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| 8-K - FORM 8-K - NTELOS HOLDINGS CORP. | d311408d8k.htm |
 Investor
Presentation March 2012
Exhibit 99.1 |
 Use of
Non-GAAP Financial Measures Special Note Regarding Forward-Looking
Statements 2
Presentation of Financial and Other Important Information
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: our ability to attract and retain retail
subscribers to our services; the dependence on our strategic relationship with Sprint Nextel
(“Sprint”); a potential increase in roaming rates and wireless handset subsidy costs; rapid
development and intense competition in the telecommunications industry; the potential to
experience a high rate of customer turnover; the potential for Sprint and others to build networks
in our markets; cash and capital requirements; operating and financial restrictions imposed by
our senior credit facility; adverse economic conditions; federal and state regulatory fees,
requirements and developments; loss of ability to use our current cell sites; our ability to
realize the benefits anticipated following the spinoff of our wireline business; our continued reliance
on indirect channels of retail distribution; 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 most recent Annual Report filed on Form 10-K.
Included in this presentation are certain non-GAAP financial measures that are not
determined in accordance with US generally accepted accounting principles. These financial
performance measures are not indicative of cash provided or used by operating activities and
exclude the effects of certain operating, capital and financing costs and may differ from
comparable information provided by other companies, and they should not be considered in
isolation, as an alternative to, or more meaningful than measures of financial performance
determined in accordance with US generally accepted accounting principles. These
financial performance measures are commonly used in the industry and are presented because
NTELOS believes they provide relevant and useful information to investors. NTELOS
utilizes these financial performance measures to assess its ability to meet future capital expenditure
and working capital requirements, to incur indebtedness if necessary, and to fund continued
growth. NTELOS also uses these financial performance measures to evaluate the
performance of its business, for budget planning purposes and as factors in its employee
compensation programs.
Adjusted EBITDA is defined as net income attributable to NTELOS Holdings Corp. before
interest, income taxes, depreciation and amortization, accretion of asset retirement obligations,
gain/loss on derivatives, net income attributable to non-controlling interests, other
expenses/income, equity based compensation charges, acquisition related charges, net loss from
discontinued operations and costs related to the separation of the wireless and wireline
companies.
Please review the reconciliations and other definitions of non-GAAP financial measures
contained in the press release filed by the Company with the SEC on Form 8-K on February 29,
2012.
|
 Leading
“pure-play” Mid-Atlantic regional wireless company
Divested legacy wireline business in 4Q 2011
Competitive business model and strategic asset set
Diversified revenue stream
Retail –
Service provider to 415,000 postpay and prepaid subscribers
Wholesale –
Exclusive network provider to Sprint in portion of territory
Opportunities for organic and strategic growth
Strong free cash flow
Profitable
Cash dividend payer
Broad geographic and network technology footprint
8.1 million licensed POPs; 5.9 million covered POPs
86% of network is CDMA 3G EVDO
Experienced management team
3
Investment Considerations |
 Retail
Improving leading indicators
Improving distribution model
Improving net subscriber trends
Poised for improved ARPU trends
Sprint Wholesale
Growing data and voice revenue
Exclusive relationship through July 2015
Profitable
Three years of 35% average Adjusted EBITDA margin
Three years of 21% average FCF margin
4
Operating Trends and Overview |
 5
NTELOS Covered Network
Sprint Wholesale Markets
Strategic Network Assets
Where We Operate |
 6
Unlimited
Unlimited
nationwide plans
nationwide plans
always less
always less
expensive than
expensive than
AT&T and Verizon
AT&T and Verizon
Wireless
Wireless
Cutting through
Cutting through
the complexity
the complexity
with simple,
with simple,
customer friendly
customer friendly
products and
products and
plans
plans
Creating “raving
Creating “raving
fans,”
fans,”
leveraging
leveraging
local retail and
local retail and
customer service
customer service
presence
presence
