NTELOS HOLDINGS CORP WAYNESBORO, Va., July 28, 2015 /PRNewswire/ -- NTELOS Holdings Corp. (NASDAQ: NTLS) ("nTelos" or the "Company") announced today operating and financial results for its second quarter ended June 30, 2015. In the fourth quarter of 2014, the Company announced a strategic refocus of its business operations in its western Virginia and West Virginia markets ("Western Markets" or "Markets"). The Company is currently in the process of winding down operations in its Eastern Markets, which it expects to complete by November 15, 2015.
"nTelos's increased focus on being competitive in our local markets, strong retail offerings and expanded 4G LTE network continue to drive robust subscriber growth. During the first half of 2015, we more than doubled net adds over the same period last year and surpassed the halfway point of our LTE network build out, ahead of schedule," said Rod Dir, Chief Executive Officer of NTELOS Holdings Corp. "With ample liquidity evidenced by our quarter end cash balance of over $146 million, an improving cost structure and a more focused operating plan, we are well positioned to continue unlocking value and enhancing our competitive position within our Markets."
The "Highlights" and "Subscriber Update" sections represent results of operations for our Western Markets, which are included in the supplemental schedules provided.
Highlights
-- Revenues increased 6% to $91.4 million for the second quarter 2015,
compared to $86.1 million for the second quarter 2014;
-- Postpaid average monthly billings per user ("ABPU") was $58.64 for the
second quarter 2015, compared to $58.04 for the first quarter 2015 and
$59.78 for the second quarter 2014;
-- Adjusted EBITDA was $27.5 million for the second quarter 2015, compared
to $33.3 million for the second quarter 2014. Adjusted EBITDA during the
second quarter 2015 reflected the absorption of corporate overhead
previously allocated to the Eastern Markets in 2014;
-- Net subscriber additions for the six months ended June 30, 2015 of
15,400 exceeded net subscriber additions for the full year 2014 of
14,600;
-- Postpaid churn of 1.5% was the Company's lowest quarterly churn since
second quarter 2008; and
-- Approximately 53% of our covered POPs have access to our LTE network,
exceeding our original year end 2015 goal of 50%.
Subscriber Update
Total Subscribers
-- Total subscribers were 297,500 as of June 30, 2015, compared to 290,100
for the first quarter 2015 and 274,000 for the second quarter 2014;
-- Total subscriber gross additions for the second quarter 2015 were
25,700, compared to 27,500 for the first quarter 2015 and 22,500 for the
second quarter 2014; and
-- Total subscriber net additions for the second quarter 2015 were 7,400,
compared to 8,000 for the first quarter 2015 and 3,000 for the second
quarter 2014.
Postpay Subscribers
-- Postpay subscriber gross additions for the second quarter 2015 were
14,300, compared to 15,700 for the first quarter 2015 and 14,700 for the
second quarter 2014;
-- Net postpay subscriber additions were 4,300 for the second quarter 2015,
compared to 4,600 for the first quarter 2015 and 3,500 for the second
quarter 2014;
-- Postpay churn for the second quarter 2015 was 1.5%, compared to 1.7% for
the first quarter 2015 and 1.8% for the second quarter 2014;
-- ARPA was $117.18 for the second quarter 2015, compared to $136.61 for
the second quarter 2014; and
-- As of June 30, 2015, total postpay subscribers were 229,000.
Prepay Subscribers
-- Prepay subscriber gross additions for the second quarter 2015 were
11,400, compared to 11,800 for the first quarter 2015 and 7,800 for the
second quarter 2014;
-- Net prepay subscriber additions (losses) were 3,100 for the second
quarter 2015, compared to 3,400 for the first quarter 2015 and (500) for
the second quarter 2014;
-- Prepay churn for the second quarter 2015 was 4.1%, compared to 4.4% for
the first quarter 2015 and 4.2% for the second quarter 2014; and
-- As of June 30, 2015, total prepay subscribers were 68,500.
