* Subscriber base grew with 28,100 net additions and 50,200 acquired subscribers * Average revenue per unit of $49.92 for the fourth quarter of 2006 * EBITDA of $113.4 million for the fourth quarter, an 18.5 percent year-over-year increase * 2006 Operating income grew 14.8 percent to $248.0 million * Net income applicable to common shareholders of $4.2 million, or $0.02 per share, for the year * In 2007, the Company expects continued strong growth in subscribers, EBITDA and free cash flow * Company announces plans to refinance American Cellular debt in near future
OKLAHOMA CITY, Feb. 14, 2007 (PRIME NEWSWIRE) -- Dobson Communications Corporation (Nasdaq:DCEL) completed 2006 with continued improvements in operating results. The Company once again increased its subscriber base, average revenue per unit and cash flow from operations, compared with the fourth quarter of 2005.
"Our operating performance in 2006 was very solid, improving consistently through the year," said Steve Dussek, president and chief executive officer. "We delivered excellent operating and financial results. Even more importantly, the initiatives and processes now in place should enable us to deliver sustained, profitable growth in 2007 and beyond.
"The Dobson team came together around a strategy of delivering an excellent user experience to our wireless customers. We are committed today to raising customer satisfaction to an even higher level," he said. "We've laid an excellent foundation for long-term growth."
Dobson reported essentially break-even results for the fourth quarter of 2006, with a net loss applicable to common shareholders of $10,000. (See Table 1.) This included a $3.2 million tax expense.
For the fourth quarter of 2005, Dobson reported a net loss applicable to common shareholders of $27.3 million, or $0.16 per share. This included a $21.7 million loss from extinguishment of debt, a $4.5 million loss on redemption and repurchases of mandatorily redeemable preferred stock, and an income tax benefit of $16.2 million.
Dobson reported net income applicable to common shareholders of $4.2 million, or $0.02 per share, for the year ended December 31, 2006. This compared with a net loss applicable to common shareholders of $130.7 million, or $0.90 per share for 2005. Included in the 2006 results was an income tax benefit of $14.0 million.
Total gross subscriber additions were 145,800 in the fourth quarter of 2006, an increase of 18.9 percent over gross additions in the fourth quarter of 2005. (See Table 3.)
Postpaid customer churn was 1.84 percent in the fourth quarter of 2006, compared with 1.95 percent in the third quarter of 2006 and 2.62 percent in the fourth quarter of 2005.
Dobson increased its subscriber base in the fourth quarter of 2006 with 28,100 net subscriber additions, which included increases of 15,100 postpaid customers and 16,100 prepaid customers, and a reduction of 3,100 reseller customers.
Early in the fourth quarter of 2006, Dobson also completed its acquisition of Highland Cellular, which serves eight counties in West Virginia and two counties in Virginia. The acquisition brought to Dobson 357,100 POPs and 50,200 subscribers, of which the majority are on postpaid GSM calling plans.In the fourth quarter of 2005, Dobson reported a reduction of 22,500 net subscribers, which included a reduction of 28,000 postpaid customers and the addition of 300 prepaid and 5,200 reseller subscribers.
EBITDA for the fourth quarter of 2006 was $113.4 million, an increase of 18.5 percent over EBITDA of $95.7 million for the fourth quarter of 2005. Please see Table 3 for the reconciliation of EBITDA to GAAP measures. EBITDA margin on total revenue was 33.8 percent for the fourth quarter of 2006, an increase of 130 basis points over 2005's fourth quarter EBITDA margin of 32.5 percent.
Service Revenue and ARPU Continued to Increase
Service revenue increased 14.9 percent to $247.1 million in the fourth quarter of 2006, compared with $215.0 million in the fourth quarter of 2005. Average revenue per unit (ARPU) was $49.92 for the fourth quarter of 2006, a $3.82 increase over ARPU for the same period in 2005.
The data component of ARPU continued to grow, reaching $5.11 in the fourth quarter of 2006, compared with $4.34 in the third quarter of 2006 and $2.90 in the fourth quarter of 2005. The ETC portion of ARPU in the fourth quarter was $3.16, compared with $2.91 in the third quarter of 2006 and $1.39 in the fourth quarter of 2005.
