ROSEVILLE, Calif., July 29 /PRNewswire-FirstCall/ -- SureWest
Communications (Nasdaq: SURW) today announced operating results for
the second quarter ended June 30,
2010.
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Steve Oldham, SureWest’s
president and chief executive officer, said, “Our second quarter
results demonstrated our ability to create growth in both business
and residential markets with reduced year-to-date capital
expenditures. We remain focused on growing revenues, margins and
free cash flow through increases in our commercial service
offerings and residential triple-play growth while continuing our
cost-saving initiatives.
“Expanding our fiber-to-the-home network over the last five
years has provided us a significant performance advantage over our
competitors. We have a large inventory of marketable homes and
therefore do not require further capital expenditures to extend the
network. We built momentum in our core Broadband segment during the
quarter, highlighted by Advanced Digital TV and wireless carrier
backhaul. Advanced Digital TV triggered a sequential increase of
5,200 RGUs, our best results since 2008. Taking advantage of our
ubiquitous fiber network, we are working with three major carriers
to provide wireless backhaul service to over 200 cell sites and are
in negotiations for 100 additional sites. These backhaul projects
set the stage for future growth on recurring revenue streams, and
can be delivered quickly and cost efficiently due to our
high-capacity networks and proximity to cellular sites.”
The following table highlights financial results for
continuing operations on a consolidated basis (dollars are in
thousands):
|
Y-O-Y Comparison
|
|
Q-O-Q Comparison
|
|
|
Q2 '10
|
Q2 '09
|
Change
|
%
|
|
Q1 '10
|
Change
|
%
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Broadband Revenue
|
$ 43,076
|
$ 40,259
|
$ 2,817
|
7%
|
|
$ 42,577
|
$
499
|
1%
|
|
Telecom Revenue
|
17,472
|
20,671
|
(3,199)
|
(15%)
|
|
17,611
|
(139)
|
(1%)
|
|
Total Revenue
|
60,548
|
60,930
|
(382)
|
(1%)
|
|
60,188
|
360
|
1%
|
|
EBITDA (adjusted)
|
19,928
|
19,859
|
69
|
0%
|
|
19,468
|
460
|
2%
|
|
Income from Continuing
Operations
|
(527)
|
899
|
(1,426)
|
(159%)
|
|
527
|
(1,054)
|
(200%)
|
|
Income from Continuing Ops (w/o
severance)
|
323
|
899
|
(576)
|
(64%)
|
|
527
|
(204)
|
(39%)
|
|
Capital Expenditure
|
13,878
|
11,170
|
2,708
|
24%
|
|
12,536
|
1,342
|
11%
|
|
Free Cash Flow
|
857
|
3,957
|
(3,100)
|
(78%)
|
|
3,097
|
(2,240)
|
(72%)
|
|
Net Debt
|
212,891
|
226,806
|
(13,915)
|
(6%)
|
|
208,063
|
4,828
|
2%
|
|
See Non-GAAP measure notes near
end of release, and EBITDA, Free Cash Flow and Net Debt
reconciliations for detailed adjustments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results
Consolidated revenues decreased 1% year-over-year to
$60.5 million as Broadband revenue
growth of 7% was offset by Telecom revenue declines of 15%.
Excluding estimated severance costs, adjusted EBITDA remained flat
year-over-year at $19.9 million. On
June 30, 2010, the company reduced
its workforce by 60 positions as part of ongoing cost-efficiency
reviews. This resulted in an estimated annual expense savings of at
least $5.0 million beginning in 2011,
with a savings of approximately $1.0
million over the third and fourth quarters of 2010.
Additionally, the company will continue with cost-saving
initiatives such as the consolidation of office space, which is
expected to save $1.3 million
annually beginning in 2011, and reductions in professional fees for
further annual savings of approximately $1.0
million.
Operating expenses, exclusive of depreciation and amortization,
increased 3% year-over-year to $43.2
million due primarily to an estimated $1.6 million in severance costs. The second
quarter also saw an increase in transport charges associated with
commercial services growth and an increase in video license fees
due to higher programming rates and new channel additions.
Net loss for the quarter was $527
thousand compared to net income of $959 thousand in the same period last year.
Earnings per share from continuing operations was negative
$.04 compared to positive
$.06 in the second quarter 2009 and
positive $.04 in the first quarter
2010. Excluding estimated severance costs, net income for the
quarter was $323 thousand and second
quarter adjusted earnings per share was $.02.
Free cash flow, defined as income from continuing operations
plus depreciation and amortization less capital expenditures, was
positive $857 thousand for the
quarter and $4 million for the six
months ended June 30, 2010, compared
to $500 thousand for the first six
months of 2009. SureWest expects that its capital expenditures and
associated free cash flow results will vary quarter-to-quarter
based on developing commercial sales opportunities such as data
center space and wireless carrier backhaul.
Cash and cash equivalents decreased sequentially to $6.2 million from $7.0
million. During the quarter, SureWest repurchased 358
thousand shares of outstanding stock for $2.5 million. Total debt net of cash and cash
equivalents (net debt) was $212.9
million, resulting in a net debt to adjusted EBITDA ratio of
2.73.
Capital expenditures totaled $13.9
million for the second quarter and $26.4 million for the six months ended
June 30, 2010, compared to
$29.5 million for the first six
months of 2009. The company is lowering projected 2010 capital
expenditures from $55-60 million to
$50-55 million due to a more
selective success-based capital plan and a reduction in core
maintenance expenditures. The 2010 capital plan remains aimed at
increasing commercial growth and residential RGUs, with
approximately two-thirds of expenditures for success-based
investment.
Broadband Segment Results
Broadband revenues increased 7% year-over-year and accounted for
71% of the company’s total revenues, compared to 66% in the second
quarter 2009. This continues the company’s long-term trend of
offsetting structural declines in the traditional Telecom business
with increases in the growing Broadband segment.
Broadband Residential:
Broadband Residential revenues increased 4% year-over-year to
$30.9 million due to 3% growth in
ARPU and a 4% increase in RGUs. To illustrate growth trends,
Broadband RGUs, subscriber counts and ARPU are detailed both
year-over-year and sequentially in the table and text below:
|
Q2 '10 vs. Q2 '09
change
|
|
Q2 '10 vs. Q1 '10
change
|
|
|
Sacramento
Market
|
Kansas City
Market
|
Total
|
|
Sacramento
Market
|
Kansas City
Market
|
Total
|
|
Broadband Residential
RGUs
|
8%
|
0%
|
4%
|
|
3%
|
2%
|
2%
|
|
Video RGUs
|
4%
|
0%
|
2%
|
|
5%
|
2%
|
3%
|
|
Voice RGUs
|
21%
|
-2%
|
9%
|
|
5%
|
1%
|
3%
|
|
Data RGUs
|
1%
|
2%
|
2%
|
|
1%
|
2%
|
1%
|
|
Total Residential
Subscribers
|
1%
|
2%
|
1%
|
|
1%
|
1%
|
1%
|
|
|
|
|
|
|
|
|
|
During the second quarter, which was the first full quarter of
the Advanced Digital TV offering, 1,700 net video RGUs were added,
compared to a loss of 500 video RGUs in the first quarter 2010.
Through June, SureWest has added 6,905 Advanced Digital TV
subscribers, representing 29% of overall video RGUs in the
Sacramento market. Compared to
Sacramento’s other video platform, monthly recurring revenues for
Advanced Digital TV were 12% higher, premium channel take rates
were 34% higher and the high definition (HD) take rate was 27%
higher.
ARPU for the company’s fiber-to-the-home (FTTH) and hybrid fiber
coaxial (HFC) networks increased 1% year-over-year to $116 from $115 as
customer demand for higher data speeds, and HD and DVR services
increased from the prior year. Sequentially, ARPU declined by
$1 from $117 primarily due to the aggressive promotional
activity related to a retention and acquisition campaign regarding
the launch of Advanced Digital TV. The launch campaign was designed
to drive RGU growth through a short-term discount with an
expectation for ARPU increases as the promotional period phases out
and customers retain the advanced triple-play bundle due to a
superior experience.
Residential customer churn improved to 1.6% in the second
quarter compared to 1.7% in the same period last year as the
company continues to execute on churn reduction techniques such as
tailored renewal offers, and network and product enhancements to
increase customer retention and loyalty.
Broadband Business:
Broadband Business revenues increased by $1.6 million, or 17%, year-over-year to
$11.3 million. Customer counts
increased 7% year-over-year to 7,300 and ARPU grew 9% from the
prior year to $518. Business service
growth expectations remain high in both Sacramento and Kansas City. The Kansas City market grew ARPU 6% year-over-year
while increasing customer counts by 20%. In Sacramento, sales contracts and activity
increased during the first half of 2010 compared to last year.
