tw telecom Reports First Quarter 2013 Results Delivers 6.2% Year over Year Revenue Growth while investing in Growth Initiatives Delivers New Products and Ongoing Innovation Completes refinancing and executes more than $105 million of share repurchases while retiring nearly 40% par value of Convertible Debt through May 3rd PR Newswire LITTLETON, Colo., May 6, 2013 LITTLETON, Colo., May 6, 2013 /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 their global locations, today announced its first quarter 2013 financial results, including $381.2 million of revenue, $13.1 million of net income, $136.0 million of Modified EBITDA^1 ^ ("M-EBITDA"), $81.6 million of net cash provided by operating activities and $23.9 million of levered free cash flow^3. (Logo: http://photos.prnewswire.com/prnh/20080626/LATH527LOGO) "We've had a productive start to the year, as we commenced our growth initiatives, delivered ongoing revenue growth and cash flow generation and executed several strategic balance sheet activities," said Larissa Herda, tw telecom's Chairman, CEO and President. "The growth initiatives we announced in February are under way as we focus on delivering additional product innovation, increasing our sales coverage, as well as further automating the business and expanding our market reach. Everything we're doing is to increase our sales momentum and the trajectory of our revenue growth as we continue with our comprehensive balanced approach to win market share." Highlights for the First Quarter 2013 oGrew total revenue 0.9% sequentially and 6.2% year over year oGrew enterprise revenue 0.7% sequentially and 8.2% year over year oGrew data and Internet revenue 2.2% sequentially and 14.3% year over year, driven primarily by a 19.4% increase in strategic Ethernet and VPN-based product revenue oDelivered net income of $13.1 million, or $0.09 basic earnings per share oDelivered M-EBITDA of $136.0 million representing a 35.7% M-EBITDA margin^1 oDelivered $23.9 million of levered free cash flow, representing 6.3% of revenue oExecuted $60.0 million of share repurchases Subsequent Events April 1 through May 3 oExecuted an additional $45.5 million of share repurchases for $105.5 million total year to date oRetired nearly 40% of the par amount of convertible debt or $145.1 million, via open market purchases or voluntary conversions, which have been or will be settled in cash oRefinanced and upsized term loan and revolver with lower rates, longer maturities and greater covenant flexibility Business Trends "Our first quarter results were in line with our expectations, including several discrete items that we communicated in February," said Mark Peters, tw telecom's Executive Vice President and Chief Financial Officer. "We continued with our track record of thoughtful balance sheet management. Through May 3rd, we refinanced our secured debt at attractive terms, executed $105.5 million in share repurchases and retired nearly 40% of the par value of our convertible debt that has been, or will be, settled for cash. We expect to continue our share repurchase plan this year and to retire the balance of our convertible debt in the near term," said Peters. Product Innovation and Differentiation "Our plans for 2013 include further differentiation of our product portfolio," said John Blount, tw telecom's Chief Operating Officer. "We're focused on both innovative new capabilities as well as enhancements to our core strengths. To further evolve our core portfolio, we've recently launched advanced SIP capabilities and a premium Internet security service.We expect to launch later this year new managed services features and our 40 and 100 gigabit Ethernet services with a native handoff for use in customers' metro networks. Additionally, we continue to actively develop our innovative future Constellation Platform and capabilities, which encompasses our Intelligent Network services." "Our product enhancements and ongoing innovation are part of our growth initiatives designed to achieve greater market differentiation, win additional market share and further drive our sales momentum and revenue growth," said Blount. Operational Metrics Revenue churn^4 was 0.8% for the current quarter, down from 0.9% in the prior quarter and 1.1% in the same period last year. 