OKLAHOMA CITY, August 5, 2003 (PRIMEZONE) -- Dobson Communications Corporation (Nasdaq:DCEL):
-- Lower Cash Cost Per User Strengthens EBITDA Margin to
49.1 Percent --
-- Operating Income Increases 40 Percent to $53.2 Million --
-- Gains Generated by Property Swap and Related Preferred Stock
Redemption --
Dobson Communications Corporation (Nasdaq:DCEL) reported net income of $49.7 million for its second quarter ended June 30, 2003, compared with a net loss of $108.2 million for the same period last year. Operating income for the second quarter of $53.2 million was 40 percent higher than operating income of $38.0 million for the same quarter last year.
Net income applicable to common shareholders, after preferred stock dividends of $20.0 million and a $196.3 million gain on the redemption of preferred stock, was $225.9 million, or $2.43 per share on a fully diluted basis (Table 1). Net income applicable to common shareholders for the second quarter also included a $27.5 million gain (net of taxes) on the disposal of discontinued operations, representing the Santa Cruz Metropolitan Service Area (MSA) and California Rural Service Area (RSA) 4.
Both gains related to the June 17, 2003 swap of the two California properties for AT&T Wireless' (NYSE:AWE) Anchorage MSA and Alaska RSA 2. As part of the swap, AT&T Wireless transferred to Dobson the Dobson Series AA preferred stock that AT&T Wireless had owned. Dobson recorded a gain on redemption of preferred stock, versus its carrying value, of approximately $168 million. The remainder of the $196.3 million gain is primarily comprised of approximately $28.5 million of previously accrued dividends that were cancelled.
Second-quarter operating results for the California properties were reflected as $3.6 million in income from discontinued operations, net of taxes, as required by GAAP (Generally Accepted Accounting Principles). In accordance with GAAP, Dobson has also reclassified prior-period results for the California properties as discontinued operations (Tables 1 and 3).
On the other hand, GAAP requires that operating results for the Anchorage MSA and AK RSA 2 be included only for the period from the time of acquisition, June 17, 2003, through the end of the second quarter; and that their historical operating results not be included in results of operations.
Dobson's results for the second quarter also do not include the operations of American Cellular Corporation (see below), which is jointly owned by Dobson and AT&T Wireless. Dobson's investment in American Cellular was effectively written down to zero in June 2002.
For last year's second quarter, Dobson recorded a net loss applicable to common shareholders of $132.1 million, or $1.45 per share, after dividends of $23.9 million on preferred stock. The net loss included a $177.2 million loss from the investment in the American Cellular joint venture, primarily related to a goodwill impairment write-down.
"We had another exceptional quarter, highlighted by a 40 percent increase in operating income over the second quarter last year," said Everett R. Dobson, president, chairman and chief executive officer. "Sales increased a bit from the first quarter, and even more importantly, we increased our monthly profit per subscriber to approximately $21.00, compared with approximately $19.50 for the second quarter last year.
"The completion of the California/Alaska property swap is also very important to our future," he said. "We are excited by the growth opportunities in Alaska, where Dobson is now the largest wireless services provider."
Dobson's EBITDA for the second quarter of 2003 was $75.7 million, representing a 30.1 percent increase over EBITDA of $58.2 million for the second quarter last year. EBITDA margin on total revenue for the second quarter this year increased to 49.1 percent, compared with an EBITDA margin of 40.9 percent for the same period in 2002. The higher margin was attributed to service revenue growth, increased profitability of service revenue, roaming revenue growth, and lower sales volumes, which reduced variable sales and marketing expenses. (For definition of EBITDA and a reconciliation of EBITDA to net income from continuing operations, please see Table 1, footnote 1.)
Dobson generated 40,100 gross subscriber additions (postpaid) for the second quarter of 2003, compared with 56,700 for the same quarter last year. Total net subscriber additions for the quarter were 13,000, reflecting postpaid customer churn of 1.5 percent. For the second quarter last year, Dobson reported 20,100 total net subscriber additions and churn of 1.7 percent.