SureWest’s fiber-optic network provides a superior long-term
solution for customers in both regions and is driving additional
revenue opportunities. For example, the company has commitments to
bill over 200 wireless carrier backhaul sites, and is in
negotiations for 100 additional sites.
Telecom Segment Results
Telecom revenues declined 15% year-over-year to $17.5 million due to the industry-wide trend of
declines in access lines and access revenues. As the company
focuses on growing its Broadband segment, the Telecom segment
continues to account for a smaller percentage of total company
revenues at 29%, compared to 34% in the second quarter 2009.
Internal forecasts anticipate the slowing of Telecom declines over
the next several years.
Telecom Residential:
Telecom Residential revenues declined 30% year-over-year to
$4.5 million resulting from losses in
Telecom voice RGUs of 27% year-over-year. Of the 12,300
year-over-year Telecom Residential voice RGU losses, 5,000, or 41%,
migrated to the SureWest Broadband Voice over IP service.
Telecom Business:
Telecom Business revenues declined 8% year-over-year to
$8.4 million due to a decline in
small- and medium-sized business customers, particularly those
impacted by California’s depressed real estate industry, as well as
a decrease in services from a few large carriers. These declines
are related to the economy, not competition, and are expected to
flatten out and begin growing as the Sacramento economy recovers and vacancy rates
improve.
Telecom Access:
Telecom Access revenues decreased $545
thousand year-over-year to $4.4
million primarily due to the scheduled reduction in the
California High Cost Fund (CHCF) subsidy and the decline in
switched access revenues related to access line loss. The annual
CHCF subsidies are scheduled to be $4.1
million in 2010, a decrease from $6.1
million in 2009, and will continue to decline by
$2 million annually through 2011.
Additionally, the transport interconnection charge will be
eliminated effective January 1, 2011
resulting in an estimated reduction of $2
million in 2011 intrastate access revenues.
Non-GAAP Measures
In addition to the results presented in accordance with
generally accepted accounting principles (GAAP) throughout this
press release; the company has presented non-GAAP financial
measures such as adjusted EBITDA, free cash flow and net debt.
Adjusted EBITDA represents net income (loss) from continuing
operations excluding amounts for income taxes, depreciation and
amortization, non-cash pension and certain post-retirement
benefits, non-cash stock compensation, severance and other related
termination costs, and all other non-operating income/expenses.
Free cash flow represents net income (loss) from continuing
operations plus depreciation and amortization less capital
expenditures. Free cash flow is a measure of operating cash flows
available for corporate purposes after providing significant fixed
asset additions to maintain current productive capacity. Net debt
represents total long-term debt (including current maturities) less
cash and cash equivalents. Net debt can be used as a component in
measuring leverage. The company believes these non-GAAP measures,
viewed in addition to but not in lieu of its reported GAAP results,
provide useful information to investors as they are an integral
part of the internal evaluation of operating performance. In
addition, they are measures that the company uses to evaluate
management’s effectiveness. Reconciliations to the comparable GAAP
measures are provided in the accompanying financial and operating
summaries. SureWest’s non-GAAP financial measures may not be
comparable to similarly titled measures presented by other
companies.
Conference Call and Webcast
SureWest will host a conference call providing details of its
results and business strategy at 11 a.m.
Eastern Time on Thursday, July
29. Open to the public, a simultaneous live webcast of the
call will be available from the company's investor relations
website at www.surw.com. A telephone replay of the call will be
available shortly after completion through Thursday, August 5, 2010 by calling 888.286.8010
and entering pass code 61012602. Visit www.surw.com for updates
prior to the call.
About SureWest
SureWest Communications (www.surewest.com) is a leading
integrated communications provider and the bandwidth leader in the
markets it serves. Headquartered in Northern California for more than 95 years,
the company expanded into the Kansas
City region in February 2008
with the acquisition of Everest Broadband, Inc. and offers bundled
residential and commercial services that include IP-based digital
and high-definition television, high-speed Internet, Voice over IP,
and local and long distance telephone. SureWest was the nation’s
first provider to launch residential HDTV over an IP network and
offers one of the nation’s fastest symmetrical Internet services
with speeds of up to 50 Mbps in each direction on its
fiber-to-the-home network.
Safe Harbor Statement
Statements made in this news release that are not historical
facts are forward-looking statements and are made pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of
1995. In some cases, these forward-looking statements may be
identified by the use of words such as “may,” “will,” “should,”
“expect,” “plan,” “anticipate” or “project,” or the negative of
those words or other comparable words. We undertake no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Such
forward-looking statements are subject to a number of risks,
assumptions and uncertainties that could cause the company's actual
results to differ from those projected in such forward-looking
statements.
Important factors that could cause actual results to differ from
those set forth in the forward-looking statements include, but are
not limited to, advances in telecommunications technology, changes
in the telecommunications regulatory environment, changes in the
financial stability of other telecommunications providers who are
customers of the company, changes in competition in markets in
which the company operates, adverse circumstances affecting the
economy in California,
Kansas and Missouri in general, and in the greater
Sacramento, California and greater
Kansas City, Kansas and
Missouri areas in particular, the
availability of future financing, changes in the demand for
services and products, new product and service development and
introductions, and pending and future litigation.
Contacts
|
|
Ron Rogers
|
|
Corporate
Communications
|
|
916-746-3123
|
|
r.rogers@surewest.com
|
|
|
|
Misty Wells
|
|
Investor Relations
|
|
916-786-1799
|
|
m.wells@surewest.com
|
|
|
SUREWEST
COMMUNICATIONS
|
|
CONDENDSED CONSOLIDATED
STATEMENTS OF INCOME
|
|
(Unaudited; Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
|
$
|
|
%
|
|
|
|
|
June 30, 2010
|
|
June 30, 2009
|
|
Change
|
|
Change
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
Broadband
|
$
85,653
|
|
$
79,481
|
|
$ 6,172
|
|
8%
|
|
|
Telecom
|
35,083
|
|
42,391
|
|
(7,308)
|
|
-17%
|
|
|
|
Total operating
revenues
|
120,736
|
|
121,872
|
|
(1,136)
|
