LITTLETON, Colo., Feb. 6 /PRNewswire-FirstCall/ -- Time Warner Telecom Inc. , a leading provider of managed voice and data networking solutions for business customers, today announced its fourth quarter 2006 financial results, including $238.8 million of revenue, $80.2 million in Modified EBITDA(1) ("M-EBITDA") and a net loss of $24.8 million. For the year ended December 31, 2006, the Company reported $812.4 million of revenue, $286.0 million of M-EBITDA, and a net loss of $98.8 million.
"This was an incredibly strong year for the Company," said Larissa Herda, Time Warner Telecom's Chairman, CEO and President. "Our organic results including revenue growth, M-EBITDA, margins, cash flow and customer growth were all impressive. We successfully executed a strategic acquisition, and accelerated free cash flow through accretive refinancing activities while maintaining our financial flexibility. We leveraged the positive momentum of our business to facilitate two equity offerings, which resulted in us becoming a non-controlled company, eliminating our Class B super-voting shares. In addition, we continued to invest in the business to focus on delivering complex solutions and serving large customer opportunities, all positioned to capture greater market share and grow revenue."
Highlights for the Quarter
For the quarter ending December 31, 2006, the Company --
* Grew total revenue 29% year over year and 22% sequentially
-- Included organic growth(2) of 9% year over year and 3% sequentially
* Grew enterprise revenue 43% year over year, and 29% sequentially
-- Included organic growth of 16% year over year and 5% sequentially
* Grew data and Internet revenue 40% year over year and 16% sequentially
-- Included organic growth of 30% year over year and 8% sequentially
* Produced $80.2 million of M-EBITDA, and 34% M-EBITDA margin
* Delivered $5.9 million of levered free cash flow(6) for the quarter
Acquisition and Integration of Xspedius ("Acquired Operations"(4))
On October 31, 2006, the Company completed its strategic acquisition of Xspedius. The Company paid $216 million in cash and issued 18.2 million Class A common shares. The Company achieved the following integration milestones in the first 60 days:
* Consolidated sales and marketing management, including the regional
sales structure, field operations and field engineering
* Integrated acquired IP backbone into the Company's nationwide network
* Integrated human resource and financial reporting systems and launched
a consolidated view of critical customer information
"To optimize the value out of our acquisition we are putting an intense focus toward fully integrating our operations," said Mark Peters, Time Warner Telecom's Executive Vice President and Chief Financial Officer. "We are pleased with our integration accomplishments this quarter. As expected, we will make integration expenditures over the next 12 to 16 months, weighted more heavily earlier in the integration process, with cost synergies to be realized later in the process. Accordingly, we expect the lower margins of the acquired operations and the related integration costs will impact our consolidated margins until we realize the expected cost synergies." The Company anticipates $15 to $20 million of expenses, and $20 to $25 million in capital expenditures related to the integration process in 2007. The Company also expects margins to be impacted by regular first quarter merit increases to employee compensation, the resetting of payroll taxes, and its re-branding initiative.
Year over Year Results -- Fourth Quarter 2006 compared to Fourth
Quarter 2005
Revenue
Quarterly revenue was $238.8 million for the current quarter, as compared to $184.5 million for the fourth quarter of 2005, an increase of $54.3 million, or 29%. This included revenue from core operations(3) of $201.6 million, which represented a 9% growth over the same period last year. The primary components of the change in revenue included:
* $44.6 million increase in revenue from enterprise customers, which
included the impact of the acquired operations and a $17.0 million
increase from core operations
* $8.5 million increase in revenue from carriers, which included the
impact of the acquired operations and a $.7 million increase from core
operations
By product line, the percentage change in revenue year over year was as follows:
* 40% increase for data and Internet(7) services, which included the
impact of the acquired operations and strong organic growth. Core
operations included 30% organic growth due primarily to success with
Ethernet and IP-based product sales
* 58% increase for voice services(8), which included the impact of the
acquired operations and strong organic growth. Core operations
included 8% organic growth due primarily to growth in bundled voice
products
* 12% increase for network services(9) due to the acquired operations.
