Filed by Windstream Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: NuVox, Inc.
Commission File No. 001-32422
The attached presentation may be deemed to be solicitation material in respect of the proposed merger of NuVox and Windstream Corporation (Windstream). In connection with the proposed merger, Windstream will file a Registration Statement on Form S-4 with the SEC that will contain an information statement/prospectus. NuVox investors and security holders are advised to read the information statement/prospectus and any other relevant documents filed with the SEC when they become available because those documents will contain important information about NuVox, Windstream and the proposed merger. The final information statement/prospectus will be mailed to shareholders of NuVox. Investors and security holders may obtain a free copy of the information statement/prospectus when it becomes available at the SECs Web site at www.sec.gov. Free copies of the information statement/prospectus, when it becomes available, may also be obtained from Windstream upon written request to Windstream Investor Relations, 4001 Rodney Parham Road, Little Rock, AR 72212 or by calling (866) 320-7922, or from NuVox upon written request to NuVox, Two North Main Street, Greenville, SC 29601 or by calling (864) 672-5000 or (877) 466-8869.
Windstream Communications Tony Thomas, Chief Financial Officer Mary Michaels, Director Investor Relations Bank of America Merrill Lynch Marketing Trip December 1, 2009 |
Safe
Harbor Statement Windstream claims the protection of the safe-harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995. Forward-looking statements, including statements regarding the completion of the acquisition and expected benefits of the acquisition, are subject to uncertainties that
could cause actual future events and results to differ materially from those
expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs and assumptions that Windstream believes are
reasonable but are not guarantees of future events and results. Actual
future events and results of Windstream may differ materially from those expressed in these forward-looking statements as a result of a number of important factors. Factors that could cause actual results to differ materially from those contemplated above include, among others: receipt of
required approvals of regulatory agencies; the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer to realize than expected; the possibility that costs or difficulties related to the
integration of Iowa Telecom operations into Windstream will be greater than
expected; the ability of the combined company to retain and hire key personnel; and those additional factors under the caption Risk Factors in Windstreams Form 10-K for the year ended Dec. 31, 2008 and in subsequent Securities and Exchange Commission filings. In addition to these factors,
actual future performance, outcomes and results may differ materially
because of more general factors including, among others, general industry and market conditions and growth rates, economic conditions, and governmental and public policy
changes. Windstream undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause Windstream's actual results
to differ materially from those contemplated in the forward-looking
statements should be considered in connection with information regarding risks and uncertainties that may affect Windstream's future results included in Windstreams
filings with the Securities and Exchange Commission at www.sec.gov.
Safe Harbor Statement Regulation G Disclaimer This presentation includes certain non-GAAP financial measures. On the Windstream
investor relations web site, the company has posted additional information
regarding these non-GAAP financial measures, including a reconciliation of each of such measure to the most directly comparable GAAP measure. The Investor