Roaming revenue was $70.1 million in the fourth quarter of 2006, an increase of 10.6 percent over roaming revenue for the same period of 2005. Roaming minutes of use (MOUs) totaled 719 million for the fourth quarter of 2006, a 23.1 percent increase over roaming MOUs in the fourth quarter of 2005. As expected, roaming yield declined in the fourth quarter of 2006, compared with the third quarter of 2006, reflecting seasonal changes in the mix of MOUs, with less roaming traffic in higher-rate markets.
Cost of service expense was $94.6 million in the fourth quarter of 2006, an increase of 22.2 percent over cost of service in the fourth quarter of the previous year. This increase primarily reflected higher network operating costs related to cell sites added in the past 12 months and the network operating costs in acquired markets in Alaska, Texas, Virginia and West Virginia.
Incollect, or off-network, expense also increased year-over-year. Roaming usage per Dobson subscriber averaged 86 MOUs per month in the fourth quarter of 2006, compared with 84 MOUs in the third quarter of 2006 and 64 MOUs in the fourth quarter of 2005.
Marketing and selling expense rose on a year-over-year basis, reflecting the 35.5 percent increase in postpaid and prepaid gross additions, compared with the fourth quarter of 2005. Cost per gross add (CPGA) decreased in the fourth quarter to $424, compared with CPGA of $451 for the fourth quarter of 2005.
General and administrative expense declined to $49.4 million in the fourth quarter of 2006, a decrease of 5.2 percent from the fourth quarter of 2005. This primarily reflected a decrease in bad debt expense to $7.3 million in the fourth quarter of 2006, compared with $10.2 million in the same period of 2005.
The GSM transition of Dobson's subscriber base continued in the fourth quarter of 2006. At year-end 2006, 89 percent of Dobson's subscriber base and 93 percent of its postpaid customers were on GSM calling plans. At year-end 2005, the respective GSM percentages for total customers and postpaid customers were 67 percent and 72 percent.
Capital expenditures in the fourth quarter of 2006 were $45.5 million, which included $25.7 million at Dobson Cellular Systems and $19.8 million at American Cellular. Full-year capital expenditures were $162.0 million.
Free cash flow was $34.4 million for the fourth quarter of 2006, bringing full-year 2006 free cash flow to $43.3 million. Dobson defines free cash flow as EBITDA minus cash interest and dividends, capital expenditures and changes to working capital.
Dobson's balance sheet at December 31, 2006 included $117.1 million in cash and $5.0 million in short-term investments; $2.6 billion in total debt; and $135.7 million in preferred stock. The Company also announced plans to pursue the refinancing of substantially all of American Cellular's indebtedness in the near future from the proceeds of new non-convertible indebtedness.
Additional Growth Expected in 2007
"We are very encouraged with our 2006 performance, especially in areas of the business that relate closely to customer loyalty, shareholder value and long-term growth," Dussek said. "In 2007 we are focused on steady, continued improvement."
Subscriber Growth: Dobson expects to report at least 90,000 total net subscriber additions in 2007. The Company expects additional growth in gross subscriber additions and for postpaid customer churn to remain below 2 percent.
In the first quarter of 2007, net subscriber additions are expected to be sequentially lower based on typical seasonal trends.
Revenue Growth: Total revenue should increase at least 7 percent in 2007, driven primarily by local service revenue growth, related to subscriber increases and strong ARPU. The Company expects that roaming revenue will continue to grow, but at a lower rate than 2006. The growth of roaming revenue will be determined in large part by the subscriber and average MOU growth at both AT&T and T-Mobile USA, partially offset by the previously discussed January 1, 2007 step-down in rates in the AT&T/Dobson roaming agreement.
EBITDA Growth: The Company expects EBITDA of at least $485 million for 2007, with improved EBITDA margins.
Capital Expenditures: The Company expects 2007 capital expenditures of approximately $155 million.
Free Cash Flow Growth: Dobson expects to generate at least $90 million in 2007 free cash flow, more than double its free cash flow for 2006.
Fourth Quarter 2006 Conference Call
On Thursday, February 15, 2007, Dobson plans to conduct its fourth quarter earnings conference call beginning at 9:00 a.m. CT (10:00 a.m. ET). Along with fourth quarter results, Dobson plans to comment on recent operating trends and its 2007 outlook. Investors will be able to listen by phone or via web-cast on Dobson's web site at www.dobson.net. Those interested may access the call by dialing:
Conference call (888) 208-1812 International (719) 457-2654 Pass code 2323948
A replay of the call will be available by phone for two weeks. The replay of the call may be accessed later in the day on Thursday, February 15, 2007:
Conference call (888) 203-1112 International (719) 457-0820 Pass code 2323948
For further analysis of quarterly results, please see the Company's annual report on Form 10-K, which Dobson plans to filed on or before Thursday, March 1, 2007.