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 both the prior quarter and the same quarter last year and indicative of a loyal customer base, strong customer experience strategy and competitive product portfolio. The Company had over 28,000 customers as of March 31, 2013. Customer churn^4 was 0.9% for both the current quarter and prior quarter, down from 1.0% in the same quarter last year. The Company ended the quarter with over 29,000 fiber route miles (of which over 22,000 were metro miles). Capital Investments Capital investments were $90.9 million for the quarter as compared to the prior quarter of $99.6 million and for the same period last year of $79.1 million. The fluctuation between periods primarily reflects timing of projects as well as a year over year increase in investments to support new product and other technology initiatives. The Company continues to expect capital investments for 2013 to be approximately $360 to $370 million, with the majority tied to new sales opportunities. Trends and 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 installations^5, usage, rate changes, disputes, settlements, repricing for contract renewals and fluctuations in revenue churn, expenses, capital expenditures and taxes and fees. The Company's bookings^7, or sales, continued to grow compared to the same period last year as it takes market share and sells more to existing customers, although not at a high enough rate to sustain its 2012 revenue growth rate. The Company commenced its growth initiatives that were previously announced in February, with the goal to increase sales and ultimately to accelerate its overall revenue growth rate. These initiatives include both operating expense and capital investments that are expected to temporarily impact Modified EBITDA margin and cash flow until growth in recurring revenue absorbs these increased costs and investments. In April, the Company refinanced its $462 million term loan and replaced its undrawn $80 million revolving credit facility with a $520 million term loan and a $100 million revolving credit facility, which is undrawn. This refinancing extended the Company's maturities, substantially improved its interest rate and provided additional covenant flexibility. Year to date through May 3, the Company executed $105.5 million of share repurchases, or 4.1 million shares; and retired $145.1 million par amount of its convertible debt through open market purchases and voluntary conversions that have been, or will be, settled for cash. Giving effect to these repurchases and pending retirements, the Company has $228.6 million par value of outstanding convertible debt that it expects to retire in the near future. Pro-forma for additional convertible debt retirement and share repurchases, the Company expects to maintain a minimum of $300 million in cash, equivalents and short term investments by year-end, in order to provide ongoing liquidity and the flexibility for other operating and strategic initiatives. Year over Year Results – First Quarter 2013 compared to First Quarter 2012 Revenue for the quarter was $381.2 million compared to $358.9 million for the first quarter last year, representing a year over year increase of $22.3 million or 6.2%. Revenue grew primarily due to ongoing enterprise revenue growth. Key changes in revenue included: o$23.0 million increase in revenue from enterprise customers, or 8.2% year over year, driven primarily by data and Internet services o$1.0 million decrease in revenue from carriers, primarily due to churn and repricing for contract renewals, largely offset by growth in Ethernet services o$0.3 million increase in intercarrier compensation revenue primarily reflecting an increase in minutes of use and higher settlements in the current quarter, which offset the impact of a mandatory FCC rate reduction in July 2012 By product line, the percentage change in revenue ^ year over year was as follows: o14.3% 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 53% of total revenue for the quarter compared to 49% a year ago o3.1% increase in voice services, primarily from converged and other voice