|
-1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Cost of services and products
(exclusive of depreciation and amortization)
|
51,179
|
|
50,132
|
|
1,047
|
|
2%
|
|
|
Customer operations and
selling
|
16,434
|
|
16,580
|
|
(146)
|
|
-1%
|
|
|
General and
administrative
|
17,576
|
|
18,187
|
|
(611)
|
|
-3%
|
|
|
Depreciation and
amortization
|
30,368
|
|
29,038
|
|
1,330
|
|
5%
|
|
|
|
Total operating
expenses
|
115,557
|
|
113,937
|
|
1,620
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
5,179
|
|
7,935
|
|
(2,756)
|
|
-35%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest income
|
46
|
|
71
|
|
(25)
|
|
-35%
|
|
|
Interest
expense
|
(3,878)
|
|
(5,356)
|
|
1,478
|
|
28%
|
|
|
Other, net
|
(333)
|
|
(172)
|
|
(161)
|
|
-94%
|
|
|
|
Total other income (expense),
net
|
(4,165)
|
|
(5,457)
|
|
1,292
|
|
24%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations before income taxes
|
1,014
|
|
2,478
|
|
(1,464)
|
|
-59%
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
1,014
|
|
1,500
|
|
(486)
|
|
-32%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
-
|
|
978
|
|
(978)
|
|
-100%
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of
tax:
|
|
|
|
|
|
|
|
|
|
Loss from discontinued
operations
|
–
|
|
(69)
|
|
69
|
|
100%
|
|
|
Gain on sale of discontinued
operations
|
–
|
|
2,568
|
|
(2,568)
|
|
-100%
|
|
|
|
Total discontinued
operations
|
–
|
|
2,499
|
|
(2,499)
|
|
-100%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
-
|
|
$
3,477
|
|
$ (3,477)
|
|
-100%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
common share:
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$
-
|
|
$
0.07
|
|
$ (0.07)
|
|
|
|
|
Discontinued operations, net of
tax
|
-
|
|
0.18
|
|
(0.18)
|
|
|
|
|
Net income per basic and diluted
common share
|
$
-
|
|
$
0.25
|
|
$ (0.25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock used to
calculate earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
13,958
|
|
13,992
|
|
(34)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUREWEST
COMMUNICATIONS
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Unaudited; Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
|
Quarter Ended
|
|
Quarter Ended
|
|
$
|
|
%
|
|
|
|
|
June 30, 2010
|
|
June 30, 2009
|
|
Change
|
|
Change
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
Broadband
|
$
43,076
|
|
$
40,259
|
|
$ 2,817
|
|
7%
|
|
|
Telecom
|
17,472
|
|
20,671
|
|
(3,199)
|
|
-15%
|
|
|
|
Total operating
revenues
|
60,548
|
|
60,930
|
|
(382)
|
|
-1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Cost of services and products
(exclusive of depreciation and amortization)
|
26,261
|
|
25,118
|
|
1,143
|
|
5%
|
|
|
Customer operations and
selling
|
8,225
|
|
8,345
|
|
(120)
|
|
-1%
|
|
|
General and
administrative
|
8,763
|
|
8,624
|
|
139
|
|
2%
|
|
|
Depreciation and
amortization
|
15,262
|
|
14,228
|
|
1,034
|
|
7%
|
|
|
|
Total operating
expenses
|
58,511
|
|
56,315
|
|
2,196
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
2,037
|
|
4,615
|
|
(2,578)
|
|
-56%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
28
|
|
34
|
|
(6)
|
|
-18%
|
|
|
|
Interest expense
|
(2,235)
|
|
(3,046)
|
|
811
|
|
27%
|
|
|
|
Other, net
|
(167)
|
|
(88)
|
|
(79)
|
|
-90%
|
|
|
|
Total other income (expense),
net
|
(2,374)
|
|
(3,100)
|
|
726
|
|
23%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before income taxes
|
(337)
|
|
1,515
|
|
(1,852)
|
|
-122%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
190
|
|
616
|
|
(426)
|
|
-69%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations
|
(527)
|
|
899
|
|
(1,426)
|
|
-159%
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of
tax:
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued
operations
|
–
|
|
–
|
|
–
|
|
–
|
|
|
Gain on sale of discontinued
operations
|
–
|
|
60
|
|
(60)
|
|
-100%
|
|
|
|
Total discontinued
operations
|
–
|
|
60
|
|
(60)
|
|
-100%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(527)
|
|
$
959
|
|
$ (1,486)
|
|
-155%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
common share:
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations
|
$
(0.04)
|
|
$
0.06
|
|
$ (0.10)
|
|
|
|
|
Discontinued operations, net of
tax
|
-
|
|
0.01
|
|
(0.01)
|
|
|
|
|
Net income (loss) per basic and
diluted common share
|
$
(0.04)
|
|
$
0.07
|
|
$ (0.11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock used to
calculate earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
13,913
|
|
14,020
|
|
(107)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUREWEST
COMMUNICATIONS
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Unaudited; Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Quarter Ended
|
|
$
|
|
%
|
|
|
|
|
June 30, 2010
|
|
March 31, 2010
|
|
Change
|
|
Change
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
Broadband
|
$
43,076
|
|
$
42,577
|
|
$ 499
|
|
1%
|
|
|
Telecom
|
17,472
|
|
17,611
|
|
(139)
|
|
-1%
|
|
|
|
Total operating
revenues
|
60,548
|
|
60,188
|
|
360
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Cost of services and products
(exclusive of depreciation and amortization)
|
26,261
|
|
24,918
|
|
1,343
|
|
5%
|
|
|
Customer operations and
selling
|
8,225
|
|
8,209
|
|
16
|
|
0%
|
|
|
General and
administrative
|
8,763
|
|
8,813
|
|
(50)
|
|
-1%
|
|
|
Depreciation and
amortization
|
15,262
|
|
15,106
|
|
156
|
|
1%
|
|
|
|
Total operating
expenses
|
58,511
|
|
57,046
|
|
1,465
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
2,037
|
|
3,142
|
|
(1,105)
|
|
-35%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
28
|
|
18
|
|
10
|
|
56%
|
|
|
|
Interest expense
|
(2,235)
|
|
(1,643)
|
|
(592)
|
|
-36%
|
|
|
|
Other, net
|
(167)
|
|
(166)
|
|
(1)
|
|
-1%
|
|
|
|
Total other income (expense),
net
|
(2,374)
|
|
(1,791)
|
|
(583)
|
|
-33%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before income taxes
|
(337)
|
|
1,351
|
|
(1,688)
|
|
-125%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
190
|
|
824
|
|
(634)
|
|
-77%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations
|
(527)
|
|
527
|
|
(1,054)
|
|
-200%
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of
tax:
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued
operations
|
–
|
|
–
|
|
–
|
|
–
|
|
|
Gain on sale of discontinued
operations
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
Total discontinued
operations
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(527)
|
|
$
527
|
|
$ (1,054)
|
|
-200%
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
common share:
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations
|
$
(0.04)
|
|
$
0.04
|
|
$ (0.08)
|
|
|
|
|
Discontinued operations, net of
tax
|
-
|
|
-
|
|
-
|
|
|
|
|
Net income (loss) per basic and
diluted common share
|
$
(0.04)
|
|
$
0.04
|
|
$ (0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock used to
calculate earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
13,913
|
|
14,002
|
|
(89)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUREWEST
COMMUNICATIONS
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS - RECONCILIATION
|
|
(Unaudited; Amounts in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Severance and
