Delivers 4Q13 Revenue of $51 Million and Adjusted EBITDA of $24 Million
Strategic Data Revenue was 61% of Total 4Q13 Revenue and Grew 2.7% Sequentially
Introduces 2014 Financial Guidance of $200 to $204 Million in Revenue and $94 to $96 Million in Adjusted EBITDA
Cash Dividend of $0.14 per Share Declared
WAYNESBORO, Va.–(BUSINESS WIRE)–
Lumos Networks Corp. (“Lumos Networks” or “the Company”) (LMOS), a fiber-based service provider of data, voice and IP-based telecommunication services in the Mid-Atlantic region, today announced financial results for its fourth quarter of 2013 and the full year 2013.
Total revenue in 2013 was $207.5 million compared to $206.9 million in 2012. Total Adjusted EBITDA in 2013 was $96.3 million versus $88.9 million in 2012. Total revenue for the fourth quarter of 2013 was $51.0 million, compared to $52.7 million for the fourth quarter of 2012 and $51.6 million in the third quarter of 2013. Total Adjusted EBITDA was $24.0 million for the fourth quarter of 2013, compared to $23.2 million in the fourth quarter of 2012 and $23.0 million in the third quarter of 2013.
“In 2013, Lumos Networks’ strategic data revenue grew by 11.3% year-over-year, which offset declines in our legacy voice revenue streams, and overall Adjusted EBITDA grew by 8.4% as a result of effective expense control. We had sequential strategic data revenue growth in each quarter of 2013 and for the total year strategic data revenue accounted for more than 50% of our total revenue,” said Mr. Biltz, President and CEO.
“For 2014, we have targeted year-over-year strategic data revenue growth in the 6% to 8% range and the same level of overall Adjusted EBITDA as generated in 2013. Total revenue in 2014 is likely to be marginally down when compared to 2013 as a result of our legacy voice revenue streams,” continued Mr. Biltz. “In 2014, we plan to continue to tightly control expenses while making major investments in our fiber optics network and expansion markets to enhance our capability to increase fiber bandwidth revenue from both carrier and enterprise customers. We believe that these investments will position the Company to increase total revenue and profitability on an annual run-rate basis as we exit 2014,” concluded Mr. Biltz.
Highlights
- The Company ended the year with 608 connected fiber to the cell (“FTTC”) sites, up 68 sequentially, which represents a year-over-year increase in total FTTC sites of 64%. Lumos Networks reached its prior guidance to end 2013 with over 600 connected sites and maintains its target for 1,500 sites within the next few years.
- The Company’s project to upgrade its internal systems continued to gain momentum and is expected to drive operating efficiencies, improve customer facing capabilities and streamline business processes as we progress through 2014.
- Lumos Networks finalized plans to complete an 850-mile MEF certified Carrier Ethernet MPLS/IP network overlay designed primarily for FTTC traffic, which will allow up to 1 terabyte of total bandwidth traffic.
- At the end of 2013, the Company’s 110-mile fiber “Edge-out” market in Richmond, Virginia had annualized sales bookings of $3.4 million.
- On February 20, 2014, the Board of Directors of Lumos Networks declared a dividend on its common stock in the amount of $0.14 per share to be paid on April 10, 2014 to stockholders of record on March 13, 2014.
Business Outlook
For the first quarter of 2014, the Company expects revenue to be $50 to $51 million and Adjusted EBITDA $22.5 to $23 million. For the full year 2014, the Company is introducing guidance of $200 to $204 million for revenue and $94 to $96 million for Adjusted EBITDA.
Please see the schedules accompanying this release for additional financial guidance, including reconciliations of non-GAAP measures to GAAP results.
Statements made are based on management’s current expectations. These statements are forward-looking and actual results may differ materially. Please see “Special Note from the Company Regarding Forward-Looking Statements.”
Conference Call
A conference call and simultaneous webcast, hosted by Timothy G. Biltz, CEO, Harold L. Covert, CFO, and Will Davis, Director of Investor Relations, to review these financial and operational results and financial guidance will be held at 8:00 A.M. (ET) on February 25, 2014.