solutions and certain taxes and fees, partially offset by churn. Voice revenue represented 24% of total revenue for the quarter compared to 25% a year ago o7.0% decrease in network services, primarily reflecting the net impact of churn and repricing for contract renewals. Network services revenue represents 21% of total revenue for the quarter compared to 24% a year ago Operating Costs Operating costs for the quarter increased year over year, which included increases in network access costs primarily as a result of revenue growth, as well as higher maintenance and employee-related costs. Operating costs as a percentage of revenue were 42.3% for the quarter compared to 41.6% for the same period last year. Modified gross margin^6 as a percentage of revenue was 57.9% in the current quarter compared to 58.6% in the same period last year due to an increase in network access and maintenance costs. 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 higher employee-related costs, including commissions, additional headcount, merit-based increases and stock-based compensation. SG&A costs as a percentage of revenue increased to 24.5% for the quarter from 24.0% for the same period last year. This primarily reflects higher employee costs, which increased as a percentage of revenue year over year. Net Income Net income was $13.1 million for the quarter compared to $19.3 million from the same period last year, reflecting an increase in interest expense related to the October 2012 financing and higher depreciation expense, resulting from asset additions and the timing of assets becoming fully depreciated, offset by M-EBITDA growth and lower income tax expense. The Company delivered basic earnings per share of $0.09 for the current quarter as compared to $0.13 for the same period last year. M-EBITDA and Margins M-EBITDA grew to $136.0 million for the quarter, an increase of 3.2% from the same period last year primarily as a result of revenue growth. M-EBITDA margin for the quarter was 35.7% as compared to 36.7% for the same period last year, as network access costs, employee costs and maintenance costs as a percentage of revenue increased year over year. Sequential Results – First Quarter 2013 compared to Fourth Quarter 2012 Revenue for the quarter was $381.2 million, as compared to $377.9 million for the fourth quarter of 2012, an increase of $3.3 million, or 0.9%, representing the 34^th consecutive quarter of sequential growth. Revenue grew primarily due to ongoing enterprise growth. Key changes in revenue included: o$2.2 million increase in enterprise revenue, driven primarily by data and Internet services, offset by a $2.2 million customer settlement in the prior quarter that did not recur and a rate reduction for certain taxes and fees o$0.2 million increase in revenue from carrier customers, primarily reflecting growth in Ethernet services, offset by churn and repricing for contract renewals o$0.9 million increase in intercarrier compensation revenue, primarily reflecting an increase in the minutes of use and higher settlements By product line, the percentage change in revenue sequentially was as follows: o2.2% increase for data and Internet services, primarily driven by an increase in strategic Ethernet and VPN-based products and other services, partially offset by a $2.2 million customer settlement in the prior quarter that did not recur as well as churn and repricing oVoice services were largely unchanged, primarily reflecting an increase in converged solutions, offset by churn and a rate reduction for certain taxes and fees o2.7% decrease in network services, primarily reflecting the net impact of churn and repricing for contract renewals and a reduction in settlements Operating Costs Operating costs increased primarily due to higher network access costs as a result of revenue growth, as well as increased employee-related costs, largely due to the resetting of payroll taxes, somewhat offset by a reduction in the rate of certain taxes and fees. Operating costs were 42.3% of revenue for the quarter and 42.1% for the prior quarter. Modified gross margin for the quarter as a percentage of revenue was 57.9% compared to 58.0% in the prior quarter. Selling, General