|
|
Quarter Ended
|
|
Quarter Ended
|
|
$
|
|
%
|
|
|
|
|
June 30, 2010
|
|
Related Costs
|
|
June 30, 2010
|
|
June 30, 2009
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
revenues
|
$
60,548
|
|
$
-
|
|
$
60,548
|
|
$
60,930
|
|
$ (382)
|
|
-1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
(exclusive of depreciation and amortization)
|
26,261
|
|
359
|
|
25,902
|
|
25,118
|
|
784
|
|
3%
|
|
|
Customer operations and
selling
|
8,225
|
|
135
|
|
8,090
|
|
8,345
|
|
(255)
|
|
-3%
|
|
|
General and
administrative
|
8,763
|
|
1,146
|
|
7,617
|
|
8,624
|
|
(1,007)
|
|
-12%
|
|
|
Depreciation and
amortization
|
15,262
|
|
-
|
|
15,262
|
|
14,228
|
|
1,034
|
|
7%
|
|
|
|
Total operating
expenses
|
58,511
|
|
1,640
|
|
56,871
|
|
56,315
|
|
556
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
2,037
|
|
(1,640)
|
|
3,677
|
|
4,615
|
|
(938)
|
|
-20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense),
net
|
(2,374)
|
|
-
|
|
(2,374)
|
|
(3,100)
|
|
726
|
|
23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before income taxes
|
(337)
|
|
(1,640)
|
|
1,303
|
|
1,515
|
|
(212)
|
|
-14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
190
|
|
(790)
|
|
980
|
|
616
|
|
364
|
|
59%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations
|
(527)
|
|
(850)
|
|
323
|
|
899
|
|
(576)
|
|
-64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of
tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued
operations
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
|
|
Gain on sale of discontinued
operations
|
–
|
|
–
|
|
–
|
|
60
|
|
(60)
|
|
-100%
|
|
|
|
Total discontinued
operations
|
–
|
|
–
|
|
–
|
|
60
|
|
(60)
|
|
-100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(527)
|
|
$
(850)
|
|
$
323
|
|
$
959
|
|
$ (636)
|
|
-66%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per basic and
diluted common share
|
$
(0.04)
|
|
$
(0.06)
|
|
$
0.02
|
|
$
0.07
|
|
$ (0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
|
|
Adjusted
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Severance and
|
|
Quarter Ended
|
|
Quarter Ended
|
|
$
|
|
%
|
|
|
|
|
June 30, 2010
|
|
Related Costs
|
|
June 30, 2010
|
|
March 31, 2010
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
revenues
|
$
60,548
|
|
$
-
|
|
$
60,548
|
|
$
60,188
|
|
$ 360
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services and products
(exclusive of depreciation and amortization)
|
26,261
|
|
359
|
|
25,902
|
|
24,918
|
|
984
|
|
4%
|
|
|
Customer operations and
selling
|
8,225
|
|
135
|
|
8,090
|
|
8,209
|
|
(119)
|
|
-1%
|
|
|
General and
administrative
|
8,763
|
|
1,146
|
|
7,617
|
|
8,813
|
|
(1,196)
|
|
-14%
|
|
|
Depreciation and
amortization
|
15,262
|
|
-
|
|
15,262
|
|
15,106
|
|
156
|
|
1%
|
|
|
|
Total operating
expenses
|
58,511
|
|
1,640
|
|
56,871
|
|
57,046
|
|
(175)
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
2,037
|
|
(1,640)
|
|
3,677
|
|
3,142
|
|
535
|
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense),
net
|
(2,374)
|
|
-
|
|
(2,374)
|
|
(1,791)
|
|
(583)
|
|
-33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing
operations before income taxes
|
(337)
|
|
(1,640)
|
|
1,303
|
|
1,351
|
|
(48)
|
|
-4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
190
|
|
(790)
|
|
980
|
|
824
|
|
156
|
|
19%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
(527)
|
|
$
(850)
|
|
$
323
|
|
$
527
|
|
$ (204)
|
|
-39%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per basic and
diluted common share
|
$
(0.04)
|
|
$
(0.06)
|
|
$
0.02
|
|
$
0.04
|
|
$ (0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SureWest
Communications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly Selected Financial
Results & Reconciliations of Non-GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(on a consolidated and a segment
basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited; Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Results of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Twelve Months Ended December 31,
2009
|
|
March 31
|
|
June 30
|
|
Six Months Ended June 30,
2010
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Operating revenues
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
$
35,713
|
|
$
36,180
|
|
$
35,246
|
|
$
35,845
|
|
$
142,984
|
|
$
35,842
|
|
$
35,390
|
|
$
71,232
|
|
$
(790)
|
|
(2%)
|
|
$
(452)
|
|
(1%)
|
|
Business
|
|
18,633
|
|
18,704
|
|
18,705
|
|
18,969
|
|
75,011
|
|
18,988
|
|
19,653
|
|
38,641
|
|
949
|
|
5%
|
|
665
|
|
4%
|
|
Access
|
|
6,031
|
|
5,351
|
|
5,031
|
|
4,942
|
|
21,355
|
|
4,887
|
|
4,949
|
|
9,836
|
|
(402)
|
|
(8%)
|
|
62
|
|
1%
|
|
Other
|
|
565
|
|
695
|
|
547
|
|
543
|
|
2,350
|
|
471
|
|
556
|
|
1,027
|
|
(139)
|
|
(20%)
|
|
85
|
|
18%
|
|
Total operating revenues from
external customers
|
|
60,942
|
|
60,930
|
|
59,529
|
|
60,299
|
|
241,700
|
|
60,188
|
|
60,548
|
|
120,736
|
|
(382)
|
|
(1%)
|
|
360
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(1)
|
|
42,812
|
|
42,087
|
|
41,653
|
|
41,851
|
|
168,403
|
|
41,940
|
|
43,249
|
|
85,189
|
|
1,162
|
|
3%
|
|
1,309
|
|
3%
|
|
Depreciation and
amortization
|
|
14,810
|
|
14,228
|
|
15,260
|
|
15,426
|
|
59,724
|
|
15,106
|
|
15,262
|
|
30,368
|
|
1,034
|
|
7%
|
|
156
|
|
1%
|
|
Income from
operations
|
|
$
3,320
|
|
$
4,615
|
|
$
2,616
|
|
$
3,022
|
|
$
13,573
|
|
$
3,142
|
|
$
2,037
|
|
$
5,179
|
|
$
(2,578)
|
|
(56%)
|
|
$
(1,105)
|
|
(35%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Reconciliation of
Adjusted EBITDA to Net Income (Loss) from Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Twelve Months Ended December 31,
2009
|
|
March 31
|
|
June 30
|
|
Six Months Ended June 30,
2010
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Net income (loss) from
continuing operations
|
|
$
79
|
|
$
899
|
|
$
(211)
|
|
$
(100)
|
|
$
667
|
|
$
527
|
|
$
(527)
|
|
$
-
|
|
$
(1,426)
|
|
(159%)
|
|
$
(1,054)
|
|
(200%)
|
|
Add: income tax
expense
|
|
884
|
|
616
|
|
14
|
|
492
|
|
2,006
|
|
824
|
|
190
|
|
1,014
|
|
(426)
|
|
(69%)
|
|
(634)
|
|
(77%)
|
|
Less: other
(income)/expense
|
|
2,357
|
|
3,100
|
|
2,813
|
|
2,630
|
|
10,900
|
|
1,791
|
|
2,374
|
|
4,165
|
|
(726)
|
|
(23%)
|
|
583
|
|
33%
|
|
Income from
operations
|
|
3,320
|
|
4,615
|
|
2,616
|
|
3,022
|
|
13,573
|
|
3,142
|
|
2,037
|
|
5,179
|
|
(2,578)
|
|
(56%)
|
|
(1,105)
|
|
(35%)
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
14,810
|
|
14,228
|
|
15,260
|
|
15,426
|
|
59,724
|
|
15,106
|
|
15,262
|
|
30,368
|
|
1,034
|
|
7%
|
|
156
|
|
1%
|
|
Non-cash pension
expense
|
|
755
|
|
552
|
|
642
|
|
642
|
|
2,591
|
|
420
|
|
341
|
|
761
|
|
(211)
|
|
(38%)
|
|
(79)
|
|
(19%)
|
|
Non-cash stock compensation
expense
|
|
608
|
|
464
|
|
443
|
|
495
|
|
2,010
|
|
800
|
|
1,144
|
|
1,944
|
|
680
|
|
147%
|
|
344
|
|
43%
|
|
Severance and other related
costs (3)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,144
|
|
1,144
|
|
1,144
|
|
100%
|
|
1,144
|
|
100%
|
|
Adjusted EBITDA
(2)
|
|
$
19,493
|
|
$
19,859
|
|
$
18,961
|
|
$
19,585
|
|
$
77,898
|
|
$
19,468
|
|
$
19,928
|
|
$
39,396
|
|
$
69
|
|
0%
|
|
$
460