The webcast may be accessed via the Internet at http://ir.lumosnetworks.com/ and the live call (“Lumos Networks Fourth Quarter 2013 Earnings Conference Call”) may be accessed with the following numbers:
Domestic: 1-888-317-6016
International: 1-412-317-6016
Canada: 1-855-669-9657
The conference call will be archived and available for replay through March 7, 2014 before 5:00 P.M. (ET) and may be accessed with the following numbers:
Domestic: 1-877-344-7529
International: 1-412-317-0088
Replay pass codes: Conference ID: 10041144
The webcast will also be archived and the replay may be accessed at http://ir.lumosnetworks.com/.
About Lumos Networks
Lumos Networks is a fiber-based service provider in the Mid-Atlantic region serving carrier, business and residential customers over a dense fiber network offering data, voice and IP services. With headquarters in Waynesboro, VA, Lumos Networks serves Virginia, West Virginia and portions of Pennsylvania, Kentucky, Ohio, and Maryland over a fiber network of 7,414 fiber route miles. Detailed information about Lumos Networks is available at www.lumosnetworks.com.
Non-GAAP Measures
Adjusted EBITDA is defined as net income attributable to Lumos Networks before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other expenses/income, equity-based compensation charges, acquisition-related charges, amortization of actuarial losses on retirement plans, employee separation charges, restructuring-related charges, gain or loss on settlements and gain or loss on interest rate derivatives. Adjusted EBITDA margin is calculated as the ratio of Adjusted EBITDA, as defined, to operating revenues.
Adjusted EBITDA is a non-GAAP financial performance measure. It should not be considered in isolation or as an alternative to measures determined in accordance with GAAP. Please refer to the schedules herein and our SEC filings for a reconciliation of these non-GAAP financial performance measures to the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability and use of such financial performance measures.
SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS
Any statements contained in this presentation that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “targets,” “projects,” “should,” “may,” “will” and similar words and expressions are intended to identify forward-looking statements. Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise. Important factors with respect to any such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, include, but are not limited to: rapid development and intense competition in the telecommunications and high speed data transport industry; our ability to offset expected revenue declines in legacy voice and access products related to the recent regulatory actions, wireless substitution, technology changes and other factors; our ability to effectively allocate capital and implement our “edge-out” expansion plans in a timely manner; our ability to complete customer installations in a timely manner; adverse economic conditions; operating and financial restrictions imposed by our senior credit facility; our cash and capital requirements; declining prices for our services; our ability to maintain and enhance our network; the potential to experience a high rate of customer turnover; federal and state regulatory fees, requirements and developments; our reliance on certain suppliers and vendors; and other unforeseen difficulties that may occur. These risks and uncertainties are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our SEC filings, including our Annual Reports filed on Forms 10-K and our Quarterly Reports filed on Forms 10-Q.
Exhibits:
- Condensed Consolidated Balance Sheets
- Condensed Consolidated Statements of Income
- Condensed Consolidated Statements of Cash Flows
- Summary of Operating Results, Customer and Network Statistics