Relations Web site is located at www.windstream.com/investors.
|
Windstream is. . . . A COMMUNICATIONS AND ENTERTAINMENT COMPANY SERVING RURAL AMERICA - Access Lines: 3M - Long-distance customers: 1.9M - High-speed Internet customers: 1.1M - Digital TV customers: 323K (1) Last 12 months ended 9/30/09 (2) Revenue is pro forma to exclude the results of the divested wireless and external
supply businesses (3) OIBDA is defined as Operating Income Before Depreciation and Amortization. Pro
forma to exclude the results of the divested wireless and supply businesses
as well as merger and integration costs and non cash pension expense (4) Free cash flow is defined as net cash from operations less capital expenditures
(5) As of 9/30/09 Financial Overview (1) Favorable Rural Markets Geographically Diverse Serving 16 States Operational Overview (5) - Revenue (2) : $3.0B - OIBDA (3) : $1.6B - Free Cash Flow (4) : $787M - FCF / Share: $1.81 per share - Dividend: $1.00 per share - Dividend Payout Ratio: 56% - Net Leverage: 3.2x |
Focus
on free cash flow accretive activities Transform company to broadband and
business model Windstream Business Model Driving Shareholder Value Increase competitiveness and improve service levels Drive 3 core products (high-speed Internet, digital TV and voice) Aggressively manage expenses and capex Sustain free cash flow Financial Objectives Strategic Objectives Operating Objectives |
Returning Capital to Shareholders Windstream Strategic Objectives Driving Shareholder Value Pursuing FCF Accretive Deals. . . $400 million share repurchase plan repurchased ~$320M through October - To date, we have repurchased 29M shares, yielding annual dividend savings of $29M Including dividends, returned ~$560M of capital to shareholders in 2009 Valor (2006) CT Communications (2007) D&E Communications (2009) Lexcom (2009) NuVox (2009 pending) Iowa Telecommunications (2009- pending) . . .That are Good Strategic Fits Free cash flow accretive deals Opportunity to generate meaningful synergies Focusing on properties in attractive markets (rural / away from major metropolitan areas) Favorable competitive environment Well-positioned network Maintaining leverage in same range |
Acquisition of Iowa Telecommunications - Wireless spectrum covers 75% of Iowas access lines - Potential for additional expansion in data services and wholesale segments - Strong EBITDA margins and high free cash flow conversion - Additional upside via synergy realization from recently completed acquisitions
- Limited exposure to subsidies with only ~3% of revenues from USF Solid Financial and Operating Performance Other Potential Opportunities Very Rural LEC - Vast majority of communities served are under 2,000 in population - Strong local brand - Extensive fiber footprint in Midwest with over 4,800 owned route miles - Estimated present value of tax assets of ~$130M (~$3.90/share) - Federal NOL of $157 as of 12/31/08, expiring in 2021-2024 - Goodwill amortization of ~$41M annually through June 2015 Significant Tax Assets (1) LTM revenue and OIBDA results shown pro forma for the acquisition of Sherburne
Telecommunications. LTM capex and free cash flow results shown as
actual. (2) Defined as net cash from operating activities less capital expenditures. Iowa Highlights IOWA Telecommunications Overview Financial Overview (LTM Sept. 2009 (1) ): Revenue: $275M Adjusted OIBDA $130M Capex: $24M Free Cash Flow (2) : $69M Operating Overview (Sept. 2009): ILEC Lines: 214,100 CLEC Lines: 41,500 Broadband Subs: 94,500 Video Subs: 26,400 |