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
32%
|
|
33%
|
|
32%
|
|
32%
|
|
32%
|
|
32%
|
|
33%
|
|
33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Free Cash Flow from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Twelve Months Ended December 31,
2009
|
|
March 31
|
|
June 30
|
|
Six Months Ended June 30,
2010
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Net income (loss) from
continuing operations
|
|
$
79
|
|
$
899
|
|
$
(211)
|
|
$
(100)
|
|
$
667
|
|
$
527
|
|
$
(527)
|
|
$
-
|
|
$
(1,426)
|
|
(159%)
|
|
$
(1,054)
|
|
(200%)
|
|
Add: Depreciation and
amortization
|
|
14,810
|
|
14,228
|
|
15,260
|
|
15,426
|
|
59,724
|
|
15,106
|
|
15,262
|
|
30,368
|
|
1,034
|
|
7%
|
|
156
|
|
1%
|
|
Less: Capital
expenditures
|
|
(18,352)
|
|
(11,170)
|
|
(13,841)
|
|
(14,967)
|
|
(58,330)
|
|
(12,536)
|
|
(13,878)
|
|
(26,414)
|
|
(2,708)
|
|
(24%)
|
|
(1,342)
|
|
(11%)
|
|
Free cash flow
(4)
|
|
$
(3,463)
|
|
$
3,957
|
|
$
1,208
|
|
$
359
|
|
$
2,061
|
|
$
3,097
|
|
$
857
|
|
$
3,954
|
|
$
(3,100)
|
|
(78%)
|
|
$
(2,240)
|
|
(72%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Debt Ratio from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
|
|
March 31
|
|
June 30
|
|
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Net Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, including
current maturities
|
|
$
240,187
|
|
$
236,685
|
|
$
226,683
|
|
$
223,045
|
|
|
|
$
215,045
|
|
$
219,045
|
|
|
|
$
(17,640)
|
|
(7%)
|
|
$
4,000
|
|
2%
|
|
Less: Cash and cash
equivalents
|
|
(1,678)
|
|
(9,879)
|
|
(7,138)
|
|
(7,489)
|
|
|
|
(6,982)
|
|
(6,154)
|
|
|
|
3,725
|
|
38%
|
|
828
|
|
12%
|
|
Net Debt (5)
|
|
$
238,509
|
|
$
226,806
|
|
$
219,545
|
|
$
215,556
|
|
|
|
$
208,063
|
|
$
212,891
|
|
|
|
$
(13,915)
|
|
(6%)
|
|
$
4,828
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Net Debt to Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt
|
|
$
238,509
|
|
$
226,806
|
|
$
219,545
|
|
$
215,556
|
|
|
|
$
208,063
|
|
$
212,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divided by: Adjusted EBITDA
(TTM)
|
|
$
74,226
|
|
$
74,315
|
|
$
75,328
|
|
$
77,898
|
|
|
|
$
77,873
|
|
$
77,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net debt to Adjusted
EBITDA (6)
|
|
3.21
|
|
3.05
|
|
2.91
|
|
2.77
|
|
|
|
2.67
|
|
2.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Results of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Twelve Months Ended December 31,
2009
|
|
March 31
|
|
June 30
|
|
Six Months Ended June 30,
2010
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Data
|
|
$
10,763
|
|
$
11,184
|
|
$
11,236
|
|
$
11,878
|
|
$
45,061
|
|
$
12,248
|
|
$
12,145
|
|
$
24,393
|
|
$
961
|
|
9%
|
|
$
(103)
|
|
(1%)
|
|
Video
|
|
11,689
|
|
11,995
|
|
11,711
|
|
12,127
|
|
47,522
|
|
12,219
|
|
12,166
|
|
24,385
|
|
171
|
|
1%
|
|
(53)
|
|
(0%)
|
|
Voice
|
|
6,399
|
|
6,594
|
|
6,442
|
|
6,462
|
|
25,897
|
|
6,507
|
|
6,600
|
|
13,107
|
|
6
|
|
0%
|
|
93
|
|
1%
|
|
Total residential
revenues
|
|
28,851
|
|
29,773
|
|
29,389
|
|
30,467
|
|
118,480
|
|
30,974
|
|
30,911
|
|
61,885
|
|
1,138
|
|
4%
|
|
(63)
|
|
(0%)
|
|
Business
|
|
9,585
|
|
9,615
|
|
10,018
|
|
10,336
|
|
39,554
|
|
10,570
|
|
11,253
|
|
21,823
|
|
1,638
|
|
17%
|
|
683
|
|
6%
|
|
Access
|
|
384
|
|
398
|
|
427
|
|
419
|
|
1,628
|
|
727
|
|
541
|
|
1,268
|
|
143
|
|
36%
|
|
(186)
|
|
(26%)
|
|
Other
|
|
402
|
|
473
|
|
341
|
|
344
|
|
1,560
|
|
306
|
|
371
|
|
677
|
|
(102)
|
|
(22%)
|
|
65
|
|
21%
|
|
Total operating revenues from
external customers
|
|
39,222
|
|
40,259
|
|
40,175
|
|
41,566
|
|
161,222
|
|
42,577
|
|
43,076
|
|
85,653
|
|
2,817
|
|
7%
|
|
499
|
|
1%
|
|
Intersegment revenues
|
|
91
|
|
94
|
|
93
|
|
160
|
|
438
|
|
168
|
|
145
|
|
313
|
|
51
|
|
54%
|
|
(23)
|
|
(14%)
|
|
Total operating
revenues
|
|
39,313
|
|
40,353
|
|
40,268
|
|
41,726
|
|
161,660
|
|
42,745
|
|
43,221
|
|
85,966
|
|
2,868
|
|
7%
|
|
476
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses without
depreciation
|
|
34,695
|
|
34,294
|
|
34,615
|
|
34,247
|
|
137,851
|
|
35,137
|
|
36,003
|
|
71,140
|
|
1,709
|
|
5%
|
|
866
|
|
2%
|
|
Depreciation and
amortization
|
|
11,620
|
|
11,283
|
|
12,199
|
|
12,257
|
|
47,359
|
|
12,180
|
|
12,140
|
|
24,320
|
|
857
|
|
8%
|
|
(40)
|
|
(0%)
|
|
Loss from operations
|
|
$
(7,002)
|
|
$
(5,224)
|
|
$
(6,546)
|
|
$
(4,778)
|
|
$
(23,550)
|
|
$
(4,572)
|
|
$
(4,922)
|
|
$
(9,494)
|
|
$
302
|
|
6%
|
|
$
(350)
|
|
(8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband Reconciliation of
Adjusted EBITDA to Net Loss from Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Twelve Months Ended December 31,
2009
|
|
March 31
|
|
June 30
|
|
Six Months Ended June 30,
2010
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Net loss from continuing
operations
|
|
$
(5,398)
|
|
$
(4,884)
|
|
$
(5,619)
|
|
$
(4,881)
|
|
$
(20,782)
|
|
$
(3,720)
|
|
$
(4,269)
|
|
$
(7,989)
|
|
$
615
|
|
13%
|
|
$
(549)
|
|
(15%)
|
|
Add: income tax
benefits
|
|
(3,656)
|
|
(3,312)
|
|
(3,810)
|
|
(2,675)
|
|
(13,453)
|
|
(2,504)
|
|
(2,867)
|
|
(5,371)
|
|
445
|
|
13%
|
|
(363)
|
|
(14%)
|
|
Less: other
(income)/expense
|
|
2,052
|
|
2,972
|
|
2,883
|
|
2,778
|
|
10,685
|
|
1,652
|
|
2,214
|
|
3,866
|
|
(758)
|
|
(26%)
|
|
562
|
|
34%
|
|
Loss from operations
|
|
(7,002)
|
|
(5,224)
|
|
(6,546)
|
|
(4,778)
|
|
(23,550)
|
|
(4,572)
|
|
(4,922)
|
|
(9,494)
|
|
302
|
|
6%
|
|
(350)
|
|
(8%)
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
11,620
|
|
11,283
|
|
12,199
|
|
12,257
|
|
47,359
|
|
12,180
|
|
12,140
|
|
24,320
|
|
857
|
|
8%
|
|
(40)
|
|
(0%)
|
|
Non-cash pension
expense
|
|
327
|
|
56
|
|
197
|
|
199
|
|
779
|
|
205
|
|
162
|
|
367
|
|
106
|
|
189%
|
|
(43)
|
|
(21%)
|
|
Non-cash stock compensation
expense
|
|
304
|
|
231
|
|
221
|
|
246
|
|
1,002
|
|
386
|
|
560
|
|
946
|
|
329
|
|
142%
|
|
174
|
|
45%
|
|
Severance and other related
costs (3)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
469
|
|
469
|
|
469
|
|
100%
|
|
469
|
|
100%
|
|
Adjusted EBITDA
(2)
|
|
$
5,249
|
|
$
6,346
|
|
$
6,071
|
|
$
7,924
|
|
$
25,590
|
|
$
8,199
|
|
$
8,409
|
|
$
16,608
|
|
$
2,063
|
|
33%
|
|
$
210
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
13%
|
|
16%
|
|
15%
|
|
19%
|
|
16%
|
|
19%
|
|
19%
|
|
19%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Results of
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Twelve Months Ended December 31,
2009
|
|
March 31
|
|
June 30
|
|
Six Months Ended June 30,
2010
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Residential
|
|
$
6,862
|
|
$
6,407
|
|
$
5,857
|
|
$
5,378
|
|
$
24,504
|
|
$
4,868
|
|
$
4,479
|
|
$
9,347
|
|
$
(1,928)
|
|
(30%)
|
|
$
(389)
|
|
(8%)
|
|
Business
|
|
9,048
|
|
9,089
|
|
8,687
|
|
8,633
|
|
35,457
|
|
8,418
|
|
8,400
|
|
16,818
|
|
(689)
|
|
(8%)
|
|
(18)
|
|
(0%)
|
|
Access
|
|
5,647
|
|
4,953
|
|
4,604
|
|
4,523
|
|
19,727
|
|
4,160
|
|
4,408
|
|
8,568
|
|
(545)
|
|
(11%)
|
|
248
|
|
6%
|
|
Other
|
|
163
|
|
222
|
|
206
|
|
199
|
|
790
|
|
165
|
|
185
|
|
350
|
|
(37)
|
|
(17%)
|
|
20
|
|
12%
|
|
Total operating revenues from
external customers
|
|
21,720
|
|
20,671
|
|
19,354
|
|
18,733
|
|
80,478
|
