Valor Comm (NYSE:VCG)
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Exceeds 2005 Pro Forma Cash Available to Pay Dividends Guidance
IRVING, Texas, Feb. 28 /PRNewswire-FirstCall/ -- VALOR Communications Group, Inc. (NYSE:VCG) today reported fourth quarter and fiscal year 2005 consolidated financial and operating results and will host a conference call today at 8:30 a.m. (EST) to discuss these results and its business.
* Pro forma CAPD of $36.3 million for the fourth quarter and
$134.2 million for 2005.
* Adjusted EBITDA of $274 million and an Adjusted EBITDA margin of 54%
for 2005.
* Average monthly revenue per access line (ARPU) of $79.63 in 2005, an
increase of $2.56 over the prior year.
* Total access lines of 518,456 at December 31, 2005, a decrease of 4%
over the prior year.
* 52,759 DSL subscribers and 232,031 long distance customers at
December 31, 2005, increases of 131% and 7%, respectively, over the
prior year.
"I am pleased to report pro forma cash available to pay dividends of $134 million, which exceeded our 2005 pro forma guidance of $128-133 million," commented Jack Mueller, VALOR Communications Group, Inc. president and chief executive officer. "Capital expenditures of $57 million came in favorable to guidance of approximately $59 million, and our pro forma payout ratio was 74.5% for 2005. We more than doubled our DSL subscribers during 2005, exceeding our objectives for both DSL growth and availability. Our DSL and long distance penetration rates were approximately 10% and 45%, respectively, at year-end."
Net income was $16.4 million in the fourth quarter of 2005, resulting in quarterly EPS (earnings per share) of $0.24 per share. Excluding $3.3 million of merger-related expenses and the related tax effect incurred in the fourth quarter of 2005, net income was $18.8 million. For full year 2005, net income was $35.3 million, resulting in annual EPS of $0.42 per share. Excluding merger-related expenses of $3.3 million and the related tax effect, net income was $37.7 million for the full year.
For full year 2005, VALOR reported revenue of $506 million, essentially flat compared to 2004, despite access line losses of 4%. Adjusted EBITDA of $274 million was also flat in 2005 compared to the prior year due to improved operating efficiencies, lower headcount and higher ARPU.
For 2005, revenue from data services, long distance and other increased 31.6%, 7.2% and 14.0%, respectively, due to increases in average subscribers and sales of equipment and services provided to wholesale carriers. Revenue from local service, access and Universal Service Fund decreased 4.3%, 4.9% and 3.8%, respectively, for 2005 due primarily to lower access line count. For the fourth quarter of 2005, revenues of $126 million were down 1.6% compared to $128 million in the prior year.
Total connections increased 1.4% in 2005 over the prior year. The majority of VALOR's markets, or approximately 88% of its total access lines, do not have active cable-telephony competition. In these markets, VALOR's access line loss was approximately 1.5% for the full year.
Merger with Alltel Wireline
"We continue to work with the wireline management team of Alltel to develop and implement integration plans to ensure an efficient transition. We anticipate a smooth transition of back office systems due to our selection of Alltel's billing platform several years ago," commented Jack Mueller. "In addition, we have received early termination of the waiting period related to the Hart-Scott-Rodino Antitrust Improvements Act and have received transfer of control approval from the Federal Communications Commission. We have filed in all states where filing is required and continue to anticipate a mid-year closing of the transaction."
Other
VALOR recorded additional fourth quarter expenses of approximately $300,000 related to Hurricane Rita cleanup. In addition, VALOR recorded approximately $1.1 million in impairment charges for goodwill related to a small wireless broadband service provider purchased to expand our data product line. The company also recorded $2.3 million of non-cash stock based compensation expense.
Cash and cash equivalents at December 31, 2005 were $64.2 million. VALOR's net operating loss (NOL) position increased $13 million during 2005 to approximately $320 million.
VALOR's reportable distributions during calendar year 2005 have been classified as 100% Non-dividend Distribution (return of capital). The Company recommends shareholders consult their tax advisors to determine what impact, if any, the above information may have on their tax situations.
Conference Call Information
As previously announced, the company will host a conference call and simultaneous Webcast to discuss fourth quarter and fiscal year 2005 results at 8:30 a.m. (EST) on Feb. 28, 2006. During the conference call, VALOR may discuss and answer one or more questions concerning its business and financial matters as well as trends that affect the company. VALOR's responses to these questions, as well as other matters discussed during the conference call, may contain information that has not been previously disclosed.
