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tw telecom Reports Fourth Quarter and Full Year 2011 Results

 
 

Accelerated annual revenue growth rate by 45% to 7.4% in 2011 from 5.1% in 2010

Delivered a strong 36.4% Modified EBITDA margin for 2011

Grew fiber connected building additions by over 2,200 in 2011 - over a third greater than 2010

LITTLETON, Colo., Feb. 8, 2012 /PRNewswire/ -- tw telecom inc. (NASDAQ: TWTC), a leading national provider of managed services, including Business Ethernet, converged and IP VPN solutions to enterprises across the U.S. and to global locations, today announced its fourth quarter 2011 financial results, including $351.5 million of revenue, $128.1 million of Modified EBITDA(1) ("M-EBITDA"), $25.6 million of levered free cash flow(3) and net income of $16.4 million.  For the year, the Company reported $1.367 billion in revenue, $497.7 million of M-EBITDA, $91.3 million of levered free cash flow and net income of $57.9 million.

(Logo: http://photos.prnewswire.com/prnh/20080626/LATH527LOGO)

"We delivered another strong annual performance, as we significantly expanded our revenue growth rate, maintained an impressive Modified EBITDA margin and produced continued strong cash flow," said Larissa Herda, tw telecom's Chairman, CEO and President.  "At the same time we strategically invested in the business to advance our network capabilities, deliver new product features and reach more customer locations.  For 2012, we expect to continue to innovate and take market share as we focus on delivering better, faster and easier network solutions for our customers' dynamic network needs.  This includes further advancing our new Intelligent Network capabilities and enabling customers' changing consumption models that drive data center and cloud demand."  

Highlights for the Year – 2011 compared to 2010

  • Grew total revenue 7.4% year over year compared to 5.1% for 2010
  • Grew enterprise revenue 9.4% year over year compared to 6.3% for 2010
  • Grew data and Internet revenue 18.2% year over year compared to 15.8% for 2010, driven primarily by a 28% increase in strategic Ethernet and VPN-based product revenue
  • Grew M-EBITDA by 7.4% to $497.7 million representing a 36.4% M-EBITDA margin(1)
  • Delivered $91.3 million of levered free cash flow, representing 6.7% of revenue
  • Completed a $50 million share repurchase plan announced in February 2011 and commenced a new $300 million plan announced in November 2011
  • Grew cash, equivalents and short term investments to $484.9 million, while returning $58.6 million to shareholders in the form of share repurchases

Business Trends

"In 2011, we excelled financially, operationally and strategically through a balanced approach to the business that yielded a strong and consistent performance highlighted by our 29th consecutive quarter of revenue growth, ongoing strong margins and continued strong cash flow," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer.  "In 2011, we were able to invest in our operations and also return value to our shareholders in the form of share repurchases.  Our plans for 2012 will be similar to 2011, and include our goals to continue to further expand our revenue growth rate, deliver strong margins and grow cash flow, with a balanced approach and disciplined capital plan."

Operational Metrics

Revenue churn(4) was 0.8% for the current quarter, reflecting the lowest churn in over 10 years, down from 1% for both the prior quarter and the same quarter last year.  Full year 2011 revenue churn improved to 0.9% from 1.0% in 2010.  As a component of revenue churn, revenue lost from customers fully disconnecting service was 0.2% for both the current quarter and the same quarter last year, down from 0.3% for the prior quarter, indicative of a loyal customer base, strong customer experience strategy and competitive product portfolio.

The Company had approximately 27,500 customers as of December 31, 2011.  Customer churn(4) was 1.0% for both the current quarter and prior quarter and 1.1% for the same quarter last year.  The Company ended the fourth quarter with approximately 27,000 fiber route miles (of which approximately 21,000 were metro miles).

Capital Expenditures

Capital expenditures of $86.6 million for the quarter were nearly flat compared to $86.0 million for the prior quarter and increased from $78.1 million for the same period last year.  The increase over the same quarter last year primarily reflects greater strategic product and technology investments, as well as increased success-based investments primarily for managed services.   For the year, capital expenditures were $342.7 million compared to $321.8 million for 2010, primarily reflecting increases in success-based capital.