|
17,611
|
|
17,472
|
|
35,083
|
|
(3,199)
|
|
(15%)
|
|
(139)
|
|
(1%)
|
|
Intersegment revenues
|
|
4,874
|
|
4,981
|
|
5,043
|
|
4,999
|
|
19,897
|
|
4,919
|
|
5,091
|
|
10,010
|
|
110
|
|
2%
|
|
172
|
|
3%
|
|
Total operating
revenues
|
|
26,594
|
|
25,652
|
|
24,397
|
|
23,732
|
|
100,375
|
|
22,530
|
|
22,563
|
|
45,093
|
|
(3,089)
|
|
(12%)
|
|
33
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses without
depreciation
|
|
13,082
|
|
12,868
|
|
12,174
|
|
12,763
|
|
50,887
|
|
11,890
|
|
12,482
|
|
24,372
|
|
(386)
|
|
(3%)
|
|
592
|
|
5%
|
|
Depreciation and
amortization
|
|
3,190
|
|
2,945
|
|
3,061
|
|
3,169
|
|
12,365
|
|
2,926
|
|
3,122
|
|
6,048
|
|
177
|
|
6%
|
|
196
|
|
7%
|
|
Income from
operations
|
|
$
10,322
|
|
$
9,839
|
|
$
9,162
|
|
$
7,800
|
|
$
37,123
|
|
$
7,714
|
|
$
6,959
|
|
$
14,673
|
|
$
(2,880)
|
|
(29%)
|
|
$
(755)
|
|
(10%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecom Reconciliation of
Adjusted EBITDA to Net Income from Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For 2009 Quarters
Ended:
|
|
|
|
For 2010 Quarters
Ended:
|
|
|
|
Year-over-Year
|
|
Qtr-over-Qtr
|
|
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Twelve Months Ended December 31,
2009
|
|
March 31
|
|
June 30
|
|
Six Months Ended June 30,
2010
|
|
$ chg
|
|
%
|
|
$ chg
|
|
%
|
|
Net income from continuing
operations
|
|
$
5,477
|
|
$
5,783
|
|
$
5,408
|
|
$
4,781
|
|
$
21,449
|
|
$
4,247
|
|
$
3,742
|
|
$
7,989
|
|
$
(2,041)
|
|
(35%)
|
|
$
(505)
|
|
(12%)
|
|
Add: income tax
expense
|
|
4,540
|
|
3,928
|
|
3,824
|
|
3,167
|
|
15,459
|
|
3,328
|
|
3,057
|
|
6,385
|
|
(871)
|
|
(22%)
|
|
(271)
|
|
(8%)
|
|
Less: other
(income)/expense
|
|
305
|
|
128
|
|
(70)
|
|
(148)
|
|
215
|
|
139
|
|
160
|
|
299
|
|
32
|
|
25%
|
|
21
|
|
15%
|
|
Income from
operations
|
|
10,322
|
|
9,839
|
|
9,162
|
|
7,800
|
|
37,123
|
|
7,714
|
|
6,959
|
|
14,673
|
|
(2,880)
|
|
(29%)
|
|
(755)
|
|
(10%)
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
3,190
|
|
2,945
|
|
3,061
|
|
3,169
|
|
12,365
|
|
2,926
|
|
3,122
|
|
6,048
|
|
177
|
|
6%
|
|
196
|
|
7%
|
|
Non-cash pension
expense
|
|
428
|
|
496
|
|
445
|
|
443
|
|
1,812
|
|
215
|
|
179
|
|
394
|
|
(317)
|
|
(64%)
|
|
(36)
|
|
(17%)
|
|
Non-cash stock compensation
expense
|
|
304
|
|
233
|
|
222
|
|
249
|
|
1,008
|
|
414
|
|
584
|
|
998
|
|
351
|
|
151%
|
|
170
|
|
41%
|
|
Severance and other related
costs (3)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
675
|
|
675
|
|
675
|
|
100%
|
|
675
|
|
100%
|
|
Adjusted EBITDA
(2)
|
|
$
14,244
|
|
$
13,513
|
|
$
12,890
|
|
$
11,661
|
|
$
52,308
|
|
$
11,269
|
|
$
11,519
|
|
$
22,788
|
|
$
(1,994)
|
|
(15%)
|
|
$
250
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
54%
|
|
53%
|
|
53%
|
|
49%
|
|
52%
|
|
50%
|
|
51%
|
|
51%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) External
customers only.
|
|
|
|
(2) Adjusted
EBITDA represents net income (loss) from continuing operations
excluding amounts for income taxes; depreciation and amortization;
non-cash pension and certain post-retirement benefits; non-cash
stock compensation; severance and other related termination costs;
and all other non-operating income/expenses. Adjusted EBITDA
is a common measure of operating performance in the
telecommunications industry. Adjusted EBITDA is not a measure of
financial performance under United States generally accepted
accounting principles and should not be considered in isolation or
as a substitute for consolidated net income (loss) as a measure of
performance.
|
|
|
|
(3) Severance
and other related termination costs related to the workforce
reduction initiative implemented during the quarter ended June 30,
2010. Amounts exclude the termination costs related to stock
compensation expense, which are included in non-cash stock
compensation expense of the Adjusted EBITDA
reconciliation.
|
|
|
|
(4) Free cash
flow is a measure of operating cash flows available for corporate
purposes after providing sufficient fixed asset additions to
maintain current productive capacity.
|
|
|
|
(5) Net debt
represents total long-term debt (including current maturities) less
cash and cash equivalents. Net debt can be a component in
measuring leverage. Net debt is not a measure determined in
accordance with United States generally accepted accounting
principles and should not be considered as a substitute for total
long-term debt.
|
|
|
|
(6) The ratio of
net debt to Adjusted EBITDA is calculated as net debt divided by
Adjusted EBITDA based on a trailing twelve month period. This
measure provides useful information to our investors about our debt
level relative to our performance and about our ability to meet our
financial obligations.
|
|
|
SUREWEST
COMMUNICATIONS
|
|
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
(Unaudited; Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
$
|
|
%
|
|
|
|
|
|
2010
|
|
2009
|
|
Variance
|
|
Variance
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 6,154
|
|
$
7,489
|
|
$ (1,335)
|
|
(18%)
|
|
|
|
Short-term
investments
|
|
551
|
|
4,306
|
|
(3,755)
|
|
(87%)
|
|
|
|
Accounts receivable,
net
|
|
19,074
|
|
19,734
|
|
(660)
|
|
(3%)
|
|
|
|
Income tax receivable
|
|
2,156
|
|
2,221
|
|
(65)
|
|
(3%)
|
|
|
|
Prepaid expenses
|
|
3,938
|
|
3,704
|
|
234
|
|
6%
|
|
|
|
Deferred income taxes
|
|
9,030
|
|
3,373
|
|
5,657
|
|
168%
|
|
|
|
Other current assets
|
|
-
|
|
1,760
|
|
(1,760)
|
|
(100%)
|
|
|
|
Assets held for sale
|
|
6,009
|
|
6,009
|
|
-
|
|
0%
|
|
|
Total current assets
|
46,912
|
|
48,596
|
|
(1,684)
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
519,137
|
|
522,493
|
|
(3,356)
|
|
(1%)
|
|
|
Intangible and other
assets:
|
|
|
|
|
|
|
|
|
|
|
Customer relationships,
net
|
|
3,240
|
|
3,847
|
|
(607)
|
|
(16%)
|
|
|
|
Goodwill
|
|
45,814
|
|
45,814
|
|
-
|
|
0%
|
|
|
|
Deferred charges and other
assets
|
|
2,674
|
|
2,113
|
|
561
|
|
27%
|
|
|
|
|
|
51,728
|
|
51,774
|
|
(46)
|
|
(0%)
|
|
|
|
|
|
$ 617,777
|
|
$
622,863
|
|
$ (5,086)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term
debt
|
$ 15,636
|
|
$
15,636
|
|
$
-
|
|
0%
|
|
|
|
Accounts payable
|
1,785
|
|
2,547
|
|
(762)
|
|
(30%)
|
|
|
|
Other accrued
liabilities
|
15,084
|
|
18,315
|
|
(3,231)
|
|
(18%)
|
|
|
|
Advance billings and deferred
revenues
|
8,056
|
|
8,580
|
|
(524)
|
|
(6%)
|
|
|
|
Accrued compensation
|
6,062
|
|
9,172
|
|
(3,110)
|
|
(34%)
|
|
|
Total current
liabilities
|
46,623
|
|
54,250
|
|
(7,627)
|
|
(14%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
203,409
|
|
207,409
|
|
(4,000)
|
|
(2%)
|
|
|
Deferred income taxes
|
61,532
|
|
54,856
|
|
6,676
|
|
12%
|
|
|
Accrued pension and other
post-retirement benefits
|
33,284
|
|
32,451
|
|
833
|
|
3%
|
|
|
Other liabilities and deferred
revenues
|
4,668
|
|
4,714
|
|
(46)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
–
|
|
–
|
|
–
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Common stock, without par value;
100,000 shares
authorized, 13,970 and 14,148
shares issued and
outstanding at June 30, 2010
and
December 31, 2009,
respectively
|
144,427
|
|
146,844
|
|
(2,417)
|
|
(2%)
|
|
|
|
Accumulated other comprehensive