Eastern Markets Wind Down Update
During the six months ended June 30, 2015, we reduced our Eastern Markets subscribers by 85,400 as we take action to wind down our operations in an orderly manner. In addition, on June 30 we released the first 10MHz of spectrum to the buyer as planned. Eastern Markets Adjusted EBITDA for the six months ended June 30, 2015 was $13.7 million, and is not included in Western Markets Adjusted EBITDA as discussed above.
Net Income
Net income of nTelos Holdings, after net income attributable to noncontrolling interests, was $1.6 million, or $0.07 per diluted share, for the second quarter 2015, compared to $0.5 million, or $0.02 per diluted share, for the second quarter 2014.
Liquidity
Cash at the end of the second quarter 2015 was $146.5 million, compared to $75.7 million at the end of the fourth quarter 2014. The cash balance includes $2.2 million in restricted cash and approximately $56.0 million nTelos received on April 15, 2015 in connection with the sale of the Company's spectrum portfolio in its Eastern Markets.
Business Outlook
For the year ending December 31, 2015, the Company reiterates its full year 2015 Adjusted EBITDA guidance to be between $100.0 million and $108.0 million. Adjusted EBITDA excludes restructuring costs and results from the Eastern Markets. Full year 2015 capital expenditures are still expected of between $95.0 and $105.0 million.
Conference Call
The Company will host a conference call with investors and analysts to discuss its second quarter 2015 results this morning, July 28, 2015, at 11:00am ET. To participate, please dial 1-877-407-9120 in the U.S. and Canada and 1-412-902-1009 for international, approximately 10 minutes before the scheduled start of the call. The conference call and accompanying presentation will also be accessible live on the Investor Relations section of the Company's website at http://ir.ntelos.com.
An archive of the conference call will be available online at http://ir.ntelos.com beginning approximately one hour after the call. A replay will also be available via telephone by dialing 1-877-660-6853 in the U.S. and Canada or 1-201-612-7415 internationally and entering access code 13601222 beginning approximately one hour after the call and continuing until August 4, 2015.
Non-GAAP Measures
Adjusted EBITDA is defined as net income attributable to NTELOS Holdings Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, transaction related costs, restructuring and asset impairment charges, gain/loss on sale or disposal of assets and derivatives, net income attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, separation charges, secondary offering costs, adjustments for impact of recognizing deferred gain associated with towers sold to Grain Management and adjustments for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis.
ARPA, or average monthly revenue per account, is computed by dividing service revenues per period by the average number of accounts during that period. Please see the footnotes in the exhibits for a complete definition of this measure.
ABPU, or average billings per user, is computed by adding average monthly postpaid service billings to users and equipment installment plan (EIP) billings divided by the average number of postpaid users during the period, further divided by the number of months in the period. NTELOS believes average postpaid customer billings per user is indicative of estimated cash collection, including equipment installments, from customers each month.
Adjusted EBITDA is a key metric used by investors to determine if the Company is generating sufficient cash flows to continue to produce shareholder value and provide liquidity for future growth. ARPA and ABPU provides management with useful information concerning the appeal of the Company's postpay rate plans and service offerings and the Company's performance in attracting and retaining high value customers.
Adjusted EBITDA, ARPA and ABPU are non-GAAP financial performance measures. They should not be considered in isolation or as an alternative to measures determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Please refer to the exhibits and materials posted on the Company's website for a reconciliation of these non-GAAP financial performance measures to the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability and use of such financial performance measures.
About NTELOS
NTELOS Holdings Corp. (NTLS), operating through its subsidiaries as "nTelos Wireless," is headquartered in Waynesboro, VA, and provides high-speed, dependable nationwide voice and data coverage for approximately 297,500 retail subscribers based in its Western Markets, comprised of western Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. The Company's licensed territories in the Western Markets have a total population of approximately 4.4 million residents, of which its wireless network covers approximately 3.1 million residents. The Company is also the exclusive wholesale provider of wireless network services to Sprint Corporation in portions of its western Virginia and West Virginia territories for all Sprint wireless customers.
