Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - NTELOS HOLDINGS CORP. | d494032d8k.htm |
| EX-99.1 - EX-99.1 - NTELOS HOLDINGS CORP. | d494032dex991.htm |
 4Q
& FY 2012 Earnings Presentation
February 28, 2013
Exhibit 99.2 |
 Presentation of Financial and Other Important Information
2
NASDAQ: NTLS
USE OF NON-GAAP FINANCIAL MEASURES
Included in this presentation are certain non-GAAP financial measures that are not determined in
accordance with US generally accepted accounting principles (“GAAP”). These financial
performance measures are not indicative of cash provided or used by operating activities and exclude the effects of certain
operating, capital and financing costs and may differ from comparable information provided by other
companies, and they should not be considered in isolation, as an alternative to, or more
meaningful than measures of financial performance determined in accordance with US generally accepted accounting principles.
These financial performance measures are commonly used in the industry and are presented because
NTELOS believes they provide relevant and useful information to investors. NTELOS utilizes
these financial performance measures to assess its ability to meet future capital expenditure and working capital
requirements, to incur indebtedness if necessary, and to fund continued growth. NTELOS also uses
these financial performance measures to evaluate the performance of its business, for budget
planning purposes and as factors in its employee compensation programs. Adjusted EBITDA is defined as net income
attributable to NTELOS Holdings Corp. before interest, income taxes, depreciation and amortization,
accretion of asset retirement obligations, gain/loss on derivatives, net income attributable to
non-controlling interests, other expenses/income, equity based compensation charges, acquisition related charges, net
loss from discontinued operations and costs related to the separation of the wireless and wireline
companies. Please review the reconciliations and other definitions of non-GAAP financial
measures contained in the press releases filed by the Company with the SEC, including those filed on Form 8-K on February
29, 2012, April 30, 2012, August 1, 2012, November 1, 2012 and February 28, 2013.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this presentation 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 and the potential outcome of any disputes with
Sprint Nextel (“Sprint”); 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; the potential to experience a high rate
of customer turnover; the potential for Sprint and others to build networks in our markets; cash and capital requirements;
operating and financial restrictions imposed by our senior credit facility; 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.
|
 Agenda
NASDAQ: NTLS
3
•
Jim Hyde, Chief Executive Officer
•
Steb Chandor, Chief Financial Officer
•
Conrad Hunter, Chief Operating Officer
Review Financial and Operational Highlights
Guidance Update
Q&A Session |
 Significant Growth in Operating Revenues
4
NASDAQ: NTLS
4Q12 revenue increased 11% from 4Q11 to $117.4 million
FY 2012 revenue increased 7% from FY 2011 to $454.0 million
|
 Retail Revenue Gains Momentum
5
NASDAQ: NTLS
Subscriber revenue growth driven by both:
ARPU growth
Subscriber growth
4Q12 retail revenue increased 6% sequentially and 13% from 4Q11 to $75.1 million
FY 2012 retail revenue increased 3% from FY 2011 to $285.1 million
|
 Wholesale/Other Revenue Shows Growth
6
NASDAQ: NTLS
millions
millions
+7%
+17%
4Q12 wholesale/other revenue increased 7% from 4Q11 to $42.2 million
FY 2012 wholesale/other revenue increased 17% from FY 2011 to $168.9 million
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
4Q 2011
4Q 2012
$130.0
$135.0
$140.0
$145.0
$150.0
$155.0
$160.0
$165.0
$170.0
$175.0
FY 2011
FY 2012 |
 Sprint Disputes Update
7
NASDAQ: NTLS
Data rate reset dispute
