NTELOS Holdings Corp. Reports Third Quarter 2012 Operating Results

NTELOS Holdings Corp. Reports Third Quarter 2012 Operating Results

-Net Quarterly Subscriber Additions of 5,500

-Adjusted EBITDA of $31.9 Million

-Company Declares Quarterly Dividend of $0.42 Per Share

WAYNESBORO, Va.--(BUSINESS WIRE)-- NTELOS Holdings Corp. (the "Company," NASDAQ: NTLS), a leading regional provider of nationwide wireless voice and data communications and home to the "best value in wireless," announced today operating results for its third quarter ended September 30, 2012.

Third Quarter Highlights

• Operating revenues for the third quarter 2012 increased 7% to $114.5 million, compared to $107.4 million for the same period in 2011;

• Net subscriber additions for the third quarter 2012 were 5,500, compared to a net loss of (9,800) for the same period in 2011;

• Blended subscriber churn for the third quarter 2012 improved to 2.9%, compared to 3.7% for the same period in 2011; and

• Blended ARPU for the third quarter was $50.93, compared to $49.77 for the same period in 2011.

"During the third quarter, we continued to execute successfully against our combined retail / wholesale operating model. Within our retail business, we were extremely encouraged by the substantial increase in subscriber revenue, which had its largest sequential improvement in more than four years. We also experienced substantial growth in smartphone penetration during the quarter, ending the period with smartphone customers representing 50% of our subscriber base, up from 45% and 24% at the end of Q2 2012 and Q3 2011, respectively. These accomplishments were the result of a strong response to the value proposition within our network operating footprint, continued improvements in our distribution network as well as favorable handset additions to our smartphone lineup," noted James A. Hyde, CEO of NTELOS Holdings Corp. "At the same time, wholesale revenue increased sequentially and year-over-year, driven by the continued growth in both voice and data usage on our network."

Highlights from Operations

• Operating revenues for the third quarter 2012 were $114.5 million, up 7% from the third quarter 2011. The increase in operating revenues reflected both an increase in wholesale revenue and an increase in retail revenues;

• Retail revenues, which include subscriber and equipment revenue, were $71.1 million for the third quarter 2012, compared to $69.9 million for the third quarter 2011;

• Wholesale and other revenue derived primarily from the Company's Strategic Network Alliance with Sprint increased 16% to $43.3 million for the third quarter 2012, compared to $37.5 million for the third quarter 2011;

• Adjusted EBITDA was $31.9 million for the third quarter 2012, compared to $38.7 million for the third quarter 2011; and

• Income from continuing operations, less net income attributable to noncontrolling interests, was $4.6 million, or $0.22 per diluted share, for the third quarter 2012 compared to $6.5 million, or $0.31 per diluted share, for the same period in 2011.

Total Subscribers

• Total subscribers were 430,300 as of September 30, 2012, compared to 415,000 as of September 30, 2011;

• Total gross additions for the third quarter were 42,400, compared to 36,500 for the same period of 2011; and

• Total net subscriber additions for the third quarter were 5,500, compared to a loss of (9,800) for the same period for 2011.

Postpay Subscribers

• Postpay subscriber gross additions for the third quarter 2012 were 22,000, compared to 16,500 in the third quarter 2011 and 16,800 in the second quarter 2012;

• Net postpay subscriber additions were 4,900 for the third quarter 2012, compared to a loss of (6,400) in the third quarter 2011 and up significantly from a gain of 700 in the second quarter 2012;

• Postpay churn for the third quarter 2012 was 2.0%, compared to 2.6% in the third quarter 2011; and

• As of September 30, 2012, total postpay subscribers were 288,900.

Prepay Subscribers

• Prepay subscriber gross additions for the third quarter 2012 were 20,400, compared to 20,000 in both the third quarter 2011 and second quarter 2012;

• Net prepay subscriber additions were 600 for the third quarter 2012, compared to a loss of (3,400) in the third quarter 2011 and additions of 2,800 in the second quarter 2012;

• Prepay churn for the third quarter 2012 was 4.7%, compared to 6.5% in the third quarter 2011; and

• As of September 30, 2012, total prepay subscribers were 141,400.

