Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - NTELOS HOLDINGS CORP. | d658554dex991.htm |
| 8-K - 8-K - NTELOS HOLDINGS CORP. | d658554d8k.htm |
 NASDAQ: NTLS
Lender Presentation
January 2014
Exhibit 99.2 |
 NASDAQ: NTLS
Company Overview |
 Company Overview
3
Leading “pure-play”
wireless carrier in mid-Atlantic region
Headquartered in Waynesboro, VA
Exclusive CDMA Network provider for Sprint in WV and Western VA
NTELOS-branded retail postpay and prepay subscribers; robust wholesale
business NASDAQ: NTLS
NASDAQ:
NTLS
–
Market
Capitalization
approximately
$455
million¹
7.9 million licensed POPs; 6.0 million covered POPs; 464,600 subscribers
¹
As of market close 1/10/14 |
 Investment Considerations
Leading “pure-play”
regional wireless company
4
Strategic asset set
Strong free cash flow
Broad geographic and network technology footprint
Experienced management team
NASDAQ: NTLS
Competitive and diversified business model |
 Key
Operating Strategies 5
Elevate brand & best value in wireless position to improve quality of
subscriber base and grow market share
Enhance customer experience at all touch points by focusing on core differentiators
of Savings, Simplicity and Service to improve customer satisfaction and
reduce subscriber churn
Leverage disciplined network investments to expand revenues and margins
Drive Smartphone and data services penetration to increase ARPU
NASDAQ: NTLS
Manage cost structure to improve profitability |
 Regional Wireless Service Provider
NASDAQ: NTLS
6
Ntelos Covered Network
Sprint Wholesale Markets
STRATEGIC NETWORK ASSETS |
 Attractive Spectrum Portfolio
7
NASDAQ: NTLS
Average
Spectrum
Depth
in
Key
Markets
(1)
Band
Commentary
PCS
Average depth of 23 MHz
Scarce strategic asset
AWS
Significant spectrum
holdings in contiguous
markets in western Virginia
Currently undeployed
MHZ
3,673
2,710
1,767
1,016
Licensed POPs
(000’s)
302
200
209
216
205
278
66
Source: Map Info: Custom Data, Total Population – Current Year and Five Year USA by Block
Group: United States, SO215245
(1) Excludes limited BRS (2.5 GHz) spectrum |
 Operating Revenues
8
NASDAQ: NTLS
+14%
millions
$131 |
 Retail Revenue Gains Continue
9
NASDAQ: NTLS
millions
Subscriber revenue growth continues:
7 straight quarters of sequential growth
7 straight quarters of positive net adds
3Q13 retail revenue increased 2% sequentially and 13% from 3Q12 to $80.3
million Highest level in company history
+13% |
 NTELOS Branding Resonating With Consumers
10
NASDAQ: NTLS
Source: Independent third-party research studies.
Positive net ports
vs. all other carriers
3Q11
3Q12
3Q13
Unaided
Awareness
Unaided
Recall
Purchase
Consideration
18%
28%
29%
12%
21%
13%
24%
32%
31%
(4,000)
(2,000)
0
2,000
4,000
6,000
8,000
Net Ports |
 Churn Remains Stable
11
NASDAQ: NTLS |
 Subscribers –
Net Additions Trend
12
NASDAQ: NTLS
Seventh consecutive quarter of positive net adds |
 Smartphone Penetration
13
NASDAQ: NTLS
As of September 30, 2013:
Smartphone Penetration
ARPU
69% of postpaid subscribers have a smartphone
57% of prepaid subscribers have a smartphone |
 Closing the Device Gap on Competition
14
NASDAQ: NTLS
Best
Q4 2009
Q4 2010
Q4 2013
Better
Good
LG Optimus
Plus
Motorola
Defy XT
Alcatel One
Touch Ultra
ZTE
Director
Samsung Galaxy S II
Samsung
Galaxy III
LG Optimus
Select
iPhone 4S
iPhone 5c
BlackBerry
Curve 8330
BlackBerry
Pearl Flip
8230
HTC Hero
Android
BlackBerry
Pearl
8130
HTC 6800
HTC Touch
Diamond
BlackBerry
Curve 8330
BlackBerry
Pearl Flip
8230
HTC Snap
HTC Hero
Android
BlackBerry
Tour 9630
iPhone 5s |
 Network Evolution
NASDAQ: NTLS
15
•
6.0mm covered POPs; 7.96mm licensed
POPs
•
100% of covered POPs are served with 3G
EV-DO Rev. A
•
Primarily Alcatel Lucent equipment
•
1,432 cell sites deployed
•
Market level spectrum holdings ranging from
10 MHz to 50 MHz
•
PCS average depth of 23 MHz
•
AWS average depth of 20 MHz
•
Additional spectrum includes
•
Small amount of BRS (2.5 GHz)
•
Opportunities for additional spectrum
and spectrum sharing being evaluated
•
Upgrade history
•
1xRTT launched in 2002
•
EV-DO Rev A launched in 2008
•
LTE launched Dec 2013
•
LTE Drivers
•
Serve the needs of our retail
subscribers
•
Maintain competitive position in
marketplace
•
Optimize long-term network
operating cost with new technology
•
Serve the needs of our largest
wholesale customer, Sprint
•
Deployment Plan
•
First LTE markets launched Dec ‘13
•
Complete initial build-out by year-end
2014; 70% of covered POPs
•
Devices supporting Band Classes 2,
4 and 25
•
Estimated network CapEx of
approximately $65mm to $70mm