Still outstanding
Ranges updated to:
Sprint’s favor: $9.0 million
nTelos’s favor: $13.0 million
$4.2 million unrelated dispute raised during 3Q, isolated to historical billing
issues only $10.0 million
accrual
recorded
for
the
disputes
in
2012
included
in
current
liabilities |
 Subscribers –
Return to Growth
8
NASDAQ: NTLS
Subscribers up 6% year-over year to 439,600
As of December 31, 2012, postpaid made up 68% of subscriber base
+6%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
4Q 2011
4Q 2012
Prepaid Subscribers
Postpaid Subscribers |
 Subscribers –
Return to Growth (Continued)
9
NASDAQ: NTLS
Highest quarterly net adds in almost four years |
 Average Revenue Per User (ARPU)
10
NASDAQ: NTLS
4Q12 Blended ARPU up 9% year-over-year to $52.78
4Q12 Postpaid ARPU up 11% year-over-year to $61.19
+9%
+11% |
 Operational Expenses
NASDAQ: NTLS
11
($ in millions)
4Q12
4Q11
Cost of sales and services
$47.4
$37.2
Customer operations
$30.7
$29.8
Corporate operations
$7.8
$7.9
Depreciation & Amortization
$17.4
$17.6
$103.3
$92.5
Increase of 12% primarily driven by growth in subscriber additions
|
 Adjusted EBITDA
12
NASDAQ: NTLS
Investments in network and smartphone lineup driving return to growth in
EBITDA |
 Growth in Cell Sites
13
NASDAQ: NTLS
Expands wholesale coverage
Controls roaming costs
Mitigates churn risk |
  Capitalization Overview
($ in millions)
December 31, 2012
Cash
$76.2
Total Debt
$494.1
Net Debt
$417.9
Adjusted EBITDA
$134.7
Net Debt Leverage
3.1x
NASDAQ: NTLS
14 |
 Competitively Differentiated Retail Model
SAVINGS
SIMPLICITY
SERVICE
Driving consideration for
“the best value in
wireless”
proposition
Making it “easy”
to switch
Creating “raving fans”
through superior
customer service
15
NASDAQ: NTLS |
 Full Year Net Adds
16
NASDAQ: NTLS
FY 2012 prepaid net adds improved 20,500 year-over-year
FY 2012 postpaid net adds improved 22,500 year-over-year
|
 Smartphone Penetration
17
NASDAQ: NTLS
iPhone Update:
44,600 or 67% sold to new customers
21,500 or 33% sold to upgrading
subscribers
As of December 31, 2012:
71% of iPhone sales to new subscribers in
4Q 2012
22% of postpaid base had iPhones as of
December 31, 2012
66,100 iPhones sold in 2012
59% of postpaid subscribers have a
smartphone
47% of prepaid subscribers have a
smartphone |
 Churn –
Improvements Driving Greater Retail Profitability
18
NASDAQ: NTLS
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Prepaid Churn
Postpaid Churn |
 Guidance (as of February 28, 2013)
NASDAQ: NTLS
19
For the year ended December 31, 2013
Adjusted
EBITDA
of
$135
million
-
$145
million
CapEx
of
$75
million
-
$85
million
2013 net adds expected to exceed 2012 net adds |
 Appendix |
 21
NASDAQ: NTLS
NTELOS Holdings Corp.
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
(In thousands)
FY 2012
4Q12
3Q12
2Q12
1Q12
4Q11
Net Income Attributable to NTELOS Holdings Corp.
18,387
$
321
$
4,608
$
5,606
$
7,852
$
(60,537)
$
Net income attributable to noncontrolling interests
1,941
443
488
881
129
447
Net Income
20,328
764
5,096
6,487
7,981
(60,090)
Discontinued operations, net
-
-
-
-
-
(64,812)
Income from continuing operations
20,328
764
5,096
6,487
7,981
4,722
Interest expense
22,944
6,651
5,432
5,433
5,428
5,463
Loss (gain) on derivatives
-
-
-
-
5
-
Income taxes
12,676
(454)
3,141
4,609
5,380
2,071
Other expense (income), net
7,194
7,038
50
44
57
1,174
Operating income
63,142
13,999
13,719
16,573
18,851
13,430
Depreciation and amortization
63,528
17,440
15,810
15,101
14,907
17,589
Accretion of asset retirement obligations
637
174
163
151
149
156
Equity-based compensation
6,029
1,346
1,478
1,536
1,669
1,225
Business separation charges ¹
1,660
56
684
635
285
1,608
Adjusted EBITDA
134,726
$
33,015
$
31,854
$
33,996
$
35,861
$
34,008
$
1
Charges for legal and consulting services costs in connection with the separation of the
wireless and wireline operations. |
 22
NASDAQ: NTLS
NTELOS Holdings Corp.
