tw telecom Reports Fourth Quarter and Full Year 2009 Results
- Grew revenue 5% for the year -
- Achieved 36.0% M-EBITDA margin for 2009, a 160 basis point expansion over 2008 -
- Delivered $98 million levered free cash for 2009, an 84% improvement over 2008 -
- Grew EPS to $0.19 per share for 2009 from ($0.05) loss per share in 2008 -
LITTLETON, Colo., Feb. 8 /PRNewswire-FirstCall/ -- tw telecom inc. (Nasdaq: TWTC), a leading provider of managed voice, Internet and data networking solutions for business customers, today announced its fourth quarter 2009 financial results, including $307.9 million of revenue, $113.9 million in Modified EBITDA(1) ("M-EBITDA"), $25.7 million in levered free cash flow(3) and net income of $11.1 million, or $0.07 earnings per share.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080626/LATH527LOGO)
For the year ended December 31, 2009, the Company reported $1.2 billion in revenue, $436.7 million of M-EBITDA, $97.5 million in levered free cash flow and net income of $27.6 million, or $0.19 earnings per share.
"We delivered strong comprehensive financial and operational results in 2009," said Larissa Herda, tw telecom's Chairman, CEO and President. "We grew revenue, drove strong margins higher, and generated increased cash flow, while we strategically invested and maintained healthy liquidity. In 2010, we plan to further invest in growth initiatives including equipping our networks with new capabilities, launching new products and services, and implementing tools to better serve enterprise customers. All of these initiatives are focused on capturing greater market share and driving revenue growth."
Highlights for the Year – 2009 compared to 2008
- Grew total revenue 5% year over year and enterprise revenue 8%
- Grew M-EBITDA to $436.7 million, an increase of 9%
- Achieved modified gross margin(5) of 58.7%, an 80 basis point improvement
- Achieved 36.0% M-EBITDA margin, a 160 basis point improvement
- Achieved net income of $27.6 million, or $0.19 earnings per share for 2009, compared to a net loss of $7.3 million, or $0.05 loss per share for 2008
- Delivered levered free cash flow of $97.5 million, or 8% of revenue, compared to $53.2 million, or 5% of revenue for 2008, an 84% improvement
- Ended the year with $470.8 million in cash, equivalents, and short term investments, a 34% increase over December 31, 2008
Business Trends
"We continued to scale the business as demonstrated by our ability to accelerate cash generation and grow returns, while strategically investing for long term growth," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer. "We expect our ongoing investments and strong execution will allow us to drive to higher revenue growth, although economic headwinds are likely to continue in the near term." The Company continues in a strong liquidity position of $471 million in cash, equivalents and short term investments, with no significant debt maturities until 2013.
Operational Metrics
Reflecting the current economic environment, revenue churn(4) was 1.2% for the current quarter and prior quarter, as well as the same quarter last year. As a component of revenue churn, revenue lost from customers fully disconnecting service remained low at 0.3% for both the current and prior quarter, as well as the same quarter last year, reflecting a strong and stable customer base. The Company expects total revenue churn to remain elevated and to continue to pressure revenue growth.
The Company had approximately 28,000 customers as of December 31, 2009. Customer churn(4) was 1.2% for the current quarter and prior quarter, down from 1.3% for the same period last year. The majority of the turnover was from small customers, and the Company expects this churn will continue.
The Company ended the fourth quarter with over 27,000 route miles (including more than 20,000 miles of metro miles), over 10,000 buildings on net(6) and 2,870 employees, including 522 sales associates.
Other Trends
The Company continues to expect business fluctuations to impact sequential trends in revenue, margins and cash flow. This includes the timing as well as any seasonal nature of sales and installations, usage, disputes, repricing for contract renewals, and fluctuations in revenue churn, expenses and capital expenditures.
The Company expects the first quarter of 2010 will be impacted by historical trends, including lower seasonal revenue growth and a sequential cost increase due to resetting of payroll taxes and other employee related costs.
Capital Expenditures
Capital expenditures were $72.3 million for the quarter compared to $59.9 million for the prior quarter and $72.9 million for the same period last year. The $12.4 million sequential increase reflects the timing of projects for infrastructure, capacity and other IT initiatives. For the year, capital investments were $274.9 million as compared to $276.9 million for the prior year.