Competitively Differentiated Retail Model
Savings
Savings
Simplicity
Simplicity
Services
Services |
 Refocused
Distribution Strategy NTELOS Owned Retail Stores
60% of NTELOS owned retail stores had
new look at the end of 2011
Majority of remaining NTELOS owned
retail stores will be retrofitted in 2012
Highlight:
10% improvement in
postpaid same store sales YOY
2011
Indirect Distribution Expansions
31% growth in Indirect channel from 308
selling doors in 4Q10 to 402 in 4Q 2011
Grew the number of Exclusive Retail
Partners (ERP’s) from 18 in 4Q 2010 to 52
in 4Q 2011
Highlight:
9%
increase
YOY
2011
7
7
79%
79%
78%
71%
70%
71%
67%
66%
21%
21%
22%
29%
30%
29%
33%
34%
0%
20%
40%
60%
80%
100%
Q110
Q210
Q310
Q410
Q111
Q211
Q311
Q411
Gross Adds Distribution
Direct Gross Adds %
Indirect Gross Adds %
Platform for Organic Growth –
Distribution Strategy
200
250
300
350
400
450
50
55
60
65
70
75
80
Q110
Q210
Q310
Q410
Q111
Q211
Q311
Q411
Points of Presence
Company Stores
Agent Locations |
 8
Increased smartphone penetration drives ARPU and lowers churn
8
$11.84
$13.23
$14.06
$14.61
$15.45
$16.36
$16.02
$17.12
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
Postpaid Data ARPU and Device
Penetration of Postpaid Base
Postpay Data ARPU
Smartphone %
36%
47%
52%
57%
0%
10%
20%
30%
40%
50%
60%
NTELOS
Verizon
Sprint
AT&T
Smartphones as a % of Postpaid Base
Smartphone as a % of Postpaid Base
(1)
% of CDMA Postpay base
(1)
Platform for Organic Growth –
Smartphone Explosion |
 9
Network investments driving wholesale revenue growth
Sprint wholesale revenue up
32% YOY
Platform for Organic Growth –
Wholesale Revenues
•
Calculated Sprint Revenue was below the $9M contractual monthly minimum in the first three
quarters of 2010. •
Wholesale Revenue shown above includes Sprint SNA Revenue and other Roaming Revenue. |
 10
Subscriber ports now net positive for first time since July 2007
Smartphone customers have better churn characteristics
Wireless Number Porting
Postpay Voluntary Churn (%)
Leading Indicators Support Strategy and Execution |
 11
Moderate increases in retail penetration provide substantial revenue and EBITDA growth
1% increase in market share = 59k incremental subs
* Assumes current subscriber base mix at higher penetration and applies operating financial
metrics to illustrate assumed subscriber base. * Assumes 45% incremental EBITDA
margin. * Current NTELOS combined share in all markets is 7.1%.
“Size of the Prize” |
 12
Network upgrade to EVDO drove revenue growth
(1)
Includes corporate CapEx previously excluded from Wireless in external reporting
CapEx¹ Summary vs Total Revenue
35
47
9
18
25
15
16
10
16
9
19
14
25
7
8
20
13
13
9
8
8
9
10
$0
$20
$40
$60
$80
$100
$120
2007
2008
2009
2010
2011
350
360
370
380
390
400
410
420
430
Maintenance
IT and Other
Capacity
Growth
EVDO
85
97
71
52
58
Investment in EVDO |
 Fast follower
with LTE Well positioned with Sprint for technology upgrade
Clearwire and other possible options
LTE field trials completed
VZ launch in 30
cities
First LTE Device
Introduced
13
EVDO Build
Completion
Metro PCS
initial Launch
AT&T launch in
10 cities
Sprint WiMAX
in Baltimore
LTE Field Trials
Completed
NTELOS Milestones
Industry Milestones
4G Roadmap |
 Financial
Summary |
 15
Managing to Growth |
 16
(1)
Includes corporate CapEx previously excluded from Wireless in external reporting
Financial Overview
2009
2010
2011
YOY Delta
Inc/(Dec)
Gross Adds (000s)
176
165
158
(7)
Ending Subscribers (000s)
439
432
415
(17)
ARPU -
blended
$53.20
$50.85
$49.79
($1.06)
Churn -
blended
3.3%
3.3%
3.5%
0.2%
Revenue ($mm)
$425
$407
$423
$16
Adjusted EBITDA ($mm)
$156
$142
$143
$1
CapEx ($mm)
¹
$71
$52
$58
$6
FCF ($mm)
$85
$90
$85
($5) |
 17
(in millions)
2010
2011
Results
Revenue
$407
$423
Adjusted EBITDA
$142
$143
Pro Forma Capitalization (as of 12/31/11)
Cash
$60
Total Debt
$457
Net Debt
$397
Net Debt Leverage
2.8X
Guidance*
Adjusted EBITDA –
First Quarter 2012
$32mm -
$35mm
CapEx –
Full Year 2012
$65mm -
$75mm
* Per Earnings call on 2/29/12
Financial Overview |
 18
Jim Hyde, CEO, President and Director
Former T-Mobile USA / Western Wireless / VoiceStream Sr. Exec
Former CEO, T-Mobile UK
17 years industry experience
Steb Chandor, EVP, CFO and Treasurer
Former CFO, iPCS Wireless
Former CFO, Metro One
16 years industry experience
Conrad Hunter, EVP, COO
Former COO, iPCS Wireless
Former VP of Midwest Operations, U.S. Cellular Corporation
32 years industry experience
Senior Executives –
Wireless Veterans |
 Leading
“pure-play” Mid-Atlantic regional wireless company
Diversified revenue stream
Strong free cash flow
Broad geographic and network technology footprint
Experienced management team
19
Summary |
 Investor
Presentation March 2012 |