 2011

Revenue for the quarter was $377.9 million compared to $351.5 million for the fourth quarter last year, representing a year over year increase of $26.4 million or 7.5%.  Revenue grew primarily due to ongoing enterprise revenue growth.  Key changes in revenue included:

  • $28.4 million increase in revenue from enterprise customers, or 10.4% year over year, driven primarily by data and Internet services
  • $1.3 million decrease in revenue from carriers, primarily due to churn and repricing for contract renewals, partially offset by growth in Ethernet services

By product line, the percentage change in revenue year over year was as follows:

  • 15.2% increase for data and Internet services, primarily driven by an increase in strategic Ethernet and VPN-based products and other services, partially offset by churn and repricing.  Data and Internet revenue represents 52% of total revenue for the quarter compared to 49% a year ago
  • 6.1% increase in voice services, primarily reflecting sales of converged and other voice solutions, and an increase in certain taxes and fees, partially offset by churn
  • 5.2% decrease in network services, primarily reflecting churn and repricing for contract renewals largely in transport services which outpaced growth in colocation services

Operating Costs

Operating costs for the quarter increased year over year, primarily as a result of revenue growth, which included increases in network access costs and certain taxes and fees, as well as higher employee-related costs.  Operating costs as a percentage of revenue were 42.1% for the quarter compared to 41.6% for the same period last year.  Modified gross margin6 as a percentage of revenue was 58.0% in the current quarter compared to 58.5% in the same period last year due to an increase in operating costs discussed above as well as the dilutive impact of growth in certain taxes and fees.

The Company utilizes a fully burdened modified gross margin, including network costs, and personnel costs for customer care, provisioning, network maintenance, technical field and network operations, excluding non-cash, stock-based compensation expense, net of costs capitalized for labor and overhead on capital projects.

Selling, General and Administrative Costs ("SG&A")

SG&A costs increased year over year, primarily as a result of an increase in employee-related and regulatory costs, somewhat offset by a reduction in bad debt expense.  SG&A costs as a percentage of revenue decreased to 23.1% for the quarter from 23.9% for the same period last year.  This primarily reflects lower employee costs and bad debt expense, which declined as a percentage of revenue year over year.

Net Income

Net income was $17.3 million for the quarter compared to $16.4 million from the same period last year, reflecting M-EBITDA growth, offset by an increase in interest expense related to the October financing, and higher depreciation expense.  The Company delivered basic earnings per share of $0.11 for both the current quarter and the same period last year.

M-EBITDA and Margins 

M-EBITDA grew to $138.3 million for the quarter, an increase of 8.0% from the same period last year primarily as a result of revenue growth.  M-EBITDA margin for the quarter was 36.6% as compared to 36.4% for the same period last year, as employee costs and bad debt expense as a percentage of revenue declined year over year somewhat offset by the dilutive impact of the growth in certain taxes and fees.

Sequential Results – Fourth Quarter 2012 compared to Third Quarter 2012

Revenue for the quarter was $377.9 million, as compared to $368.9 million for the third quarter of 2012, an increase of $9.0 million, or 2.4%, representing the 33rd consecutive quarter of sequential growth.   Revenue grew due to ongoing enterprise growth.  Key changes in revenue included:

  • $9.0 million increase in enterprise revenue, representing 3.1% sequential growth driven primarily by data and Internet services, a $2.2 million customer settlement and an increase in certain taxes and fees
  • $0.4 million increase in revenue from carrier customers, primarily reflecting growth in Ethernet services, offset by churn and repricing for contract renewals

By product line, the percentage change in revenue sequentially was as follows:

  • 4.6% increase for data and Internet services, primarily driven by an increase in strategic Ethernet and VPN-based product sales and other services, a $2.2 million customer settlement, partially offset by churn and repricing
  • 1.1% increase in voice services, primarily reflecting an increase in sales of converged solutions and an increase in certain taxes and fees, offset by churn and a reduction in usage
  • Network services were largely unchanged, primarily reflecting churn and repricing for contract renewals mostly in transport services, which outpaced growth in colocation services and an increase in settlements

Operating Costs

Operating costs increased primarily as a result of revenue growth and included higher network access costs and an increase in certain taxes and fees as well as increased employee-related costs, somewhat offset by seasonally lower utility costs.  Operating costs were 42.1% of revenue for the quarter and 42.3% for the prior quarter.  Modified gross margin for the quarter as a percentage of revenue was 58.0% compared to 57.8% in the prior quarter.