Dobson Communications is a leading provider of wireless phone services to rural and suburban markets in the United States. Headquartered in Oklahoma City, the Company owns wireless operations in 17 states. For additional information, please visit its web site at www.dobson.net.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding the Company's plans, intentions and expectations. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, but are not limited to, increased levels of competition or other factors that might inhibit the growth of its subscriber base; shortages of key network equipment and/or handsets; substantial leverage and debt service requirements; restrictions on the Company's ability to finance its growth; increased operating costs; changes in the Company's roaming agreements that could affect revenue and/or earnings expectations; technology changes; regulatory changes; changes in end-user requirements and preferences; and other factors. A more extensive discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports and other filings filed with the Securities and Exchange Commission. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements.
Table 1 Dobson Communications Corporation Statements of Operations Three Months Ended Year Ended December 31, December 31, -------------------------- -------------------------- 2006 2005 2006 2005 ------------ ------------ ------------ ------------ ($ in thousands except per share data) Operating Revenue Service revenue $ 247,106 $ 215,008 $ 918,785 $ 858,385 Roaming revenue 70,089 63,398 283,277 258,407 Equipment & other revenue 17,873 15,813 69,034 62,670 ------------ ------------ ------------ ------------ Total 335,068 294,219 1,271,096 1,179,462 ------------ ------------ ------------ ------------ Operating Expenses (excluding depreciation & amortization) Cost of service (exclusive of depreciation & amortization shown separately below) 94,558 77,380 340,943 296,594 Cost of equipment 33,911 33,334 136,178 130,111 Marketing & selling 43,854 35,769 165,128 141,253 General & administrative 49,365 52,052 190,961 196,896 ------------ ------------ ------------ ------------ Total 221,688 198,535 833,210 764,854 ------------ ------------ ------------ ------------ EBITDA (a) 113,380 95,684 437,886 414,608 Gain on disposition of operating assets 1,567 1,483 6,390 3,854 Depreciation & amortization (50,097) (51,383) (196,303) (202,395) ------------ ------------ ------------ ------------ Operating income 64,850 45,784 247,973 216,067 Interest expense (59,423) (58,545) (232,084) (243,002) Loss from extinguishment of debt (522) (21,698) (13,239) (21,698) Loss from redemption and repurchases of mandatorily redeemable preferred stock -- (4,457) (1,482) (70,840) Dividends on mandatorily redeemable preferred stock -- (1,161) (709) (22,552) Other income, net 2,245 1,966 7,590 4,577 Minority interests in income of subsidiaries (2,248) (2,932) (9,228) (9,755) ------------ ------------ ------------ ------------ Income (loss) before income taxes 4,902 (41,043) (1,179) (147,203) Income tax (expense) benefit (3,160) 16,150 13,960 25,593 ------------ ------------ ------------ ------------ Net income (loss) 1,742 (24,893) 12,781 (121,610) Dividends on preferred stock (1,752) (2,361) (8,537) (9,069) ------------ ------------ ------------ ------------ Net (loss) income applicable to common stockholders $ (10) $ (27,254) $ 4,244 $ (130,679) ============ ============ ============ ============ Basic net (loss) income applicable to common stockholders per common share $ (0.00) $ (0.16) $ 0.02 $ (0.90) ============ ============ ============ ============ Basic weighted average common shares outstanding 170,781,646 169,066,959 170,194,375 145,960,251 ============ ============ ============ ============ Diluted net (loss) income applicable to common stockholders per common share $ (0.00) $ (0.16) $ 0.02 $ (0.90) ============ ============ ============ ============ Diluted weighted average common shares outstanding (b) 170,781,646 169,066,959 172,003,381 145,960,251 ============ ============ ============ ============ (a) EBITDA is defined as net (loss) income before depreciation and amortization, gain on disposition of operating assets, interest expense, loss from extinguishment of debt, loss from redemption and repurchases of mandatorily redeemable preferred stock, dividends on mandatorily redeemable preferred stock, other income, net, minority interest in income of subsidiaries and income tax (expense) benefit. We believe that EBITDA provides meaningful additional information concerning a company's operating results and its ability to service its long-term debt and other fixed obligations and to fund its continued growth. Many financial analysts consider EBITDA to be a meaningful indicator of an entity's ability to meet its future financial obligations, and they consider growth in EBITDA to be an indicator of future profitability, especially in a capital intensive industry such as wireless communications. You should not construe EBITDA as an alternative to net (loss) income as determined in accordance with GAAP, as an alternative to cash flows from operating activities as determined in accordance with GAAP or a measure of liquidity. Because EBITDA is not calculated in the same manner by all companies, it may not be comparable to other similarly titled measures of other companies. (b) For the year ended December 31, 2006, dilutive shares include potentially dilutive shares from option grants. Both our series F convertible preferred stock and our convertible debt were anti-dilutive for the year ended December 31, 2006. Table 2 Dobson Communications Corporation Selected Balance Sheet and Statistical Data Balance Sheet Data: December 31, December 31, 2006 2005 -------------- ------------- ($ in millions) ($ in millions) Cash and cash equivalents (unrestricted) (a) $ 117.1 $ 196.5 Restricted investments $ 4.4 $ 4.5 Short-term investments $ 5.0 $ -- Debt: DCC Senior Floating Rate Notes $ 150.0 $ 150.0 DCC Senior Convertible Debentures 160.0 160.0 DCS 8.375% Senior Notes 511.2 250.0 DCS 9.875% Senior Notes 325.0 325.0 DCS Floating Rate Senior Notes -- 250.0 DCC 8.875% Senior Notes 419.7 419.7 ACC Credit Facility 124.7 -- ACC 9.5% Senior Notes, net 15.8 14.8 ACC 10.0% Senior Notes 900.0 900.0 --------- --------- Total debt $ 2,606.4 $ 2,469.5 ========= ========= Preferred Stock: Senior Exchangeable Preferred Stock, 12.25%, net (b) -- 5.1 Senior Exchangeable Preferred Stock, 13.00%, net (c) -- 27.7 Series F Preferred Stock 135.7 135.7 --------- --------- Total preferred stock $ 135.7 $ 168.5 ========= ========= Year Ended December 31, -------------------------------- 2006 2005 ------------- ------------- ($ in millions) ($ in millions) Capital Expenditures: $ 162.0 $ 145.9 ============= ============= (a) Includes $36.5 million and $76.6 million of cash and cash equivalents from American Cellular at December 31, 2006 and December 31, 2005, respectively. (b) Net of discount of $(0.1) million. (c) Net of deferred financing costs of $(0.1) million. Table 3 Dobson Communications Corporation For the Quarter Ended 12/31/2006 9/30/2006 6/30/2006 3/31/2006 12/31/2005 ($ in thousands except per subscriber data) (unaudited) Operating Revenue Service revenue $ 247,106 $ 232,324 $ 223,260 $ 216,095 $ 215,008 Roaming revenue 70,089 87,365 71,043 54,780 63,398 Equip- ment and other revenue 17,873 16,681 17,756 16,724 15,813 ---------- ---------- ---------- ---------- ---------- Total 335,068 336,370 312,059 287,599 294,219 ---------- ---------- ---------- ---------- ---------- Operating Expenses (excluding deprecia- tion and amorti- zation) Cost of service 94,558 88,809 81,503 76,073 77,380 Cost of equip- ment 33,911 33,152 36,545 32,570 33,334 Market- ing and selling 43,854 42,155 39,996 39,123 35,769 General and admini- strative 49,365 47,527 46,744 47,325 