Core operations included 1% organic growth
* 5% increase in Intercarrier Compensation primarily related to the
acquired operations. Core operations included an 11% decrease from
core operations due to fluctuations in dispute settlements
Monthly revenue churn was 1.1% and 1.3% for the third and fourth quarters of 2006, respectively. This compares to 1.3% monthly revenue churn for the fourth quarter of 2005. The Company expects to experience ongoing churn, including disconnects from carrier customers related to their merger activities and network grooming. In the current quarter the Company experienced a $1.3 million reduction in revenue from a wireless carrier from the prior quarter, primarily related to its earlier consolidation. The Company expects the balance of this carrier's disconnects related to consolidation to be completed in the first half of 2007.
M-EBITDA and Margins
M-EBITDA grew $9.6 million to $80.2 million for the fourth quarter of 2006, a 14% increase over the same period last year. The increase in M-EBITDA primarily reflects the impact of the acquired operations and strong revenue growth. Included in M-EBITDA was $1.9 million of integration costs in the current quarter, and none in the same period last year. Operating costs increased primarily due to revenue growth and further investments in the business such as expansion of the IP backbone. Selling, general and administrative costs ("SG&A") remained stable in relation to total revenue between periods, but increased over the same period last year due to increases in headcount, higher commissions and acquisition costs.
Excluded from M-EBITDA, but included in operating and SG&A costs is non- cash stock-based compensation expense under SFAS 123R, which was adopted in the first quarter of 2006. Operating and SG&A costs include $.6 million and $3.2 million, respectively, for non-cash stock-based compensation expense in the current quarter, which was not recognized in the prior year.
M-EBITDA margin was 34% for the quarter as compared to 38% for the same quarter last year. Modified gross margin(10) was 59% for the current quarter compared to 66% for the same period last year. The difference in margins between periods primarily reflects the impact of integration costs for the Xspedius acquisition and two months of acquired operations, as well as normal fluctuations in revenue and costs. 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 Loss
The Company's net loss was $24.8 million, a loss of $.18 per share for the current quarter compared to a net loss of $22.3 million, a loss of $.19 per share for the fourth quarter of 2005. Excluding the non-cash stock-based compensation expense and debt extinguishment costs, the net loss narrowed to a loss of $.07 per share for the current quarter as compared to a loss of $.14 per share for the same period last year, reflecting strong M-EBITDA growth as well as significant net interest savings due to refinancing events.
Sequential Results - Fourth Quarter 2006 compared to Third Quarter 2006
Revenue
Revenue for the quarter was $238.8 million, as compared to $196.1 million for the third quarter of 2006, an increase of $42.7 million sequentially. Revenue from core operations was $201.6 million and represented a 3% growth over the prior quarter. The primary components of the change in revenue included:
* $33.8 million increase in revenue from enterprise customers which
included the impact of the acquired operations and $6.2 million
sequential increase for core operations
* $6.2 million increase in revenue from carrier customers, which included
the impact of the acquired operations and a $1.6 million decrease from
core operations
By product line, the percentage change in revenue sequentially was as follows:
* 16% increase for data and Internet services which included the impact
of the acquired operations and strong organic growth. Core operations
included 8% organic growth due primarily to success with Ethernet and
IP-based product sales
* 49% increase for voice services which included the impact of the
acquired operations and strong organic growth. Core operations
included 2% organic growth due primarily to growth in bundled voice
products
* 10% increase in Network services due to the impact of acquired
operations. Core operations included a 1% decrease
M-EBITDA and Margins
M-EBITDA grew $9.0 million to $80.2 million for the fourth quarter of 2006, a 13% increase sequentially. The increase in M-EBITDA primarily reflects the impact of the acquired operations and strong revenue growth. Included in M-EBITDA was $1.9 million of integration costs in the current quarter and $.8 million in the prior quarter.
M-EBITDA margin was 34% for the quarter, as compared to 36% reported in the third quarter of 2006. Modified gross margin was 59% for the quarter as compared to 63% in the third quarter. The difference in margins between periods primarily reflects the impact of integration costs for the Xspedius acquisition and two months of acquired operations.