loss
|
(15,338)
|
|
(15,280)
|
|
(58)
|
|
0%
|
|
|
|
Retained earnings
|
139,172
|
|
137,619
|
|
1,553
|
|
1%
|
|
|
Total shareholders'
equity
|
268,261
|
|
269,183
|
|
(922)
|
|
(0%)
|
|
|
|
|
|
$ 617,777
|
|
$
622,863
|
|
$ (5,086)
|
|
(1%)
|
|
|
|
|
|
|
|
|
|
|
|
|
SUREWEST COMMUNICATIONS -
Consolidated Operations
|
|
SELECTED OPERATING
METRICS
|
|
As of and for the quarter
ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/30/2010
(1)
|
6/30/2009
(1)
|
Chg
|
Chg %
|
|
3/31/2010
(1)
|
Chg
|
Chg %
|
|
BROADBAND
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Homes (2)
|
|
265,100
|
239,800
|
25,300
|
11%
|
|
261,900
|
3,200
|
1%
|
|
|
|
|
RGUs
|
|
60,300
|
59,100
|
1,200
|
2%
|
|
58,600
|
1,700
|
3%
|
|
|
|
|
Penetration (2)
|
|
22.7%
|
23.7%
|
-1.0%
|
-4%
|
|
22.4%
|
0.4%
|
2%
|
|
|
|
|
ARPU
|
|
$68
|
$67
|
$1
|
2%
|
|
$69
|
($1)
|
-2%
|
|
|
|
Voice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Homes
|
|
310,400
|
309,300
|
1,100
|
0%
|
|
309,900
|
500
|
0%
|
|
|
|
|
RGUs
|
|
74,200
|
68,000
|
6,200
|
9%
|
|
72,100
|
2,100
|
3%
|
|
|
|
|
Penetration
|
|
23.9%
|
22.0%
|
1.9%
|
9%
|
|
23.3%
|
0.6%
|
3%
|
|
|
|
|
ARPU
|
|
$30
|
$33
|
($3)
|
-8%
|
|
$30
|
$0
|
-1%
|
|
|
|
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Homes
|
|
310,400
|
309,300
|
1,100
|
0%
|
|
309,900
|
500
|
0%
|
|
|
|
|
RGUs
|
|
99,200
|
97,700
|
1,500
|
2%
|
|
97,800
|
1,400
|
1%
|
|
|
|
|
Penetration
|
|
32.0%
|
31.6%
|
0.4%
|
1%
|
|
31.6%
|
0.4%
|
1%
|
|
|
|
|
ARPU
|
|
$41
|
$38
|
$3
|
8%
|
|
$42
|
($1)
|
-1%
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGUs
|
|
233,700
|
224,800
|
8,900
|
4%
|
|
228,500
|
5,200
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber totals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscribers (3)
|
|
103,100
|
101,800
|
1,300
|
1%
|
|
102,000
|
1,100
|
1%
|
|
|
|
|
Penetration
|
|
33.2%
|
32.9%
|
0.3%
|
1%
|
|
32.9%
|
0.3%
|
1%
|
|
|
|
|
ARPU (4)
|
|
$100
|
$97
|
$3
|
3%
|
|
$101
|
($1)
|
-1%
|
|
|
|
|
Triple Play ARPU (5)
|
|
$116
|
$115
|
$1
|
1%
|
|
$117
|
($1)
|
-1%
|
|
|
|
|
Triple Play RGUs per Subscriber
(5)
|
|
2.57
|
2.58
|
(0.01)
|
0%
|
|
2.56
|
0.01
|
0%
|
|
|
|
|
Churn
|
|
1.6%
|
1.7%
|
-0.1%
|
-7%
|
|
1.6%
|
0.0%
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business [6]
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers
|
|
7,300
|
6,800
|
500
|
7%
|
|
7,200
|
100
|
1%
|
|
|
|
|
ARPU
|
|
$518
|
$475
|
$43
|
9%
|
|
$494
|
$24
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TELECOM
|
|
|
6/30/2010
(1)
|
6/30/2009
(1)
|
Chg
|
Chg %
|
|
3/31/2010
(1)
|
Chg
|
Chg %
|
|
|
Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
Voice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Homes
|
|
91,200
|
90,900
|
300
|
0%
|
|
91,100
|
100
|
0%
|
|
|
|
|
RGUs (7)
|
|
32,800
|
45,100
|
(12,300)
|
-27%
|
|
35,500
|
(2,700)
|
-8%
|
|
|
|
|
Cumulative Migration to
Broadband Voice (8)
|
|
14,000
|
9,000
|
5,000
|
56%
|
|
12,900
|
1,100
|
9%
|
|
|
|
|
Penetration
|
|
36.0%
|
49.6%
|
-13.7%
|
-28%
|
|
39.0%
|
-3.0%
|
-8%
|
|
|
|
|
ARPU
|
|
$44
|
$45
|
($1)
|
-3%
|
|
$44
|
$0
|
0%
|
|
|
|
|
Churn (9)
|
|
2.1%
|
2.3%
|
-0.1%
|
-6%
|
|
2.3%
|
-0.2%
|
-9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customers
|
|
8,200
|
8,900
|
(700)
|
-8%
|
|
8,300
|
(100)
|
-1%
|
|
|
|
|
ARPU
|
|
$340
|
$339
|
$1
|
0%
|
|
$334
|
$6
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED RESIDENTIAL VOICE
RGUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ILEC Voice RGUs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadband
|
|
19,000
|
12,400
|
6,600
|
53%
|
|
17,500
|
1,500
|
9%
|
|
|
|
|
Telecom
|
|
32,800
|
45,100
|
(12,300)
|
-27%
|
|
35,500
|
(2,700)
|
-8%
|
|
|
|
|
Total ILEC Voice RGUs
(10)
|
|
51,800
|
57,500
|
(5,700)
|
-10%
|
|
53,000
|
(1,200)
|
-2%
|
|
|
|
|
CLEC Residential Voice RGUs
(11)
|
|
55,200
|
55,600
|
(400)
|
-1%
|
|
54,600
|
600
|
1%
|
|
|
|
|
TOTAL Residential Voice RGUs
(12)
|
|
107,000
|
113,100
|
(6,100)
|
-5%
|
|
107,600
|
(600)
|
-1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NETWORK METRICS
|
|
6/30/2010
(1)
|
6/30/2009
(1)
|
Chg
|
Chg %
|
|
3/31/2010
[1]
|
Chg
|
Chg %
|
|
|
|
|
Marketable Homes -
Fiber
|
|
147,900
|
146,900
|
1,000
|
1%
|
|
147,700
|
200
|
0%
|
|
|
|
|
Marketable Homes -
HFC
|
|
93,200
|
92,900
|
300
|
0%
|
|
93,000
|
200
|
0%
|
|
|
|
|
Marketable Homes - Copper
2-Play
|
|
45,300
|
69,500
|
(24,200)
|
-35%
|
|
47,900
|
(2,600)
|
-5%
|
|
|
|
|
Marketable Homes - Copper
3-Play
|
|
24,000
|
0
|
24,000
|
n/a
|
|
21,300
|
2,700
|
13%
|
|
|
|
|
Total
|
|
310,400
|
309,300
|
1,100
|
0%
|
|
309,900
|
500
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The calculation of certain
metrics have been revised over time to reflect the current view of
our business. Where necessary prior period metric
calculations have been revised to conform with current practice.
All amounts rounded to the nearest 100s, except percents and
dollars.
|
|
|
|
(2) Marketable Homes - Prior to
Q110, video marketable homes and penetration rate included
serviceable homes in Sacramento and Kansas City fiber and hybrid
fiber coax (HFC) networks only. With launch of ADTV in Q110,
certain copper homes became video serviceable and 3-play capable
and are included in marketable home counts. Penetration rates prior
to Q110 were not adjusted for small number of video customers on
copper network prior to ADTV.
|
|
|
|
(3) A residential subscriber is
a customer who subscribes to one or more residential RGUs.
|
|
|
|
(4) ARPU is the total
residential revenue per average subscriber.
|
|
|
|
(5) Triple play ARPU includes
the total residential revenue per average subscriber and Triple
play RGUs per Subscriber includes ending RGUs per ending
subscriber, for the triple play markets, excluding the ILEC
market.
|
|
|
|
(6) A business customer is a
customer who subscribes to business data, voice or video and
represents a unique customer account. ARPU is the total
business revenue per average customer.
|
|
|
|
(7) A voice RGU is a residential
customer who subscribers to one or more voice access line.
|
|
|
|
(8) Telecom Voice RGU Migration
to Broadband Voice are residential Telecom voice RGUs in Line (7)
that have ported their Telecom primary access line service to
Broadband VoIP.
|
|
|
|
(9) Telecom Churn excludes
disconnects in Line (8) that have ported their Telecom primary
access line service to Broadband VoIP.
|
|
|
|
(10) ILEC Voice RGUs are the
total residential voice RGUs in the ILEC franchise market area that
are either a Telecom primary access line or Broadband VoIP
subscriber.
|
|
|
|
(11) CLEC Voice RGUs are the
total residential voice RGUs in the Kansas City and Sacramento
markets, excluding the ILEC market.
|
|
|
|
(12) Total Voice RGUs are the
total of ILEC and CLEC residential voice RGUs, and represent the
total company residential voice RGUs of both the Broadband and
Telecom Segments.
|
|
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(13) Telecom access lines
include residential and business access lines. For information
purposes, access line counts were 82,600 at 6/30/09, 69,300 at
3/31/10, and 65,800 at 6/30/10.