Acquisition of NuVox - Provides full service solutions from basic voice to VoIP and managed services including webhosting, network security and data center services - Over 60% of sales from IP and managed services - Attractive top line revenue growth - Improving OIBDA and free cash flow margins - Solid free cash flow generation Strong Performance and Track Record Advanced IP Centric Services and Full Product Offering Leading Communications Service Provider - Regional CLEC with strong franchise, operating history and mgmt team - Leading provider to SMEs in underserved, less competitive markets - Well balanced, aggressive sales distribution - Fully deployed IP-centric network plus traditional TDM network - Company owned switching gateways & points of presence in all markets serviced Well-positioned Network (1) Excludes merger and integration costs NuVox Overview NuVox Highlights Financial Overview Revenue $565M Pro forma OIBDA(2) $112M Estimated Synergies $30M Business Overview Footprint 16 States Customer Locations 88k |
Positioning Company as a Leading Rural Provider Acquisitions add complementary rural markets to Windstreams footprint On a pro-forma basis, Windstream will operate in 23 states Note: Windstream and NuVoX shared markets: Little Rock, AR, Lexington, KY,
Charlotte, Greensboro and Raliegh, NC |
Integration Strategy Staged and Manageable The integration plans are staged in a manageable way, with D&E expected to be
fully integrated in the next few months We expect to maintain NuVoxs billing platform and convert existing Windstream
CLEC operations to that platform, making the integration process fairly straightforward Windstream has the experience and a solid track record of successfully integrating
acquisitions |
Combined
Financial Overview Pursuing an Opportunistic Growth Strategy (Dollars in Millions) Total Expected Combined LTM 9/30/09 Windstream D&E Lexcom NuVox Iowa (3) Pre-Synergies Synergies (4) Company Revenue 2,963 $ 145 $ 43 $ 565 $ 275 $ 3,991 $ 3,991 $ Adjusted OIBDA (1) 1,591 $ 64 $ 23 $ 112 $ 130 $ 1,920 $ 86 $ 2,006 $ Margin 54% 44% 54% 20% 47% 50% Capex 305 21 4 71 24 426 $ (8) 418 $ Operating Cash Flow (2) 1,286 $ 43 $ 19 $ 41 $ 106 $ 1,494 $ 94 $ 1,588 $ (1) Excludes pension expense and merger and integration expense (2) Defined as Adjusted OIBDA less capex (3) LTM results shown pro forma for the acquisition of Sherburne
Telecommunications where available (4) Includes expected synergies for all pending transactions Improving Windstreams Financial Profile with Free Cash Flow Accretive Acquisitions while Maintaining a Solid Balance Sheet
|
Focusing on Growth Areas of the Business Transforming Company to Broadband and Business Model Pro Forma for all Pending Transactions, Over 50% of Windstreams Revenue will be From Broadband and Business Customers |
Monetizing the Broadband Connection Network positioned to drive incremental revenue Increasing Broadband ARPU with Faster Internet Speeds 0% 20% 40% 60% 80% 100% 1.5 Mbps 3.0 Mbps 6.0 Mbps 10-12 Mbps Upgraded our core network to increase capacity, speed and reliability Selling add-on services to drive incremental revenue and improve retention - Internet security suite - Home networking - Video on demand - Tech help PC support - Online back-up secure on-line storage Leveraging Existing Infrastructure to Increase Sales Opportunities Approximately 84% of 3Q09 gross adds subscribed to 3Mb or faster Internet speeds vs. 66% in 3Q08 Internet Speed Availability (% of Total Addressable Lines) |
Positioning the Company to Capitalize on Business Opportunities CLEC Business ~ 133k CLEC lines NuVox transaction adds ~ 90k customers and advances our strategy of expanding service to business customers Focusing on less competitive tier 2 and 3 markets The business channel represents just over one third of Windstreams total
revenue We have re-aligned the organization to shift resources to the business organization in order to improve focus, execution and customer service Additionally, we have invested in our network over the past several years to
deliver next generation data services and expand IP product availability