Net Loss
The Company's net loss was $24.8 million, a loss of $.18 per share for the quarter compared to a net loss of $11.3 million, a loss of $.09 per share for the prior quarter. Excluding the non-cash stock-based compensation expense and debt extinguishment costs, the loss was $.07 per share for the current quarter as compared to a loss of $.06 per share for the prior quarter, reflecting strong M-EBITDA growth as well as increased interest costs for the additional debt drawn to fund the Xspedius acquisition.
Full year 2006 results compared to 2005 results
For the year 2006, the Company reported revenue of $812.4 million, M- EBITDA of $286.0 million, and a net loss of $98.8 million. For the year 2006, the Company:
* Grew total revenue $103.6 million or 15% for the year, which included
the impact of the acquired operations and strong organic growth from
core operations
--Included 9% organic growth
* Grew data and Internet revenue by 33% for the year, which included the
impact of the acquired operations and strong organic growth from core
operations
--Included 30% organic growth
* Increased M-EBITDA by 14%, primarily due to increased sales, which
included the impact of the acquired operations and strong organic
growth from core operations
* Completed refinancing of $1.1 billion of debt and redeemed $640 million
of senior notes and $199 million of term loan indebtedness, improving
the effective interest costs. Moved the nearest scheduled debt
maturity to 2013, excluding minimal annual amortization of the secured
term loan
* Achieved modified gross margin of 62% and M-EBITDA margin of 35%
* Achieved $15.2 million of levered free cash flow
Capital Expenditures
Capital expenditures were $55.8 million for the fourth quarter, which included $3.5 million of investments made for integration of the acquired operations. Capital expenditures for the year ending December 31, 2006, were $192.7 million compared to $162.5 million for the same period last year. Capital expenditures for core operations were $187.0 million for the current year. For 2007, the Company expects capital expenditures to be approximately $250 to $275 million, which will primarily be used to fund growth opportunities, and also includes $20 to $25 million for integration investments.
Summary
"We delivered impressive organic growth in 2006, at the same time we executed significant strategic events including completion of a valuable acquisition, acceleration of free cash flow through accretive refinancing activities and elimination of our super voting stock," said Herda. "All of our actions are focused on continuing to strengthen our differentiated market position and to enable us to grow long term shareholder value."
Time Warner Telecom Inc. plans to conduct a webcast conference call to discuss its earnings results on February 7 at 9:00 a.m. MST (11:00 a.m. EST). To access the webcast and the financial and statistical information to be discussed in the webcast, visit http://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, asset impairment charge, interest expense, debt extinguishment costs, interest income, investment gains and losses, income tax expense or benefit, cumulative effect of change in accounting principle, and, beginning the first quarter of 2006, non-cash stock-based compensation expense. (See a discussion below of Modified EBITDA under "Financial Measures".)
(2) Organic growth is defined as results from the Company's operations excluding the impact of acquired operations of Xspedius since October 31, 2006 and the related integration costs.
(3) Core operations are defined as the Company's operations excluding the results from the acquired operations of Xspedius since October 31, 2006 and the related integration costs.
(4) Acquired Operations are defined as the results of the Xspedius acquisition since October 31, 2006 and the related integration costs.
(5) The Company defines un-levered free cash flow as Modified EBITDA less capital expenditures. Un-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.
(6) The Company defines levered free cash flow as Modified EBITDA less capital expenditures and net interest expense from operations (but excludes debt extinguishment 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.
(7) Data and Internet services include services that enable customers to connect their internal computer networks and to access external networks, including Internet at high speeds using Ethernet protocol. Services include metro and wide area Ethernet, virtual private network solutions and Internet access.
(8) Voice services contain traditional and next generation voice capabilities, including voice services from stand alone and bundled products, long distance, 800 services, and VoIP.
(9) Network services include transmission speeds up to OC 192 to carrier and enterprise customers. These services transmit voice, data, image, storage and video, using state-of-the-art fiber optics.