FORWARD-LOOKING STATEMENTS
Any statements contained in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words "anticipates," "believes," "expects," "intends," "plans," "estimates," "targets," "projects," "should," "may," "will" and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include, but are not limited to: our ability to attract and retain retail subscribers to our services; our dependence on our strategic relationship with Sprint Corporation ("Sprint"); our ability to realize the expected proceeds, cost savings and other benefits from the wind down of our Eastern Markets; a potential increase in roaming rates and wireless handset subsidy costs; rapid development and intense competition in the telecommunications industry; our ability to finance, design, construct and realize the benefits of any planned network technology upgrade; our ability to acquire or gain access to additional spectrum in the future; the potential to experience a high rate of customer turnover; the potential for competitors to build networks in our markets; cash and capital requirements; operating and financial restrictions imposed by our credit agreement; adverse economic conditions; federal and state regulatory fees, requirements and developments; loss of ability to use our current cell sites; our continued reliance on indirect channels of retail distribution; our reliance on certain suppliers and vendors; and other unforeseen difficulties that may occur. These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our most recent Annual Report filed on Form 10-K.
Exhibits:
-- Consolidated Financial Statements
-- Condensed Consolidated Balance Sheets
-- Condensed Consolidated Statements of Income
-- Consolidated Operating Metrics
-- Reconciliation of Net Income Attributable to NTELOS Holdings Corp.
to Adjusted EBITDA
-- Key Metrics
-- ARPA Reconciliation - Postpay
-- ABPU Reconciliation- Postpay
-- Western Markets Operating Metrics
-- Western Markets Condensed Consolidated Statements of Operating
Income
-- Western Markets Reconciliation of Net Income Attributable to NTELOS
Holdings Corp. to Adjusted EBITDA
-- Western Markets Key Metrics
-- Western Markets ARPA Reconciliation - Postpay
-- Western Markets ABPU Reconciliation - Postpay
NTELOS Holdings Corp.
---------------------
Condensed Consolidated Balance Sheets (Unaudited) (Unaudited)
June 30, 2015 December 31, 2014
------------- -----------------
(In thousands)
ASSETS
Current Assets
Cash $144,293 $73,546
Restricted cash 2,167 2,167
Accounts receivable, net 52,771 43,668
Inventories and supplies 16,282 18,297
Deferred income taxes 24,034 24,770
Prepaid expenses 14,684 13,543
Other current assets 336 4,626
254,567 180,617
------- -------
Assets Held for Sale 1,454 64,271
Securities and Investments 1,522 1,522
Property, Plant and Equipment, net 308,422 289,947
Intangible Assets
Goodwill 63,700 63,700
Radio spectrum licenses 44,933 44,933
Customer relationships and trademarks, net 4,688 5,084
Deferred Charges and Other Assets 20,869 18,474
Total Assets $700,155 $668,548
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Current portion of long-term debt $5,728 $5,816
Accounts payable 15,474 24,541
Accrued expenses and other current liabilities 47,788 41,706
68,990 72,063
------ ------
Long-Term Debt 517,111 519,592
Other Long-Term Liabilities 128,351 109,845
Stockholders' Equity (Deficit) (14,297) (32,952)
Total Liabilities and Stockholders' Equity (Deficit) $700,155 $668,548
======== ========
NTELOS Holdings Corp.