Small / Med Business Targeting 1 -10 line business customers Providing local, long- distance, Internet, and digital TV services Bundling key products while selling value- added services to increase ARPU and improve retention Enterprise Business Targeting 11+ line business customers Offering full suite of voice, Internet and next generation data networking solutions Providing special access services to business and wholesale customers |
Growth
Opportunities for the Business and Enterprise Channel Increasing penetration of next generation data services Virtual Private Networks (VPN) and Virtual LAN services (VLS) enable customers to connect multiple branch offices and remote locations Improved Internet offering with Ethernet Internet Access Selling value-added services Increasing special access opportunities as data needs grow Dedicated Internet connection provides higher performance and reliability 3 Mbps to 10Mbps speeds in most markets Offers symmetrical upload / download speeds Network security Data back-up PC Support With the increasing demand for bandwidth, business and wireless providers have growing needs for additional network transport capabilities Webhosting Web conferencing Faster Internet speeds |
Marketing at the local level Door-to-door sales strategy Partnering relationships - DISH / DirecTV - Agents - E-commerce - New mover services (Moveroo) Focusing on multi-dwelling units Targeted Greenstreak (1) offering Operating Objectives Increasing Competitiveness with Sales and Marketing Initiatives ~63% of lines have voice competition ~75-80% of lines have broadband competition Improving Gross Adds with Additional Distribution Channels Fragmented Competitive Environment Cable Overlap (% of access lines) Time Warner 29% Other 30% Charter 9% Comcast 12% Cox 3% Mediacom 3% Insight 4% (1) Our Greenstreak service offering packages Internet service with a metered voice line
|
Improving
Service Levels Churn Reduction and Retention Strategies Increase bundle penetration Proactively reaching out to customers to address issues: -Resolving technical issues (i.e. service provisioned but not active) -Customers with contract or promotional expirations nearing Increasing Retention with Focus on a Reliable Network and Solid Customer Service Network Reliability and Customer Service Improve the service provisioning process Focusing on network reliability across all products First call resolution Save Team Trained to Help Resolve Issues Retention and Customer Relationships Team dedicated to saving at risk customers Target wireless replacers with Greenstreak Save team follow-ups to ensure customer remains satisfied |
Marketing
Activities Driving Industry Leading Operational Results Video Penetration of Total Access Lines -5.2% -5.7% -6.3% -6.8% -7.4% -8.5% -9.1% -10.0% -11.0% -11.0% WIN IWA FTR CBB CNSL ALSK CTL VZ Q T Source: Public filings and Analyst Reports Note: Data as of 9/30/09 (1) IWA access line results exclude impact of Sherburne acquisition 11% 11% 10% 9% 8% 8% 8% 8% WIN CTL IWA CNSL T FTR VZ Q 39% 36% 34% 34% 32% 30% 29% 28% 27% 24% CNSL WIN IWA T CBB CTL FTR VZ Q ALSK Added 26k new Internet customers and now have 1,050,000 subscribers Residential broadband penetration is 53% of primary residential lines Video subs grew by 11k or 28% YoY Delivered the best access line trends since the company was formed due to solid execution and price for life promotion HSI Penetration of Total Access Lines Year-over-Year Change in Access Lines (1) 3Q09 Operational Highlights |
$360 $400 3Q09 3Q08 $366 $373 3Q09 3Q08 $726 $772 3Q09 3Q08 3Q09 Revenue Financial Objectives Delivering Solid Financial Results (1) Expenses exclude depreciation and amortization. Notes: Windstream financial information is presented on a pro forma basis
which excludes the wireless and supply business All dollars in