The Company expects capital investments for 2010 to be approximately $275 to $300 million. The Company expects the majority of the full year capital investments to be tied to new sales opportunities.
Highlights for the Fourth Quarter 2009
- Grew total revenue 5% year over year and 1% sequentially
- Grew enterprise revenue 6% year over year and 1% sequentially
- Grew data and Internet revenue 16% year over year and 4% sequentially
- Grew M-EBITDA 9% year over year and 4% sequentially
- Achieved a 37.0% M-EBITDA margin, a 160 basis point improvement year over year and 110 basis point improvement sequentially
- Grew EPS to $0.07 per share, a $0.06 improvement year over year
- Delivered $25.7 million of levered free cash flow, representing 8% of revenue
Year over Year Results – Fourth Quarter 2009 compared to Fourth Quarter 2008
Revenue
Revenue for the quarter was $307.9 million compared to $294.6 million for the fourth quarter last year, representing a year over year increase of $13.3 million, or 5%. Key changes in revenue included:
- $13.9 million increase in revenue from enterprise customers, or 6% year over year, representing 30 consecutive quarters of enterprise growth
- $1.9 million decrease in revenue from carriers. Growth in new sales was outpaced by churn and repricing for contract renewals
- $1.3 million increase in intercarrier compensation related primarily to fluctuations in disputes and volume as well as rate changes
By product line, the percentage change in revenue year over year was as follows:
- 16% increase for data and Internet services, primarily due to continued success with Ethernet and IP-based product sales, partially offset by churn
- Voice services were flat, reflecting ongoing sales of bundled and other local product sales offset by churn
- 5% decrease for network services, due to churn and repricing for contract renewals that outpaced sales, partially offset by growth in co-location and high capacity services
M-EBITDA and Margins
M-EBITDA grew to $113.9 million for the quarter, an increase of 9%, or $9.7 million from the same period last year. The growth in M-EBITDA represents the contribution from revenue growth, cost efficiencies from network and other optimization efforts and lower bad debt expense, partially offset with an increase in employee costs.
Operating costs for the quarter increased primarily due to increased network access costs associated with higher revenue and increased employee related costs, partially offset by network and other cost efficiencies. Operating costs as a percent of revenue were 42% for the current period compared to 43% for the same period last year.
Selling, general and administrative costs ("SG&A") increased year over year, primarily reflecting higher employee costs partially offset by a decrease in bad debt. Bad debt expense was $0.3 million for the quarter and $3.9 million for the same period last year, representing 0.1% of quarterly revenue for the current quarter and 1.3% for the same period last year. SG&A costs as a percent of revenue were 23% for the current quarter and 24% for the same period last year.
Modified gross margin was 58.2% for the current quarter compared to 57.6% for the same period last year, a 60 basis point improvement. M-EBITDA margin for the quarter was 37.0% as compared to 35.4% for the same period last year, a 160 basis point improvement.
The Company utilizes a fully burdened modified gross margin, including network costs, and personnel costs for customer care, provisioning, network maintenance, technical field and network operations, excluding non-cash stock-based compensation expense.
Net Income
For the quarter, the Company achieved net income of $11.1 million, or $0.07 per share, compared to net income of $0.9 million, or $0.01 per share, for the same period last year. The increase year over year in net income reflects strong M-EBITDA growth and lower net interest costs.
Sequential Results – Fourth Quarter 2009 compared to Third Quarter 2009
Revenue
Revenue for the quarter was $307.9 million, as compared to $304.8 million for the third quarter of 2009, an increase of $3.1 million, or 1%. Key changes in revenue included:
- $2.1 million increase in enterprise revenue, representing 1% sequential growth
- $1.0 million decrease in revenue from carrier customers primarily reflecting new sales offset by churn and the repricing of renewed customer contracts
- $2.0 million increase in intercarrier compensation primarily for fluctuations in disputes and volume, as well as rate changes
By product line, the percentage change in revenue sequentially was as follows:
- 4% increase for data and Internet services, primarily due to continued success with Ethernet and IP-based product sales partially offset by churn
- 1% decrease in voice services, reflecting ongoing sales of bundled and other local products offset by churn
- 3% decrease in network services, primarily due to sales that were outpaced by ongoing churn and repricing for customer contract renewals
M-EBITDA and Margins
M-EBITDA was $113.9 million for the quarter, compared to $109.4 million for the prior quarter, reflecting a 4% increase. The growth in M-EBITDA represents contribution from revenue growth, cost efficiencies from network and other optimization efforts, and a decrease in bad debt expense and employee related costs.