52,052 ---------- ---------- ---------- ---------- ---------- Total 221,688 211,643 204,788 195,091 198,535 ---------- ---------- ---------- ---------- ---------- EBITDA (a)(b) $ 113,380 $ 124,727 $ 107,271 $ 92,508 $ 95,684 ========== ========== ========== ========== ========== Pops 12,672,900 12,052,700 12,039,200 11,854,000 11,854,000 Post-paid Gross Adds 95,000 92,100 89,600 84,800 80,400 Net Adds 15,100 11,300 13,800 -- (28,000) Subscri- bers 1,453,200 1,390,800 1,378,900 1,364,700 1,364,700 Churn 1.84% 1.95% 1.84% 2.08% 2.62% Pre-paid Gross Adds 39,700 33,300 23,900 22,000 19,000 Net Adds 16,100 14,500 7,700 6,300 300 Subscri- bers 107,500 88,500 73,200 65,400 59,100 Reseller Gross Adds 11,100 14,100 14,400 18,500 23,200 Net Adds (3,100) (2,300) (4,200) (3,800) 5,200 Subscri- bers 106,200 109,300 111,600 115,800 119,600 Total Gross Adds 145,800 139,500 127,900 125,300 122,600 Net Adds 28,100 23,500 17,300 2,500 (22,500) Subscri- bers 1,666,900 1,588,600 1,563,700 1,545,900 1,543,400 ARPU $ 49.92 $ 49.16 $ 47.89 $ 46.76 $ 46.10 Penetra- tion 13.2% 13.2% 13.0% 13.0% 13.0% (a) Includes $2.5 million, $2.7 million, $2.5 million, $2.6 million and $3.3 million of EBITDA for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006, March 31, 2006 and December 31, 2005, respectively, related to minority interests. (b) A reconciliation of EBITDA to net income (loss) as determined in accordance with generally accepted accounting principles is as follows: Net income (loss) $ 1,742 $ 27,979 $ (6,043) $ (10,897) $ (24,893) Add back non- EBITDA items included in net income (loss): Deprecia- tion and amorti- zation (50,097) (47,776) (48,155) (50,275) (51,383) Gain on dis- position of operat- ing assets 1,567 1,566 1,593 1,664 1,483 Interest expense (59,423) (57,840) (57,414) (57,407) (58,545) Loss on redemp- tion and repur- chases of manda- torily redeem- able pre- ferred stock -- -- (37) (1,445) (4,457) Dividends on man- datorily redeem- able pre- ferred stock -- -- -- (709) (1,161) Other income, net 2,245 1,810 1,636 1,842 1,966 Loss from extin- guish- ment of debt (522) -- (12,660) -- (21,698) Minority interests in income of sub- sidiar- ies (2,248) (2,447) (2,169) (2,364) (2,932) Income tax (expense) benefit (3,160) 7,939 3,892 5,289 16,150 ---------- ---------- ---------- ---------- ---------- EBITDA $ 113,380 $ 124,727 $ 107,271 $ 92,508 $ 95,684 ========== ========== ========== ========== ========== Table 4 Dobson Cellular Systems For the Quarter Ended 12/31/2006 9/30/2006 6/30/2006 3/31/2006 12/31/2005 ($ in thousands except per subscriber data) (unaudited) Operating Revenue Service revenue $ 146,198 $ 140,711 $ 133,739 $ 128,622 $ 125,069 Roaming revenue 36,724 47,869 41,548 31,797 38,532 Equipment and other revenue 15,351 14,701 15,277 14,478 13,271 ---------- ---------- ---------- ---------- ---------- Total 198,273 203,281 190,564 174,897 176,872 ---------- ---------- ---------- ---------- ---------- Operating Expenses (excluding depreciation and amortization) Cost of service 55,703 55,018 52,478 48,206 48,312 Cost of equipment 20,300 20,676 22,613 20,356 20,102 Marketing and selling 25,752 25,007 24,311 23,083 20,770 General and adminis- trative 28,922 27,919 27,319 27,739 30,684 ---------- ---------- ---------- ---------- ---------- Total 130,677 128,620 126,721 119,384 119,868 ---------- ---------- ---------- ---------- ---------- EBITDA (a) (b) $ 67,596 $ 74,661 $ 63,843 $ 55,513 $ 57,004 ========== ========== ========== ========== ========== Pops 6,913,700 6,724,700 6,711,200 6,687,500 6,687,500 Post-paid Gross Adds 58,900 58,200 56,100 51,900 48,400 Net Adds 13,900 11,700 11,500 3,300 (13,000) Subscribers 811,500 797,600 785,300 773,800 770,500 Churn 1.87% 1.96% 1.91% 2.10% 2.63% Pre-paid Gross Adds 24,600 21,100 16,100 13,900 13,000 Net Adds 8,900 9,200 5,100 3,000 -- Subscribers 66,900 58,000 48,000 42,900 39,900 Reseller Gross Adds 7,800 9,400 9,300 11,200 11,100 Net