and Administrative Costs SG&A costs increased primarily reflecting higher employee-related costs, including the impact of the annual resetting of payroll taxes and higher stock-based compensation expense. SG&A was 24.5% of revenue for the quarter and 23.1% for the prior quarter. Net Income Net income was $13.1 million for the quarter, down from $17.3 million in the prior quarter, primarily reflecting a decrease in M-EBITDA, largely attributable to the annual resetting of payroll taxes, as well as an increase in stock-based compensation expense. The Company delivered basic earnings per share of $0.09 for the quarter compared to $0.11 in the prior quarter. M-EBITDA and Margins M-EBITDA was $136.0 million for the quarter, a decrease of 1.6% from the prior quarter primarily as a result of increased selling, general and administrative costs as discussed above.M-EBITDA margin was 35.7% for the quarter compared to 36.6% for the prior quarter, reflecting primarily an increase in payroll taxes, network costs and the impact of a customer settlement in the prior quarter that did not recur. tw telecom plans to conduct a webcast conference call to discuss its earnings results on May 7, 2013 at9:00 a.m. MDT (11:00 a.m. EDT). To access the webcast and the financial and other information to be discussed in the webcast, visit www.twtelecom.comunder "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 2013 and beyond, including statements regarding product and platform plans, growth prospects, market opportunities, sales growth, cash flow, growth initiatives, sales force, customer opportunities, network capabilities, sales and installations timing, demand, revenue growth, margins, expense trends, churn, business trends and fluctuations, future cash balances, future share repurchases, debt retirement andexpected 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 2012 Annual Report on Form 10-K and in its quarterly reports on Form 10-Q for the quarter ended March 31, 2013 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.comfor more information. tw telecom inc. Consolidated Operations Highlights (Dollars in thousands) Unaudited (1) Three Months Ended March 31, 2013 2012 Growth % Revenue Data and Internet services $202,082 $176,851 14.3% Voice services 92,355 89,621 3.1% Network services 78,863 84,804 -7.0% Service Revenue 373,300 351,276 6.3% Intercarrier compensation 7,909 7,649 3.4% Total Revenue 381,209 358,925 6.2% Expenses Operating costs 161,082 149,193 Gross Margin 220,127 209,732 Selling, general and administrative 93,562 86,090 costs Depreciation, amortization and accretion 74,395 68,394 Operating Income 52,170 55,248 -5.6% Interest expense (21,546) (15,444) Non-cash interest expense and deferred (6,794) (6,137) debt costs Interest income 277 104 Income before income 24,107 33,771 -28.6% taxes Income tax expense 10,963 14,439 Net Income $13,144 $19,332 -32.0% SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA Gross Margin $220,127 $209,732 Add back non-cash stock-based 583 500 compensation expense Modified Gross Margin 220,710 210,232 5.0% Selling, general and administrative costs 93,562 86,090 Add back non-cash stock-based 8,879 7,628 compensation expense Modified EBITDA 136,027 131,770 3.2% Non-cash stock-based compensation expense 9,462 8,128 Depreciation, amortization and accretion 74,395 68,394 Net Interest expense 21,269 15,340 Non-cash interest expense and deferred 6,794 6,137 debt costs Income tax expense 10,963 14,439 Net Income $13,144 $19,332 Modified Gross Margin % 57.9% 58.6% Modified EBITDA Margin % 35.7% 36.7% Free Cash Flow Modified EBITDA $136,027 $131,770 3.2% Less: Capital Expenditures 90,853 79,109 14.8% Unlevered Free Cash Flow 45,174 52,661 -14.2% Less: Net interest expense 21,269 15,340 38.7% Levered Free Cash Flow $23,905 $37,321 -35.9% (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 Mar. 31 Dec. 31 2013 2012 Growth % Revenue Data and Internet services $202,082 $197,802 2.2% Voice services 92,355 92,062 0.3% Network services 78,863 81,014 -2.7% Service Revenue 373,300 370,878 0.7% Intercarrier compensation 7,909 7,015 12.7% Total Revenue 381,209 377,893 0.9% Expenses Operating costs 161,082 159,179 Gross Margin 