(10) The Company defines modified gross margin as Total Revenue less operating costs excluding non-cash stock-based compensation expense under SFAS 123R. Modified gross margin is reconciled to gross margin in the financial tables.
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. Modified EBITDA is reconciled to Net Loss, the most comparable GAAP measure to Modified EBITDA, within the Consolidated Operations Highlights and in the supplemental information posted on the Company's website. In addition, management uses unlevered and levered free cash flow, which measure the ability of M-EBITDA to cover capital expenditures. The Company uses these cash flow definitions to eliminate certain non-cash costs. Levered and unlevered free cash flow are reconciled to Net Cash provided by (used in) operating activities 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 related to the adoption of SFAS 123R. 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 2007 and beyond, including expansion plans, growth prospects, expected margins, sales activity, expected customer disconnections, integration activities and results 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 summarized in the Company's filings with the SEC, especially the section entitled "Risk Factors" in its 2005 Annual Report on Form 10-K. Time Warner 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 Time Warner Telecom
Time Warner Telecom Inc., headquartered in Littleton, Colo., provides managed network services, specializing in Ethernet and transport data networking, Internet access, local and long distance voice, VoIP and security, to enterprise organizations and communications services companies throughout the U.S. As a leading provider of integrated and converged network solutions, Time Warner Telecom delivers customers overall economic value, quality service, and improved business productivity. Please visit http://www.twtelecom.com/ for more information.
Time Warner Telecom Inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited (1)
Three Months Ended Twelve Months Ended
December 31, December 31,
Growth Growth
2006 2005 % 2006 2005 %
Revenue
Network services
(formerly dedicated
transport) (2) $95,892 $85,468 12% $355,996 $341,779 4%
Data and Internet
services 62,849 44,752 40% 216,419 162,834 33%
Voice services
(formerly switched
services) (2) 68,457 43,267 58% 201,968 166,808 21%
Service Revenue 227,198 173,487 31% 774,383 671,421 15%
Intercarrier
compensation (3) 11,583 11,032 5% 37,992 37,306 2%
Total Revenue 238,781 184,519 29% 812,375 708,727 15%
Expenses
Operating costs (4) 98,085 62,598 311,532 264,517
Gross Margin 140,696 121,921 500,843 444,210
Selling, general and
administrative costs(4) 64,300 51,289 228,485 193,052
Depreciation,
amortization and
accretion 71,567 61,907 256,091 238,180
Operating Income 4,829 8,725 16,267 12,978
Interest expense (23,317) (29,778) (98,238) (120,219)
Debt extinguishment
costs (11,097) (5,470) (36,874) (14,043)
Interest income 4,811 4,117 20,054 13,220
Loss before
income taxes (24,774) (22,406) (98,791) (108,064)
Income tax expense
(benefit) 21 (150) 28 --
Net Loss ($24,795) ($22,256) ($98,819) ($108,064)
SUPPLEMENTAL INFORMATION
TO RECONCILE MODIFIED
GROSS MARGIN AND
MODIFIED EBITDA
Gross Margin $140,696 $121,921 $500,843 $444,210
Add back non-cash
stock-based
compensation expense 603 -- 2,075 --
Modified Gross
Margin 141,299 121,921 16% 502,918 444,210 13%
Selling, general and
administrative costs 64,300 51,289 228,485 193,052
Add back non-cash
stock-based
compensation expense 3,246 -- 11,590 --
Modified EBITDA 80,245 70,632 14% 286,023 251,158 14%
Non-cash stock-based
compensation expense 3,849 -- 13,665 --
Depreciation,
amortization and
accretion 71,567 61,907 256,091 238,180
Net Interest expense 18,506 25,661 78,184 106,999
Debt extinguishment
costs 11,097 5,470 36,874 14,043
Income tax expense 21 (150) 28 --
Net Loss ($24,795) ($22,256) ($98,819) ($108,064)
Modified Gross Margin % 59% 66% 62% 63%
Modified EBITDA Margin % 34% 38% 35% 35%
Free Cash Flow:
Modified EBITDA $80,245 $70,632 $286,023 $251,158
Less: Capital
Expenditures 55,805 41,053 192,679 162,521
Unlevered Free Cash
Flow 24,440 29,579 93,344 88,637
Less: Net interest
expense 18,506 25,661 78,184 106,999
Levered Free Cash Flow $5,934 $3,918 $15,160 ($18,362)
Integration Costs (5)
Operating costs &
Selling, General and
Administrative costs $2,010 -- $2,829 --
Capital Expenditures 3,511 -- 3,511 --
Total $5,521 -- $6,340 --
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) The Company modified the name of its revenue categories in order to
provide further clarity in the first quarter of 2006. This change
reflects only a change in title and is consistent with reporting in
prior periods. Please see the footnotes of the press release for a
further description.