Selling, General and Administrative Costs

SG&A costs increased primarily reflecting an increase in employee-related costs, including commissions and benefits expense, partially offset by a decrease in bad debt expense.  SG&A was 23.1% of revenue for the quarter and 22.6% for the prior quarter.  

Net Income

Net income was $17.3 million for the quarter, down from $21.0 million in the prior quarter, primarily reflecting an increase in interest expense related to the October financing, and higher depreciation expense primarily resulting from new asset additions, partially offset by a decrease in income tax expense and M-EBITDA growth.  The Company delivered basic earnings per share of $0.11 for the quarter compared to $0.14 in the prior quarter.

M-EBITDA and Margins 

M-EBITDA was $138.3 million for the quarter, an increase of 1.3% from the prior quarter primarily as a result of revenue growth.   M-EBITDA margin was 36.6% for the quarter compared to 37.0% for the prior quarter, reflecting an increase primarily in commissions and other benefits expense as well as the dilutive impact of certain taxes and fees.

tw telecom plans to conduct a webcast conference call to discuss its earnings results on February 12, 2013 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) Modified EBITDA (or "M-EBITDA") is defined as net income or loss before depreciation, amortization, accretion, impairment charges and other income and losses, interest expense, debt extinguishment costs, interest income, income tax expense or benefit, cumulative effect of change in accounting principle, and non-cash stock-based compensation expense.  The Company defines Modified EBITDA margin as M-EBITDA divided by total revenue.

(2) Unlevered free cash flow is defined as Modified EBITDA less capital expenditures, which is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website.

(3) Levered free cash flow is defined as Modified EBITDA less capital expenditures and net interest expense from operations (excluding debt extinguishment costs, non-cash interest expense and deferred debt costs), which is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website.  

 (4) Revenue churn is defined as the average lost recurring monthly billing for the period from a customer's partial or complete disconnection of services (excluding repricing impacts and usage) compared to reported revenue for the period.  Customer churn is defined as the average monthly customer turnover for the period compared to the average monthly customer count for the period.

(5) Installations reflect services from signed customer sales that are installed and recognized as revenue from the date of installation

(6) The Company defines modified gross margin as total revenue less operating costs excluding non-cash stock-based compensation expense.  

(7) Bookings are defined as signed customer contracts.  The timing of when these sales are installed and recognized into revenue varies based on the underlying contract.

Financial Measures The Company provides financial measures using U.S. generally accepted accounting principles ("GAAP") as well as adjustments to GAAP measures to describe its business trends, including Modified EBITDA.  Management believes that its definition of Modified EBITDA (see above) is a standard measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures, as well as non-cash and non-operating income or charges to earnings.  Modified EBITDA is not intended to replace operating income (loss), net income (loss), cash flow, and other measures of financial performance and liquidity reported in accordance with GAAP.  Management uses Modified EBITDA internally to assess on-going operations and it is the basis for various financial covenants contained in the Company's debt agreements and for operating performance and liquidity.  Modified EBITDA is reconciled to Net Income (Loss), the most comparable GAAP measure for operating performance within the Consolidated Operations Highlights and in the supplemental information posted on the Company's website.  Modified EBITDA, as a measure of liquidity, is also reconciled to Net Cash provided by operating activities on the Company's website.

In addition, management uses unlevered and levered free cash flow, which measure the ability of M-EBITDA to cover capital expenditures.  The Company uses these cash flow definitions to eliminate certain non-cash costs.  Levered and unlevered free cash flow are reconciled to Net Cash provided by operating activities and also to Modified EBITDA in the supplemental information posted on the Company's website.  The Company also provides an adjustment to the measure gross margin by eliminating the impact of non-cash stock-based compensation expense.  Management uses modified gross margin internally to assess on-going operations.  Modified gross margin is reconciled to gross margin in the financial tables.