The Company expects capital investments for 2012 to be approximately $345 to $355 million with the majority tied to new sales opportunities.

Other Trends

The Company continues to expect business fluctuations to impact sequential trends in revenue, margins and cash flow.  This includes the timing, as well as any seasonal nature of sales and installations(5), usage, rate changes, taxes and fees, disputes, repricing for contract renewals and fluctuations in revenue churn, expenses and capital expenditures.  

The Company expects the first quarter of 2012 may be affected by historical trends, including seasonal revenue fluctuations and cost increases.  The Company anticipates approximately a $3 million sequential cost increase in the first quarter of 2012 due to the annual resetting of payroll taxes.

The Company recorded a higher effective tax rate in 2011 than in 2010 as the prior year included a reversal of a valuation allowance for its deferred tax assets. The Company expects an effective tax rate in 2012 similar to 2011.  Due to its approximate $1 billion federal net operating loss carry forward, as well as bonus depreciation, the Company expects that cash taxes in 2012 will be similar to 2011.  

Intercarrier compensation revenue represented 2% of total revenue in 2011.  Due to a recent FCC order, the Company expects about half of this revenue will be eliminated over a six-year period ending July 2018 with approximately $2 million of this reduction occurring in the last half of 2012.  

Year over Year Results – Fourth Quarter 2011 compared to Fourth Quarter 2010

Revenue

Revenue for the quarter was $351.5 million compared to $324.8 million for the fourth quarter last year, representing a year over year increase of $26.7 million, or 8.2%.  Revenue grew primarily due to ongoing strong enterprise revenue growth.  Key changes in revenue included:

  • $27.6 million increase in revenue from enterprise customers, or 11.2% year over year, driven primarily by data and Internet services
  • $0.2 million decrease in revenue from carriers, primarily due to churn and repricing for contract renewals offset by Ethernet services provided to wireline and wireless carriers to serve their end users
  • $0.7 million decrease in intercarrier compensation primarily due to fluctuations in disputes and rate reductions

By product line, the percentage change in revenue year over year was as follows:

  • 18.3% increase for data and Internet services, primarily driven by an increase in strategic Ethernet and IP-based products.  Data and Internet revenue represents 49% of total revenue for the quarter compared to 45% a year ago
  • 4.5% decrease in network services, primarily reflecting churn and repricing for contract renewals largely in transport services, which outpaced growth in high capacity and colocation services
  • 6.0% increase in voice services primarily reflecting sales of converged and other voice solutions as well as an increase in both the volume and rate of certain taxes and fees, partially offset by churn

M-EBITDA and Margins

M-EBITDA grew to $128.1 million for the quarter, an increase of 7.3%, from the same period last year, primarily reflecting the contribution from revenue growth, partially offset by an increase in employee costs.  M-EBITDA margin for the quarter was 36.4% as compared to 36.7% for the same period last year.  

Operating costs for the quarter grew year over year, primarily due to increased network access costs, certain taxes and fees and employee costs.  Operating costs as a percent of revenue were 41.6% for the quarter and 41.4% for the same period last year.  Modified gross margin(6) as a percentage of revenue was 58.5% in the current quarter compared to 58.9% in the same period last year largely driven by increased network access costs and an increase in both the volume and rate of certain taxes and fees.  These increased costs were primarily to support higher revenue growth particularly for new product offerings.

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 of costs capitalized for labor and overhead on capital projects.

Selling, general and administrative costs ("SG&A") increased year over year primarily reflecting an increase in employee costs, largely from sales and sales support personnel, and an increase in bad debt expense.  SG&A costs as a percent of revenue improved to 23.9% for the quarter from 24.0% for the same period last year.  

Net Income

The Company reported growth of 40.3% in pre-tax income to $26.9 million in the current quarter from $19.2 million in the same period last year.  This increase was primarily driven by M-EBITDA growth somewhat offset by higher interest expense.