Operating costs increased primarily reflecting increased network access costs associated with higher revenue as well as fluctuations in cost settlements, partially offset by network optimization efforts. Operating costs were 42% of revenue for both quarters.
SG&A costs decreased primarily reflecting decreases in employee related costs and bad debt expense. Bad debt expense decreased to $0.3 million from $1.8 million sequentially, representing 0.1% and 0.6% of quarterly revenue, respectively. SG&A was 23% of revenue for the current period as compared to 24% for the prior quarter.
Modified gross margin was 58.2% compared to 58.6% for the prior quarter, a 40 basis point reduction. M-EBITDA margin was 37.0% for the quarter, compared to 35.9% for the prior quarter, a 110 basis point increase.
Net Income
For the quarter, the Company reported net income of $11.1 million, or $0.07 per share, compared to net income of $7.7 million, or $0.05 per share for the prior quarter. The increase in net income sequentially primarily reflects M-EBITDA growth.
Summary
"Through our ongoing strong financial and operational execution, we delivered great results in 2009 and we're strategically well positioned to propel our enterprise business and achieve long term growth," said Herda.
tw telecom plans to conduct a webcast conference call to discuss its earnings results on February 9, 2010 at 9:00 a.m. MST (11:00 a.m. EST). To access the webcast and the financial and other information to be discussed in the webcast, visit www.twtelecom.com under "Investor Relations."
(1) The Company uses a modified definition of EBITDA to eliminate certain non-cash and non-operating income or charges to earnings to enhance the comparability of its financial performance from period to period. Modified EBITDA (or "M-EBITDA") is defined as net income or loss before depreciation, amortization, accretion, impairment charges and other gains and losses, interest expense, debt extinguishment costs, interest income, income tax expense or benefit, cumulative effect of change in accounting principle, and non-cash stock-based compensation expense.
(2) The Company defines unlevered free cash flow as Modified EBITDA less capital expenditures. Unlevered free cash flow is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website.
(3) The Company defines levered free cash flow as Modified EBITDA less capital expenditures and net interest expense from operations (but excludes debt extinguishment costs and non cash interest expense and deferred debt costs). Levered free cash flow is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website.
(4) The Company defines revenue churn as the average lost recurring monthly billing from a customer's partial or complete disconnection of services (excluding repricing impacts and usage) compared to reported revenue for the quarter. Customer churn is defined as the average monthly customer turnover compared to the average monthly customer count.
(5) The Company defines modified gross margin as total revenue less operating costs excluding non-cash stock-based compensation expense. Modified gross margin is reconciled to gross margin in the financial tables.
(6) Fiber connected buildings on-net represent locations to which the Company's fiber is directly connected with lit electronics. This does not include buildings which are exclusively Local Serving Office locations or buildings with fiber but no lit electronics.
Financial Measures
The Company provides financial measures using generally accepted accounting principles ("GAAP") as well as adjustments to GAAP measures to describe its business trends, including Modified EBITDA. Management believes that its definition of Modified EBITDA (see above) is a standard measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures, as well as non-cash and non-operating income or charges to earnings. Modified EBITDA is not intended to replace operating income (loss), net income (loss), cash flow, and other measures of financial performance and liquidity reported in accordance with GAAP. Management uses Modified EBITDA internally to assess on-going operations and it is the basis for various financial covenants contained in the Company's debt agreements and for operating performance and liquidity. Modified EBITDA is reconciled to Net Income (Loss), the most comparable GAAP measure for operating performance within the Consolidated Operations Highlights and in the supplemental information posted on the Company's website. Modified EBITDA, as a measure of liquidity, is also reconciled to Net Cash provided by 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 (used in) operating activities and also to Modified EBITDA in the supplemental information posted on the Company's website. The Company also provides an adjustment to the measure gross margin by eliminating the impact of non-cash stock-based compensation expense. Management uses modified gross margin internally to assess on-going operations. Modified gross margin is reconciled to gross margin in the Consolidated Operations Highlights.
