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tw telecom Reports Third Quarter 2012 ResultsLITTLETON, Colo., Nov. 5, 2012 /PRNewswire via COMTEX/ -- 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 their global locations, today announced its third quarter 2012 financial results, including $368.9 million of revenue, net income of $21.0 million, $136.5 million of Modified EBITDA ("M-EBITDA"), $111.2 million of net cash provided by operating activities and $37.2 million of levered free cash flow3. (Logo: http://photos.prnewswire.com/prnh/20080626/LATH527LOGO) "We delivered ongoing revenue growth and strong Modified EBITDA margin as we generated substantial levered free cash flow this quarter," said Larissa Herda, tw telecom's Chairman, CEO and President. "We've deployed many new products and features this year to meet our customers' rapidly changing requirements, including recently introducing new Ethernet capabilities and advancing our Intelligent Network. Our product investments are differentiating us in the marketplace as we continue to innovate to deliver faster, better and easier network solutions to serve our customers." Highlights for the Third Quarter 2012 Grew total revenue 1.2% sequentially and 7.1% year over year Grew enterprise revenue 2.0% sequentially and 9.8% year over year Grew data and Internet revenue 3.7% sequentially and 14.9% year over year, now representing 51% of total revenue, driven primarily by strategic Ethernet & VPN solutions Grew net income 8.5% sequentially and 43.7% year over year Grew M-EBITDA 1.9% sequentially and 9.2% year over year Delivered 37.0% M-EBITDA margin Prepaid $101.5 million of the January 2013 tranche of Term Loan B Launched a successful offering of $480 million principal amount 5.375% Senior Notes due 2022, which closed October 2, 2012 Delivered $111.2 million in net cash provided by operating activities and $37.2 million of levered free cash flow, representing 10.1% of revenue Business Trends "We achieved another quarter of solid comprehensive financial results," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer, "as we absorbed the impact of some expected regulatory and tax rate decreases. Our data and Internet revenue, which now represents over half of our total revenue stream, grew at an increased sequential rate this quarter than the past two quarters as we continue to differentiate ourselves with powerful customer solutions." "Our bookings7, or sales, were lower this quarter, primarily in September, coming off a very strong second quarter and strengthened as we started the fourth quarter with strong October sales, a solid sales funnel and a lot of customer interest in our new products," said Peters. "Throughout the past year we've transitioned more of our sales force to focus on larger enterprise opportunities, contributing to a slight contraction in our sales headcount year over year. We expect to grow our sales force over the course of the next year to leverage our new product offerings as well as market opportunities across our national footprint." New Products "We continue to deliver new product innovation," said John Blount, tw telecom's Chief Operating Officer, "including the launch in October of a new Ethernet service that enables national Ethernet coverage from a single connection - our "One-to-Many" offering - as well as further advancing our Intelligent Network. We anticipate launching a new Enhanced Management feature near year end, which will further enable efficiencies for enterprise businesses. We believe our strategic innovation, including our unique foundational design and scalability, will continue to distance us from the competition." Operational Metrics Revenue churn4 was 0.8% for the current quarter, down from 0.9% in the prior quarter and 1.0% in the same period last year. The improvement in revenue churn for the quarter was reduced by an increase in repricing upon contract renewal. As a component of revenue churn, revenue lost from customers fully disconnecting service remained low at 0.2% for the current quarter, which is consistent with the prior quarter and down from 0.3% for the same quarter last year, indicative of a loyal customer base, strong customer experience strategy and