Adds 400 1,300 600 700 3,000 Subscribers 66,300 65,900 64,600 64,000 63,300 Total Gross Adds 91,300 88,700 81,500 77,000 72,500 Net Adds 23,200 22,200 17,200 7,000 (10,000) Subscribers 944,700 921,500 897,900 880,700 873,700 ARPU $ 52.34 $ 51.59 $ 50.15 $ 49.01 $ 47.44 Penetration 13.7% 13.7% 13.4% 13.2% 13.1% (a) Includes $2.5 million, $2.7 million, $2.5 million, $2.6 million and $3.3 million of EBITDA for the quarters ended December 31, 2006, September 30, 2006, June 30, 2006, March 31, 2006 and December 31, 2005, respectively, related to minority interests. (b) A reconciliation of EBITDA to net (loss) income as determined in accordance with generally accepted accounting principles is as follows: Net (loss) income $ (293) $ 10,851 $ (9,303) $ (7,035) $ (7,625) Add back non-EBITDA items included in net (loss) income: Depreciation and amorti- zation (28,938) (28,389) (28,164) (28,778) (28,874) Gain on disposition of operating assets 851 850 857 915 802 Interest expense (37,943) (38,232) (38,562) (38,434) (38,559) Loss from extinguishment of debt (522) -- (12,549) -- -- Other income, net 3,052 2,030 1,761 1,840 1,408 Minority interests in income of subsidiaries (2,248) (2,447) (2,169) (2,364) (2,932) Income tax (expense) benefit (2,141) 2,378 5,680 4,273 3,526 ---------- ---------- ---------- ---------- ---------- EBITDA $ 67,596 $ 74,661 $ 63,843 $ 55,513 $ 57,004 ========== ========== ========== ========== ========== Table 5 American Cellular Corporation For the Quarter Ended 12/31/2006 9/30/2006 6/30/2006 3/31/2006 12/31/2005 ($ in thousands except per subscriber data) (unaudited) Operating Revenue Service revenue $ 100,908 $ 91,613 $ 89,521 $ 87,473 $ 89,939 Roaming revenue 33,365 39,496 29,495 22,983 24,866 Equipment and other revenue 6,123 5,583 6,080 5,848 5,554 --------- --------- --------- --------- --------- Total 140,396 136,692 125,096 116,304 120,359 --------- --------- --------- --------- --------- Operating Expenses (excluding depreciation and amortization) Cost of service 40,711 35,648 30,881 29,723 30,366 Cost of equipment 13,611 12,476 13,932 12,214 13,232 Marketing and selling 18,066 17,198 15,786 16,276 14,999 General and administra- tive 22,178 21,344 21,165 21,327 23,077 --------- --------- --------- --------- --------- Total 94,566 86,666 81,764 79,540 81,674 --------- --------- --------- --------- --------- EBITDA (a) $ 45,830 $ 50,026 $ 43,332 $ 36,764 $ 38,685 ========= ========= ========= ========= ========= Pops 5,759,200 5,328,000 5,328,000 5,166,500 5,166,500 Post-paid Gross Adds 36,100 33,900 33,500 32,900 32,000 Net Adds 1,200 (400) 2,300 (3,300) (15,000) Subscribers 641,700 593,200 593,600 590,900 594,200 Churn 1.82% 1.93% 1.76% 2.04% 2.60% Pre-paid Gross Adds 15,100 12,200 7,800 8,100 6,000 Net Adds 7,200 5,300 2,600 3,300 300 Subscribers 40,600 30,500 25,200 22,500 19,200 Reseller Gross Adds 3,300 4,700 5,100 7,300 12,100 Net Adds (3,500) (3,600) (4,800) (4,500) 2,200 Subscribers 39,900 43,400 47,000 51,800 56,300 Total Gross Adds 54,500 50,800 46,400 48,300 50,100 Net Adds 4,900 1,300 100 (4,500) (12,500) Subscribers 722,200 667,100 665,800 665,200 669,700 ARPU $ 46.78 $ 45.85 $ 44.88 $ 43.80 $ 44.35 Penetration 12.5% 12.5% 12.5% 12.9% 13.0% (a) A reconciliation of EBITDA to net (loss) income as determined in accordance with generally accepted accounting principles is as follows: Net (loss) income $ (1,359) $ 4,483 $ (100) $ (4,969) $ (4,434) Add back non- EBITDA items included in net (loss) income: Depreciation and amortization (21,115) (19,343) (19,948) (21,454) (22,509) Gain on disposition of operating assets 716 716 736 749 681 Interest expense (26,420) (24,540) (23,779) (23,785) (23,782) Other expense, net (1,177) (592) (483) (258) (227) Income tax benefit (expense) 807 (1,784) 42 3,015 2,718 --------- --------- --------- --------- --------- EBITDA $ 45,830 $ 50,026 $ 43,332 $ 36,764 $ 38,685 ========= ========= ========= ========= =========