- Reconciliation of Net Income Attributable to Lumos Networks Corp. to Operating Income
- Reconciliation of Operating Income to Adjusted EBITDA
- Business Outlook
| Lumos Networks Corp. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| December 31, 2013 | December 31, 2012 | |||||
| (In thousands) | ||||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 14,114 | $ | 2 | ||
| Marketable securities | 38,480 | – | ||||
| Restricted cash 1 | 4,324 | 5,303 | ||||
| Accounts receivable, net | 22,917 | 22,676 | ||||
| Other receivables | 1,588 | 2,400 | ||||
| Income tax receivable | 1,116 | 954 | ||||
| Prepaid expenses and other | 3,960 | 5,136 | ||||
| Deferred income taxes | 7,289 | 3,357 | ||||
| Total Current Assets | 93,788 | 39,828 | ||||
| Securities and investments | 699 | 462 | ||||
| Property, plant and equipment, net | 378,723 | 336,589 | ||||
| Other Assets | ||||||
| Goodwill | 100,297 | 100,297 | ||||
| Other intangibles, net | 25,071 | 34,895 | ||||
| Deferred charges and other assets | 7,722 | 4,448 | ||||
| Total Other Assets | 133,090 | 139,640 | ||||
| Total Assets | $ | 606,300 | $ | 516,519 | ||
| LIABILITIES AND EQUITY | ||||||
| Current Liabilities | ||||||
| Current portion of long-term debt | $ | 6,688 | $ | 7,900 | ||
| Accounts payable | 13,076 | 17,453 | ||||
| Dividends payable | 3,091 | 3,013 | ||||
| Advance billings and customer deposits | 13,502 | 13,527 | ||||
| Accrued compensation | 2,185 | 1,742 | ||||
| Accrued operating taxes | 4,375 | 3,838 | ||||
| Other accrued liabilities | 3,992 | 6,284 | ||||
| Total Current Liabilities | 46,909 | 53,757 | ||||
| Long-Term Liabilities | ||||||
| Long-term debt | 373,290 | 304,325 | ||||
| Retirement benefits | 16,848 | 30,413 | ||||
| Deferred income taxes | 79,087 | 59,313 | ||||
| Other long-term liabilities | 2,832 | 3,500 | ||||
| Income tax payable | 328 | 609 | ||||
| Total Long-term Liabilities | 472,385 | 398,160 | ||||
| Stockholders’ Equity | 86,333 | 64,050 | ||||
| Noncontrolling Interests | 673 | 552 | ||||
| Total Equity | 87,006 | 64,602 | ||||
| Total Liabilities and Equity | $ | 606,300 | $ | 516,519 | ||
| 1 | During 2010, the Company received a Federal stimulus award providing 50% funding to bring broadband services and infrastructure to Alleghany County, Virginia. The Company was required to deposit 100% of its grant ($8.1 million) into pledged accounts in advance of any reimbursements, to be drawn down ratably following reimbursement approvals. | |
| Lumos Networks Corp. | ||||||||||||||||
| Condensed Consolidated Statements of Income | Three months ended December 31, | Year ended December 31, | ||||||||||||||
| (In thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Operating Revenues | $ | 51,003 | $ | 52,679 | $ | 207,475 | $ | 206,871 | ||||||||
| Operating Expenses | ||||||||||||||||
| Network access costs | 10,420 | 11,374 | 42,417 | 46,845 | ||||||||||||
| Selling, general and administrative 1,2 | 18,102 | 19,835 | 76,749 | 79,176 | ||||||||||||
| Depreciation and amortization | 10,792 | 11,211 | 42,320 | 38,884 | ||||||||||||
| Accretion of asset retirement obligations | 9 | 31 | 104 | 124 | ||||||||||||
| Gain on settlements, net | – | – | – | (2,335 | ) | |||||||||||
| Restructuring charges | – | 2,981 | 50 | 2,981 | ||||||||||||
| Total Operating Expenses | 39,323 | 45,432 | 161,640 | 165,675 | ||||||||||||
| Operating Income | 11,680 | 7,247 | 45,835 | 41,196 | ||||||||||||
| Other Income (Expenses) | ||||||||||||||||
| Interest expense | (3,816 | ) | (2,941 | ) | (14,191 | ) | (11,921 | ) | ||||||||
| Loss on interest rate swap derivatives | (34 | ) | (1,343 | ) | (144 | ) | (1,898 | ) | ||||||||
| Other (expenses) income, net | (783 | ) | 26 | (1,587 | ) | 81 | ||||||||||
| Income Before Income Tax Expense | 7,047 | 2,989 | 29,913 | 27,458 | ||||||||||||