Forward Looking Statements
The statements in this press release concerning the outlook for 2010 and beyond, including expansion plans, growth prospects, market opportunities, bookings, future economic conditions, sales and installations timing, revenue growth, churn, re-pricing for contract renewals, business trends and fluctuations, seasonality, expense trends, product plans, first quarter 2010 results and costs and expected capital expenditures are forward-looking statements that reflect management's views with respect to future events and financial performance. These statements are based on management's current expectations and are subject to risks and uncertainties. Important factors that could cause actual results to differ materially from those in the forward looking statements include the risks disclosed in the Company's SEC filings, especially the section entitled "Risk Factors" in its 2008 Annual Report on Form 10-K and in its quarterly report on Form 10-Q for the quarter ended September 30, 2009. tw telecom undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About tw telecom
tw telecom, headquartered in Littleton, Colo., provides managed network services, specializing in Ethernet and data networking, Internet access, local and long distance voice, VPN, VoIP and network security, to enterprise organizations and communications services companies throughout the U.S. including their global locations. As a leading provider of integrated and converged network solutions, tw telecom delivers customers overall economic value, quality service, and improved business productivity. For more information please visit www.twtelecom.com.
tw telecom inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited (1)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ ---------------------
Growth Growth
2009 2008 % 2009 2008 %
---- ---- ------ ---- ---- ------
Revenue
Data and
Internet
services $124,799 $107,538 16% $472,647 $399,928 18%
Network
services 90,463 95,577 -5% 370,859 387,339 -4%
Voice services 82,860 82,985 0% 333,274 334,692 0%
------ ------ --- ------- ------- ---
Service
Revenue 298,122 286,100 4% 1,176,780 1,121,959 5%
Intercarrier
compensation 9,812 8,546 15% 34,610 37,060 -7%
----- ----- --- ------ ------ ---
Total
Revenue 307,934 294,646 5% 1,211,390 1,159,019 5%
------- ------- --- --------- --------- ---
Expenses
Operating costs 129,855 126,229 503,960 491,375
------- ------- ------- -------
Gross
Margin 178,079 168,417 707,430 667,644
Selling, general
and
administrative
costs 71,355 70,614 297,290 291,985
Depreciation,
amortization,
and
accretion 74,290 73,468 296,167 285,783
------ ------ ------- -------
Operating
Income 32,434 24,335 113,973 89,876
Interest
expense (3) (15,815) (18,677) (64,583) (75,311)
Non cash
interest
expense and
deferred debt
costs (2) (3) (4,969) (4,628) (19,418) (18,025)
Interest
income 33 566 360 6,308
Other loss - - - (7,767)
--- --- --- ------
Income
(Loss)
before
income taxes 11,683 1,596 30,332 (4,919)
Income tax
expense 587 697 2,746 2,347
--- --- ----- -----
Net Income
(Loss) $11,096 $899 $27,586 ($7,266)
======= ==== ======= =======
SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND
MODIFIED EBITDA
---------------------------------------------------------------
Gross Margin $178,079 $168,417 $707,430 $667,644
Add back non-cash
stock-based
compensation
expense 1,190 1,206 3,654 3,758
----- ----- ----- -----
Modified
Gross
Margin 179,269 169,623 6% 711,084 671,402 6%
=== ===
Selling, general
and
administrative
costs 71,355 70,614 297,290 291,985
Add back non-cash
stock-based
compensation
expense 5,953 5,240 22,864 19,599
----- ----- ------ ------
Modified
EBITDA 113,867 104,249 9% 436,658 399,016 9%
=== ===
Non-cash stock-
based
compensation
expense 7,143 6,446 26,518 23,357
Depreciation,
amortization,
and
accretion 74,290 73,468 296,167 285,783
Net Interest
expense (3) 15,782 18,111 64,223 69,003
Non cash interest
expense and
deferred debt
costs (2) (3) 4,969 4,628 19,418 18,025
Other loss - - - 7,767
Income tax
expense 587 697 2,746 2,347
--- --- ----- -----
Net Income
(Loss) $11,096 $899 $27,586 ($7,266)
======= ==== ======= =======
Modified Gross
Margin % 58.2% 57.6% 58.7% 57.9%
==== ==== ==== ====
Modified EBITDA
Margin % 37.0% 35.4% 36.0% 34.4%
==== ==== ==== ====
Free Cash
Flow:
Modified EBITDA $113,867 $104,249 9% $436,658 $399,016 9%
Less: Capital
Expenditures 72,347 72,868 -1% 274,890 276,857 -1%
------ ------ --- ------- ------- ---
Unlevered Free
Cash Flow 41,520 31,381 32% 161,768 122,159 32%
Less: Net
interest
expense (3) 15,782 18,111 -13% 64,223 69,003 -7%
------ ------ --- ------ ------ ---
Levered Free
Cash Flow (3) $25,738 $13,270 94% $97,545 $53,156 84%
======= ======= === ======= ======= ===
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Effective 1/1/09, the Company adopted ASC 470-20 (formerly referred
to as FSP APB 14-1 Accounting for Convertible Debt Instruments),
which requires retrospective application. Included above is $4.4
million and $4.1 million for the quarter ended Dec. 31, 2009 and
2008, respectively, and $17.1 million and $15.8 million for the
twelve months ended December 31, 2009 and 2008, respectively, for
adoption of this pronouncement.