Simultaneously with the conference call, an audio webcast of the call will be available via a link on our website, http://www.valortelecom.com/ , "Investor Relations," or at http://www.earnings.com/ . To access the call, dial 1-800-257-3401, or outside the United States, dial 1-303-262-2051. A pass code is not required. A replay of the call will be available beginning at approximately 10:30 a.m. (EST), Feb. 28, 2006, through Mar. 7, 2006, at the above websites or by calling 1-800-405-2236 or, outside the United States, 1-303-590-3000. The pass code for the replay is 11052022#.
Non-GAAP Measures
VALOR uses certain non-GAAP financial measures in evaluating its performance and liquidity. These include adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), Adjusted EBITDA margin and "Cash Available to Pay Dividends." These non-GAAP financial measures are by definition not measures of financial performance under generally accepted accounting principles and are not alternatives to operating income or net income reflected in the statement of operations or to cash flow as reflected in the statement of cash flows and are not necessarily indicative of cash available to fund all cash flow needs.
VALOR presents Adjusted EBITDA because covenants in its credit facility contain ratios based on this measure. A reconciliation of the differences between these non-GAAP financial measures to the most comparable financial measures calculated and presented in accordance with GAAP are included in the schedules that follow.
Adjusted EBITDA is defined in the credit facility as: (1) consolidated adjusted net income, as defined therein; plus (2) the following items, to the extent deducted from consolidated adjusted net income: (a) interest expense; (b) provision for income taxes; (c) depreciation and amortization; (d) certain expenses related to VALOR's initial public offering of common stock, its recent debt recapitalization and the other transactions described in "Use of Proceeds" in its registration statement for its initial public offering of common stock completed February 9, 2005; (e) other nonrecurring or unusual costs or losses incurred after the closing date of its new credit facility, to the extent not exceeding $10.0 million; (f) unrealized losses on financial derivatives recognized in accordance with SFAS No. 133; (g) losses on sales of assets other than in the ordinary course of business; and (h) all other non- cash charges that represent an accrual for which no cash is expected to be paid in a future period; minus (3) the following items, to the extent any of them increases consolidated adjusted net income; (v) income tax credits; (w) interest and dividend income (other than in respect of Rural Telephone Finance Cooperative patronage distribution); (x) gains on asset disposals not in the ordinary course of business; (y) unrealized gains on financial derivatives recognized in accordance with SFAS No. 133; and (z) all other non-cash income.
Adjusted EBITDA margin is equal to adjusted EBITDA divided by total revenue. Adjusted EBITDA margin measures the proportion of Adjusted EBITDA remaining after deducting operating expenses.
Cash Available to Pay Dividends is defined herein as Adjusted EBITDA less the sum of (i) any item excluded from the calculation of Adjusted EBITDA that has been or will be settled in cash, (ii) cash interest expense, (iii) capital expenditures, (iv) required cash pension contributions in excess of expense, and (v) cash income taxes.
VALOR considers Adjusted EBITDA, Adjusted EBITDA margin and Cash Available to Pay Dividends (CAPD) as important indicators to investors in the company's common stock because CAPD provides information related to the company's ability to provide cash flows to service debt, fund capital expenditures and pay dividends. If VALOR's Adjusted EBITDA were to decline below certain levels, covenants in its credit facility that are based on Adjusted EBITDA, including its interest coverage ratio and total leverage ratio covenants, may be violated and could cause, among other things, a default or mandatory prepayment under its credit facility, or result in its inability to pay dividends. Adjusted EBITDA, Adjusted EBITDA margin and CAPD are not measures in accordance with GAAP, and should not be considered a substitute for operating income, net income or any other measure of financial performance reported in accordance with GAAP. In addition, Adjusted EBITDA, Adjusted EBITDA margin and CAPD should not be used as a substitute for VALOR's various cash flow measures (e.g., operating, investing and financing cash flows). The non-GAAP financial measures used by VALOR may not be comparable to similarly titled measures of other companies.
While VALOR utilizes these non-GAAP financial measures in managing and analyzing its business and financial condition and believes these measures are useful to management and to investors for the reasons described above, these non-GAAP financial measures have certain shortcomings. In particular, Adjusted EBITDA does not represent the residual cash flow available for discretionary expenditures, since items such as debt repayments and interest payments are not deducted from such measure. Management compensates for the shortcomings of these measures by utilizing them in conjunction with their comparable GAAP financial measures. The information in this press release should be read in conjunction with the financial statements and footnotes contained in documents filed periodically with the U.S. Securities and Exchange Commission.