Forward Looking Statements The statements in this press release and related conference call concerning the outlook for 2013 and beyond, including statements regarding product and platform plans, growth prospects, market opportunities, sales growth, cash flow, growth initiatives, sales force, customer opportunities, network capabilities, sales and installations timing, demand, revenue growth, margins, the impact of regulatory changes, churn, business trends and fluctuations, taxes and expected capital expenditures are forward-looking statements that reflect management's views with respect to future events and financial performance.  These statements are based on management's current expectations and are subject to risks and uncertainties.  Important factors that could cause actual results to differ materially from those in the forward looking statements include the risks disclosed in the Company's SEC filings, especially the section entitled "Risk Factors" in its 2011 Annual Report on Form 10-K and in its subsequent 2012 Annual Report on Form 10-K and quarterly reports on Form 10-Q.  tw telecom undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About tw telecom tw telecom, headquartered in Littleton, Colo., is a leading national provider of managed services, including Business Ethernet, converged and IP VPN solutions for enterprises throughout the U.S. and globally. tw telecom also delivers secure, scalable private connections for transport data networking, Internet access, voice, VPN, VoIP and security to large organizations and communications services companies. Employing a resilient fiber network infrastructure, robust product portfolio and its own Intelligent Network capabilities, tw telecom delivers customers overall economic value, an industry-leading quality service experience, 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

Twelve Months Ended

Dec 31,

Dec 31,

2012

2011

Growth %

2012

2011

Growth %

Revenue

Data and Internet services 

$197,802

$171,657

15.2%

$746,297

$646,682

15.4%

Voice services 

92,062

86,775

6.1%

363,743

338,655

7.4%

Network services

81,014

85,422

-5.2%

330,088

350,709

-5.9%

Service Revenue

370,878

343,854

7.9%

1,440,128

1,336,046

7.8%

Intercarrier compensation 

7,015

7,653

-8.3%

30,127

30,845

-2.3%

Total Revenue

377,893

351,507

7.5%

1,470,255

1,366,891

7.6%

Expenses

Operating costs 

159,179

146,320

617,553

571,461

Gross Margin

218,714

205,187

852,702

795,430

Selling, general and administrative costs 

87,412

83,854

341,423

325,538

Depreciation, amortization and accretion

74,703

72,572

284,292

283,329

Operating Income 

56,599

48,761

16.1%

226,987

186,563

21.7%

Interest expense 

(21,720)

(15,944)

(68,271)

(64,246)

Debt extinguishment costs

-

-

(77)

-

Non-cash interest expense and deferred debt costs 

(6,771)

(6,027)

(25,486)

(23,472)

Interest income

512

102

793

545

Income before income taxes

28,620

26,892

6.4%

133,946

99,390

34.8%

Income tax expense

11,352

10,500

57,058

41,479

Net Income

$17,268

$16,392

5.3%

$76,888

$57,911

32.8%

SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA

Gross Margin

$218,714

$205,187

$852,702

$795,430

Add back non-cash stock-based compensation expense

476

590

1,904

2,327

Modified Gross Margin

219,190

205,777

6.5%

854,606

797,757

7.1%

Selling, general and administrative costs

87,412

83,854

341,423

325,538

Add back non-cash stock-based compensation expense

6,507

6,133

27,396

25,490

Modified EBITDA

138,285

128,056

8.0%

540,579

497,709

8.6%

Non-cash stock-based compensation expense

6,983

6,723

29,300

27,817

Depreciation, amortization and accretion

74,703

72,572

284,292

283,329

Net Interest expense 

21,208

15,842

67,478

63,701

Debt extinguishment costs

-

-

77

-

Non-cash interest expense and deferred debt costs

6,771

6,027

25,486

23,472

Income tax expense

11,352

10,500

57,058

41,479

Net Income

$17,268

$16,392

$76,888

$57,911

Modified Gross Margin %

58.0%

58.5%

58.1%

58.4%

Modified EBITDA Margin %

36.6%

36.4%

36.8%

36.4%

Free Cash Flow:

Modified EBITDA

$138,285

$128,056

8.0%

$540,579

$497,709

8.6%

Less: Capital Expenditures

99,624

86,637

15.0%

343,425

342,731

0.2%

Unlevered Free Cash Flow

38,661

41,419

-6.7%

197,154

154,978

27.2%

Less: Net interest expense 

21,208

15,842

33.9%

67,478

63,701

5.9%

Levered Free Cash Flow 

$17,453

$25,577

-31.8%

$129,676

$91,277

42.1%

(1) For complete financials and related footnotes, please refer to the Company's SEC filings.