Net income was $16.4 million for the quarter, compared to $17.5 million for the same period last year.  Net income was impacted primarily by an increase in income tax expense associated with a higher effective tax rate, largely offset by M-EBITDA growth.

Sequential Results – Fourth Quarter 2011 compared to Third Quarter 2011

Revenue

Revenue for the quarter was $351.5 million, as compared to $344.5 million for the third quarter of 2011, an increase of $7.0 million, or 2.0%, representing the 29th consecutive quarter of sequential growth.  Revenue grew primarily due to enterprise revenue.  Key changes in revenue included:

  • $6.8 million increase in enterprise revenue, representing 2.5% sequential growth driven primarily by data and Internet services
  • $0.3 million increase in revenue from carrier customers, primarily reflecting growth in Ethernet services provided to wireline and wireless carriers to serve their end users, offset by churn and repricing for contract renewals largely in network services

By product line, the percentage change in revenue sequentially was as follows:

  • 4.2% increase for data and Internet services, primarily driven by an increase in strategic Ethernet and IP-based product sales
  • 1.7% decrease in network services, primarily reflecting churn, repricing for contract renewals largely in transport services and a decrease in taxes and fees, which outpaced growth in high capacity and colocation services
  • 1.8% increase in voice services, primarily reflecting sales of converged solutions and an increase in both the volume and rate of certain taxes and fees, partially offset by churn

M-EBITDA and Margins

M-EBITDA was $128.1 million for the quarter, an increase of 2.4% from the prior quarter, primarily reflecting contribution from revenue growth.  M-EBITDA margin was 36.4% for the quarter compared to 36.3% for the prior quarter.

Operating costs increased primarily due to higher network access costs and fluctuations in disputes, partially offset by seasonally lower utility costs and a reduction in contract labor. Operating costs were 41.6% of revenue for the quarter and 41.9% for the prior quarter.  Modified gross margin for the quarter as a percentage of revenue was 58.5% compared to 58.3% in the prior quarter.

SG&A costs increased primarily reflecting an increase in employee-related costs.  SG&A was 23.9% of revenue for the quarter and 23.8% for the prior quarter.  

Net Income

The Company reported net income of $16.4 million for the quarter, compared to $14.6 million in the prior quarter, a 12.3% sequential increase that primarily reflected M-EBITDA growth, partially offset by an increase in depreciation expense.

tw telecom plans to conduct a webcast conference call to discuss its earnings results on February 9, 2012 at 9:00 a.m. MST (11:00 a.m. EST).  To access the webcast and the financial and other information to be discussed in the webcast, visit www.twtelecom.com under "Investors."

(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, impairment charges and other income and losses, interest expense, debt extinguishment costs, interest income, income tax expense or benefit, cumulative effect of change in accounting principle, and non-cash stock-based compensation expense. The Company defines Modified EBITDA margin as M-EBITDA divided by total revenue.

(2) The Company defines unlevered free cash flow as Modified EBITDA less capital expenditures. Unlevered free cash flow is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website.

(3) The Company defines levered free cash flow as Modified EBITDA less capital expenditures and net interest expense from operations (but excludes debt extinguishment costs, non-cash interest expense and deferred debt 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.  

(4) The Company defines revenue churn as the average lost recurring monthly billing for the period from a customer's partial or complete disconnection of services (excluding repricing impacts and usage) compared to reported revenue for the period.  Customer churn is defined as the average monthly customer turnover for the period compared to the average monthly customer count for the period.

(5) Installations reflect services from signed customer sales that are installed and recognized as revenue from the date of installation.  

(6) The Company defines modified gross margin as total revenue less operating costs excluding non-cash stock-based compensation expense.  

Financial Measures

The Company provides financial measures using U.S. 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 and for operating performance and liquidity.  Modified EBITDA is reconciled to Net Income (Loss), the most comparable GAAP measure for operating performance within the Consolidated Operations Highlights and in the supplemental information posted on the Company's website.  Modified EBITDA, as a measure of liquidity, is also reconciled to Net Cash provided by operating activities 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 operating activities and also to Modified EBITDA 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.  Management uses modified gross margin internally to assess on-going operations.  Modified gross margin is reconciled to gross margin in the financial tables.