---------------------
Condensed Consolidated Statements of Income Three Months Ended Six Months Ended
------------------------------------------- ------------------ ----------------
(Unaudited) (Unaudited)
(In thousands, except per share amounts) June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
--------------------------------------- ------------- ------------- ------------- -------------
Operating Revenues
Retail Revenue $58,223 $72,935 $124,757 $146,811
Wholesale and other revenue 37,647 38,300 73,930 79,015
Equipment sales 12,454 6,560 29,843 14,051
Operating Revenues 108,324 117,795 228,530 239,877
------- ------- ------- -------
Operating Expenses
Cost of services 32,017 29,180 61,675 57,085
Cost of equipment sold 20,038 22,144 43,673 45,997
Customer operations 20,499 25,377 44,848 53,000
Corporate operations 9,975 11,261 19,387 23,032
Restructuring 1,602 - 3,610 -
Depreciation and amortization 14,485 19,929 28,359 38,996
Gain on sale of assets (802) - (16,749) -
97,814 107,891 184,803 218,110
------ ------- ------- -------
Operating Income 10,510 9,904 43,727 21,767
Other Expense
Interest expense (7,574) (8,315) (15,491) (16,274)
Other income (expense), net 35 (92) 31 (1,164)
--- --- ---
(7,539) (8,407) (15,460) (17,438)
------ ------ ------- -------
Income before Income Taxes 2,971 1,497 28,267 4,329
Income Taxes 1,090 640 11,099 1,750
----- --- ------ -----
Net Income 1,881 857 17,168 2,579
Net Income Attributable to Noncontrolling Interests (271) (373) (762) (809)
Net Income Attributable to NTELOS Holdings Corp. $1,610 $484 $16,406 $1,770
====== ==== ======= ======
Earnings per Share Attributable to Common Shares:
Net Income applicable to NTELOS Holdings Corp. $1,610 $484 $16,406 $1,770
Net Income applicable to participating securities 70 - 611 -
Net Income applicable to common shares $1,540 $484 $15,795 $1,770
====== ==== ======
Basic $0.07 $0.02 $0.74 $0.08
===== ===== =====
Weighted average shares outstanding - basic 21,242 21,099 21,218 21,090
====== ====== ======
Diluted $0.07 $0.02 $0.71 $0.08
Weighted average shares outstanding - diluted 22,564 22,039 22,347 22,037
====== ====== ======
Cash Dividends Declared per Share - Common Stock $ - $0.42 $ - $0.84
================= ===== ================= =====
NTELOS Holdings Corp.
---------------------
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA - (Consolidated)
(In thousands)
-------------
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
------------- ------------- ------------- -------------
Net income attributable to NTELOS Holdings Corp. $1,610 $484 $16,406 $1,770
Net income attributable to noncontrolling interests 271 373 762 809
--- --- --- ---
Net income $1,881 $857 $17,168 $2,579
Interest expense 7,574 8,315 15,491 16,274
Income taxes 1,090 640 11,099 1,750
Other expense (35) 92 (31) 1,164
------------- --- --- --- -----
Operating income $10,510 $9,904 $43,727 $21,767
Depreciation and amortization 14,485 19,929 28,359 38,996
Restructuring 1,602 - 3,610 -
Gain on sale of assets (802) - (16,749) -
Accretion of asset retirement obligations 447 331 951 646
Equity-based compensation 910 1,283 1,769 2,594
SNA straight-line adjustment (1) 3,065 2,043 6,130 2,043
Cell site spectrum rent 1,006 - 1,006 -
Other (2) (94) 873 (294) 2,240
-------- --- --- ---- -----
Adjusted EBITDA $31,129 $34,363 $68,509 $68,286
======= ======= ======= =======
(1) Adjustment for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis.
(2) In 2014, Other includes legal and advisory fees related to new Sprint agreement and certain employee separation charges. In 2015,
Other includes certain non-recurring corporate costs and adjustments for recognizing a portion of the deferred gain for towers
sold to Grain Management, LLC.
NTELOS Holdings Corp.