millions 3Q09 Expenses (1) Despite an incremental $23M in pension expense and $7.5M in restructuring, 3Q09 expenses declined $7M Expense reductions driven by aggressive expense management were partially offset by higher seasonal expenses Revenue declined due primarily to fewer access lines, usage declines and lower product sales Growth in HSI and next generation data revenues helped offset a portion of the revenue declines Normalized for pension and restructuring expense, OIBDA decline was 2.5% and our OIBDA margin was ~53.8% OIBDA of $391M, excluding Pension and restructuring $31M in pension and rest. 3Q09 OIBDA |
Generating Strong and Sustainable Cash Flows Free Cash Flow Note: Windstream financial information is presented on a pro forma basis
which excludes the wireless and supply business Capital
Expenditures Net Cash from Ops Despite top line pressure, generated $242M in net cash from operations an increase of $19M or 9% YoY Capital expenditures were $67M, or ~9% of total revenue in 3Q09 Generating strong FCF, driven by cost structure improvements, lower capex and lower taxes YTD, generated $535M in FCF, representing a payout ratio of 61% $242 $223 3Q09 3Q08 $67 $86 3Q09 3Q08 $175 $137 3Q09 3Q08 |
Solid
Balance Sheet and Liquidity Position Total cash of $290M at 9/30/09 and ~
$500M in revolver capacity Net leverage ratio of 3.2x Solid BB credit rating - Moodys: Ba2; S&P: BB; Fitch: BB+ - Will likely maintain leverage around current levels should additional strategic
opportunities arise Further strengthened our financial position by:
Opportunistically raising $400M during the 3Q09 to fund the D&E and Lexcom
transactions Amending and extending the credit facility, enabling us to
extend a substantial portion of our bank debt maturities by two years
Manageable Debt Maturity Profile with no significant maturities until 2013 Key Highlights Note: Maturity profile excludes $25.3M discount on long-term debt Debt maturity profile reflects new issuance of $400M and the extension of our senior bank debt $433 $11 $1,021 $810 $400 $1,746 $400 $500 $32 $137 $14 $14 $100 $10 $10 $10 $10 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Thereafter Senior Unsecured Notes Senior Secured Debt |
Windstream Highlights Well-positioned to succeed going forward - Significant scale and profitability - Favorable rural markets - Sound capital structure - Strategic flexibility Delivering best in class operational results Delivering solid financial results Generating strong sustainable free cash flow Returning capital to shareholders Ranked 4th in 2009 BusinessWeek 50 list of best performing U.S. companies |
Appendix 1. Reconciliations of Non-GAAP Financial Measures 2. Supplemental Financial Information D&E Communications Lexcom NuVox Iowa Telecommunications |
Reconciliations of Non-GAAP Financial Measures Windstream Corporation Reconciliations of Non-GAAP Financial Measures Net Debt to OIBDA (net leverage ratio): As of (Dollars in millions) September 30, 2009 Long-term debt, including current maturities 5,223.1 $
Cash and cash
equivalents (290.0) Net debt (A) 4,933.1 $
Operating
Income: Twelve Months Ended (Dollars in millions) September 30, 2009 Operating income under GAAP 999.0 $
Pro forma adjustments: Operating income adjustment for the disposition of Windstream Supply LLC (1.8) Merger and integration costs 2.4 Depreciation and amortization 523.1 Pro forma OIBDA from current businesses (B) 1,522.7 $
Net debt to
OIBDA from current businesses (A)/(B) 3.2 Three Three Increase Months Ended Months Ended (Decrease) (Dollars in millions) September 30, 2009 September 30, 2008 Amount % Operating income under GAAP 225.4 $
270.6 $
Pro forma adjustments: Operating income adjustment for the disposition of Windstream Supply LLC 0.1 (1.2) Merger and integration costs 1.0 - Impairment loss on assets held for sale 6.5 Depreciation and amortization 133.8 123.8 Pro forma OIBDA from current businesses 360.3 399.7 Restructuring charges 7.5 1.0 Pension expense 22.8 (0.2) Pro forma OIBDA from current businesses adjusted (C) 390.6 $
400.5 $