| Income Tax Expense | 2,982 | 1,025 | 12,019 | 11,010 | ||||||||||||
| Net Income | 4,065 | 1,964 | 17,894 | 16,448 | ||||||||||||
| Net Income Attributable to Noncontrolling Interests | – | (28 | ) | (121 | ) | (108 | ) | |||||||||
| Net Income Attributable to Lumos Networks Corp. | $ | 4,065 | $ | 1,936 | $ | 17,773 | $ | 16,340 | ||||||||
| Basic and Diluted Earnings per Common Share Attributable to Lumos Networks Corp. Stockholders: | ||||||||||||||||
| Earnings per share – basic | $ | 0.18 | $ | 0.09 | $ | 0.81 | $ | 0.78 | ||||||||
| Earnings per share – diluted | $ | 0.18 | $ | 0.09 | $ | 0.80 | $ | 0.76 | ||||||||
| Cash Dividends Declared per Share – Common Stock | $ | 0.14 | $ | 0.14 | $ | 0.56 | $ | 0.56 | ||||||||
| 1 | Includes equity-based compensation charges related to all of the Company’s share-based awards and the Company’s 401(k) matching contributions of $1.2 million and $1.0 million for three months ended December 31, 2013 and 2012, respectively, and $6.8 million and $3.9 million for the years ended December 31, 2013 and 2012, respectively. | |
| 2 | For the year ended December 31, 2012, selling, general and administrative expenses include a $2.3 million charge related to the recognition of employee separation benefits which were provided for in the separation agreement of an executive officer who left the Company in April 2012. | |
| Lumos Networks Corp. | ||||||||
| Condensed Consolidated Statements of Cash Flows | Year ended December 31, | |||||||
| (In thousands) | 2013 | 2012 | ||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | 17,894 | $ | 16,448 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 32,496 | 27,750 | ||||||
| Amortization | 9,824 | 11,134 | ||||||
| Accretion of asset retirement obligations | 104 | 124 | ||||||
| Deferred income taxes | 11,502 | 10,514 | ||||||
| Loss on interest rate swap derivatives | 144 | 1,898 | ||||||
| Equity-based compensation expense | 6,778 | 3,912 | ||||||
| Amortization of debt issuance costs | 1,280 | 812 | ||||||
| Write off of unamortized debt issuance costs | 890 | – | ||||||
| Gain on settlement | – | (3,035 | ) | |||||
| Retirement benefits, net of cash contributions and distributions | (329 | ) | 665 | |||||
| Excess tax benefits from share-based compensation | (1,060 | ) | (428 | ) | ||||
| Other | (163 | ) | – | |||||
| Changes in operating assets and liabilities, net | (5,106 | ) | 2,421 | |||||
| Net Cash Provided by Operating Activities | 74,254 | 72,215 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property, plant and equipment | (68,334 | ) | (59,881 | ) | ||||
| Broadband network expansion funded by stimulus grant | (29 | ) | (1,351 | ) | ||||
| Proceeds from disposal of managed services business | – | 750 | ||||||
| Purchases of marketable securities | (38,560 | ) | – | |||||
| Change in restricted cash | 979 | 2,251 | ||||||
| Cash reimbursement received from broadband stimulus grant | 979 | 2,251 | ||||||
| Purchase of tradename asset | – | (333 | ) | |||||
| Other | 62 | (26 | ) | |||||
| Net Cash Used in Investing Activities | (104,903 | ) | (56,339 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from issuance of long-term debt | 375,000 | – | ||||||
| Payment of debt issuance costs | (4,872 | ) | – | |||||
| Principal payments on senior secured term loans | (308,876 | ) | (2,000 | ) | ||||
| Borrowings from revolving credit facility | 15,000 | 9,783 | ||||||
| Principal payments on revolving credit facility | (18,521 | ) | (21,261 | ) | ||||
| Termination payments of interest rate swap derivatives | (858 | ) | – | |||||
| Cash dividends paid on common stock | (12,213 | ) | (11,951 | ) | ||||
| Principal payments under capital lease obligations | (1,456 | ) | (1,542 | ) | ||||
| Proceeds from stock option exercises and employee stock purchase plan | 1,222 | 122 | ||||||