---------------------
Key Metrics Six Months Ended
- (Consolidated)
Quarter Ended: 6/30/2014 9/30/2014 12/31/2014 3/31/2015 6/30/2015 6/30/2014 6/30/2015
-------------- --------- --------- ---------- --------- --------- --------- ---------
Subscribers
-----------
Beginning Subscribers 468,000 458,100 457,200 448,900 414,700 464,600 448,900
Postpay 306,800 308,200 310,200 310,100 294,300 306,700 310,100
Prepay 161,200 149,900 147,000 138,800 120,400 157,900 138,800
Gross Additions 39,000 41,400 40,400 28,800 25,800 84,400 54,600
Postpay 20,400 20,800 22,500 15,800 14,400 40,600 30,200
Prepay 18,600 20,600 17,900 13,000 11,400 43,800 24,400
Disconnections (1) 38,600 42,300 48,700 63,000 61,600 80,600 124,600
Postpay 17,100 18,900 22,700 31,500 32,200 37,000 63,700
Prepay 21,500 23,400 26,000 31,500 29,400 43,600 60,900
Net Additions (Losses) (1) 400 (900) (8,300) (34,200) (35,800) 3,800 (70,000)
Postpay 3,300 1,900 (200) (15,700) (17,800) 3,600 (33,500)
Prepay (2,900) (2,800) (8,100) (18,500) (18,000) 200 (36,500)
Ending Subscribers (1) 458,100 457,200 448,900 414,700 378,900 458,100 378,900
Postpay 308,200 310,200 310,100 294,300 276,400 308,200 276,400
Prepay 149,900 147,000 138,800 120,400 102,500 149,900 102,500
Churn, net (1) 2.8% 3.1% 3.6% 4.9% 5.2% 2.9% 5.0%
Postpay 1.8% 2.0% 2.4% 3.5% 3.8% 2.0% 3.6%
Prepay 4.5% 5.3% 6.0% 8.1% 8.8% 4.6% 8.5%
Other Items
-----------
ABPU/ARPA Statistics
--------------------
ABPU $62.05 $61.41 $61.43 $61.41 $60.14 $62.38 $60.80
ARPA $137.20 $134.18 $132.48 $125.98 $117.90 $137.34 $122.05
Postpay Accounts (2) 140,500 142,100 143,400 138,500 130,500 140,500 130,500
Postpay Subscribers
per Account (2) 2.2 2.2 2.2 2.1 2.1 2.2 2.1
Strategic Network Alliance
Revenues (000's) (3)
---------------------------
Billed Revenue $37,997 $38,144 $38,329 $36,627 $37,887 $77,281 $74,514
Straight-Line Adjustment (2,043) (3,065) (3,065) (3,065) (3,065) (2,043) (6,130)
Spectrum Lease
Consideration 822 1,234 1,233 1,190 1,222 822 2,412
------------ --- ----- ----- ---
SNA Revenues $36,776 $36,313 $36,497 $34,752 $36,044 $76,060 $70,796
------- ------- ------- ------- -------
Network Statistics
------------------
Licensed Population
(millions) 8.0 8.0 8.0 8.0 8.0 8.0 8.0
Covered Population
(millions) 6.0 6.0 6.0 6.0 6.0 6.0 6.0
Total Cell Sites 1,445 1,446 1,453 1,455 1,443 1,445 1,443
(1) During the 2014 second quarter, the Company terminated approximately 2,100 postpay subscribers that repeatedly exceeded
their terms and conditions relating to permitted usage. Additionally, the Company changed its business rules related to
reporting of long-term, non-revenue prepay subscribers. This change resulted in approximately 8,200 prepay subscribers
being excluded from our ending subscriber base. The impact of these Company-initiated terminations and change in
business rules is reflected in our ending subscriber totals as of June 30, 2014, and is not reflected in our
disconnections, net additions and churn calculations for the quarter ended June 30, 2014.
(2) End of Period
(3) Effective 5/1/14, SNA Revenues include the impact of recognizing the fixed fee element of SNA contract revenues on a
straightline basis, which is a reduction of billed revenue, and the non-cash consideration attributable to spectrum
leases. We have recognized an equal charge for spectrum lease expense within cost of sales and services.
NTELOS Holdings Corp.
---------------------
ARPA Reconciliation - Postpay - (Consolidated) Three Months Ended Six Months Ended
--------------------------------------------- ------------------ ----------------
Average Monthly Revenue per Account (ARPA) (1) June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
--------------------------------------------- ------------- ------------- ------------- -------------
(In thousands, except for accounts and ARPA)
Retail Revenue $58,223 $72,935 $124,757 $146,811
Less: prepay service revenues and other (10,612) (15,806) (23,560) (32,069)
---------------------------------------- ------- ------- ------- -------
Postpay service revenues $47,611 $57,129 $101,197 $114,742
Average number of postpay accounts 134,600 138,800 138,200 139,200
Postpay ARPA $117.90 $137.20 $122.05 $137.34
============ ======= ======= ======= =======
(1) Average monthly revenue per account (ARPA) is computed by dividing
postpay service revenues per period by the average number of
postpay accounts during that period. ARPA as defined may not be
similar to ARPA measures of other companies, is not a measurement
under GAAP and should be considered in addition to, but not as a
substitute for, the information contained in the Company's
consolidated statements of operations. The Company closely
monitors the effects of new rate plans and service offerings on
ARPA in order to determine their effectiveness. ARPA provides
management useful information concerning the appeal of NTELOS
rate plans and service offerings and the Company's performance in
attracting and retaining high-value customers.