 

 

 

tw telecom inc.

Consolidated Operations Highlights

(Dollars in thousands)

Unaudited (1)

Three Months Ended

Dec 31,

Sept 30,

2012

2012

Growth %

Revenue

Data and Internet services

$197,802

$189,164

4.6%

Voice services 

92,062

91,052

1.1%

Network services

81,014

81,261

-0.3%

          Service Revenue

370,878

361,477

2.6%

Intercarrier compensation 

7,015

7,457

-5.9%

Total Revenue

377,893

368,934

2.4%

Expenses

Operating costs 

159,179

156,195

Gross Margin

218,714

212,739

Selling, general and administrative costs 

87,412

83,341

Depreciation, amortization and accretion

74,703

70,726

Operating Income 

56,599

58,672

-3.5%

Interest expense

(21,720)

(15,495)

Debt extinguishment costs

-

(77)

Non-cash interest expense and deferred debt costs 

(6,771)

(6,330)

Interest income

512

84

Income before income taxes

28,620

36,854

-22.3%

Income tax expense

11,352

15,885

Net Income 

$17,268

$20,969

-17.6%

SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA

Gross Margin

$218,714

$212,739

Add back non-cash stock-based compensation expense

476

473

Modified Gross Margin

219,190

213,212

2.8%

Selling, general and administrative costs

87,412

83,341

Add back non-cash stock-based compensation expense

6,507

6,667

Modified EBITDA

138,285

136,538

1.3%

Non-cash stock-based compensation expense

6,983

7,140

Depreciation, amortization and accretion

74,703

70,726

Net Interest expense

21,208

15,411

Debt extinguishment costs

-

77

Non-cash interest expense and deferred debt costs 

6,771

6,330

Income tax expense

11,352

15,885

Net Income

$17,268

$20,969

Modified Gross Margin %

58.0%

57.8%

Modified EBITDA Margin %

36.6%

37.0%

Free Cash Flow

Modified EBITDA

$138,285

$136,538

1.3%

Less: Capital Expenditures

99,624

83,900

18.7%

Unlevered Free Cash Flow

38,661

52,638

-26.6%

Less: Net interest expense

21,208

15,411

37.6%

Levered Free Cash Flow

$17,453

$37,227

-53.1%

(1) For complete financials and related footnotes, please refer to the Company's SEC filings.

 

 

 

tw telecom inc.

Highlights of Results Per Share

Unaudited (1) (2) 

Three Months Ended

Twelve Months Ended

Dec. 31

Sept. 30

Dec. 31

Dec. 31

Dec. 31

2012

2012

2011

2012

2011

Weighted Average Shares Outstanding (thousands)

Basic 

148,253

147,973

146,416

147,675

147,247

Diluted (2)

152,311

150,359

148,125

150,059

149,349

Basic Income per Common Share

$0.11

$0.14

$0.11

$0.51

$0.39

Diluted Income per Common Share

$0.11

$0.14

$0.11

$0.50

$0.38

As of

Dec. 31

Sept. 30

Dec. 31

2012

2012

2011

Common shares (thousands)

Actual Shares Outstanding

151,397

151,271

149,044

Unvested Restricted Stock Units

and Restricted Stock Awards (thousands)

4,573

4,598

4,182

Options (thousands)

Options Outstanding 

4,860

5,065

6,674

Options Exercisable 

4,169

4,369

4,974

Options Exercisable and In-the-Money

4,169

4,369

3,114

(1) For complete financials and related footnotes, please refer to the Company's SEC filings.

