Attached files
| file | filename |
|---|---|
| 8-K - 8-K - NTELOS HOLDINGS CORP. | d622691d8k.htm |
| EX-99.1 - EX-99.1 - NTELOS HOLDINGS CORP. | d622691dex991.htm |
 NASDAQ: NTLS
3Q 2013 Earnings Presentation
November 5, 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,
business separation charges, gain/loss on sale of assets and 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 November 8, 2012, February 28, 2013,
May 7, 2013, July 30, 2013 and November 5, 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 with Sprint
Corporation (“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; our ability to acquire or gain access to additional
spectrum; 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 |
 Continuing Growth in Operating Revenues
4
NASDAQ: NTLS
millions
+14%
3Q13 revenue increased 14% from 3Q12 to $130.9 million
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
3Q 2012
3Q 2013
Retail
Wholesale & Other |
 Retail Revenue Gains Continue
5
NASDAQ: NTLS
millions
Subscriber revenue growth continues to be driven by both:
ARPU growth
Subscriber growth
3Q13 retail revenue increased 2% sequentially and 13% from 3Q12 to $80.3
million Highest level in company history
+13%
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
3Q 2012
3Q 2013 |
 Wholesale/Other Revenue Remains Strong
6
NASDAQ: NTLS
millions
+17%
3Q13 wholesale/other revenue increased 17% from 3Q12 to $50.6 million
Increase reflects incremental revenue recognized from SNA settlement
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
3Q 2012
3Q 2013
SNA Settlement |
 Subscribers –
Net Additions Trend
7
NASDAQ: NTLS
Subscribers up 6% year-over year to approximately 457,100
As of September 30, 2013, postpaid made up 65% of subscriber base
+6%
+6%
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
3Q 2012
3Q 2013
Prepaid Subscribers
Postpaid Subscribers |
 Subscribers –
Net Additions Trend (Continued)
8
NASDAQ: NTLS
Seventh consecutive quarter of positive net adds
(500)
6,800
3,500
5,500
9,300
11,400
3,800
2,300
(2,000)
0
2,000
4,000
6,000
8,000
10,000
12,000
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013 |
 Average Revenue Per User (ARPU)
9
NASDAQ: NTLS
3Q13 Blended ARPU up 7% year-over-year to $54.29
3Q13 Postpaid ARPU up 10% year-over-year to $64.62
+7%
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013
Blended ARPU
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013
Postpaid ARPU
+10% |
 Operational Expenses
NASDAQ: NTLS
10
($ in millions)
3Q13
3Q12
Cost of sales and services
$46.5
$46.3
Customer operations
$32.2
$30.1
Corporate operations
$8.2
$8.6
Depreciation & Amortization
$16.6
$15.8
$103.5
$100.7
Increase of 3% primarily driven by:
Increased bad debt, retention and network costs
Increased depreciation tied to replacement of legacy network equipment
|
 Adjusted EBITDA
11
NASDAQ: NTLS
(millions)
Continued investments in the business resulted in higher Adjusted EBITDA
+43%
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
3Q 2012
3Q 2013
SNA Settlement |
 Capital Investment
12
NASDAQ: NTLS
Status:
1,434 cell sites as of Sept. 30, 2013
Pending launch of first LTE markets
millions
Catalysts:
2011-2012 Cell site expansion
2013 Initial LTE deployment
$52
$58
$72
$53
$65
$0
$10
$20
$30
$40
$50
$60
$70
$80
FY 2010
FY 2011
FY 2012
YTD 2012
YTD 2013 |
  Capitalization Overview
($ in millions)
September 30, 2013
Cash, unrestricted
$110.9
Total Debt
$491.5
Net Debt
$380.6
LTM Adjusted EBITDA
$157.2
Secured Term Loan
$490.4
Net Debt Leverage
2.4x
NASDAQ: NTLS
13 |
 Guidance (as of November 5, 2013)
NASDAQ: NTLS
14
For the year ended December 31, 2013
Adjusted
EBITDA
of
$150
million
-
$155
million
CapEx of approximately $80 million
Previously
$75
million
-
$85
million
2013 net adds expected to be at or about 2012 net adds
|
 3Q
2013 Net Adds 15
NASDAQ: NTLS
3Q13 prepaid net adds increased 1,300 year-over-year
3Q13 postpaid net adds decreased 4,500 year-over-year
600
4,900
5,500
1,900
400
2,300
0
1,000
2,000
3,000
4,000
5,000
6,000
Prepaid Net Adds
Postpaid Net Adds
Total Net Adds
3Q12
3Q13 |
 Smartphone Penetration
16
NASDAQ: NTLS
As of September 30, 2013:
Smartphone Penetration
ARPU
50%
55%
60%
63%
65%
$49.00
$50.00
$51.00
$52.00
$53.00
$54.00
$55.00
0%
10%
20%
30%
40%
50%
60%
70%
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013
Blended ARPU
69% of postpaid subscribers have a smartphone
57% of prepaid subscribers have a smartphone |
 Churn Remains Stable
17
NASDAQ: NTLS
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013
Prepaid Churn
Postpaid Churn |
 Questions & Answers |
 Appendix |
 20
NASDAQ: NTLS
NTELOS Holdings Corp.
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
(In thousands)
3Q13
2Q13
1Q13
4Q12
3Q12
Net Income Attributable to NTELOS Holdings Corp.