Mr. Hyde concluded, "We expect the favorable trends seen in the first nine months of 2012 to continue. The benefits of the improvements we have made to our handset lineup and the consistent focus on our value proposition and brand positioning are successfully impacting our retail business. These results complement the continued growth recognized in the wholesale business, which combined provide a catalyst for positive returns for our shareholders."

Discontinued Operations

The Company completed the separation of its wireless and wireline operations with the spin-off of Lumos Networks Corp. (NAS: LMOS) on October 31, 2011. The wireline results are reflected as Discontinued Operations for all periods presented. As such, the reported operating results reflect the wireless operations of the Company, including certain expenses related to the business separation.

Net Income

Net income, after net income attributable to noncontrolling interests, was $4.6 million, or $0.22 per diluted share, for the third quarter 2012, compared to net income, after net income attributable to noncontrolling interests, of $13.3 million, or $0.63 per diluted share, for the third quarter 2011, which included $6.8 million related to discontinued operations.

Declaration of Dividend

On November 2, 2012, the Company's Board of Directors declared a quarterly cash dividend on its common stock in the amount of $0.42 per share to be paid on January 11, 2013 to stockholders of record on December 14, 2012.

Business Outlook

For the year ended December 31, 2012, the Company expects its full year 2012 Adjusted EBITDA to be between $132.0 million and $136.0 million. In addition, the Company expects its full year 2012 capital expenditures to be approximately $75.0 million. Lastly, the Company reaffirmed previously communicated subscriber development guidance of net positive subscriber growth in both postpaid and prepaid subscribers for the full year 2012.

Conference Call

The Company will host a conference call with investors and analysts to discuss its third quarter 2012 results this morning, November 8, 2012, at 10:00 a.m. ET. To participate, please dial 1-877-317-6789, 1-866-605-3852 in Canada and 1- 412-317-6789 for international, approximately 10 minutes before the scheduled start of the call. The conference call will also be accessible live on the Investor Relations section of the Company's website at http://ir.ntelos.com.

An archive of the conference call will be available online at http://ir.ntelos.com beginning approximately two hours after the call and continuing until November 15, 2012. A replay will also be available via telephone by dialing 1-877-344-7529, 1-412-317-0088 internationally and entering access code 10020133 beginning approximately two hours after the call and continuing until November 15, 2012.

Non-GAAP Measures

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 noncontrolling interests, other expenses/income, equity-based compensation charges, acquisition related charges, net income from discontinued operations and costs related to the separation of the wireless and wireline operations.

ARPU, or average monthly revenue per user, is computed by dividing service revenues per period by the average number of subscribers during that period. Please see the footnotes in the exhibits for a complete definition of this measure.

Adjusted EBITDA is a key metric used by investors to determine if the Company is generating sufficient cash flows to continue to produce shareholder value, provide liquidity for future growth and continue to fund dividends. ARPU provides management with useful information concerning the appeal of the Company's rate plans and service offerings and the Company's performance in attracting and retaining high value customers.

Adjusted EBITDA and ARPU are non-GAAP financial performance measures. They should not be considered in isolation or as an alternative to measures determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Please refer to the exhibits and materials posted on the Company's website for a reconciliation of these non-GAAP financial performance measures to the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability and use of such financial performance measures.

About NTELOS

NTELOS Holdings Corp. (NAS: NTLS) , operating through its subsidiaries as "nTelos Wireless," is headquartered in Waynesboro, VA, and provides high-speed, dependable nationwide voice and data coverage for over 430,000 retail subscribers based in Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. The Company's licensed territories have a total population of approximately 8.1 million residents, of which its wireless network covers approximately 6.0 million residents. The Company is also the exclusive wholesale provider of wireless digital PCS services to Sprint Nextel in the Company's western Virginia and West Virginia service area for all Sprint CDMA wireless customers. Additional information about the Company is available at www.ntelos.com or www.facebook.com/nteloswireless and www.twitter.com/ntelos_wireless.

SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS

Any statements contained in this press release 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. There are 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. We advise the reader to review in detail the cautionary statements and risk factors included in our SEC filings, including our most recent Annual Report filed on Form 10-K.

Exhibits:

• Condensed Consolidated Balance Sheets (unaudited)

• Condensed Consolidated Statements of Operations (unaudited)

• Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to Adjusted EBITDA

• Key Metrics

• ARPU Reconciliation