(3) Intercarrier Compensation includes switched access and reciprocal
compensation.
(4) The Company adopted SFAS 123R effective January 1, 2006 for non-cash
stock-based compensation.
(5) Represents costs to integrate the acquired operations. All amounts
are included in the reported results above.
Time Warner Telecom Inc.
Consolidated Operations Highlights
(Dollars in thousands)
Unaudited (1)
Three Months Ended
December 31, September 30,
2006 2006 Growth %
Revenue
Network services (formerly
dedicated transport) (2) $95,892 $87,312 10%
Data and Internet services 62,849 53,995 16%
Voice services (formerly switched
services) (2) 68,457 45,932 49%
Service Revenue 227,198 187,239 21%
Intercarrier compensation (3) 11,583 8,870 31%
Total Revenue 238,781 196,109 22%
Expenses
Operating costs (4) 98,085 74,018
Gross Margin 140,696 122,091
Selling, general and
administrative costs (4) 64,300 54,409
Depreciation, amortization and
accretion 71,567 62,028
Operating Income 4,829 5,654
Interest expense (23,317) (21,759)
Debt extinguishment costs (11,097) --
Interest income 4,811 4,754
Loss before income taxes (24,774) (11,351)
Income tax expense 21 --
Net Loss ($24,795) ($11,351)
SUPPLEMENTAL INFORMATION TO
RECONCILE MODIFIED GROSS MARGIN AND
MODIFIED EBITDA
Gross Margin $140,696 $122,091
Add back non-cash stock-based
compensation expense 603 491
Modified Gross Margin 141,299 122,582 15%
Selling, general and
administrative costs 64,300 54,409
Add back non-cash stock-based
compensation expense 3,246 3,026
Modified EBITDA 80,245 71,199 13%
Non-cash stock-based compensation
expense 3,849 3,517
Depreciation, amortization and
accretion 71,567 62,028
Net Interest expense 18,506 17,005
Debt extinguishment costs 11,097 --
Income tax expense 21 --
Net Loss ($24,795) ($11,351)
Modified Gross Margin % 59% 63%
Modified EBITDA Margin % 34% 36%
Free Cash Flow
Modified EBITDA $80,245 $71,199
Less: Capital Expenditures 55,805 48,171
Unlevered Free Cash Flow 24,440 23,028
Less: Net interest expense 18,506 17,005
Levered Free Cash Flow $5,934 $6,023
Integration Costs (5)
Operating costs and Selling,
General and Administrative costs $2,010 --
Capital Expenditures 3,511 --
Total $5,521 --
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) The Company modified the name of its revenue categories in order to
provide further clarity in the first quarter of 2006. This change
reflects only a change in title and is consistent with reporting in
prior periods. Please see the footnotes of the press release for a
further description.
(3) Intercarrier Compensation includes switched access and reciprocal
compensation.
(4) The Company adopted SFAS 123R effective January 1, 2006 for non-cash
stock-based compensation.
(5) Represents costs to integrate the acquired operations. All amounts
are included in the reported results above.
Time Warner Telecom Inc.