NTELOS Holdings Corp.
---------------------
ABPU Reconciliation - Postpay - (Consolidated) Three Months Ended Six Months Ended
--------------------------------------------- ------------------ ----------------
Average Monthly Billings per User (ABPU) (1) June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
------------------------------------------- ------------- ------------- ------------- -------------
(In thousands, except for accounts and ABPU)
Retail Revenue $58,223 $72,935 $124,757 $146,811
Plus: EIP billings 3,919 - 6,249 -
Less: prepay service revenues and other (10,612) (15,806) (23,560) (32,069)
---------------------------------------- ------- ------- ------- -------
Total postpay billings $51,530 $57,129 $107,446 $114,742
Average number of postpay subscribers 285,600 306,900 294,500 306,600
Postpay ABPU $60.14 $62.05 $60.80 $62.38
============ ====== ====== ====== ======
(1) Average monthly billings per user (ABPU) is computed by dividing
postpay service revenues and equipment installment plan (EIP)
billings per period by the average number of postpay subscribers
during that period. ABPU as defined may not be similar to ABPU
measures of other companies, is not a measurement under GAAP and
should be considered in addition to, but not as a substitute for,
the information contained in the Company's consolidated
statements of operations. The Company closely monitors the
effects of new rate plans and service offerings on ABPU in order
to determine their effectiveness. ABPU provides management
useful information concerning the appeal of NTELOS rate plans and
service offerings and the Company's performance in attracting and
retaining high-value customers.
NTELOS Western Markets (1)
-------------------------
Condensed Consolidated Statements of Operating Income Three Months Ended Six Months Ended
----------------------------------------------------- ------------------ ----------------
(Unaudited) (Unaudited)
(In thousands) June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
------------- ------------- ------------- ------------- -------------
Operating Revenues
Retail Revenue $42,547 $44,262 $85,558 $88,643
Wholesale and other revenue 36,700 37,811 72,297 78,039
Equipment sales 12,141 4,052 28,844 8,609
Operating Revenues 91,388 86,125 186,699 175,291
------ ------ ------- -------
Operating Expenses
Cost of services 22,785 19,858 43,606 38,643
Cost of equipment sold 19,885 14,744 42,883 30,510
Customer operations 16,130 14,996 35,682 31,017
Corporate operations 9,317 7,238 17,942 14,961
Restructuring 677 - 2,282 -
Depreciation and amortization 13,073 13,718 25,934 26,640
Gain on sale of assets (102) - (11,111) -
81,765 70,554 157,218 141,771
------ ------ ------- -------
Operating Income $9,623 $15,571 $29,481 $33,520
(1) Western Markets is defined as Holdings less Eastern Markets.
NTELOS Western Markets (1)
-------------------------
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Western Markets Proforma Adjusted EBITDA
(In thousands)
-------------
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
------------- ------------- ------------- -------------
Net Income Attributable to NTELOS Holdings Corp. $1,610 $484 $16,406 $1,770
Net income attributable to noncontrolling interests 271 373 762 809
--- --- --- ---
Net income $1,881 $857 $17,168 $2,579
Operating loss (income) attributable to Eastern Markets (887) 5,668 (14,246) 11,754
Interest expense 7,574 8,315 15,491 16,274
Income taxes 1,090 640 11,099 1,750
Other expense (35) 92 (31) 1,164
------------- --- --- --- -----
Operating income $9,623 $15,572 $29,481 $33,521
Depreciation and amortization 13,073 13,718 25,934 26,640
Restructuring (2) 677 - 2,282 -
Gain on sale of assets (102) - (11,111) -
Accretion of asset retirement obligations 315 234 615 457
Equity-based compensation 900 867 1,760 1,754
SNA straight-line adjustment (3) 3,065 2,043 6,130 2,043
Other ? (95) 873 (295) 2,240
------- --- --- ---- -----
Adjusted EBITDA $27,456 $33,307 $54,796 $66,655
======= ======= ======= =======
(1) Western Markets is defined as Holdings less Eastern Markets.