Forward Looking Statements

The statements in this press release and related conference call concerning the outlook for 2012 and beyond, including statements regarding product and platform plans, growth prospects, market opportunities, sales momentum, operational improvements, customer opportunities, network capabilities, sales and installations timing, demand, revenue growth, margins, the impact of regulatory changes, expected cost increases, churn, business trends and fluctuations, seasonality, taxes 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 disclosed in the Company's SEC filings, especially the section entitled "Risk Factors" in its 2010 Annual Report on Form 10-K/A and in its subsequent quarterly reports on Forms 10-Q/A and 10-Q.  tw 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 tw telecom

tw telecom, headquartered in Littleton, Colo., provides managed network services, specializing in converged services, Ethernet and data networking, Internet access, voice, VPN, VoIP and network security, to enterprise organizations and communications services companies throughout the U.S. including their global locations.  As a leading provider of integrated and converged network solutions, tw telecom delivers customers overall economic value, quality service, and improved business productivity.  For more information please visit www.twtelecom.com.

tw telecom inc.










Consolidated Operations Highlights








(Dollars in thousands)









Unaudited (1)



























Three Months Ended


Twelve Months Ended






December 31,


December 31,






2011

2010

Growth %


2011

2010

Growth %













Revenue












Data and Internet services

$171,657

$145,107

18.3%


$646,682

$547,218

18.2%


Network services


85,422

89,470

-4.5%


350,709

359,169

-2.4%


Voice services


86,775

81,891

6.0%


338,655

332,870

1.7%



Service Revenue


343,854

316,468

8.7%


1,336,046

1,239,257

7.8%


Intercarrier compensation


7,653

8,349

-8.3%


30,845

33,914

-9.0%




Total Revenue

351,507

324,817

8.2%


1,366,891

1,273,171

7.4%













Expenses











Operating costs


146,320

134,554



571,461

528,965





Gross Margin

205,187

190,263



795,430

744,206



Selling, general and administrative costs

83,854

78,106



325,538

308,470



Depreciation, amortization, and accretion

72,572

72,534



283,329

289,564





Operating Income

48,761

39,623



186,563

146,172



Interest expense


(15,944)

(15,057)



(64,246)

(59,535)



Debt extinguishment costs


-

-



-

(17,070)



Non-cash interest expense and deferred debt costs

(6,027)

(5,571)



(23,472)

(21,417)



Interest income


102

170



545

608



Other income



-

-



-

825





Income before income taxes

26,892

19,165



99,390

49,583



Income tax expense (benefit) (2)

10,500

1,671



41,479

(291,295)





Net Income

$16,392

$17,494



$57,911

$340,878






































SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA


















Gross Margin


$205,187

$190,263



$795,430

$744,206



Add back non-cash stock-based compensation expense

590

929



2,327

3,261





Modified Gross Margin

205,777

191,192

7.6%


797,757

747,467

6.7%














Selling, general and administrative costs

83,854

78,106



325,538

308,470



Add back non-cash stock-based compensation expense

6,133

6,270



25,490

24,571





Modified EBITDA

128,056

119,356

7.3%


497,709

463,568

7.4%














Non-cash stock-based compensation expense

6,723

7,199



27,817

27,832



Depreciation, amortization, and accretion

72,572

72,534



283,329

289,564



Net interest expense


15,842

14,887



63,701

58,927



Debt extinguishment costs


-

-



-

17,070



Non-cash interest expense and deferred debt costs

6,027

5,571



23,472

21,417



Other income



-

-



-

(825)



Income tax expense (benefit) (2)

10,500

1,671



41,479

(291,295)





Net Income

$16,392

$17,494



$57,911

$340,878















Modified Gross Margin %

58.5%

58.9%



58.4%

58.7%















Modified EBITDA Margin %

36.4%

36.7%



36.4%

36.4%


























Free Cash Flow:











Modified EBITDA


$128,056

$119,356

7.3%


$  497,709

$ 463,568

7.4%


Less: Capital Expenditures


86,637

78,118

10.9%


342,731

321,844

6.5%


Unlevered Free Cash Flow

41,419

41,238

0.4%


154,978

141,724

9.4%


Less: Net interest expense

15,842

14,887

6.4%


63,701

58,927

8.1%


Levered Free Cash Flow

$25,577

$26,351

-2.9%


$91,277

$82,797

10.2%





































(1) For complete financials and related footnotes, please refer to the Company's SEC filings.