About VALOR Communications Group
VALOR Communications Group is one of the largest providers of telecommunications services in rural communities in the southwestern United States. The company, through its subsidiary VALOR Telecom, offers to residential, business and government customers a wide range of telecommunications services, including: local exchange telephone services, which covers basic dial-tone service as well as enhanced services, such as caller identification, voicemail and call waiting; long distance services; and data services, such as providing digital subscriber lines. VALOR Communications Group is headquartered in Irving, Texas. For more information, visit http://www.valortelecom.com/ . Information contained on our website does not comprise a part of this press release.
VALOR Communications Group ("VALOR") is a holding company and has no direct operations. VALOR was formed for the sole purpose of reorganizing the company's corporate structure and consummation of our initial public offering in February 2005. VALOR's principal assets are the direct and indirect equity interests in its subsidiaries. As a result, the historical consolidated financial results prior to the offering in February 2005 only reflect the operations of VALOR Telecommunications, LLC.
Safe Harbor Statement
Certain matters discussed in this press release may constitute "forward- looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as "believes," "anticipates," "expects," "intends," "estimates," "projects, " "outlook" and other similar expressions, which are predictions of or indicate future events and trends, typically identify forward-looking statements. Statements in this press release regarding VALOR Communications Group's business that are not historical facts, including our intention to pay quarterly dividends, are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results or the timing of events to differ materially from those described in the forward-looking statements. We cannot assure you that the expectations discussed in these forward-looking statements will be attained. Some of the factors that could cause actual results or the timing of certain events to differ from those described in these forward-looking statements include, without limitation: our leverage and debt service obligations; the terms of our credit facility and our rights and obligations thereunder; any adverse changes in government regulation; the risk that we may not be able to retain existing customers or obtain new customers; the risk of increased competition in the markets we serve; our financial position, results of operations and availability of capital; risks associated with the impending merger with Alltel Wireline, including but not limited to, the risk that the anticipated benefits from the merger may not be realized, integration-related risks and challenges that could negatively impact operations and financial results, the risk that regulatory agencies could delay or impose conditions on approval of the merger, which may diminish the anticipated benefits of the merger and other risks detailed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, the risks described in our proxy statement/prospectus-information statement dated February 28, 2006, relating to our merger with Alltel Wireline and in our Annual Report on Form 10-K filed on February 28, 2006 with the Securities and Exchange Commission. We disclaim any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, the occurrence of future events or otherwise, except as required by law.
Supplemental Schedules
Consolidated Statements of Operations A
Condensed Consolidated Balance Sheets B
Condensed Consolidated Statements of Cash Flows C
Non-GAAP Measures - Adjusted EBITDA Calculation D
Non-GAAP Measures - Cash Available to Pay Dividends Reconciliation E
Historical Operating Statistics F
Schedule A
VALOR Communications Group, Inc.
Consolidated Statements of Operations
(Dollars, except per share amounts, in thousands)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2005 2004 2005 2004
Operating revenues
Local service $37,171 $42,099 $151,549 $158,404
Data services 9,155 6,647 33,209 25,239
Long distance services 10,021 10,177 41,109 38,350
Access services 29,450 30,537 120,682 126,838
Universal Service Fund 28,678 29,286 115,540 120,045
Other services 11,465 9,285 43,805 38,434
Total operating
revenues 125,940 128,031 505,894 507,310
Operating expenses
Cost of service
(exclusive of
depreciation and
amortization shown
separately below) 26,418 26,230 107,581 104,934
Selling, general and
administrative
(exclusive of non-cash
stock compensation shown
separately below) 30,209 37,361 126,946 137,459
Non-cash stock based
compensation 2,287 1,345 12,699 1,345
Asset impairment 1,082 --- 1,696 ---
Depreciation and
amortization 22,744 22,458 89,928 86,451
Total operating
expenses 82,740 87,394 338,850 330,189
Operating income 43,200 40,637 167,044 177,121
Operating margin 34.3% 31.7% 33.0% 34.9%
Other income (expense)
Interest expense (18,428) (26,903) (83,154) (110,287)