competitive product portfolio. The Company had approximately 27,700 customers as of September 30, 2012. Customer churn4 was 0.9% for the current quarter, down from 1.0% in both the prior quarter and the same quarter last year. The Company ended the third quarter with over 28,000 fiber route miles (of which approximately 22,000 were metro miles). Capital Expenditures Capital expenditures were $83.9 million for the quarter as compared to the prior quarter of $80.8 million and for the same period last year of $86.0 million, with the majority of the investments in each period related to success-based initiatives. The Company expects capital spending to increase in the fourth quarter with much of the increase related to the timing of both success-based and strategic initiatives including network expansion and other infrastructure projects. Capital investments for the year are expected to be at the lower end of the original guidance of $345 to $355 million. The Company also expects the majority of these investments to be tied to new success-based opportunities. Other 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 seasonality of sales and installations5, usage, rate changes, disputes, repricing for contract renewals and fluctuations in revenue churn, expenses, capital expenditures and taxes and fees. Intercarrier compensation revenue represented 2% of total revenue for the third quarter. Due to a November 2011 FCC order, intercarrier compensation revenue will decline over a six-year period beginning July 2012. The Company lowered rates in July to comply with the order with an approximate $1 million impact to revenue in the third quarter for the mandated rate step down, with the next rate step down to occur in the third quarter of next year. On October 2, 2012, the Company completed a private offering of $480 million principal amount 5.375% Senior Notes due 2022 at an offering price of 100% of the principal amount. The Company plans to use the net proceeds of this offering to settle the conversion obligations for the Convertible Debentures to the extent holders elect to convert their Convertible Debentures and the Company elects to settle the conversion obligations in whole or in part in cash, or if the Company otherwise redeems the Convertible Debentures. Any net proceeds not used for these purposes would be used for general corporate purposes. Year over Year Results - Third Quarter 2012 compared to Third Quarter 2011 Revenue Revenue for the quarter was $368.9 million compared to $344.5 million for the third quarter last year, representing a year over year increase of $24.4 million or 7.1%. Revenue grew primarily due to ongoing enterprise revenue growth. Key changes in revenue included: $26.2 million increase in revenue from enterprise customers, or 9.8% year over year, driven primarily by data and Internet services $1.5 million decrease in revenue from carriers, primarily due to churn and repricing for contract renewals, partially offset by Ethernet services provided to wireline and wireless carriers to serve their end users By product line, the percentage change in revenue year over year was as follows: 14.9% increase for data and Internet services, primarily driven by an increase in strategic Ethernet and VPN-based products and other services, partially offset by churn and repricing. Data and Internet revenue represents 51% of total revenue for the quarter compared to 48% a year ago 6.8% increase in voice services, primarily reflecting sales of converged and other voice solutions as well as an increase in certain taxes and fees, partially offset by churn 6.5% decrease in network services, primarily reflecting churn and repricing for contract renewals largely in transport services and a decrease in certain taxes and fees, which outpaced growth in high capacity and colocation services Operating Costs Operating costs for the quarter increased year over year, primarily as a result of revenue growth, which included increases in network access costs and certain taxes and fees, as well as fluctuations in franchise fees. As a result of these increases, somewhat offset by efficiency gains, operating costs as a percentage of revenue were 42.3% for the quarter and 41.9% for the same period last year. Modified gross margin6 as a percentage of revenue was 57.8% in the current quarter compared to 58.3% in the same period last year due to an increase in operating costs discussed above. 