(2) Includes a non-cash income tax benefit of $299.0 million for the twelve months ended December 31, 2010.







tw telecom inc.






Consolidated Operations Highlights




(Dollars in thousands)





Unaudited (1)



















Three Months Ended






Dec. 31

Sept. 30







2011

2011

Growth %









Revenue








Data and Internet services


$171,657

$164,670

4.2%


Network services


85,422

86,878

-1.7%


Voice services


86,775

85,220

1.8%



Service Revenue


343,854

336,768

2.1%


Intercarrier compensation


7,653

7,688

-0.5%




Total Revenue

351,507

344,456

2.0%









Expenses







Operating costs


146,320

144,161





Gross Margin

205,187

200,295



Selling, general and administrative costs

83,854

82,085



Depreciation, amortization, and accretion

72,572

70,940





Operating Income

48,761

47,270



Interest expense


(15,944)

(16,012)



Non-cash interest expense and deferred debt costs

(6,027)

(5,918)



Interest income


102

126





Income before income taxes

26,892

25,466



Income tax expense


10,500

10,873





Net Income

$16,392

$14,593


















SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA










Gross Margin


$205,187

$200,295



Add back non-cash stock-based compensation expense

590

565





Modified Gross Margin

205,777

200,860

2.4%










Selling, general and administrative costs

83,854

82,085



Add back non-cash stock-based compensation expense

6,133

6,248





Modified EBITDA

128,056

125,023

2.4%










Non-cash stock-based compensation expense

6,723

6,813



Depreciation, amortization, and accretion

72,572

70,940



Net Interest expense


15,842

15,886



Non-cash interest expense and deferred debt costs

6,027

5,918



Income tax expense


10,500

10,873





Net Income

$16,392

$14,593











Modified Gross Margin %

58.5%

58.3%











Modified EBITDA Margin %

36.4%

36.3%


















Free Cash Flow







Modified EBITDA


$128,056

$125,023

2.4%


Less: Capital Expenditures


86,637

85,957

0.8%


Unlevered Free Cash Flow

41,419

39,066

6.0%


Less: Net interest expense

15,842

15,886

-0.3%


Levered Free Cash Flow

$25,577

$23,180

10.3%

























(1) For complete financials and related footnotes, please refer to the Company's SEC filings.





tw telecom inc.













Highlights of Results Per Share












Unaudited (1) (2)


































Three Months Ended


Twelve Months Ended







Dec. 31


Sept. 30


Dec. 31


Dec. 31


Dec. 31







2011


2011


2010


2011


2010
















Weighted Average Shares Outstanding (thousands)


























Basic




146,416


147,084


148,267


147,247


149,156

















Diluted (2)




148,125


148,999


150,490


149,349


171,456
















Basic Income per Common Share












Prior to impacts of debt extinguishment












   and recognition of the value of tax assets


$0.11


$0.10


$0.12


$0.39


$0.39


Debt extinguishment costs



-


-


-


-


($0.11)


Recognition of the value of tax assets


-


-


-


-


$1.98



Total




$0.11


$0.10


$0.12


$0.39


$2.26
















Diluted Income per Common Share


$0.11


$0.10


$0.11


$0.38


$2.12





































As of











Dec. 31


Sept. 30


Dec. 31











2011


2011


2010





Common shares (thousands)




























Actual Shares Outstanding



149,044


149,332


149,246




















Unvested Restricted Stock Units












and Restricted Stock Awards (thousands)

4,182


4,300


3,162




















Options (thousands)





























Options Outstanding



6,674


6,824


9,154





















Options Exercisable



4,974


4,950


6,051





















Options Exercisable and In-the-Money


3,114


1,533


2,417



































(1) For complete financials and related footnotes, please refer to the Company's SEC filings.