| Excess tax benefits from share-based compensation | 1,060 | 428 | ||||||
| Other | (725 | ) | – | |||||
| Net Cash Provided by (Used in) Financing Activities | 44,761 | (26,421 | ) | |||||
| Increase (decrease) in cash and cash equivalents | 14,112 | (10,545 | ) | |||||
| Cash and cash equivalents: | ||||||||
| Beginning of Year | 2 | 10,547 | ||||||
| End of Year | $ | 14,114 | $ | 2 | ||||
| Lumos Networks Corp. | ||||||||||||||
| Operating Results, Customer and Network Statistics | ||||||||||||||
| (Dollars in thousands) | Three months ended: | Year ended: | ||||||||||||
| December 31, 2013 | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | ||||||||
| Revenue and Adjusted EBITDA | ||||||||||||||
| Revenue | ||||||||||||||
| Enterprise Data | 10,126 | 10,133 | 10,043 | 10,075 | 9,877 | 40,377 | 37,416 | |||||||
| Carrier Data | 16,327 | 15,494 | 15,195 | 14,868 | 14,457 | 61,884 | 52,978 | |||||||
| IP Services | 4,753 | 4,758 | 4,780 | 4,781 | 4,730 | 19,072 | 18,616 | |||||||
| Total Strategic Data | 31,206 | 30,385 | 30,018 | 29,724 | 29,064 | 121,333 | 109,010 | |||||||
| Legacy Voice | 13,318 | 14,063 | 14,264 | 14,821 | 15,334 | 56,466 | 64,146 | |||||||
| Access | 6,479 | 7,179 | 8,029 | 7,989 | 8,281 | 29,676 | 33,715 | |||||||
| Total Revenue | 51,003 | 51,627 | 52,311 | 52,534 | 52,679 | 207,475 | 206,871 | |||||||
| Adjusted EBITDA1 | ||||||||||||||
| Strategic Data | 13,983 | 12,563 | 13,395 | 13,788 | 13,693 | 53,729 | 50,892 | |||||||
| Legacy Voice | 5,053 | 5,162 | 5,114 | 4,923 | 3,771 | 20,252 | 14,850 | |||||||
| Access | 4,996 | 5,321 | 6,042 | 5,984 | 5,747 | 22,343 | 23,147 | |||||||
| Total Adjusted EBITDA | 24,032 | 23,046 | 24,551 | 24,695 | 23,211 | 96,324 | 88,889 | |||||||
| Adjusted EBITDA Margin1 | 47.1% | 44.6% | 46.9% | 47.0% | 44.1% | 46.4% | 43.0% | |||||||
| Capital Expenditures | 22,613 | 18,997 | 11,692 | 15,032 | 15,956 | 68,334 | 59,881 | |||||||
| Adjusted EBITDA less Capital Expenditures | 1,419 | 4,049 | 12,859 | 9,663 | 7,255 | 27,990 | 29,008 | |||||||
| Customer and Network Statistics | ||||||||||||||
| Customer Statistics | ||||||||||||||
| Competitive voice connections2 | 95,730 | 98,296 | 102,189 | 105,695 | 110,261 | 95,730 | 110,261 | |||||||
| Total Broadband Connections3 | 46,857 | 47,190 | 42,607 | 42,110 | 39,950 | 46,857 | 39,950 | |||||||
| Video Subscribers | 5,034 | 4,975 | 4,767 | 4,666 | 4,549 | 5,034 | 4,549 | |||||||
| Network Statistics | ||||||||||||||
| On-Network Buildings 4 | 1,344 | 1,303 | 1,273 | 1,235 | 1,196 | 1,344 | 1,196 | |||||||
| Fiber to the Cell Sites 4 | 608 | 540 | 465 | 405 | 370 | 608 | 370 | |||||||
| RLEC Total Access Lines | 28,886 | 29,518 | 30,129 | 30,643 | 31,203 | 28,886 | 31,203 | |||||||
| 1 | Adjusted EBITDA is a non-GAAP measure. See definition on page 2 of this earnings release. Adjusted EBITDA margin is calculated as the ratio of Adjusted EBITDA, as defined, to Total Revenue. | |
| 2 | Includes customer Primary Rate Interface (PRI) line equivalents at 23 lines per PRI. Excludes intercompany PRI lines. | |
| 3 | Includes customers or customer equivalents for DSL, dedicated Internet access, wireless portable broadband, broadband over fiber and metro Ethernet. All revenues from broadband products are recorded in the operating revenues of our strategic data segment. | |
| 4 | Includes statistics for legacy markets only, excluding FiberNet, through December 31, 2013. | |
| Note: Certain prior period revenue amounts have been reclassified to conform with the current year presentation. | ||
| Lumos Networks Corp. | ||||||||||||||
| Reconciliation of Net Income Attributable to Lumos Networks Corp. to Operating Income | ||||||||||||||
| (In thousands) | ||||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||
| Net Income Attributable to Lumos Networks Corp. | $ | 4,065 | $ | 1,936 | $ | 17,773 | $ | 16,340 | ||||||