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") SG&A costs increased year over year, primarily as a result of an increase in employee-related costs, property and other taxes and regulatory fees. SG&A costs as a percentage of revenue decreased to 22.6% for the quarter from 23.8% for the same period last year, reflecting scaling of employee costs which declined as a percentage of revenue year over year. Net Income Net income grew 43.7% to $21.0 million for the quarter from $14.6 million for the same period last year. The increase was primarily driven by M-EBITDA growth, partially offset by an increase in income tax expense. Earnings per share grew to $0.14 for the quarter compared to $0.10 in the same period last year. M-EBITDA and Margins M-EBITDA grew to $136.5 million for the quarter, an increase of 9.2% from the same period last year primarily as a result of revenue growth. M-EBITDA margin for the quarter was 37.0% as compared to 36.3% for the same period last year, as employee costs as a percentage of revenue declined year over year somewhat offset by the dilutive impact of the growth in certain taxes and fees. Sequential Results - Third Quarter 2012 compared to Second Quarter 2012 Revenue Revenue for the quarter was $368.9 million, as compared to $364.5 million for the second quarter of 2012, an increase of $4.4 million, or 1.2%, representing the 32nd consecutive quarter of sequential growth. Revenue grew due to ongoing enterprise growth. Key changes in revenue included: $5.7 million increase in enterprise revenue, representing 2.0% sequential growth driven primarily by data and Internet services, partially offset by a decrease in certain taxes and fees $0.8 million decrease in revenue from carrier customers, primarily reflecting churn and repricing for contract renewals, offset by growth in Ethernet services provided to wireline and wireless carriers to serve their end users By product line, the percentage change in revenue sequentially was as follows: 3.7% increase for data and Internet services, primarily driven by an increase in strategic Ethernet and VPN-based product sales and other services, partially offset by churn and repricing Voice services were unchanged, primarily reflecting an increase in sales of converged solutions offset by churn and decreases in certain taxes and fees as a result of rate reductions 2.1% decrease in network services, primarily reflecting churn and repricing for contract renewals largely in transport services, which outpaced growth in high capacity and collocation services Operating Costs Operating costs increased primarily as a result of revenue growth and included increased network access costs and seasonally higher maintenance and utility costs, somewhat offset by a reduction in certain taxes and fees. Operating costs were 42.3% of revenue for the quarter and 42.0% for the prior quarter. Modified gross margin for the quarter as a percentage of revenue was 57.8% compared to 58.2% in the prior quarter due to an increase in operating costs discussed above. Selling, General and Administrative Costs SG&A costs decreased reflecting a decrease in employee and other costs, partially offset by an increase in bad debt expense. SG&A was 22.6% of revenue for the quarter and 23.2% for the prior quarter. Net Income Net income grew to $21.0 million for the quarter from $19.3 million in the prior quarter, primarily reflecting M-EBITDA growth, partially offset by an increase in income tax expense. Earnings per share was $0.14 for the quarter compared to $0.13 in the prior quarter. M-EBITDA and Margins M-EBITDA was $136.5 million for the quarter, an increase of 1.9% from the prior quarter primarily as a result of revenue growth. M-EBITDA margin was 37.0% for the quarter compared to 36.8% for the prior quarter. tw telecom plans to conduct a webcast conference call to discuss its earnings results on November 6, 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 "Investor Relations." (1) 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) Unlevered