(2) Stock options, restricted stock units/awards and convertible debt subject to conversion, are excluded from the computation of



diluted weighted average shares outstanding if inclusion would be anti-dilutive. See the Company's SEC filings for more details.




tw telecom inc.









Condensed Consolidated Balance Sheet Highlights






(Dollars in thousands)








Unaudited (1)


























Dec. 31


Sept. 30


Dec. 31







2011


2011


2010

















ASSETS


















Cash, equivalents, and short term investments

$484,919


$469,093


$475,594













Receivables




104,374


99,914


89,496



Less: allowance



(8,192)


(7,660)


(7,898)




Net receivables


96,182


92,254


81,598













Prepaid expenses and other current assets

17,340


22,842


16,935


Deferred income taxes



65,008


40,428


40,428




Total other current assets

82,348


63,270


57,363













Property, plant and equipment


4,026,134


3,958,489


3,732,050



Less:  accumulated depreciation


(2,598,922)


(2,541,885)


(2,375,438)




Net property, plant and equipment

1,427,212


1,416,604


1,356,612













Deferred income taxes



162,535


194,081


224,795


Goodwill




412,694


412,694


412,694


Intangible assets, net of accumulated amortization

17,742


19,417


24,444


Other assets, net of accumulated amortization

24,594


25,290


17,854




Total other non-current assets

617,565


651,482


679,787
















Total


$2,708,226


$2,692,703


$2,650,954




























LIABILITIES AND STOCKHOLDERS' EQUITY


















Current Liabilities










Accounts payable



$52,739


$66,356


$53,436



Deferred revenue



42,253


41,724


37,888



Accrued taxes, franchise and other fees

66,880


68,708


68,663



Accrued interest



13,934


7,459


15,208



Accrued payroll and benefits


44,284


39,738


41,772



Accrued carrier costs



32,760


28,816


35,049



Current portion of debt and lease obligations

7,733


7,742


7,202



Other current liabilities



31,361


37,404


42,570




Total current liabilities


291,944


297,947


301,788













Long-Term Debt and Capital Lease Obligations








2 3/8% convertible senior debentures, due 4/1/2026

373,744


373,744


373,744



Unamortized Discount



(27,057)


(32,133)


(46,732)




Net



346,687


341,611


327,012



Floating rate senior secured debt - Term Loan B, due 1/7/2013

102,055


102,324


103,130



Floating rate senior secured debt - Term Loan B, due 12/30/2016

467,946


469,176


472,870



8% senior unsecured notes, due 3/1/2018 (2)

427,614


427,518


427,227



Capital lease obligations


16,251


16,594


15,260




Less: current portion


(7,733)


(7,742)


(7,202)




Total long-term debt and capital lease obligations

1,352,820


1,349,481


1,338,297













Long-Term Deferred Revenue


22,296


22,330


14,864


Other Long-Term Liabilities


35,445


33,636


29,364













Stockholders' Equity



1,005,721


989,309


966,641
















Total


$2,708,226


$2,692,703


$2,650,954























(1) For complete financials and related footnotes, please refer to the Company's SEC filings.






(2) Net of unamortized discount








tw telecom inc.












Condensed Consolidated Statements of Cash Flows











(Dollars in thousands)












Unaudited (1)




































Three Months Ended


Twelve Months Ended








Dec. 31


Sept. 30


Dec. 31


Dec. 31


Dec. 31








2011


2011


2010


2011


2010

































Cash flows from operating activities:












Net Income




$16,392


$14,593


$17,494


$57,911


$340,878


Adjustments to reconcile net income to net cash













provided by operating activities:














Depreciation, amortization, and accretion


72,572


70,940


72,534


283,329


289,564




Deferred income taxes


5,973


10,426


1,565


35,756


(293,529)