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SUREWEST COMMUNICATIONS -
Consolidated Operations
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SELECTED OPERATING
METRICS
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As of and for the quarter
ended
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3/31/2008 (1)
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6/30/2008 (1)
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9/30/2008 (1)
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12/31/2008 (1)
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3/31/2009 (1)
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6/30/2009
(1)
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9/30/2009
(1)
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12/31/2009
(1)
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3/31/2010
(1)
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6/30/2010
(1)
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BROADBAND
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Residential
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Video
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Marketable Homes (2)
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211,000
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217,700
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221,700
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232,400
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236,500
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239,800
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240,000
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240,500
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261,900
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265,100
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RGUs
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55,200
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57,100
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58,500
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60,100
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60,000
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59,100
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59,200
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59,100
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58,600
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60,300
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Penetration (2)
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24.9%
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25.0%
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25.2%
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24.7%
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24.4%
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23.7%
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23.8%
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23.7%
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22.4%
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22.7%
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ARPU
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$64
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$62
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$59
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$59
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$65
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$67
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$66
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$68
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$69
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$68
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Voice
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Marketable Homes
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286,600
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292,200
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296,600
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304,200
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308,200
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309,300
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309,400
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309,700
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309,900
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310,400
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RGUs
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53,800
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56,600
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60,000
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63,500
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66,300
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68,000
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70,300
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71,600
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72,100
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74,200
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Penetration
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18.8%
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19.4%
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20.2%
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20.9%
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21.5%
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22.0%
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22.7%
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23.1%
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23.3%
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23.9%
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ARPU
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$33
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$33
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$32
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$32
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$33
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$33
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$31
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$30
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$30
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$30
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Data
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Marketable Homes
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286,600
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292,200
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296,600
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304,200
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308,200
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309,300
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309,400
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309,700
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309,900
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310,400
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RGUs
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91,800
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94,000
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95,700
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97,400
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98,100
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97,700
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97,700
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98,500
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97,800
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99,200
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Penetration
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32.0%
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32.2%
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32.3%
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32.0%
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31.8%
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31.6%
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31.6%
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31.8%
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31.6%
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32.0%
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ARPU
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$39
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$37
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$36
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$36
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$37
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$38
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$38
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$40
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$42
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$41
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Total
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RGUs
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200,800
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207,700
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214,200
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221,000
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224,400
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224,800
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227,200
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229,200
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228,500
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233,700
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Qtrly chg
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2,300
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6,900
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6,500
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6,800
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3,400
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400
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2,400
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2,000
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(700)
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5,200
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Subscriber totals
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Subscribers (3)
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96,900
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99,000
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100,600
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102,400
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102,800
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101,800
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102,500
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102,600
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102,000
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103,100
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Penetration
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33.8%
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33.9%
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33.9%
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33.7%
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33.4%
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32.9%
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33.1%
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33.1%
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32.9%
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33.2%
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ARPU (4)
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$85
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$89
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$88
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$89
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$94
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$97
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$96
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$99
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$101
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$100
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Triple Play ARPU (5)
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$111
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$109
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$106
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$107
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$112
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$115
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$112
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$115
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$117
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$116
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Triple Play RGUs per Subscriber
(5)
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2.59
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2.60
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2.60
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2.59
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2.59
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2.58
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2.57
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2.57
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2.56
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2.57
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Churn
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1.4%
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1.5%
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1.7%
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1.4%
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1.4%
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1.7%
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1.8%
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1.5%
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1.6%
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1.6%
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Business (6)
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Customers
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6,000
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6,200
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6,300
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6,500
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6,700
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6,800
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7,000
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7,100
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7,200
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7,300
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ARPU
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$412
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$458
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$494
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$467
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$484
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$475
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$483
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$492
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$494
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$518
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TELECOM
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3/31/2008 (1)
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6/30/2008 (1)
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9/30/2008 (1)
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12/31/2008 (1)
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3/31/2009 (1)
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6/30/2009
(1)
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9/30/2009
(1)
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12/31/2009
(1)
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3/31/2010
(1)
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6/30/2010
(1)
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Residential
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Voice
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Marketable Homes
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89,900
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90,000
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90,500
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90,800
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90,800
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90,900
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90,900
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91,000
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91,100
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91,200
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RGUs (7)
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66,800
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62,900
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58,500
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54,000
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49,500
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45,100
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41,300
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38,500
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35,500
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32,800
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Cumulative Migration to
Broadband Voice (8)
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0
|
1,400
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2,900
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4,700
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6,900
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9,000
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10,700
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11,800
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12,900
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14,000
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Penetration
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74.3%
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69.9%
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64.6%
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59.5%
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54.5%
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49.6%
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45.4%
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42.3%
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39.0%
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36.0%
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ARPU
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$44
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$44
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$43
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$43
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$44
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$45
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$45
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$45
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$44
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$44
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Churn (9)
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2.3%
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2.1%
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2.4%
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2.2%
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2.1%
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2.3%
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2.3%
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2.0%
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2.3%
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2.1%
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Business (6)
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Customers
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9,600
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9,600
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9,400
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9,200
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9,000
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8,900
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8,700
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8,500
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8,400
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8,200
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ARPU
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$311
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$341
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$354
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$327
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$332
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$339
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$329
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$334
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$334
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$340
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CONSOLIDATED RESIDENTIAL VOICE
RGUs
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3/31/2008 (1)
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6/30/2008 (1)
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9/30/2008 (1)
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12/31/2008 (1)
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3/31/2009 (1)
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6/30/2009
(1)
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9/30/2009
(1)
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12/31/2009
(1)
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3/31/2010
(1)
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6/30/2010
(1)
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ILEC Voice RGUs
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Broadband
|
100
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2,000
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4,400
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7,100
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9,900
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12,400
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14,700
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16,200
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17,500
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19,000
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Telecom
|
66,800
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62,900
|
58,500
|
54,000
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49,500
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45,100
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41,300
|
38,500
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35,500
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32,800
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Total ILEC Voice RGUs
(10)
|
66,900
|
64,900
|
62,900
|
61,100
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59,400
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57,500
|
56,000
|
54,700
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53,000
|
51,800
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CLEC Residential Voice RGUs
(11)
|
53,700
|
54,600
|
55,600
|
56,400
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56,400
|
55,600
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55,600
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55,400
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54,600
|
55,200
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TOTAL Residential Voice RGUs
(12)
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120,600
|
119,500
|
118,500
|
117,500
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115,800
|
113,100
|
111,600
|
110,100
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107,600
|
107,000
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Qtrly change
|
(2,100)
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(1,100)
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(1,000)
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(1,000)
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(1,700)
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(2,700)
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(1,500)
|
(1,500)
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(2,500)
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(600)
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NETWORK METRICS
|
3/31/2008 (1)
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6/30/2008 (1)
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9/30/2008 (1)
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12/31/2008 (1)
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3/31/2009 (1)
|
6/30/2009
(1)
|
9/30/2009
(1)
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12/31/2009
(1)
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3/31/2010
(1)
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6/30/2010
(1)
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Marketable Homes -
Fiber
|
119,900
|
125,700
|
129,000
|
138,800
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|
142,900
|
146,900
|
147,100
|
147,600
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147,700
|
147,900
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Marketable Homes -
HFC
|
91,100
|
92,000
|
92,700
|
93,600
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93,600
|
92,900
|
92,900
|
92,900
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93,000
|
93,200
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Marketable Homes - Copper
2-Play
|
75,600
|
74,500
|
74,900
|
71,800
|
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71,700
|
69,500
|
69,400
|
69,200
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47,900
|
45,300
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Marketable Homes - Copper
3-Play
|
0
|
0
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0
|
0
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0
|
0
|
0
|
0
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21,300
|
24,000
|
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Total
|
286,600
|
292,200
|
296,600
|
304,200
|
|
308,200
|
309,300
|
309,400
|
309,700
|
|
309,900
|
310,400
|
|
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ACCESS LINES
- Telecom (13)
|
110,200
|
105,900
|
100,200
|
94,600
|
|
88,400
|
82,600
|
77,600
|
73,200
|
|
69,300
|
65,800
|
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(1-13) See all notes on
Selected Operating Metrics Actuals Quarterly and Year-over-Year
comparison
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SOURCE SureWest Communications