10,583
$
9,386
$
5,493
$
321
$
4,608
$
Net income attributable to noncontrolling interests
588
541
529
443
488
Net Income
11,171
9,927
6,022
764
5,096
Interest expense
7,480
7,398
7,361
6,651
5,432
Income taxes
8,340
6,380
3,744
(454)
3,141
Other expense (income), net
431
(151)
369
7,038
50
Operating income
27,422
23,554
17,496
13,999
13,719
Depreciation and amortization
16,559
20,443
18,456
17,440
15,810
Gain on sale of intangible assets
-
(4,442)
-
-
-
Accretion of asset retirement obligations
135
173
143
174
163
Equity-based compensation
1,442
1,460
1,321
1,346
1,478
Business separation charges ¹
-
-
-
56
684
Adjusted EBITDA
45,558
$
41,188
$
37,416
$
33,015
$
31,854
$
1
Charges for legal and consulting services costs in connection with the separation of the
wireless and wireline operations. |
 21
NASDAQ: NTLS
NTELOS Holdings Corp.
ARPU Reconciliation
Average Monthly Revenue per User (ARPU)
1
3Q13
2Q13
1Q13
4Q12
3Q12
FY 2012
FY 2011
(In thousands, except for subscribers and ARPU)
Operating Revenues
130,912
$
119,859
$
119,345
$
117,398
$
114,466
$
453,989
$
422,629
$
Less: Equipment revenue from sales to new customers
(3,595)
(3,104)
(3,521)
(3,808)
(3,333)
(15,041)
(9,091)
Less: Equipment revenue from sales to existing customers
(2,946)
(2,395)
(3,117)
(3,315)
(3,416)
(15,037)
(17,793)
Less: Wholesale, other and adjustments
(50,142)
(41,179)
(40,918)
(41,488)
(42,380)
(165,765)
(143,477)
Gross subscriber revenue
74,229
73,181
71,789
68,787
65,337
258,146
252,268
Less: prepay subscriber revenue
(16,248)
(15,879)
(15,205)
(14,823)
(14,103)
(56,330)
(48,758)
Less: adjustments to prepay subscriber revenue
(230)
(303)
(479)
(237)
(434)
(1,706)
(1,175)
Gross postpay subscriber revenue
57,751
$
56,999
$
56,105
$
53,727
$
50,800
$
200,110
$
202,335
$
Prepay subscriber revenue
16,248
15,879
15,205
14,823
14,103
56,330
48,758
Plus: adjustments to prepay subscriber revenue
230
303
479
237
434
1,706
1,175
Gross prepay subscriber revenue
16,478
$
16,182
$
15,684
$
15,060
$
14,537
$
58,036
$
49,933
$
Average number of subscribers
455,724
453,262
444,244
434,457
427,610
425,377
422,256
Total ARPU
54.29
$
53.82
$
53.87
$
52.78
$
50.93
$
50.57
$
49.79
$
Average number of postpay subscribers
297,900
299,304
298,414
292,668
287,165
288,428
298,992
Postpay ARPU
64.62
$
63.48
$
62.67
$
61.19
$
58.97
$
57.82
$
56.39
$
Average number of prepay subscribers
157,824
153,958
145,831
141,789
140,446
136,949
123,264
Prepay ARPU
34.80
$
35.04
$
35.85
$
35.41
$
34.50
$
35.31
$
33.76
$
Gross subscriber revenue
74,229
73,181
71,789
68,787
65,337
258,146
252,268
Less: voice and other feature revenue
(43,672)
(43,078)
(42,658)
(41,379)
(39,366)
(156,032)
(171,882)
Data revenue
30,557
$
30,103
$
29,131
$
27,408
$
25,971
$
102,114
$
80,386
$
Average number of subscribers
455,724
453,262
444,244
434,457
427,610
425,377
422,256
Total Data ARPU
22.35
$
22.14
$
21.86
$
21.03
$
20.25
$
20.00
$
15.86
$
Gross postpay subscriber revenue
57,751
56,999
56,105
53,727
50,800
200,110
202,335
Less: postpay voice and other feature revenue
(36,652)
(36,170)
(35,952)
(34,651)
(33,028)
(130,601)
(144,114)
Postpay data revenue
21,099
$
20,829
$
20,153
$
19,076
$
17,772
$
69,509
$
58,221
$
Gross prepay subscriber revenue
16,478
16,182
15,684
15,060
14,537
58,036
49,933
Less: prepay voice and other feature revenue
(7,020)
(6,908)
(6,706)
(6,728)
(6,338)
(25,431)
(27,768)
Prepay data revenue
9,458
$
9,274
$
8,978
$
8,332
$
8,199
$
32,605
$
22,165
$
Average number of postpay subscribers
297,900
299,304
298,414
292,668
287,165
288,428
298,992
Postpay data ARPU
23.61
$
23.20
$
22.51
$
21.73
$
20.63
$
20.08
$
16.23
$
Average number of prepay subscribers
157,824
153,958
145,831
141,789
140,445
136,949
123,264
Prepay data ARPU
19.98
$
20.08
$
20.52
$
19.59
$
19.46
$
19.84
$
14.99
$
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 |
 November 5, 2013
3Q 2013 Earnings Presentation |