Stock-based compensation


6,723


6,813


7,200


27,817


27,832




Extinguishment costs, amortization of discount on debt














and deferred debt costs and other


6,014


5,887


5,528


23,388


37,649


Changes in operating assets and liabilities:













Receivables, prepaid expenses and other assets


2,379


(18,769)


3,205


(22,211)


(5,264)



Accounts payable, deferred revenue, and other liabilities

1,752


(13,965)


(17,346)


(2,402)


(11,378)




















Net cash provided by operating activities


111,805


75,925


90,180


403,588


385,752

















Cash flows from investing activities:












Capital expenditures



(86,637)


(84,491)


(78,118)


(340,731)


(321,844)


Purchase of investments



(28,327)


(97,572)


(78,714)


(223,638)


(246,575)


Proceeds from sale of investments


25,615


97,562


61,337


208,340


154,786


Other investing activities, net


(646)


3,886


2,098


3,230


(4,416)




Net cash used in investing activities


(89,995)


(80,615)


(93,397)


(352,799)


(418,049)

















Cash flows from financing activities:












Net proceeds (tax withholdings) from issuance of common  












stock upon exercise of stock options and vesting of













restricted stock awards and units


922


1,525


(1,153)


9,966


1,045


Purchases of treasury stock


(8,562)


(34,612)


(38,206)


(58,562)


(49,911)


Excess tax benefits from stock-based compensation


1,385


-


-


1,385


-


Net (costs) proceeds from issuance of debt


-


-


(4,356)


-


413,069


Retirement of debt obligations


-


-


-


-


(413,683)


Payment of debt and capital lease obligations


(1,902)


(1,713)


(1,662)


(7,106)


(7,208)




















Net cash used in financing activities


(8,157)


(34,800)


(45,377)


(54,317)


(56,688)




















Increase (decrease) in cash and cash equivalents

13,653


(39,490)


(48,594)


(3,528)


(88,985)




Cash and cash equivalents at the beginning of the period

339,741


379,231


405,516


356,922


445,907




Cash and cash equivalents at the end of the period

$353,394


$339,741


$356,922


$353,394


$356,922

















Supplemental disclosures cash, equivalents











   and short term investments














Cash and cash equivalents at the end of the period

$353,394


$339,741


$356,922


$353,394


$356,922




Short term investments


131,525


129,352


118,672


131,525


118,672





Total of cash, equivalents and short term investments

$484,919


$469,093


$475,594


$484,919


$475,594

















Supplemental disclosures of cash flow information:












Cash paid for interest



$9,970


$23,079


$7,771


$67,566


$63,169


Cash paid for debt extinguishment costs


-


-


-


-


$13,677


Cash paid for income taxes, net of refunds


$218


$575


$701


$3,231


$4,653


Addition of capital lease obligation


-


$1,466


-


$2,000


-

















Supplemental information to reconcile capital expenditures:











Capital expenditures per cash flow statement


$86,637


$84,491


$78,118


$340,731


$321,844


Addition of capital lease obligation


-


1,466


-


2,000


-


Total capital expenditures


$86,637


$85,957


$78,118


$342,731


$321,844

































(1) For complete financials and related footnotes, please refer to the Company's SEC filings.











tw telecom inc.










Selected Operating Statistics










Unaudited (1)








































































Three Months Ended






2010


2011






Mar. 31

Jun. 30

Sept. 30

Dec. 31


Mar. 31

Jun. 30

Sept. 30

Dec. 31















Operating Metrics:

























Buildings (2)

11,909

12,276

12,693

13,230


13,742

14,311

14,872

15,438
















Headcount












Total Headcount

2,887

2,901

2,932

2,975


2,985

3,071

3,065

3,051



Sales Associates

523

528

545

555


564

553

564

555
















Customers













Total Customers

27,685

27,460

27,382

27,281


27,234

27,322

27,376

27,509



























(1) For complete financials and related footnotes, please refer to the Company's SEC filings.


(2) Reflects on-net buildings and ILEC Local Serving Offices (LSOs) directly served by the Company's fiber network.




SOURCE tw telecom

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http://www.twtelecom.com