Highlights of Results Per Share
Unaudited (1) (2) (3)
Three Months Ended
12/31/06 9/30/06 12/31/05
Weighted Average Shares
Outstanding (thousands)
Basic and Diluted 136,182 121,659 116,915
Basic and Diluted Loss
per Common Share
Loss per share before debt
extinguishment costs and
non-cash stock-based
compensation expense ($0.07) ($0.06) (0.14)
Impact of debt extinguishment
costs (0.08) -- (0.05)
Impact of non-cash stock-based
compensation expense (0.03) (0.03) --
As Reported ($0.18) ($0.09) ($0.19)
As of
12/31/06 9/30/06 12/31/05
Common shares (thousands)
Actual Shares Outstanding 142,815 122,823 117,382
Options (thousands)
Options Outstanding 13,738 14,336 19,512
Options Exercisable 8,977 9,843 13,158
Options Exercisable and
In-the-Money 4,526 5,355 4,022
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) As of December 31, 2006 only Class A common shares remain outstanding.
(3) Stock options, restricted stock units and convertible debt subject to
conversion were excluded from the computation of weighted average
shares outstanding because their inclusion would be anti-dilutive.
Time Warner Telecom Inc.
Condensed Consolidated Balance Sheet Highlights
(Dollars in thousands)
Unaudited (1)
December 31,September 30,December 31,
2006 2006 2005
ASSETS
Cash and equivalents, and short-
term investments $309,453 $345,121 $393,523
Receivables 87,105 65,629 58,535
Less: allowance (13,182) (7,395) (10,936)
Net receivables 73,923 58,234 47,599
Other current assets 31,297 27,519 28,251
Property, plant and equipment 2,771,631 2,601,746 2,480,113
Less: accumulated depreciation (1,477,519) (1,422,315) (1,253,163)
Net property, plant and
equipment 1,294,112 1,179,431 1,226,950
Other Assets 544,452 109,251 96,213
Total $2,253,237 $1,719,556 $1,792,536
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $41,388 $36,306 $34,787
Deferred revenue 22,582 18,622 20,478
Accrued taxes, franchise and
other fees 78,795 57,289 60,687
Accrued interest 16,984 13,737 35,211
Accrued payroll and benefits 34,688 37,017 28,757
Current portion of debt and
lease obligations 6,679 3,038 4,211
Other current liabilities 83,390 75,094 72,113
Total current liabilities 284,506 241,103 256,244
Long-Term Debt and Capital Lease
Obligations
Floating rate senior secured
debt - Term Loan B due 1/7/2013 600,000 -- --
Floating rate senior secured
debt - Term Loan B due
11/30/2010 (2) -- 198,500 200,000
Floating rate senior secured
notes, due 2/15/2011 (3) -- 240,000 240,000
10 1/8% senior unsecured notes,
due 2/1/2011 (4) -- -- 400,000
9 1/4% senior unsecured notes,
due 2/15/2014 400,396 400,410 400,451
2 3/8% convertible senior
debentures, due 4/1/2026 373,750 373,750 --
Capital lease obligations 8,491 8,919 10,122
Less: current portion (6,679) (3,038) (4,211)
Total long-term debt and
capital lease obligations 1,375,958 1,218,541 1,246,362
Long-term Deferred Revenue 20,357 18,226 16,937
Other Long-Term Liabilities 19,768 9,083 8,479
Stockholders' Equity 552,648 232,603 264,514
Total $2,253,237 $1,719,556 $1,792,536
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) This debt was refinanced on October 6, 2006.
(3) These notes were fully redeemed on November 6, 2006.
(4) These notes were fully redeemed on May 1, 2006.
Time Warner Telecom Inc.