(2) Restructuring costs attributable to Corporate and Western Markets.
(3) Adjustment for impact of recognizing a portion of the billed SNA contract revenues on a straight line basis.
4 In 2014, Other includes legal and advisory fees related to new Sprint agreement and certain employee
separation charges.
In 2015, Other includes certain non-recurring corporate costs and adjustments for recognizing a portion of
the deferred gain for towers sold to Grain Management, LLC.
NTELOS Western Markets (1)
-------------------------
Key Metrics Six Months Ended
----------------
Quarter Ended: 6/30/2014 9/30/2014 12/31/2014 3/31/2015 6/30/2015 6/30/2014 6/30/2015
-------------- --------- --------- ---------- --------- --------- --------- ---------
Subscribers
-----------
Beginning Subscribers 277,100 274,000 277,100 282,100 290,100 273,600 282,100
Postpay 210,300 212,400 215,500 220,100 224,700 208,800 220,100
Prepay 66,800 61,600 61,600 62,000 65,400 64,800 62,000
Gross Additions 22,500 24,600 28,300 27,500 25,700 47,500 53,200
Postpay 14,700 15,500 18,600 15,700 14,300 29,300 30,000
Prepay 7,800 9,100 9,700 11,800 11,400 18,200 23,200
Disconnections (2) 19,500 21,500 23,300 19,500 18,300 41,000 37,800
Postpay 11,200 12,500 13,900 11,100 10,000 24,100 21,100
Prepay 8,300 9,000 9,400 8,400 8,300 16,900 16,700
Net Additions (Losses) (2) 3,000 3,100 5,000 8,000 7,400 6,500 15,400
Postpay 3,500 3,000 4,700 4,600 4,300 5,200 8,900
Prepay (500) 100 300 3,400 3,100 1,300 6,500
Ending Subscribers (2) 274,000 277,100 282,100 290,100 297,500 274,000 297,500
Postpay 212,400 215,500 220,100 224,700 229,000 212,400 229,000
Prepay 61,600 61,600 62,000 65,400 68,500 61,600 68,500
Churn, net (2) 2.3% 2.6% 2.8% 2.3% 2.1% 2.5% 2.2%
Postpay 1.8% 1.9% 2.2% 1.7% 1.5% 1.9% 1.6%
Prepay 4.2% 4.9% 5.0% 4.4% 4.1% 4.3% 4.3%
Other Items
-----------
ABPU/ARPA Statistics
--------------------
ABPU $59.78 $59.27 $59.35 $58.04 $58.64 $59.99 $58.34
ARPA $136.61 $133.83 $132.12 $122.04 $117.18 $136.60 $119.58
Postpay Accounts (3) 93,700 95,500 98,700 101,900 104,307 93,700 104,307
Postpay Subscribers per
Account (3) 2.3 2.3 2.2 2.2 2.2 2.3 2.2
Strategic Network Alliance Revenues
(000's) ?
------------------------------------
Billed Revenue $37,997 $38,144 $38,329 $36,627 $37,887 $77,281 $74,514
Straight-Line Adjustment (2,043) (3,065) (3,065) (3,065) (3,065) (2,043) (6,130)
Spectrum Lease
Consideration 822 1,234 1,233 1,190 1,222 822 2,412
------------ --- ----- ----- ----- ---
SNA Revenues $36,776 $36,313 $36,497 $34,752 $36,044 $76,060 $70,796
------- ------- ------- ------- -------
Network Statistics
------------------
Licensed Population
(millions) 4.4 4.4 4.4 4.4 4.4 4.4 4.4
Covered Population
(millions) 3.1 3.1 3.1 3.1 3.1 3.1 3.1
Total Cell Sites 999 1,000 1,004 1,006 1,007 999 1,007
LTE Cell Sites 89 135 135 202 274 89 274
LTE % of Total Cell Sites 8.9% 13.5% 13.4% 20.1% 27.2% 8.9% 27.2%
LTE % of Covered POPs NA NA 22.2% 43.6% 53.1% NA 53.1%
(1) Western Markets is defined as Holdings less Eastern Markets.