Loss on interest rate
hedging arrangements (21) (4) (399) (126)
Earnings from
unconsolidated cellular
partnerships 214 106 421 1,113
Impairment on investment
in cellular partnerships --- --- (2,339) (6,678)
Loss on debt
extinguishment --- (62,975) (29,262) (62,975)
Other income and
(expense), net (2,799) (56) (1,898) (25,116)
Total other income
(expense) (21,034) (89,832) (116,631) (204,069)
Income (loss) before income
taxes, minority interest
and cumulative effect of
change in accounting
principle 22,166 (49,195) 50,413 (26,948)
Income tax expense 5,477 6,760 14,329 665
Income (loss) before
minority interest and
cumulative effect of
change in accounting
principle 16,689 (55,955) 36,084 (27,613)
Minority interest --- (3,029) 468 142
Income (loss) before
cumulative effect of
change in accounting
principle 16,689 (52,926) 35,616 (27,755)
Cumulative effect of change
in accounting principle,
net of tax of $156 269 --- 269 ---
Net income (loss) $16,420 $(52,926) $35,347 $(27,755)
Earnings per share-basic:
Earnings per share before
cumulative effect of
accounting change $0.24 n/m $0.42 * n/m
Loss per share from
cumulative effect of
accounting change --- n/m $--- * n/m
Earnings per share $0.24 n/m $0.42 * n/m
Earnings per share-diluted:
Earnings per share before
cumulative effect of
accounting change $0.24 n/m $0.42 * n/m
Loss per share from
cumulative effect of
accounting change --- n/m $(0.01)* n/m
Earnings per share $0.24 n/m $0.41 * n/m
Weighted average common
shares outstanding:
Basic 69,372,369 n/m 69,368,333 * n/m
Diluted 69,620,880 n/m 69,666,018 * n/m
* Represents earnings per share and weighted average shares outstanding
for the period from the initial public offering date of February 9,
2005 through December 31, 2005.
n/m = not meaningful
Schedule B
VALOR Communications Group, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
December 31, 2005 December 31, 2004
ASSETS
Cash & cash equivalents $64,178 $17,034
Accounts receivable, net 59,973 62,757
Prepayments and other current assets 11,724 10,221
TOTAL CURRENT ASSETS 135,875 90,012
NET PROPERTY, PLANT AND EQUIPMENT 717,529 749,984
INVESTMENTS AND OTHER ASSETS 1,109,377 1,131,171
TOTAL ASSETS $1,962,781 $1,971,167
LIABILITIES AND EQUITY
Total current liabilities $100,259 $74,916
Long-term debt, net of current
maturities 1,180,555 1,599,177
Other long-term liabilities 110,199 290,603
TOTAL LIABILITIES 1,391,013 1,964,696
TOTAL STOCKHOLDERS' EQUITY 571,768 6,471
TOTAL LIABILITIES AND EQUITY $1,962,781 $1,971,167
Schedule C
VALOR Communications Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2005 2004 2005 2004
Cash flow from operating
activities:
Net income (loss) $16,420 $(52,926) $35,347 $(27,755)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization 22,744 22,458 89,928 86,451
Loss on debt
extinguishment --- 62,975 29,262 62,975
Expense incurred related
to cash payment to
minority shareholders in
connection with
reorganization --- --- --- 17,988
Non-cash stock
compensation expense 2,287 1,345 12,699 1,345
Asset impairment 1,082 --- 1,696 ---
Impairment on investment
in cellular partnerships --- --- 2,339 6,678
Cumulative effect of
change in accounting
principle, net of tax 269 --- 269 ---
Changes in working capital 2,686 (17,173) 2,919 (6,069)
Other, net 9,584 1,743 16,632 2,103
Net cash provided by
operating activities 55,072 18,422 191,091 143,716
Cash flow from investing
activities:
Payments for property, plant
and equipment (12,341) (14,005) (57,385) (65,525)
Redemption of RTFC capital
certificate --- 31,111 24,445 31,111
Other, net (22) 32 203 (444)
Net cash provided by (used
in) investing activities (12,363) 17,138 (32,737) (34,858)
Cash flow from financing
activities:
Proceeds from issuance of
long-term debt --- 1,300,000 400,000 1,359,000
Payments of long-term debt,
net of proceeds from
issuance of debt (64) (1,104,902) (820,364) (1,223,249)
Proceeds from issuance of
common stock, net of
offering costs (65) --- 411,257 ---
Prepayment fees paid in
connection with IPO --- --- (19,393) ---
Payments of debt issuance
costs (149) (31,206) (17,530) (31,330)
Cash dividends paid (24,974) --- (62,433) ---
Cash payment to minority
interest holders in
connection with
reorganization --- --- --- (18,646)
Prepayment fees paid in
connection with the
repayment of debt --- (11,376) --- (11,376)
Redemption of redeemable
preferred interests --- (134,102) --- (134,102)
Redemption of Class C
interests --- (16,458) --- (16,458)
Redemption of redeemable
preferred interests in
subsidiary --- (8,791) --- (8,791)
Other, net --- (12,336) (2,747) (8,273)
Net cash used in financing
activities (25,252) (19,171) (111,210) (93,225)
Net increase in cash and cash
equivalents from continuing
operations 17,457 16,389 47,144 15,633
Net operating cash provided by
(used in) discontinued
operations --- 4 --- (13)
Net increase in cash and cash
equivalents 17,457 16,393 47,144 15,620
Cash and cash equivalents at
beginning of period 46,721 641 17,034 1,414
Cash and cash equivalents at
end of period $64,178 $17,034 $64,178 $17,034
Schedule D
VALOR Communications Group, Inc.