220,127 218,714 Selling, general and administrative costs 93,562 87,412 Depreciation, amortization and accretion 74,395 74,703 Operating Income 52,170 56,599 -7.8% Interest expense (21,546) (21,720) Non-cash interest expense and deferred (6,794) (6,771) debt costs Interest income 277 512 Income before income 24,107 28,620 -15.8% taxes Income tax expense 10,963 11,352 Net Income $13,144 $17,268 -23.9% SUPPLEMENTAL INFORMATION TO RECONCILE MODIFIED GROSS MARGIN AND MODIFIED EBITDA Gross Margin $220,127 $218,714 Add back non-cash stock-based compensation 583 476 expense Modified Gross Margin 220,710 219,190 0.7% Selling, general and administrative costs 93,562 87,412 Add back non-cash stock-based compensation 8,879 6,507 expense Modified EBITDA 136,027 138,285 -1.6% Non-cash stock-based compensation expense 9,462 6,983 Depreciation, amortization and accretion 74,395 74,703 Net Interest expense 21,269 21,208 Non-cash interest expense and deferred 6,794 6,771 debt costs Income tax expense 10,963 11,352 Net Income $13,144 $17,268 Modified Gross Margin % 57.9% 58.0% Modified EBITDA Margin % 35.7% 36.6% Free Cash Flow Modified EBITDA $136,027 $138,285 -1.6% Less: Capital Expenditures 90,853 99,624 -8.8% Unlevered Free Cash Flow 45,174 38,661 16.8% Less: Net interest expense 21,269 21,208 0.3% Levered Free Cash Flow $23,905 $17,453 37.0% (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 Mar. 31 Dec. 31 Mar. 31 2013 2012 2012 Weighted Average Shares Outstanding (thousands) Basic 149,129 148,253 146,967 Diluted (2) 152,452 152,311 149,090 Basic and Diluted Income per Common Share $0.09 $0.11 $0.13 As of Mar. 31 Dec. 31 Mar. 31 2013 2012 2012 Common shares (thousands) Actual Shares Outstanding 151,388 151,397 150,374 Unvested Restricted Stock Units and Restricted Stock Awards (thousands) 4,209 4,573 4,596 Options (thousands) Options Outstanding 3,233 4,860 5,977 Options Exercisable 3,075 4,169 5,268 Options Exercisable and In-the-Money 3,075 4,169 4,564 (1) For complete financials and related footnotes, please refer to the Company's SEC filings. Stock options, restricted stock units/awards and convertible debt (2) 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) Mar. 31 Dec. 31 Mar. 31 2013 2012 2012 ASSETS Cash, equivalents, and short term $913,285 $974,292 $486,667 investments Receivables 111,379 106,770 100,070 Less: allowance (6,949) (7,067) (8,649) Net receivables 104,430 99,703 91,421 Prepaid expenses and other current 24,524 19,164 18,334 assets Deferred income taxes 76,160 76,160 65,008 Total other current 100,684 95,324 83,342 assets Property, plant and equipment 4,327,939 4,247,868 4,080,835 Less: accumulated (2,812,332) (2,755,622) (2,641,851) depreciation Net property, plant 1,515,607 1,492,246 1,438,984 and equipment Deferred income taxes 91,238 101,885 148,432 Goodwill 412,694 412,694 412,694 Intangible assets, net of accumulated 16,063 17,578 16,335 amortization Other assets, net 28,985 30,015 23,875 Total other 548,980 562,172 601,336 non-current assets Total $3,182,986 $3,223,737 $2,701,750 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $57,096 $55,857 $56,142 Deferred revenue 46,758 45,471 42,923 Accrued taxes, franchise and 58,351 60,844 65,840 other fees Accrued interest 20,516 20,343 7,488 Accrued payroll and benefits 33,685 45,727 29,969 Accrued carrier costs 19,183 30,765 25,154 Current portion of debt and 380,687 374,969 108,482 lease obligations Other current liabilities 34,157 29,163 31,132 Total current 650,433 663,139 367,130 liabilities Long-Term Debt and Capital Lease Obligations 2 3/8% convertible senior debentures, due 4/1/2026 (2) 373,702 373,743 373,744 (4) Unamortized Discount - (5,643) (21,872) Net 373,702 368,100 351,872 Floating rate senior secured debt - Term Loan B, due - - 101,787 1/7/2013 Floating rate senior secured debt - Term Loan B, due 461,787 463,019 466,713 12/30/2016 (3) 8% senior unsecured notes, due 3/1/2018, net of unamortized 428,098 428,001 427,711 discount 5 3/8% senior unsecured notes, 480,000 480,000 - due 10/1/2022 Capital lease obligations 22,644 20,091 18,178 Less: current portion (380,687) (374,969) (108,482) Total long-term debt and capital lease 1,385,544 1,384,242 1,257,779 obligations