(9.9) $
-2.5% Revenues and sales under GAAP 734.3 $
794.1 $
Pro forma adjustments: Windstream Supply LLC revenue and sales (8.2) (21.8) Pro forma revenue and sales from current businesses (D) 726.1 $
772.3 $
Pro forma OIBDA margin (C)/(D) 53.8% 51.9% Pro forma OIBDA from current businesses Pro forma OIBDA adjustments: Pension expense Pro forma OIBDA from current businesses adjusted 1,522.7 68.1 1,590.8 $
$
|
Dividends announced on August 5, 2009 to shareholders of record as of
September 30,
2009, paid October 15, 2009 Weighted average common stock
outstanding year to date September 30, 2009 and 2008, respectively Reconciliations of Non-GAAP Financial Measures Free Cash Flow: Three Nine Nine Increase Months Ended Months Ended Months Ended (Decrease) (Millions, except per share amounts) September 30, 2009 September 30, 2009 September 30, 2008 Amount % Net cash provided from operations 242.2 $
741.4 $
729.8 $
Additions to property, plant and equipment (67.3) (206.8) (219.5) Free cash flow 174.9 $
534.6 $
510.3 $
24.3 $ 4.8% 433.8 442.3 Free cash flow per share 1.23 $
1.15 $
0.08 $ 6.8% Free Cash Flow Return to Shareholders: as of November 9, 2009 (Dollars in millions) Dividends paid on common shares as of September 30, 2009 328.6 $
108.8 Common stock repurchased as of September 30, 2009 43.5 Common stock repurchased in October 2009 77.8 Free cash flow returned to shareholders 558.7 $
OIBDA is operating income before depreciation and amortization.
|
D&E
Communications Supplemental Financial Information D&E COMMUNICATIONS UNAUDITED PRO FORMA CONSOLIDATED RESULTS (NON-GAAP) QUARTERLY SUPPLEMENTAL INFORMATION for the quarterly periods in the years 2009 and 2008 (Dollars in millions, units in thousands and per customer amounts in whole
dollars) Total 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Financial Results: Revenues and sales Service revenues 106.3 $ 35.2 $ 35.5 $ 35.6 $ 148.0 $ 37.0 $ 36.3 $ 37.2 $ 37.5 $ Product sales 0.9 0.3 0.3 0.3 1.4 0.5 0.3 0.3 0.3 Total revenues and sales 107.2 35.5 35.8 35.9 149.4 37.5 36.6 37.5 37.8 Costs and expenses: Cost of services 36.4 12.3 12.1 12.0 49.3 12.0 12.5 12.7 12.1 Cost of products sold 0.7 0.3 0.2 0.2 1.4 0.4 0.4 0.3 0.3 Selling, general, administrative and other 23.4 7.4 8.1 7.9 34.3 8.0 8.2 8.6 9.5 Total expenses excluding depreciation and amortization 60.5 20.0 20.4 20.1 85.0 20.4 21.1 21.6 21.9 OIBDA (A) 46.7 15.5 15.4 15.8 64.4 17.1 15.5 15.9 15.9 Depreciation and amortization 22.2 7.7 7.4 7.1 29.5 7.0 6.9 7.8 7.8 Operating income 24.5 $ 7.8 $ 8.0 $ 8.7 $ 34.9 $ 10.1 $ 8.6 $ 8.1 $ 8.1 $ Operating Income Margin (B) 22.9% 22.0% 22.3% 24.2% 23.4% 26.9% 23.5% 21.6% 21.4% OIBDA Margin (C) 43.6% 43.7% 43.0% 44.0% 43.1% 45.6% 42.3% 42.4% 42.1% SUPPLEMENTAL OPERATING INFORMATION: Access lines 160.9 160.9 163.0 164.6 165.5 165.5 167.5 168.9 169.6 YOY change in access lines -3.9% -3.9% -3.5% -2.9% -3.0% -3.0% -2.6% -1.9% -1.9% Net access line losses (4.6) (2.1) (1.6) (0.9) (5.1) (2.0) (1.4) (0.7) (1.0) Average access lines 163.2 162.0 163.8 165.1 168.1 166.5 168.2 169.3 170.1 Average service revenue per customer per month $72.37 $72.43 $72.24 $71.88 $73.37 $74.07 $71.94 $73.24 $73.49 High-speed Internet customers 47.4 47.4 45.8 46.2 45.2 45.2 44.4 42.6 43.0 Net high-speed Internet additions (losses) 2.2 1.6 (0.4) 1.0 3.6 0.8 1.8 (0.4) 1.4 YOY change in high-speed Internet customers 6.8% 6.8% 7.5% 7.4% 8.7% 8.7% 9.4% 10.6% 11.4% Digital satellite television customers 8.9 8.9 7.9 8.5 8.5 8.5 8.4 7.4 8.1 Capital expenditures $15.3 $4.4 $5.9 $5.0 $24.7 $5.8 $5.3 $6.0 $7.6 RECONCILIATION OF OPERATING INCOME UNDER GAAP TO PRO FORMA OIBDA: Operating income (loss) from continuing operations under GAAP 18.0 $ 7.6 $ 1.7 $ 8.7 $ (10.9) $ (9.5) $ 8.6 $ (18.1) $ 8.1 $ Pro forma adjustments: Merger and integration costs 1.0 0.2 0.8 - - - - - - Goodwill and intangible asset impairment 5.5 - 5.5 - 45.8 19.6 - 26.2 - Adjusted operating income 24.5 7.8 8.0 8.7 34.9 10.1 8.6 8.1 8.1 Depreciation and amortization expense 22.2 7.7 7.4 7.1 29.5 7.0 6.9 7.8 7.8 Pro forma OIBDA 46.7 $ 15.5 $ 15.4 $ 15.8 $ 64.4 $ 17.1 $ 15.5 $ 15.9 $ 15.9 $ (A) OIBDA is operating income before depreciation and amortization. (B) Operating income margin is calculated by dividing operating income by total