Non-GAAP Measures - Adjusted EBITDA Calculation
(Dollars in thousands)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2005 2004 2005 2004
Net income (loss) $16,420 $(52,926) $35,347 $(27,755)
Adjustments:
Income tax expense 5,477 6,760 14,329 665
Interest expense 18,428 26,903 83,154 110,287
Depreciation and amortization 22,744 22,458 89,928 86,451
Minority interest --- (3,029) 468 142
Cumulative effect of change
in accounting principle, net
of tax 269 --- 269 ---
Loss on interest rate hedging
arrangements 21 4 399 126
Earnings from unconsolidated
cellular partnerships (214) (106) (421) (1,113)
Asset impairment 1,082 --- 1,696 ---
Impairment on investment in
cellular partnerships --- --- 2,339 6,678
Other income and (expense),
net 2,799 56 1,898 25,116
Loss on debt extinguishment --- 62,975 29,262 62,975
Management fees paid to
equity sponsors --- 250 --- 1,000
Non-cash stock based
compensation 2,287 1,345 12,699 1,345
Excluded items (a) 282 3,862 3,040 9,141
Total adjustments 53,175 121,478 239,060 302,813
Adjusted EBITDA $69,595 $68,552 $274,407 $275,058
(a) Excluded items, as defined in
the credit agreement:
Termination benefits
associated with workforce
reduction $--- $346 $--- $625
2003 expanded local calling
surcharge recorded in 2004 --- (1,602) --- (1,602)
Bonuses related to debt
recapitalization --- 5,118 --- 5,118
CEO transition payment --- --- --- 5,000
IPO cash bonuses 282 --- 2,540 ---
Expenses related to credit
facility amendment --- --- 500 ---
Total excluded items, as defined in
the credit agreement $282 $3,862 $3,040 $9,141
Schedule E
VALOR Communications Group, Inc.
Non-GAAP Measures - Cash Available to Pay Dividends Reconciliation
(Dollars in thousands)
(Unaudited)
Three Three Three Three Twelve
months months months months months
ended ended ended ended ended
March 31, June 30, Sept. 30, Dec. 31, Dec. 31,
2005 2005 2005 2005 2005
Net cash provided by
operating activities $40,489 $58,188 $37,342 $55,072 $191,091
Adjustments:
Interest expense 26,048 18,864 19,814 18,428 83,154
Amortization of
debt issuance
costs (910) (942) (921) (917) (3,690)
Provision for
doubtful
accounts
receivable (1,093) (1,358) (1,795) (1,827) (6,073)
Changes in
working
capital 3,824 (4,358) 301 (2,686) (2,919)
Other, net (2,020) (588) 12,070 (1,711) 7,751
Income tax
expense
(benefit) (5,437) 7,809 6,480 5,477 14,329
Deferred income
taxes 5,437 (7,771) (6,518) (5,322) (14,174)
Other income and
(expense), net (83) (518) (300) 2,799 1,898
Excluded items (a) 2,193 283 282 282 3,040
Total adjustments 27,959 11,421 29,413 14,523 83,316
Adjusted EBITDA (b) 68,448 69,609 66,755 69,595 274,407
Items excluded from
Adjusted EBITDA
settled in cash:
Cash income
(expenses)
excluded from
Adjusted
EBITDA (c) (2,110) 235 18 (3,081) (4,938)
Cash interest
expense (26,451) (18,201) (19,041) (19,588) (83,281)
Cash pension
contributions
in excess of
estimated
expense (d) --- (1,600) (1,566) (1,600) (4,766)
Capital
expenditures (17,379) (12,510) (15,155) (12,341) (57,385)
Cash available to pay
dividends (b) $22,508 $37,533 $31,011 $32,985 $124,037
Pro forma adjustments:
Transaction fees
expensed (e) 500 --- --- --- 500
Merger costs (f) --- --- --- 3,306 3,306
Cash interest (g) 6,500 --- --- --- 6,500
Cash taxes (h) (100) --- --- --- (100)
Pro forma - cash
available to pay
dividends $29,408 $37,533 $31,011 $36,291 $134,243
(a) Excluded items,
as defined in the
credit agreement:
IPO cash bonuses $1,693 $283 $282 $282 $2,540