Consolidated Statements of Cash Flows
(Dollars in thousands)
Unaudited (1)
Three Months Ended Year Ended
12/31/06 9/30/06 12/31/06
Cash flows from operating activities:
Net Loss ($24,795) ($11,351) ($98,819)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Depreciation, amortization, and
accretion 71,567 62,028 256,091
Stock-based compensation 3,849 3,517 13,665
Other 131 -- 131
Deferred debt issue, extinguishment
costs and premium on debt 11,661 779 40,032
Changes in operating assets and
liabilities:
Receivables and prepaid expense (928) (9,915) (18,161)
Accounts payable, deferred revenue,
and other liabilities 2,713 4,943 (18,381)
Net cash provided by operating
activities 64,198 50,001 174,558
Cash flows from investing activities:
Capital expenditures (55,774) (48,171) (192,269)
Cash paid for acquisitions, net of
cash acquired (212,416) -- (212,416)
Purchases of investments (87,312) (59,545) (425,671)
Proceeds from maturities of
investments 106,693 153,116 528,201
Proceeds from sale of assets and
other investing activities 1,216 (89) 1,232
Net cash provided by (used in)
investing activities (247,593) 45,311 (300,923)
Cash flows from financing activities:
Net proceeds from issuance of common
stock upon exercise of stock
options and in
connection with the employee
purchase plan 14,107 14,108 46,404
Net proceeds from issuance of debt 595,507 (73) 957,800
Retirement of debt obligations (443,300) -- (863,552)
Payment of debt and capital lease
obligations (487) (1,052) (3,568)
Net cash provided by (used in)
financing activities 165,827 12,983 137,084
Increase (decrease) in cash and
cash equivalents (17,568) 108,295 10,719
Cash and cash equivalents at the
beginning of the period 239,121 130,826 210,834
Cash and cash equivalents at the
end of the period $221,553 $239,121 221,553
Supplemental disclosures of cash flow
information:
Cash paid for interest $20,049 $28,700 $115,604
Cash paid for debt extinguishment
costs $4,800 -- $25,052
Addition of capital lease obligation $31 -- $410
Summary of Cash and equivalents and
short-term investments:
Cash and cash equivalents at end
of the period $221,553 $239,121 $221,553
Investments 87,900 106,000 87,900
$309,453 $345,121 $309,453
Supplemental information to reconcile
capital expenditures:
Capital expenditures per cash flow
statement $55,774 $48,171 $192,269
Addition of capital lease
obligation 31 -- 410
Total capital expenditures $55,805 $48,171 $192,679
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
Time Warner Telecom Inc.
Selected Operating Statistics
Unaudited (1)
Quarter Ended
2005
Mar. 31 Jun. 30 Sept. 30 Dec. 31
Operating Metrics:
Route Miles
Metro 12,835 13,053 13,427 13,589
Regional 7,015 7,015 7,015 7,015
Total 19,850 20,068 20,442 20,604
Buildings (2)
Fiber connected
buildings (on-net) 5,281 5,501 5,752 5,982
Type II (4) 14,576 15,057 15,581 16,246
Total 19,857 20,558 21,333 22,228
Networks
Class 5 Switches 39 39 38 38
Soft Switches 20 26 32 34
Headcount
Total Headcount 2,019 2,029 2,022 2,034
Sales Associates (3) 317 312 312 318
Customers
Total Customers 10,740 11,088 11,439 11,834
Quarter Ended
2006
Mar. 31 Jun. 30 Sept. 30 Dec. 31
Operating Metrics:
Route Miles
Metro 13,913 14,053 14,409 17,786
Regional 7,015 7,015 7,015 6,884
Total 20,928 21,068 21,424 24,670
Buildings (2)
Fiber connected
buildings (on-net) 6,185 6,433 6,672 7,457
Type II (4) 16,865 17,623 18,355 18,953
Total 23,050 24,056 25,027 26,410
Networks
Class 5 Switches 38 38 38 71
Soft Switches 34 35 35 35
Headcount
Total Headcount 2,055 2,105 2,129 2,784
Sales Associates (3) 330 331 342 482
Customers
Total Customers 12,181 12,642 13,081 31,516
(1) For complete financials and related footnotes, please refer to the
Company's SEC filings.
(2) Fiber connected buildings (e.g. "on-net") represents customer
locations to which the Company's fiber network is directly connected.
Type II buildings are carried on the Company's fiber network,
including the Company's switch for voice services, with a leased
service from the Company's distribution ring to the customer location.
(3) Includes Sales Account Executives and Customer Care Specialists.
(4) Excludes Type II buildings for acquired operations in the quarter
ended December 31, 2006.