(2) Stock options, restricted stock units/awards and convertible debt subject to conversion, are excluded from the computation of diluted weighted average shares outstanding if inclusion would be anti-dilutive. See the Company's SEC filings for more details.

 

 

 

tw telecom inc.

Condensed Consolidated Balance Sheet Highlights

(Dollars in thousands)

Unaudited (1)

Dec. 31

Sept. 30

Dec. 31

2012

2012

2011

ASSETS

Cash, equivalents, and short term investments

$974,292

$459,397

$484,919

Receivables

106,770

114,407

104,374

Less: allowance

(7,067)

(7,693)

(8,192)

Net receivables

99,703

106,714

96,182

Prepaid expenses and other current assets

19,164

19,475

17,340

Deferred income taxes

76,160

65,008

65,008

Total other current assets

95,324

84,483

82,348

Property, plant and equipment

4,247,868

4,186,321

4,026,134

Less:  accumulated depreciation 

(2,755,622)

(2,721,086)

(2,598,922)

Net property, plant and equipment 

1,492,246

1,465,235

1,427,212

Deferred income taxes

101,885

123,063

162,535

Goodwill

412,694

412,694

412,694

Intangible assets, net of accumulated amortization

17,578

19,362

17,742

Other assets, net 

30,015

22,736

24,594

Total other non-current assets

562,172

577,855

617,565

Total

$3,223,737

$2,693,684

$2,708,226

LIABILITIES AND STOCKHOLDERS' EQUITY 

Current Liabilities

Accounts payable

$55,857

$61,819

$52,739

Deferred revenue

45,471

44,413

42,253

Accrued taxes, franchise and other fees

60,844

65,975

66,880

Accrued interest 

20,343

7,653

13,934

Accrued payroll and benefits

45,727

40,840

44,284

Accrued carrier costs

30,765

23,988

32,760

Current portion of debt and lease obligations

374,969

369,404

7,733

Other current liabilities

29,163

29,227

31,361

Total current liabilities

663,139

643,319

291,944

Long-Term Debt and Capital Lease Obligations 

2 3/8% convertible senior debentures, due 4/1/2026 (2)

373,743

373,743

373,744

Unamortized Discount 

(5,643)

(11,168)

(27,057)

Net

368,100

362,575

346,687

Floating rate senior secured debt - Term Loan B, due 1/7/2013

-

-

102,055

Floating rate senior secured debt - Term Loan B, due 12/30/2016

463,019

464,250

467,946

8% senior unsecured notes, due 3/1/2018, net of unamortized discount

428,001

427,905

427,614

5 3/8% senior unsecured notes, due 10/1/2022

480,000

-

-

Capital lease obligations

20,091

17,917

16,251

Less: current portion

(374,969)

(369,404)

(7,733)

Total long-term debt and capital lease obligations

1,384,242

903,243

1,352,820

Long-Term Deferred Revenue

23,177

24,031

22,296

Other Long-Term Liabilities 

41,240

36,840

35,445

Stockholders' Equity 

1,111,939

1,086,251

1,005,721

Total

$3,223,737

$2,693,684

$2,708,226

(1) For complete financials and related footnotes, please refer to the Company's SEC filings.

(2) Holders have the option to require the Company to purchase all or part of the debentures on April 1, 2013, April 1, 2016 or April 1, 2021; or at any time prior to April 1, 2026 to convert the debentures into equity. The Company has the right to redeem the debentures in whole or in part at any time on or after April 6, 2013.

 

 

tw telecom inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

Unaudited (1)

Three Months Ended

Twelve Months Ended

Dec. 31

Sept. 30

Dec. 31

Dec. 31

Dec. 31

2012

2012

2011

2012

2011

Cash flows from operating activities:

Net Income 

$17,268

$20,969

$16,392

$76,888

$57,911

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization and accretion

74,703

70,726

72,572

284,292

283,329

Deferred income taxes

4,253

15,329

5,973

48,559

35,756

Stock-based compensation expense

6,983

7,140

6,723

29,300

27,817

Amortization of discount on debt and deferred debt costs and other

6,772

6,407

6,014

25,546

23,388

Changes in operating assets and liabilities:

Accounts receivable, net

7,011

(5,806)