The acquisition of the Anchorage MSA and Alaska RSA 2 further increased the Company's subscriber base in the second quarter. Dobson had approximately 867,600 subscribers as of June 30, 2003, compared with 675,200 a year before.
Total revenue for the second quarter was $154.2 million, an increase of 8.4 percent over revenue of $142.3 million for the same quarter last year. Local service revenue increased 7.8 percent to $93.6 million, compared with $86.9 million for the second quarter last year.
Roaming revenue increased to $54.4 million, or 6.1 percent, from $51.3 million in the second quarter of 2002, reflecting a 20 percent increase in roaming minutes of use (MOUs) and a 12 percent decline in roaming yield year-over-year, due to contract rate reductions in the Company's primary long-term agreements.
Dobson completed a new GSM/GPRS roaming agreement with AT&T Wireless in July, which will enable Dobson's customers and those of AT&T Wireless to use the latest voice and data services nationwide. The agreement, which extends through 2008, will also facilitate Dobson's retail launch of GSM/GPRS handsets and services later this year. In addition to the new GSM/GPRS roaming agreement, Dobson amended and extended the length of its TDMA roaming agreement with AT&T Wireless to 2008 on terms that Dobson believes will increase its value to the Company.
Dobson once again increased monthly profit per subscriber in the most recent quarter. Second quarter monthly profit per subscriber was approximately $21.00, compared with approximately $19.50 for the same period last year and compared with approximately $20.00 for the first quarter of 2003. Dobson defines monthly profit per subscriber as the difference between total ARPU (postpaid, prepaid and reseller) and CCPU (cash cost per user).
This higher profitability was driven by the continued decline in CCPU on a year-over-year basis. Dobson reduced its CCPU by more than $3 to approximately $21.00 per customer per month, or 14 percent below CCPU for the same period last year. The Company attributed this to a combination of reduced rates on off-network MOUs; fewer average off-network MOUs per customer; and other operating improvements. CCPU reflects the average monthly cost incurred in providing service to a Dobson subscriber and excludes subscriber acquisition costs, depreciation and amortization expenses.
Postpaid ARPU for the second quarter of 2003 was approximately $43, up from approximately $42 in the immediately previous quarter and below last year's second quarter ARPU of approximately $45. Dobson reports ARPU on a postpaid basis only.
Capital expenditures were approximately $33.2 million in the second quarter, bringing year-to-date capital expenditures to approximately $50.3 million. On July 18, 2003, the Company announced that the acceleration of its GSM/GPRS network overlay would raise its total capital expenditure budget for 2003 to a range of $135 million to $145 million. The Company's total budget for the GSM/GPRS overlay has not changed.
American Cellular Corporation
American Cellular reported net income of $2.1 million for the second quarter of 2003, compared with a net loss of $381.6 million for the second quarter last year (Table 6). Last year's net loss included a charge of $377.0 million for the impairment of goodwill.
American Cellular's EBITDA increased approximately 13.1 percent to $53.2 million for the quarter, compared with $47.1 million for the same period last year. EBITDA margin increased to 45.5 percent, compared with 40.6 percent in the second quarter last year.
American Cellular reported 37,900 gross subscriber additions for the second quarter, compared with 48,700 for the second quarter last year. Approximately 79 percent of American's second quarter gross subscriber additions represented sales of local and preferred calling plans.
Net subscriber additions for the quarter were 5,400, compared with 15,700 for the same quarter last year. Second quarter churn of 1.7 percent was in line with churn for the same period last year.
American reported total revenue of $116.9 million for the second quarter of 2003, compared with $115.8 million for the same period last year. Local service revenue increased slightly, and roaming revenue declined slightly on a year-over-year basis.
American Cellular's monthly profit per subscriber was approximately $17.50, compared with approximately $16.50 for the second quarter last year and approximately $16.50 for the first quarter of 2003. Monthly profit per subscriber is the difference between total ARPU and CCPU.
CCPU in the second quarter was approximately $20.00, compared with approximately $22.50 for the same period last year. Postpaid ARPU for the second quarter of 2003 was approximately $39, compared with approximately $40 for the second quarter last year.