free cash flow is defined as Modified EBITDA less capital expenditures, which is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website. (3) Levered free cash flow is defined as Modified EBITDA less capital expenditures and net interest expense from operations (excluding debt extinguishment costs, non-cash interest expense and deferred debt costs), which is reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website. (4) Revenue churn is defined 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. (7) Bookings are defined as signed customer contracts. The timing of when these sales are installed and recognized into revenue varies based on the underlying contract. 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 funnel, sales force, customer opportunities, network capabilities, sales and installations timing, demand, revenue growth, margins, the impact of regulatory changes, churn, business trends and fluctuations, 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 2011 Annual Report on Form 10-K and in its quarterly report on Form 10-Q for the quarter ended September 30, 2012 to be filed shortly hereafter. 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., is a leading national provider of managed services, including Business Ethernet, converged and IP VPN solutions for enterprises throughout the U.S. and globally. tw telecom also delivers secure, scalable private connections for transport data networking, Internet access, voice, VPN, VoIP and security to large organizations and communications services companies. Employing a resilient fiber network infrastructure, robust product portfolio and its own Intelligent Network capabilities, tw telecom delivers customers overall economic value, an industry-leading quality service experience, and improved business productivity. Please visit www.twtelecom.com for more information. tw telecom inc. Consolidated Operations Highlights (Dollars in thousands) Unaudited (1) Three Months Ended Nine Months Ended Sept 30, Sept 30, 2012 2011 Growth % 2012 2011 Growth % Revenue Data and Internet services $189,164 $164,670 14.9% $548,495 $475,025 15.5% Voice services 91,052 85,220 6.8% 271,681 251,880 7.9% Network services 81,261 86,878 -6.5% 249,074 265,287 -6.1% Service Revenue 361,477 336,768 7.3% 1,069,250 992,192 7.8% Intercarrier compensation 7,457 7,688 -3.0% 23,112 23,192 -0.3% Total Revenue 368,934 344,456 7.1% 1,092,362 1,015,384 7.6% Expenses Operating costs 156,195 144,161 458,374 425,141 Gross Margin 212,739 200,295 633,988 590,243 Selling, general and administrative costs 83,341 82,085 254,011 241,684 Depreciation, amortization and accretion 70,726 70,940 209,589 210,757 Operating Income 58,672 47,270 24.1% 170,388 137,802 23.6% Interest expense (15,495) (16,012) (46,551) (48,302) Debt extinguishment costs (77) - (77) - Non-cash interest expense and deferred debt costs (6,330) (5,918) (18,715) (17,445) Interest income 84 126 281 443 Income before income taxes 36,854 25,466 44.7% 105,326 72,498 45.3% Income tax expense 15,885 10,873 45,706 30,979 Net Income $20,969 $14,593 43.7% $59,620 $41,519 43.6% SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA Gross Margin $212,739 $200,295 $633,988 $590,243 Add back non-cash stock-based compensation expense 473 565 1,428 1,737 Modified Gross Margin 213,212 200,860 6.1% 635,416 591,980 7.3% Selling, general and administrative costs 83,341 82,085 254,011 241,684 Add back non-cash stock-based compensation expense 6,667 6,248 20,889 19,357 Modified EBITDA 136,538 125,023 9.2% 402,294 369,653 8.8% Non-cash stock-based compensation expense 7,140 6,813 22,317 21,094 Depreciation, amortization and accretion 70,726 70,940 209,589 210,757 Net Interest expense 15,411 15,886 46,270 47,859 Debt extinguishment costs 77 - 77 - Non-cash interest expense and deferred debt costs 6,330 5,918 18,715 17,445 Income tax expense 15,885 10,873 45,706 30,979 Net Income $20,969 $14,593 $59,620 $41,519 Modified Gross Margin % 57.8% 58.3% 58.2% 58.3% Modified EBITDA Margin % 37.0% 36.3% 36.8% 36.4% Free Cash Flow: Modified EBITDA $136,538 $125,023 9.2% $402,294 $369,653 8.8% Less: Capital Expenditures 83,900 85,957 -2.4% 243,801 256,094 -4.8% Unlevered Free Cash Flow 52,638 39,066 