| Net Income Attributable to Noncontrolling Interests | – | 28 | 121 | 108 | ||||||||||
| Net Income | 4,065 | 1,964 | 17,894 | 16,448 | ||||||||||
| Interest expense | 3,816 | 2,941 | 14,191 | 11,921 | ||||||||||
| Loss on interest rate swap derivatives | 34 | 1,343 | 144 | 1,898 | ||||||||||
| Income tax expense | 2,982 | 1,025 | 12,019 | 11,010 | ||||||||||
| Other expenses (income), net | 783 | (26 | ) | 1,587 | (81 | ) | ||||||||
| Operating Income | $ | 11,680 | $ | 7,247 | $ | 45,835 | $ | 41,196 | ||||||
| Lumos Networks Corp. | ||||||||
| Reconciliation of Operating Income to Adjusted EBITDA | ||||||||
| (Dollars in thousands) | 2013 | 2012 | ||||||
| For The Three Months Ended December 31, | ||||||||
| Operating Income | $ | 11,680 | $ | 7,247 | ||||
| Depreciation and amortization and accretion of asset retirement obligations | 10,801 | 11,242 | ||||||
| Sub-total: | 22,481 | 18,489 | ||||||
| Amortization of actuarial losses | 309 | 445 | ||||||
| Equity based compensation | 1,242 | 1,025 | ||||||
| Restructuring charges | – | 2,981 | ||||||
| Employee separation charges | – | 271 | ||||||
| Gain on settlements, net | – | – | ||||||
| Adjusted EBITDA | $ | 24,032 | $ | 23,211 | ||||
| Adjusted EBITDA Margin | 47.1 | % | 44.1 | % | ||||
| For The Year Ended December 31, | ||||||||
| Operating Income | $ | 45,835 | $ | 41,196 | ||||
| Depreciation and amortization and accretion of asset retirement obligations | 42,424 | 39,008 | ||||||
| Sub-total: | 88,259 | 80,204 | ||||||
| Amortization of actuarial losses | 1,237 | 1,781 | ||||||
| Equity based compensation | 6,778 | 3,912 | ||||||
| Restructuring charges | 50 | 2,981 | ||||||
| Employee separation charges1 | – | 2,346 | ||||||
| Gain on settlements, net2 | – | (2,335 | ) | |||||
| Adjusted EBITDA | $ | 96,324 | $ | 88,889 | ||||
| Adjusted EBITDA Margin | 46.4 | % | 43.0 | % | ||||
| 1 | For the year ended December 31, 2012, selling, general and administrative expenses include a $2.3 million charge related to the recognition of employee separation benefits which were provided for in the separation agreement of an executive officer who left the Company in April 2012. | |
| 2 | The Company recognized a net pre-tax gain of approximately $2.3 million in 2012 in connection with the settlement of outstanding matters related to a prior acquisition and the settlement of an outstanding lawsuit. | |
| Lumos Networks Corp. | ||||||||||||||||
| Business Outlook 1 (as of February 25, 2014) | ||||||||||||||||
| (In millions) | 2014 Guidance 1 | |||||||||||||||
| First Quarter 2014 | 2014 Annual | |||||||||||||||
| Operating Revenues | $ | 50 | to | $ | 51 | $ | 200 | to | $ | 204 | ||||||
| Adjusted EBITDA | $ | 22.5 | to | $ | 23 | $ | 94 | to | $ | 96 | ||||||
| Capital Expenditures | $ | 18 | to | $ | 20 | $ | 70 | to | $ | 75 | ||||||
| Cash, Cash Equivalents and Marketable Securities (at end of period) | $ | 47 | to | $ | 49 | $ | 28 | to | $ | 33 | ||||||
| Reconciliation of Operating Income to Adjusted EBITDA | ||||||||||||||||
| Operating Income | approximately $10 | $ | 41 | to | $ | 43 | ||||||||||
| Depreciation and amortization | approximately $12 | approximately $48 | ||||||||||||||
| Equity based compensation charges | approximately $1 | approximately $4 | ||||||||||||||
| Amortization of actuarial losses | approximately $1 | |||||||||||||||
| Adjusted EBITDA | $ | 22.5 | to | $ | 23 | $ | 94 | to | $ | 96 | ||||||
| 1 | These estimates are based on management’s current expectations. These estimates are forward-looking and actual results may differ materially. Please see “Special Note from the Company Regarding Forward-Looking Statements” in the Lumos Networks Corp. fourth quarter 2013 earnings release dated February 25, 2014. | |
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