(3,928)

(3,521)

(14,584)

Prepaid expenses and other current and noncurrent assets

1,197

1,226

6,307

1,498

(7,627)

Accounts payable

(1,254)

3,172

(7,320)

(429)

(6,338)

Accrued interest

12,680

(6,239)

6,449

6,393

(1,261)

Accrued payroll and benefits

4,914

165

4,483

1,469

2,566

Deferred revenue, current and noncurrent

204

(41)

495

4,099

11,797

Other current and noncurrent liabilities

9,161

(1,863)

(2,355)

(10,418)

(9,166)

Net cash provided by operating activities

143,892

111,185

111,805

463,676

403,588

Cash flows from investing activities:

Capital expenditures

(97,069)

(83,474)

(86,637)

(338,118)

(340,731)

Purchase of investments

(103,308)

(19,927)

(28,327)

(243,048)

(223,638)

Proceeds from sale of investments

77,748

20,828

25,615

204,629

208,340

Other investing activities, net

(1,963)

(1,178)

(646)

2,566

3,230

Net cash used in investing activities

(124,592)

(83,751)

(89,995)

(373,971)

(352,799)

Cash flows from financing activities:

Net proceeds from issuance of common stock upon exercise of stock options and vesting of restricted stock awards and units

3,327

4,307

922

13,462

9,966

Purchases of treasury stock

(1,890)

-

(8,562)

(13,409)

(58,562)

Excess tax (shortfalls) benefits from stock-based compensation

(3)

500

1,385

1,213

1,385

Net proceeds from issuance of debt

470,796

-

-

470,796

-

Retirement of debt obligation

-

(101,518)

-

(101,518)

-

Payment of debt and capital lease obligations

(1,602)

(1,601)

(1,902)

(6,915)

(7,106)

Net cash provided by (used in) financing activities

470,628

(98,312)

(8,157)

363,629

(54,317)

Increase (decrease) in cash and cash equivalents

489,928

(70,878)

13,653

453,334

(3,528)

Cash and cash equivalents at the beginning of the period

316,800

387,678

339,741

353,394

356,922

Cash and cash equivalents at the end of the period

$806,728

$316,800

$353,394

$806,728

$353,394

Supplemental disclosures cash, equivalents and short term investments

Cash and cash equivalents at the end of the period

$806,728

$316,800

$353,394

$806,728

$353,394

Short term investments

167,564

142,597

131,525

167,564

131,525

Total of cash, equivalents and short term investments

$974,292

$459,397

$484,919

$974,292

$484,919

Supplemental disclosures of cash flow information:

Cash paid for interest

$9,223

$22,009

$9,970

$63,082

$67,566

Cash paid for income taxes, net of refunds

$1,235

$1,508

$218

$7,801

$3,231

Addition of capital lease obligation

$2,555

$426

-

$5,307

$2,000

Supplemental information to reconcile capital expenditures:

Capital expenditures per cash flow statement

$97,069

$83,474

$86,637

$338,118

$340,731

Addition of capital lease obligation

2,555

426

-

5,307

2,000

Total capital expenditures

$99,624

$83,900

$86,637

$343,425

$342,731

(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

2011

2012

Mar. 31

Jun. 30

Sept. 30

Dec. 31

Mar. 31

Jun. 30

Sept. 30

Dec. 31

Operating Metrics:

Buildings  (2) (3)

13,742

14,311

14,872

15,438

15,905

16,367

16,919

17,948

Headcount 

Total Headcount

2,985

3,071

3,065

3,051

3,059

3,089

3,087

3,147

Sales Associates 

564

553

564

555

551

546

543

574

Customers 

Total Customers 

27,234

27,322

27,376

27,509

27,495

27,569

27,699

27,966

(1) For complete financials and related footnotes, please refer to the Company's SEC filings.

(2) Reflects on-net buildings and ILEC Local Serving Offices (LSOs) directly served by the Company's fiber network.

(3) Q4 2012 building additions include an increase of 532 previously connected buildings identified during alignment of key operating systems.

 

SOURCE tw telecom



RELATED LINKS

http://www.twtelecom.com