(3) Includes $0.6 million and $2.2 million reclassification from Interest
Expense to Non Cash Interest Expense and Deferred Debt Costs for
the three and twelve months ended December 31, 2008, respectively.
tw telecom inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited (1)
Three Months Ended
------------------
Dec 31, Sept 30,
2009 2009 Growth %
---- ---- --------
Revenue
Data and Internet
services $124,799 $119,977 4%
Network services 90,463 93,233 -3%
Voice services 82,860 83,799 -1%
------ ------ ---
Service Revenue 298,122 297,009 0%
Intercarrier
compensation 9,812 7,757 26%
----- ----- ---
Total Revenue 307,934 304,766 1%
------- ------- ---
Expenses
Operating costs 129,855 127,155
------- -------
Gross Margin 178,079 177,611
Selling, general
and administrative
costs 71,355 74,611
Depreciation,
amortization, and
accretion 74,290 74,280
------ ------
Operating
Income 32,434 28,720
Interest expense (15,815) (15,852)
Non cash interest
expense and
deferred debt costs
(2) (4,969) (4,880)
Interest income 33 116
-- ---
Income before
income taxes 11,683 8,104
Income tax expense 587 406
--- ---
Net Income $11,096 $7,698 44%
======= ====== ===
SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN
AND MODIFIED EBITDA
-----------------------------------------------------------
Gross Margin $178,079 $177,611
Add back non-cash
stock-based
compensation
expense 1,190 961
----- ---
Modified Gross
Margin 179,269 178,572 0%
===
Selling, general
and administrative
costs 71,355 74,611
Add back non-cash
stock-based
compensation
expense 5,953 5,465
----- -----
Modified EBITDA 113,867 109,426 4%
===
Non-cash stock-
based compensation
expense 7,143 6,426
Depreciation,
amortization, and
accretion 74,290 74,280
Net Interest expense 15,782 15,736
Non cash interest
expense and
deferred debt costs
(2) 4,969 4,880
Income tax expense 587 406
--- ---
Net Income $11,096 $7,698
======= ======
Modified Gross
Margin % 58.2% 58.6%
==== ====
Modified EBITDA
Margin % 37.0% 35.9%
==== ====
Free Cash Flow
Modified EBITDA $113,867 $109,426 4%
Less: Capital
Expenditures 72,347 59,931 21%
------ ------ ---
Unlevered Free Cash
Flow 41,520 49,495 -16%
Less: Net interest
expense 15,782 15,736 0%
------ ------ ---
Levered Free Cash
Flow $25,738 $33,759 -24%
======= ======= ===
(1) For complete financials and related footnotes, please refer to
the Company's SEC filings.
(2) Effective 1/1/09, the Company adopted ASC 470-20 (formerly
referred to as FSP APB 14-1 Accounting for Convertible Debt
Instruments), which requires retrospective application. Included
above is $4.4 million and $4.3 million for the quarters ended
December 31, 2009 and September 30, 2009, for adoption of this
pronouncement.
tw telecom inc.