Current network
4G LTE upgrade plans |
 Sprint Strategic Network Alliance Evolution
16
NASDAQ: NTLS
1999
8/1999:
Agreement
with Horizon PCS
(Sprint affiliate)
9/2013:
Settles
disputes with Sprint
and amends
agreement
2007
2004
2006
2012
2013
2008
10/2006:
Sprint
launches EV-DO
Rev A in San Diego
10/2010:
Sprint
announces
Network Vision
8/2004:
Horizon
bankruptcy; Sprint
agreement signed
8/2007:
Amends
agreement with Sprint
3/2008:
Launch
of EV-DO
11/2008:
Completes
EV-DO build
9/2012:
Sprint has 19
metropolitan areas
with 4G LTE
2010 |
 Sprint Strategic Network Alliance Service
17
NASDAQ: NTLS
Exclusively provides 3G services to large number of Sprint home and travel
subscribers
•
Agreement through July 2015, subject to renewal options
•
Sprint prohibited from beginning 3G overbuild until February 1, 2014
•
Covers portions of WV and Western Virginia territories
Encompasses approximately
•
2.0mm covered POPs in WV and Western Virginia
•
846 cell sites
•
36,800 square miles
Provides ~$40mm in quarterly revenues |
 Financial Summary |
 Historical Financial Performance
19
NASDAQ: NTLS
Revenue
Adjusted EBITDA
millions
millions
(1)
Preliminary estimate as of January 13, 2014
(1) |
 Capital Investment
20
NASDAQ: NTLS
Status:
1,434 cell sites as of Sept. 30, 2013
millions
Catalysts:
2011-2012 Cell site expansion
2013 Initial LTE deployment
(1)
Preliminary estimate as of January 13, 2014 |
 Managing Free Cash Flow with Disciplined Capital Investment
21
NASDAQ: NTLS
CapEx
millions
millions
CapEx
Free Cash Flow
(Adjusted EBITDA Less CapEx)
(1)
Preliminary estimate as of January 13, 2014
Note: Excludes wireline and related capex incurred prior to business separation
Revenue
Revenue
millions
(1)
(1) |
  Capitalization Overview
($ 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
22
(1)
(1)
(1) Net of unamortized debt discount |
  2013
Preliminary Subscriber Activity NASDAQ: NTLS
23
2012A
2013
Preliminary
Ending subscribers
439,600
464,600
Gross adds
Full year
171,300
183,900
4th Quarter
46,200
50,800
Churn-blended
Full year
2.9%
2.9%
4th Quarter
2.8%
3.1%
Net adds
Full year
25,100
25,000
4th Quarter
9,300
7,500 |
 2013 Preliminary Financial Results and 2014 Guidance
NASDAQ: NTLS
24
2012A
2013
Preliminary
2014
Guidance
Adjusted EBITDA
$135mm
$151mm
$140 to $150mm
CapEx
$72mm
$81mm
$85 to $95mm
(1) Includes $9.6 million one-time benefit in connection with the Sprint Strategic Network
Alliance dispute settlement (1) |
 Senior Executives—Wireless Veterans
JIM HYDE
CEO, President and Director
STEB CHANDOR
EVP, CFO and Treasurer
CONRAD HUNTER
EVP, COO
Former CEO, T-Mobile UK
Former T-Mobile USA /
Western Wireless /
VoiceStream Sr. Exec
18 years industry experience
Former CFO, iPCS Wireless
Former CFO, Metro One
Telecommunications
17 years industry experience
Former COO, iPCS Wireless
Former VP of Midwest
Operations, U.S. Cellular
Corporation
33 years industry experience
25
NASDAQ: NTLS
ROBERT McAVOY
EVP, CTO
Former Market General
Manager, PrimeCo
Began career at Bell Atlantic
25 years industry experience |
 Summary
Leading “pure-play”
regional wireless company
26
Strategic asset set
Strong free cash flow
Broad geographic and network technology footprint
Experienced management team
NASDAQ: NTLS
Competitive and diversified business model |
 Appendix |
 28
NASDAQ: NTLS
NTELOS Holdings Corp.
Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA
Year Ended:
(In thousands)
2012
2011
2010
Net Income Attributable to NTELOS Holdings Corp.
18,387
$
(23,715)
$
44,808
$
Net income attributable to noncontrolling interests
1,941
(1,769)
(1,417)
Net Income
20,328
(21,946)
46,225
Discontinued operations, net
-
(45,386)
16,882
Income from continuing operations
20,328
23,440
29,343
Interest expense
22,944
23,380
24,728
Loss (gain) on derivatives
-
264
147
Income taxes
12,676
16,363
20,251
Corporate financing fees
-
1,567
Other expense (income), net
7,194
1,240
413
Operating income
63,142
66,254
74,882
Depreciation and amortization
63,258
63,083
58,016
Accretion of asset retirement obligations
637
658
770
Equity-based compensation
6,029
6,072
5,270
Acquisition related charges
-
-
2,815
Business separation charges
¹
1,660
6,997
352
Adjusted EBITDA
134,726
$
143,064
$
142,105
$
1
Charges for legal and consulting services costs in connection with the separation of
the wireless and wireline operations. |
 29
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. |
 30
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
$
1
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.
|