ARPU Reconciliation
Average Monthly Revenue per User (ARPU)
1
4Q12
3Q12
2Q12
1Q12
4Q11
FY 2012
(In thousands, except for subscribers and ARPU)
Operating Revenues
117,398
$
114,466
$
111,585
$
110,540
$
105,996
$
453,989
$
Less: Equipment revenue from sales to new customers
(3,808)
(3,333)
(4,026)
(3,874)
(2,877)
(15,041)
Less: Equipment revenue from sales to existing customers
(3,315)
(3,416)
(3,903)
(4,403)
(3,642)
(15,037)
Less: Wholesale, other and adjustments
(41,488)
(42,380)
(41,061)
(40,836)
(39,326)
(165,765)
Gross subscriber revenue
68,787
65,337
62,595
61,427
60,151
258,146
Less: prepay subscriber revenue
(14,823)
(14,103)
(14,001)
(13,403)
(11,588)
(56,330)
Less: adjustments to prepay subscriber revenue
(237)
(434)
(382)
(653)
(304)
(1,706)
Gross postpay subscriber revenue
53,727
$
50,800
$
48,212
$
43,371
$
48,259
$
200,110
$
Prepay subscriber revenue
14,823
14,103
14,001
13,403
11,588
56,330
Plus: adjustments to prepay subscriber revenue
237
434
382
653
304
1,706
Gross prepay subscriber revenue
15,060
$
14,537
$
14,383
$
14,056
$
11,892
$
58,036
$
Average number of subscribers
434,457
427,610
422,247
417,195
412,851
425,377
Total ARPU
52.78
$
50.93
$
49.41
$
49.08
$
48.57
$
50.57
$
Average number of postpay subscribers
292,668
287,165
284,834
289,047
292,775
288,428
Postpay ARPU
61.19
$
58.97
$
56.42
$
54.63
$
54.94
$
57.82
$
Average number of prepay subscribers
141,789
140,446
137,413
128,148
120,076
136,949
Prepay ARPU
35.41
$
34.50
$
34.89
$
36.56
$
33.01
$
35.31
$
Gross subscriber revenue
68,787
65,337
62,595
61,427
60,151
258,146
Less: voice and other feature revenue
(41,379)
(39,366)
(37,708)
(37,579)
(38,651)
(156,032)
Data revenue
27,408
$
25,971
$
24,887
$
23,848
$
21,500
$
102,114
$
Average number of subscribers
434,457
427,610
422,247
417,195
412,851
425,377
Total Data ARPU
21.03
$
20.25
$
19.65
$
19.05
$
17.36
$
20.00
$
Gross postpay subscriber revenue
53,727
50,800
48,212
47,371
48,259
200,110
Less: postpay voice and other feature revenue
(34,651)
(33,028)
(31,490)
(31,432)
(33,224)
(130,601)
Postpay data revenue
19,076
$
17,772
$
16,722
$
15,939
$
15,035
$
69,509
$
Gross prepay subscriber revenue
15,060
14,537
14,383
14,056
11,892
58,036
Less: prepay voice and other feature revenue
(6,728)
(6,338)
(6,218)
(6,147)
(5,427)
(25,431)
Prepay data revenue
8,332
$
8,199
$
8,165
$
7,909
$
6,465
$
32,605
$
Average number of postpay subscribers
292,668
287,165
284,834
289,047
292,775
288,428
Postpay data ARPU
21.73
$
20.63
$
19.57
$
18.38
$
17.12
$
20.08
$
Average number of prepay subscribers
141,789
140,445
137,413
128,148
120,076
136,949
Prepay data ARPU
19.59
$
19.46
$
19.81
$
20.57
$
17.95
$
19.84
$
Average monthly revenue per user (ARPU) is computed by dividing service revenues per period by the
average number of subscribers during that period. ARPU as defined may not be similar to ARPU
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 ARPU in
order to determine their effectiveness. ARPU 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. 1 |
 February 28, 2013
Q4 & FY 2012 Earnings
Presentation |