Highlights of Results Per Share
Unaudited (1) (2)
Three Months Ended Twelve Months Ended
------------------ -------------------
12/31/09 9/30/09 12/31/08 12/31/09 12/31/08
-------- ------- -------- -------- --------
Weighted Average
Shares Outstanding
(thousands)
Basic 148,439 148,082 147,605 148,087 147,251
======= ======= ======= ======= =======
Diluted (2) 151,372 149,952 148,194 149,852 147,251
======= ======= ======= ======= =======
EPS prior to impacts
of convertible debt
accounting $0.10 $0.08 $0.03 $0.31 $0.06
Adoption of
Accounting for
Convertible Debt
Instruments (3) (0.03) (0.03) (0.02) (0.12) (0.11)
----- ----- ----- ----- -----
Basic Income (Loss)
per Common Share $0.07 $0.05 $0.01 $0.19 ($0.05)
===== ===== ===== ===== ======
Diluted Income (Loss)
per Common Share $0.07 $0.05 $0.01 $0.18 ($0.05)
===== ===== ===== ===== ======
As Of
-----
12/31/09 9/30/09 12/31/08
-------- ------- --------
Common shares
(thousands)
Actual Shares
Outstanding 150,123 149,335 147,774
======= ======= =======
Unvested Restricted
Stock Units
and Restricted
Stock Awards
(thousands) 2,296 2,827 1,199
===== ===== =====
Options (thousands)
Options Outstanding 11,035 13,033 11,956
====== ====== ======
Options Exercisable 6,922 8,161 7,961
===== ===== =====
Options Exercisable
and In-the-Money 2,639 1,781 1,724
===== ===== =====
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Stock options, restricted stock units/awards and convertible debt
subject to conversion, are excluded from the computation of
diluted weighted average shares outstanding if inclusion would be
anti-dilutive. See the Company's SEC filings for more details.
(3) Effective 1/1/09, the Company adopted ASC 470-20 (formerly referred
to as FSP APB 14-1 Accounting for Convertible Debt Instruments),
which requires retrospective application. Adoption of this
pronouncement included $4.4 million, $4.3 million and $4.1 million
for the quarters ended Dec. 31, 2009, Sept. 30, 2009 and Dec. 31,
2008, respectively, for Non Cash Interest Expense and Deferred Debt
Costs.
tw telecom inc.
Condensed Consolidated Balance Sheet Highlights
(Dollars in thousands)
Unaudited (1)
December 31, September 30, December 31,
2009 2009 2008
---- ---- ----
ASSETS
Cash, equivalents and short
term investments $470,772 $432,331 $352,176
Receivables 87,465 86,324 93,662
Less: allowance (9,449) (11,011) (11,271)
------ ------- -------
Net receivables 78,016 75,313 82,391
Other current assets 43,120 22,800 20,850
Property, plant and
equipment 3,481,287 3,443,554 3,266,868
Less: accumulated
depreciation (2,186,915) (2,149,487) (1,959,958)
---------- ---------- ----------
Net property, plant and
equipment 1,294,372 1,294,067 1,306,910
Other Assets (2) 487,920 510,037 519,563
------- ------- -------
Total $2,374,200 $2,334,548 $2,281,890
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities (3)
Accounts payable $51,088 $45,999 $46,399
Deferred revenue 34,005 33,110 30,419
Accrued taxes, franchise
and other fees 68,669 67,160 64,270
Accrued interest 16,219 9,462 17,386
Accrued payroll and
benefits 42,589 43,612 38,245
Accrued carrier costs 35,890 30,502 34,818
Current portion of debt
and lease obligations 7,569 8,264 7,221
Other current liabilities 39,120 39,590 34,992
------ ------ ------
Total current
liabilities 295,149 277,699 273,750
Long-Term Debt and Capital
Lease Obligations
2 3/8% convertible senior
debentures, due 4/1/2026
(2) 373,750 373,750 373,750
Unamortized Discount (2) (64,808) (69,094) (81,418)
------- ------- -------
Net 308,942 304,656 292,332
Floating rate senior
secured debt - Term Loan
B, due 1/7/2013 582,000 583,500 588,000
9 1/4% senior unsecured
notes, due 2/15/2014 400,229 400,243 400,285
Capital lease obligations 16,768 17,706 10,782
Less: current portion (7,569) (8,264) (7,221)
------ ------ ------
Total long-term debt
and capital lease
obligations 1,300,370 1,297,841 1,284,178
Long-Term Deferred Revenue 15,988 16,506 17,734
Other Long-Term Liabilities 30,653 30,197 33,035
Stockholders' Equity (2) 732,040 712,305 673,193
------- ------- -------
Total $2,374,200 $2,334,548 $2,281,890
========== ========== ==========
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Effective January 1, 2009 the Company adopted ASC 470-20 (formerly
referred to as FSP APB 14-1 Accounting for Convertible Debt
Instruments). For further details see the Company's SEC filings and
the Company's supplemental earnings slides.