34.7% 158,493 113,559 39.6% Less: Net interest expense 15,411 15,886 -3.0% 46,270 47,859 -3.3% Levered Free Cash Flow $37,227 $23,180 60.6% $112,223 $65,700 70.8% (1) For complete financials and related footnotes, please refer to the Company's SEC filings. tw telecom inc. Consolidated Operations Highlights (Dollars in thousands) Unaudited (1) Three Months Ended Sept 30, June 30, 2012 2012 Growth % Revenue Data and Internet services $189,164 $182,480 3.7% Voice services 91,052 91,008 0.0% Network services 81,261 83,009 -2.1% Service Revenue 361,477 356,497 1.4% Intercarrier compensation 7,457 8,006 -6.9% Total Revenue 368,934 364,503 1.2% Expenses Operating costs 156,195 152,986 Gross Margin 212,739 211,517 Selling, general and administrative costs 83,341 84,580 Depreciation, amortization and accretion 70,726 70,469 Operating Income 58,672 56,468 3.9% Interest expense (15,495) (15,612) Debt extinguishment costs (77) - Non-cash interest expense and deferred debt costs (6,330) (6,248) Interest income 84 93 Income before income taxes 36,854 34,701 6.2% Income tax expense 15,885 15,382 Net Income $20,969 $19,319 8.5% SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA Gross Margin $212,739 $211,517 Add back non-cash stock-based compensation expense 473 455 Modified Gross Margin 213,212 211,972 0.6% Selling, general and administrative costs 83,341 84,580 Add back non-cash stock-based compensation expense 6,667 6,594 Modified EBITDA 136,538 133,986 1.9% Non-cash stock-based compensation expense 7,140 7,049 Depreciation, amortization and accretion 70,726 70,469 Net Interest expense 15,411 15,519 Debt extinguishment costs 77 - Non-cash interest expense and deferred debt costs 6,330 6,248 Income tax expense 15,885 15,382 Net Income $20,969 $19,319 Modified Gross Margin % 57.8% 58.2% Modified EBITDA Margin % 37.0% 36.8% Free Cash Flow Modified EBITDA $136,538 $133,986 1.9% Less: Capital Expenditures 83,900 80,792 3.8% Unlevered Free Cash Flow 52,638 53,194 -1.0% Less: Net interest expense 15,411 15,519 -0.7% Levered Free Cash Flow $37,227 $37,675 -1.2% (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 Sept. 30 Jun. 30 Sept. 30 2012 2012 2011 Weighted Average Shares Outstanding (thousands) Basic 147,973 147,497 147,084 Diluted (2) 150,359 149,532 148,999 Basic & Diluted Income per Common Share $0.14 $0.13 $0.10 As of Sept. 30 Jun. 30 Sept. 30 2012 2012 2011 Common shares (thousands) Actual Shares Outstanding 151,271 150,966 149,332 Unvested Restricted Stock Units and Restricted Stock Awards (thousands) 4,598 4,573 4,300 Options (thousands) Options Outstanding 5,065 5,375 6,824 Options Exercisable 4,369 4,674 4,950 Options Exercisable and In-the-Money 4,369 4,674 1,533 (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) Sept. 30 Jun. 30 Sept. 30 2012 2012 2011 ASSETS Cash, equivalents, and short term investments $459,397 $531,699 $469,093 Receivables 114,407 108,429 99,914 Less: allowance (7,693) (7,521) (7,660) Net receivables 106,714 100,908 92,254 Prepaid expenses and other current assets 19,475 19,929 22,842 Deferred income taxes 65,008 65,008 40,428 Total other current assets 84,483 84,937 63,270 Property, plant and equipment 4,186,321 4,116,329 3,958,489 Less: accumulated depreciation (2,721,086) (2,662,794) (2,541,885) Net property, plant and equipment 1,465,235 1,453,535 1,416,604 Deferred income taxes 123,063 136,988 194,081 Goodwill 412,694 412,694 412,694 Intangible assets, net of accumulated amortization 19,362 14,928 19,417 Other assets, net 22,736 22,862 25,290 Total other non-current assets 577,855 587,472 651,482 Total $2,693,684 $2,758,551 $2,692,703 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $61,819 $57,433 $66,356 Deferred revenue 44,413 43,856 41,724 Accrued taxes, franchise and other fees 65,975 65,274 68,708 Accrued interest 7,653 13,914 7,459 Accrued payroll and benefits 40,840 40,730 39,738 Accrued carrier costs 23,988 24,022 28,816 Current portion of debt and lease obligations 369,404 465,398 7,742 Other current liabilities 29,227 29,110 37,404 Total current liabilities 643,319 739,737 297,947 Long-Term Debt and Capital Lease Obligations 2 3/8% convertible senior debentures, due 4/1/2026 (2) 373,743 373,744 373,744 Unamortized Discount (11,168) (16,577) (32,133) Net 362,575 357,167 341,611 Floating rate senior secured debt - Term Loan B, due 1/7/2013 - 101,518 102,324 Floating rate senior secured debt - Term Loan B, due 12/30/2016 464,250 465,482 469,176 8% senior unsecured notes, due 3/1/2018, net of unamortized discount 427,905 427,808 427,518 Capital lease obligations 17,917 17,837 16,594 Less: current portion (369,404) (465,398) (7,742) Total long-term debt and capital lease obligations 903,243 904,414 1,349,481 Long-Term Deferred Revenue 24,031 24,629 22,330 Other Long-Term Liabilities 36,840 36,046 33,636 Stockholders' Equity 1,086,251 1,053,725 989,309 Total $2,693,684 $2,758,551 $2,692,703 (1) For complete financials and related footnotes, please refer to the Company's SEC filings. (2) Holders have the option to require the Company to purchase all or part of the debentures on April 1, 2013, April 1, 2016 or April 1, 2021; or at any time prior to April 1, 2026 to convert the debentures into equity. The Company has the right to redeem the debentures in whole or in part at any time on or after April 6, 2013. tw telecom inc. Condensed Consolidated Statements of Cash Flows (Dollars in thousands) Unaudited (1) Three Months Ended Sept. 30 Jun. 30 Sept. 30 2012 2012 2011 Cash flows from operating activities: Net Income $20,969 $19,319 $14,593 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion 70,726 70,469 70,940 Deferred income taxes 15,329 14,947 10,426 Stock-based compensation expense 7,140 7,049 6,813 Amortization of discount on debt and deferred debt costs and other 6,407 6,246 5,887 Changes in operating assets and liabilities: Accounts receivable, net (5,806) (9,487) (5,981) Prepaid expenses and other current and noncurrent assets 1,226 (752) (12,788) Accounts payable 3,172 (6,367) (13,961) Accrued interest (6,239) 6,418 (6,381) Accrued payroll and benefits 165 10,724 1,037 Deferred revenue, current and noncurrent (41) 3,521 4,336 Other current and noncurrent liabilities (1,863) (7,849) 1,004 Net cash provided by operating activities 111,185 114,238 75,925 Cash flows from investing activities: Capital expenditures (83,474) (80,792) (84,491) Purchase of investments (19,927) (79,711) (97,572) Proceeds from sale of investments 20,828 69,579 97,562 Other investing activities, net (1,178) 5,406 3,886 Net cash used in investing activities (83,751) (85,518) (80,615) Cash flows from financing activities: Net proceeds from issuance of common stock upon exercise of stock options and vesting of restricted stock awards and units 4,307 8,393 1,525 Purchases of treasury stock - - (34,612) Excess tax benefits from stock-based compensation 500 268 - Retirement of debt obligation (101,518) - - Payment of debt and capital lease obligations (1,601) (1,834) (1,713) Net cash (used in) provided by financing activities (98,312) 6,827 (34,800) Increase (decrease) in cash and cash equivalents (70,878) 35,547 (39,490) Cash and cash equivalents at the beginning of the period 387,678 352,131 379,231 Cash and cash equivalents at the end of the period $316,800 $387,678 $339,741 Supplemental disclosures cash, equivalents and short term investments Cash and cash equivalents at the end of the period $316,800 $387,678 $339,741 Short term investments 142,597 144,021 129,352 Total of cash, equivalents and short term investments $459,397 $531,699 $469,093 Supplemental disclosures of cash flow information: Cash paid for interest $22,009 $9,489 $23,079 Cash paid for income taxes, net of refunds $1,508 $5,082 $575 Addition of capital lease obligation $426 - $1,466 Supplemental information to reconcile capital expenditures: Capital expenditures per cash flow statement $83,474 $80,792 $84,491 Addition of capital lease obligation 426 - 1,466 Total capital expenditures $83,900 $80,792 $85,957 (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 2011 2012 Mar. 31 Jun. 30 Sept. 30 Dec. 31 Mar. 31 Jun. 30 Sept. 30 Operating Metrics: Buildings (2) 13,742 14,311 14,872 15,438 15,905 16,367 16,919 Headcount Total Headcount 2,985 3,071 3,065 3,051 3,059 3,089 3,087 Sales Associates 564 553 564 555 551 546 543 Customers Total Customers 27,234 27,322 27,376 27,509 27,495 27,569 27,699 (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 inc. |