Expenses related
to credit
facility
amendment 500 --- --- --- 500
Total excluded items,
as defined in the
credit agreement $2,193 $283 $282 $282 $3,040
(b) Adjusted EBITDA and Cash Available to Pay Dividends are non-GAAP
financial measures and by definition are not measures of financial
performance under generally accepted accounting principles (GAAP). They
should not be considered an alternative to operating income (loss) or net
income (loss) reflected in the statement of operations or to cash flow as
reflected in the statement of cash flows and are not necessarily
indicative of cash available to fund all cash flow needs.
(c) Represents cash income (expenses) reflected above under Other income
and expense, net, and Excluded items that were excluded from the
calculation of Adjusted EBITDA. These items were received or (paid) by
us in cash and would have impacted the amount of cash that would have
been available to pay dividends.
(d) Reflects our previously disclosed accelerated funding requirements to
our pension plan in 2005. This accelerated funding requirement consists
of our $1.6 million contributions in each of April and July of 2005.
CAPD excludes the optional pension payments of $6.0 million funded in
September of 2005. This optional payment is treated similarly as the
optional debt repayments in the CAPD calculation.
(e) Legal expenses charged to expense in connection with the modification
of our credit facility that we completed in conjunction with our IPO and
reorganization.
(f) Costs charged to expenses in connection with the pending Alltel
merger.
(g) Cash interest expense in the quarter ended March 31, 2005 is
approximately $6.5 million higher than it would have been had the IPO and
the related debt reduction occurred at the beginning of the quarter.
(h) Reflects estimated cash taxes we expect to pay on our taxable income.
Schedule F
Historical Operating Statistics
12/31/05 9/30/05 6/30/05 3/31/05 12/31/04
Access lines:
Primary 468,225 474,723 480,717 488,165 493,314
Secondary 50,231 49,979 49,537 48,837 47,023
Total access lines (A) 518,456 524,702 530,254 537,002 540,337
Long distance subscribers 232,031 229,530 227,347 222,874 216,437
Penetration rate of total
access lines 45% 44% 43% 42% 40%
DSL subscribers (B) 52,759 47,309 40,144 31,208 22,884
Penetration rate of total
access lines 10% 9% 8% 6% 4%
Penetration rate of total
addressable lines (1) 14% 13% 11% 9% 8%
Total connections (A+B) 571,215 572,011 570,398 568,210 563,221
Average monthly revenue per
access line (ARPU) (2) (3) $80.49 $80.86 $78.75 $77.92 $78.43
(1) Addressable lines are lines that have DSL service available.
(2) ARPU is computed by dividing the total revenue for the quarter by the
average of the access lines at the beginning and end of the quarter.
(3) ARPU for quarter ending 12/31/04 includes out-of-period revenue
recorded in the fourth quarter 2004 from the favorable resolution of a
regulatory proceeding Valor had pending before the Texas Public Utility
Commission related to expanded local calling. Excluding ELC recovery
revenue, ARPU is $76.31
DATASOURCE: VALOR Communications Group, Inc.
CONTACT: investor relations, Keith Terreri or Sheryl Seyer,
+1-972-373-1296, or fax, +1-972-373-1150, or
, or media, Cynthia T. Cruz,
+1-972-373-1134, or fax, +1-469-420-2540, or , all of
VALOR Communications Group, Inc.
Web site: http://www.earnings.com/
Web site: http://www.valortelecom.com/