(2) During the 2014 second quarter, the Company terminated approximately 1,400 postpay subscribers that repeatedly
exceeded their terms and conditions relating to permitted usage. Additionally, the Company changed its business rules
related to reporting of long-term, non-revenue prepay subscribers. This change resulted in approximately 4,700
prepay subscribers being excluded from our ending subscriber base. The impact of these Company-initiated
terminations and change in business rules is reflected in our ending subscriber totals as of June 30, 2014, and is
not reflected in our disconnections, net additions and churn calculations for the periods ended June 30, 2014.
(3) End of Period
? Effective 5/1/14, SNA Revenues include the impact of recognizing the fixed fee element of SNA contract revenues on a
straightline basis, which is a reduction of billed revenue, and the non-cash consideration attributable to spectrum
leases. We have recognized an equal charge for spectrum lease expense within cost of sales and services.
NTELOS Western Markets (1)
-------------------------
ARPA Reconciliation - Postpay Three Months Ended Six Months Ended
----------------------------- ------------------ ----------------
Average Monthly Revenue per Account (ARPA) (2) June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
--------------------------------------------- ------------- ------------- ------------- -------------
(In thousands, except for accounts and ARPA)
Retail Revenue $42,547 $44,262 $85,558 $88,643
Less: prepay service revenues and other (6,320) (6,398) (12,570) (13,008)
Postpay service revenues $36,227 $37,864 $72,988 $75,635
Average number of postpay accounts 103,000 92,400 101,700 92,300
Postpay ARPA $117.18 $136.61 $119.58 $136.60
============ ======= ======= ======= =======
(1) Western Markets is defined as Holdings less Eastern Markets.
(2) Average monthly revenue per account (ARPA) is computed by
dividing postpay service revenues per period by the average
number of postpay accounts during that period. ARPA as defined
may not be similar to ARPA measures of other companies, is not a
measurement under GAAP and should be considered in addition to,
but not as a substitute for, the information contained in the
Company's consolidated statements of operations. The Company
closely monitors the effects of new rate plans and service
offerings on ARPA in order to determine their effectiveness.
ARPA provides management useful information concerning the
appeal of NTELOS rate plans and service offerings and the
Company's performance in attracting and retaining high-value
customers.
NTELOS Western Markets (1)
-------------------------
ABPU Reconciliation - Postpay Three Months Ended Six Months Ended
----------------------------- ------------------ ----------------
Average Monthly Billings per User (ABPU) (2) June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014
------------------------------------------- ------------- ------------- ------------- -------------
(In thousands, except for accounts and ABPU)
Retail Revenue $42,547 $44,262 $85,558 $88,643
Plus: EIP billings 3,640 - 5,636 -
Less: prepay service revenues (6,320) (6,398) (12,570) (13,008)
------------------------------ ------ ------ ------- -------
Total postpay billings $39,867 $37,864 $78,624 $75,635
Average number of postpay subscribers 226,600 211,100 224,600 210,100
Postpay ABPU $58.64 $59.78 $58.34 $59.99
============ ====== ====== ====== ======
(1) Western Markets is defined as Holdings less Eastern Markets.
(2) Average monthly billings per user (ABPU) is computed by dividing
postpay service revenues and equipment installment plan (EIP)
billings per period by the average number of postpay subscribers
during that period. ABPU as defined may not be similar to ABPU
measures of other companies, is not a measurement under GAAP and
should be considered in addition to, but not as a substitute
for, the information contained in the Company's consolidated
statements of operations. The Company closely monitors the
effects of new rate plans and service offerings on ABPU in order
to determine their effectiveness. ABPU provides management
useful information concerning the appeal of NTELOS rate plans
and service offerings and the Company's performance in
attracting and retaining high-value customers.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ntelos-holdings-corp-reports-second-quarter-2015-results-300119461.html
SOURCE NTELOS Holdings Corp.