Long-Term Deferred Revenue 22,454 23,177 22,041 Other Long-Term Liabilities 43,862 41,240 35,784 Stockholders' Equity 1,080,693 1,111,939 1,019,016 Total $3,182,986 $3,223,737 $2,701,750 (1) For complete financials and related footnotes, please refer to the Company's SEC filings. Holders have the option to require the Company to purchase all or part of the debentures on 4/1/13, 4/1/16 or 4/1/21; or at any time (2) prior to 4/1/26 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 4/6/13. The Company's Term Loan B and revolving credit facility were (3) refinanced effective April 17, 2013. See the Company's SEC filings for more details. (4) See the press release narrative for retirements of convertible debt subsequent to March 31, 2013. tw telecom inc. Condensed Consolidated Statements of Cash Flows (Dollars in thousands) Unaudited (1) Three Months Ended Mar. 31, Dec. 31, Mar. 31, 2013 2012 2012 Cash flows from operating activities: Net Income $13,144 $17,268 $19,332 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion 74,395 74,703 68,394 Deferred income taxes 10,617 4,253 14,030 Stock-based compensation expense 9,462 6,983 8,128 Amortization of discount on debt and 6,795 6,772 6,121 deferred debt costs and other Changes in operating assets and liabilities: Accounts receivable, net (4,727) 7,011 4,761 Prepaid expenses and other current and (2,225) 1,197 (173) noncurrent assets Accounts payable (1,134) (1,254) 4,020 Accrued interest 150 12,680 (6,466) Accrued payroll and benefits (12,016) 4,914 (14,334) Deferred revenue, current and noncurrent 564 204 415 Other current and noncurrent liabilities (13,425) 9,161 (9,867) Net cash provided by operating 81,600 143,892 94,361 activities Cash flows from investing activities: Capital expenditures (87,800) (97,069) (76,783) Purchase of investments (50,932) (103,308) (40,102) Proceeds from sale of investments 33,990 77,748 36,474 Other investing activities, net (2,240) (1,963) 301 Net cash used in investing (106,982) (124,592) (80,110) activities Cash flows from financing activities: Net proceeds (tax withholdings) from issuance of common stock upon exercise of stock 6,158 3,327 (2,565) options and vesting of restricted stock awards and units Purchases of treasury stock (54,627) (1,890) (11,519) Excess tax benefits (shortfalls) from 601 (3) 448 stock-based compensation Net proceeds from issuance of debt - 470,796 - Retirement of debt obligation (59) - - Payment of debt and capital lease obligations (1,709) (1,602) (1,878) Net cash (used in) provided by (49,636) 470,628 (15,514) financing activities (Decrease) increase in cash and (75,018) 489,928 (1,263) cash equivalents Cash and cash equivalents at the 806,728 316,800 353,394 beginning of the period Cash and cash equivalents at the $731,710 $806,728 $352,131 end of the period Supplemental disclosures cash, equivalents and short term investments Cash and cash equivalents at the $731,710 $806,728 $352,131 end of the period Short term investments 181,575 167,564 134,536 Total of cash, equivalents and short $913,285 $974,292 $486,667 term investments Supplemental disclosures of cash flow information: Cash paid for interest $21,631 $9,223 $22,361 Cash paid for income taxes, net of refunds ($60) $1,235 ($24) Addition of capital lease obligation $3,053 $2,555 $ 2,326 Supplemental information to reconcile capital expenditures: Capital expenditures per cash flow statement $87,800 $97,069 $76,783 Addition of capital lease obligation 3,053 2,555 2,326 Total capital expenditures $90,853 $99,624 $79,109 (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 2012 2013 Mar. 31 Jun. 30 Sept. 30 Dec. 31 Mar. 31 Operating Metrics: Buildings (2) 15,905 16,367 16,919 17,948 18,466 Headcount Total Headcount 3,059 3,089 3,087 3,147 3,191 Sales Associates 551 546 543 574 578 Customers Total Customers 27,495 27,569 27,699 27,966 28,292 (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. Website: http://www.twtelecom.com Contact: Investor Relations, Carole Curtin, 303 566-1000, email@example.com or Media Relations, Bob Meldrum, 303 566-1354, firstname.lastname@example.org
tw telecom Reports First Quarter 2013 Results
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