revenue and sales. (C) OIBDA margin is calculated by dividing operating income before depreciation
and amortization by total revenues and sales. 2009 2008 |
Lexcom
Supplemental Financial Information LEXCOM, INC. UNAUDITED PRO FORMA CONSOLIDATED RESULTS (NON-GAAP) QUARTERLY SUPPLEMENTAL INFORMATION for the quarterly periods in the years 2009 and 2008 (Dollars in millions, units in thousands and per customer amounts in whole
dollars) Total 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Financial Results: Total revenues and sales 32.6 $ 10.5 $ 11.1 $ 11.0 $ 44.5 $ 11.0 $ 11.6 $ 10.8 $ 11.1 $ Total operating expenses excluding depreciation and amortization 15.3 5.0 5.1 5.2 20.5 5.3 5.2 5.1 4.9 OIBDA (A) 17.3 5.5 6.0 5.8 24.0 5.7 6.4 5.7 6.2 Depreciation and amortization 6.2 2.1 2.0 2.1 8.3 1.8 2.2 2.1 2.2 Operating income 11.1 $ 3.4 $ 4.0 $ 3.7 $ 15.7 $ 3.9 $ 4.2 $ 3.6 $ 4.0 $ Operating Income Margin (B) 34.0% 32.4% 36.0% 33.6% 35.3% 35.5% 36.2% 33.3% 36.0% OIBDA Margin (C) 53.1% 52.4% 54.1% 52.7% 53.9% 51.8% 55.2% 52.8% 55.9% SUPPLEMENTAL OPERATING INFORMATION: Access lines 34.6 34.6 35.1 35.3 35.5 35.5 36.1 36.6 37.2 YOY change in access lines -4.2% -4.2% -4.1% -5.1% -5.6% -5.6% -5.5% -6.2% -6.5% Net access line losses (0.9) (0.5) (0.2) (0.2) (2.1) (0.6) (0.5) (0.6) (0.4) Average access lines 36.1 34.9 35.2 35.4 36.6 35.8 36.4 36.9 37.4 Average service revenue per customer per month $100.34 $100.43 $105.11 $103.58 $101.32 $102.42 $106.23 $97.56 $98.93 High-speed Internet customers 9.1 9.1 8.8 8.6 8.2 8.2 7.9 7.7 7.5 Net high-speed Internet additions 0.9 0.3 0.2 0.4 1.1 0.3 0.2 0.2 0.4 Long distance customers 17.3 17.3 17.6 17.8 17.9 17.9 18.1 18.3 18.5 Capital expenditures $2.5 $0.9 $0.8 $0.8 $6.1 $1.6 $1.5 $1.5 $1.5 RECONCILIATION OF OPERATING INCOME UNDER GAAP TO PRO FORMA OIBDA: Operating income (loss) from continuing operations under GAAP 11.1 $ 3.4 $ 4.0 $ 3.7 $ 15.7 $ 3.9 $ 4.2 $ 3.6 $ 4.0 $ Depreciation and amortization expense 6.2 2.1 2.0 2.1 8.3 1.8 2.2 2.1 2.2 Pro forma OIBDA 17.3 $ 5.5 $ 6.0 $ 5.8 $ 24.0 $ 5.7 $ 6.4 $ 5.7 $ 6.2 $ (A) OIBDA is operating income before depreciation and amortization. (B) Operating income margin is calculated by dividing operating income by total
revenue and sales. (C) OIBDA margin is calculated by dividing operating income before depreciation
and amortization by total revenues and sales. 2009 2008 |
NuVox
Supplemental Financial Information NUVOX, INC. UNAUDITED PRO FORMA CONSOLIDATED RESULTS (NON-GAAP) QUARTERLY SUPPLEMENTAL INFORMATION for the quarterly periods in the year 2009 and 2008 (Dollars in millions, units in thousands) Total 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Financial Results: Revenues and sales Core 346.5 $ 116.0 $ 115.5 $ 115.0 $ 431.1 $ 113.4 $ 107.2 $ 105.7 $ 104.8 $ Non-core 77.6 24.5 25.5 27.6 119.3 27.3 29.3 31.0 31.7 Total revenues and sales 424.1 140.5 141.0 142.6 550.4 140.7 136.5 136.7 136.5 Costs and expenses: Cost of services 177.1 59.5 59.4 58.2 227.0 56.8 57.0 56.4 56.8 Selling, general, administrative and other 164.9 53.1 58.1 53.7 206.4 53.6 51.1 51.5 50.2 Total expenses excluding depreciation and amortization 342.0 112.6 117.5 111.9 433.4 110.4 108.1 107.9 107.0 OIBDA (A) 82.1 27.9 23.5 30.7 117.0 30.3 28.4 28.8 29.5 Depreciation and amortization 59.6 19.2 20.1 20.3 77.1 20.5 19.4 18.8 18.4 Operating income 22.5 $ 8.7 $ 3.4 $ 10.4 $ 39.9 $ 9.8 $ 9.0 $ 10.0 $ 11.1 $ Operating Income Margin (B) 5.3% 6.2% 2.4% 7.3% 7.2% 7.0% 6.6% 7.3% 8.1% OIBDA Margin (C) 19.4% 19.9% 16.7% 21.5% 21.3% 