(3) Certain prior period liabilities have been reclassified to conform
with the presentation for all periods.
tw telecom inc.
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,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Cash flows from
operating activities:
Net Income (loss) $11,096 $7,698 $899 $27,586 (7,266)
Adjustments to
reconcile net
income (loss) to
net cash
provided by
operating
activities:
Depreciation,
amortization,
and
accretion 74,290 74,280 73,468 296,167 285,783
Stock-based
compensation 7,143 6,426 6,446 26,518 23,357
Discount on
debt,
investment
impairment,
deferred debt
issue costs
and other 4,992 4,902 5,036 20,036 27,347
Changes in
operating assets
and liabilities:
Receivables,
prepaid
expense and
other assets (3,813) 232 (6,166) 1,972 (3,404)
Accounts payable,
deferred
revenue, and
other
liabilities 18,567 14,237 15,793 18,199 (20,297)
------ ------ ------ ------ -------
Net cash
provided by
operating
activities 112,275 107,775 95,476 390,478 305,520
------- ------- ------ ------- -------
Cash flows from
investing activities:
Capital
expenditures (72,347) (59,931) (72,868) (266,997) (274,519)
Purchase of
investments (24,892) - - (24,892) -
Proceeds from
maturities
of investments - - - - 3,699
Proceeds from
sale of
assets
and other
investing
activities 386 (6,080) (2,158) 1,300 (2,939)
--- ------ ------ ----- ------
Net cash
used in
investing
activities (96,853) (66,011) (75,026) (290,589) (273,759)
------- ------- ------- -------- --------
Cash flows from
financing activities:
Net proceeds
from issuance
of common stock
upon exercise
of stock options,
vesting of
restricted
stock awards
and units,
and employee
stock purchase
plan 444 576 (313) 1,834 5,930
Payment of
debt and
capital lease
obligations (2,290) (1,810) (1,648) (7,992) (7,046)
------ ------ ------ ------ ------
Net cash
used in
financing
activities (1,846) (1,234) (1,961) (6,158) (1,116)
------ ------ ------ ------ ------
Increase in
cash and
cash
equivalents 13,576 40,530 18,489 93,731 30,645
Cash and cash
equivalents
at the
beginning
of the
period 432,331 391,801 333,687 352,176 321,531
------- ------- ------- ------- -------
Cash and cash
equivalents
at the end
of the
period $445,907 $432,331 $352,176 $445,907 $352,176
======== ======== ======== ======== ========
Supplemental
disclosures of
cash, equivalents
and short term
investments
Cash and cash
equivalents
at the end
of the period $445,907 $432,331 $352,176 $445,907 $352,176
Short
term
investments 24,865 - - 24,865 -
------ --- --- ------ ---
Total of cash,
equivalents
and short
term
investments $470,772 $432,331 $352,176 $470,772 $352,176
======== ======== ======== ======== ========
Supplemental
disclosures of
cash flow
information:
Cash paid
for interest $9,382 $23,643 $11,626 $68,049 $77,006
====== ======= ======= ======= =======
Cash paid for
income taxes $175 $618 $1,011 $3,001 $2,072
==== ==== ====== ====== ======
Addition of
capital lease
obligation - - - $7,893 $2,338
=== === === ====== ======
Supplemental information
to reconcile
capital
expenditures:
Capital
expenditures
per cash
flow
statement $72,347 $59,931 $72,868 $266,997 $274,519
Addition of
capital
lease
obligation - - - 7,893 2,338
--- --- --- ----- -----
Total capital
expenditures $72,347 $59,931 $72,868 $274,890 $276,857
======= ======= ======= ======== ========
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
SOURCE tw telecom inc.
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