21.5% 20.8% 21.1% 21.6% SUPPLEMENTAL OPERATING INFORMATION: Customers locations (in thousands) 88.3 88.3 88.5 89.5 89.0 89.0 89.5 90.6 91.0 Capital expenditures and NRCs (D) $54.6 $14.6 $12.9 $27.1 $58.5 $16.7 $11.5 $16.7 $13.6 RECONCILIATION OF OPERATING INCOME UNDER GAAP TO PRO FORMA OIBDA: Operating income from continuing operations under GAAP 20.7 $ 8.4 $ 2.7 $ 9.6 $ 32.0 $ 8.6 $ 7.4 $ 6.1 $ 9.9 $ Pro forma adjustments: Non-recurring fees - - - - 2.9 - - 2.9 - Integration costs 1.8 0.3 0.7 0.8 5.0 1.2 1.6 1.0 1.2 Adjusted operating income 22.5 8.7 3.4 10.4 39.9 9.8 9.0 10.0 11.1 Depreciation and amortization expense 59.6 19.2 20.1 20.3 77.1 20.5 19.4 18.8 18.4 Pro forma OIBDA 82.1 $ 27.9 $ 23.5 $ 30.7 $ 117.0 $ 30.3 $ 28.4 $ 28.8 $ 29.5 $ (A) OIBDA is operating income before depreciation and amortization. (B) Operating income margin is calculated by dividing operating income by total
revenue and sales. (C) OIBDA margin is calculated by dividing operating income before depreciation
and amortization by total revenues and sales. (D) Non-recurring charges ("NRC") represent one-time charges
incurred to initiate service to a customer location. 2009
2008 |
Iowa
Telecommunications Supplemental Financial Information IOWA TELECOMMUNICATIONS, INC. UNAUDITED CONSOLIDATED RESULTS QUARTERLY SUPPLEMENTAL INFORMATION for the quarterly periods in the years 2009 and 2008 (Dollars in millions and units in thousands) Total 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. (A) (A) Operating Income Margin (C) 22.4% 21.8% 21.1% 24.3% 28.5% 27.0% 26.7% 28.5% 32.1% OIBDA Margin (D) 46.1% 45.8% 45.4% 47.1% 50.3% 49.6% 48.5% 50.3% 52.8% SUPPLEMENTAL OPERATING INFORMATION Access lines 255.6 255.6 235.5 238.5 242.1 242.1 245.8 233.3 237.0 High-speed Internet customers 94.5 94.5 79.1 78.2 75.7 75.7 74.5 67.6 65.8 Long distance customers 160.1 160.1 143.2 145.0 146.4 146.4 147.6 139.2 141.0 2009 2008 (A) (B) OIBDA is operating income before depreciation and amortization. (C) Operating income margin is calculated by dividing operating income by total
revenue and sales. (D) OIBDA margin is calculated by dividing operating income before depreciation
and amortization by total revenues and sales. During the third
quarters of 2009 and 2008, Iowa Telecommunications, Inc. completed the acquisitions of Sherburne and Bishop Communications, Inc., respectively. The impact of these acquisitions is reflected in the financial and
operational results noted above in periods subsequent to the completed acquistions. Financial Results: Total revenues and sales 188.4 $ 68.3 $ 58.8 $ 61.3 $ 247.0 $ 65.1 $ 62.9 $ 58.2 $ 60.8 $ Total operating expenses excluding depreciation and amortization 101.5 37.0 32.1 32.4 122.8 32.8 32.4 28.9 28.7 OIBDA (B) 86.9 31.3 26.7 28.9 124.2 32.3 30.5 29.3 32.1 Depreciation and amortization 44.7 16.4 14.3 14.0 53.7 14.7 13.7 12.7 12.6 Operating income 42.2 $ 14.9 $ 12.4 $ 14.9 $ 70.5 $ 17.6 $ 16.8 $ 16.6 $ 19.5 $ Capital expenditures $16.2 $5.9 $6.7 $3.6 $28.2 $8.0 $7.2 $7.1 $5.9 RECONCILIATION OF OPERATING INCOME UNDER GAAP TO PRO FORMA OIBDA: Operating income from continuing operations under GAAP 42.2 $ 14.9 $ 12.4 $ 14.9 $ 70.5 $ 17.6 $ 16.8 $ 16.6 $ 19.5 $ Depreciation and amortization expense 44.7 16.4 14.3 14.0 53.7 14.7 13.7 12.7 12.6 OIBDA 86.9 $ 31.3 $ 26.7 $ 28.9 $ 124.2 $ 32.3 $ 30.5 $ 29.3 $ 32.1 $ Operating income from continuing operations under GAAP Pro forma adjustments: Merger and integration costs Depreciation and amortization expense Pro forma OIBDA from current businesses Adjustment for Sherburne Tele Systems Pro forma OIBDA from current businesses adjusted Total revenues and sales under GAAP Pro forma adjustments: Adjustment for Sherburne Tele Systems Pro forma revenues and sales from current businesses Twelve Months Ended Sept. 30, 2009 253.5 21.9 275.4 $ $ Twelve Months Ended Sept. 30, 2009 2.0 59.4 121.2 8.3 129.5 59.8 $ $ |