American Cellular's capital expenditures were approximately $15.2 million in the second quarter, bringing year-to-date total capital expenditures to $28.3 million. American Cellular recently announced that it is accelerating its GSM/GPRS overlay, and therefore revised its guidance for 2003 capital expenditures to a range of $85 million to $105 million.
On July 14, 2003, Dobson and American Cellular announced a plan to restructure American Cellular's capital and indebtedness. Upon completion of the restructuring, American Cellular would become a wholly owned consolidated subsidiary of Dobson Communications. As noted in the July 14 announcement, the restructuring plan calls for holders of American Cellular's 9-1/2% senior subordinated notes to receive a maximum of $50 million in cash, up to 45.1 million shares of Dobson Communications Class A common stock, and a maximum of 700,000 shares of a new series of Dobson Communications convertible preferred stock.
Related to the restructuring, on July 25, 2003, American Cellular and ACC Escrow Corp. jointly announced the pricing of a private offering of $900 million aggregate principal amount of 10% senior notes due 2011. The senior notes will be issued at par.
The notes will be issued by ACC Escrow Corp., a recently formed, wholly owned, indirect subsidiary of Dobson Communications. ACC Escrow was organized to merge into American Cellular Corporation as part of the restructure plan. Upon consummation of the restructuring, including the merger, the net proceeds from the offering will be used to fully repay American Cellular's existing bank credit facility and to pay all or a portion of the expenses of the restructuring, with any remaining net proceeds to be used for general corporate purposes. Closing of the notes offering, which is scheduled for August 8, 2003, is subject to the satisfaction of customary closing conditions.
The notes are being sold only to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S. The notes have not been registered under the Securities Act of 1933 or under any state securities laws, and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer, offer to sell, or solicitation of an offer to buy any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful.
Conference Call
Dobson plans to conduct a conference call to discuss its and American Cellular's second quarter results on Wednesday, August 6, beginning at 9 a.m. ET (8 a.m. CT). On the conference call, the Company expects to discuss current market conditions, its operating outlook and its guidance for 2003. The call will also be broadcast on the Internet.
Those interested may access the call by dialing:
Conference call (800) 289-0437 Pass code 415953
The call may also be accessed via the Internet through the Investor Relations page of Dobson's web site at www.dobson.net. A replay of the call will be available later in the day via Dobson's web site or by phone.
Replay (888) 203-1112 Pass code 415953 The replay will be available by phone for two weeks.
Dobson Communications is a leading provider of wireless phone services to rural and suburban markets in the United States. Headquartered in Oklahoma City, the rapidly growing Company owns or manages wireless operations in 16 states. For additional information on the Company and its operations, 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; shortages of key equipment; restrictions on the Company's ability to finance its growth; the timing of and conditions to closing and the amount and use of proceeds and statements regarding the completion of the transactions involved in the American Cellular restructuring; 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 Six Months Ended
June 30, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
($ in thousands except per share data)
Operating Revenue (unaudited)
Service revenue $ 93,614 $ 86,867 $ 180,919 $ 166,083
Roaming revenue 54,426 51,274 99,826 95,242
Equipment & other revenue 6,202 4,205 11,590 8,282
--------- --------- --------- ---------
Total 154,242 142,346 292,335 269,607
--------- --------- --------- ---------
Operating Expenses
(excluding depreciation
& amortization)
Cost of service 35,803 38,701 68,578 75,541
Cost of equipment 9,947 10,341 18,979 20,444
Marketing & selling 15,347 17,457 29,805 33,856
General & administrative 17,436 17,653 35,356 35,062
--------- --------- --------- ---------
Total 78,533 84,152 152,718 164,903
--------- --------- --------- ---------
EBITDA (a) 75,709 58,194 139,617 104,704
Depreciation &
amortization (22,468) (20,156) (43,583) (39,445)
--------- --------- --------- ---------
Operating income 53,241 38,038 96,034 65,259
Minority interest (1,785) (1,507) (3,405) (2,923)
Loss from investment
in joint venture -- (177,158) -- (184,381)
Other income, net 2,537 1,531 4,496 2,691
--------- --------- --------- ---------
Income (loss) before
interest & income taxes 53,993 (139,096) 97,125 (119,354)
Interest expense (24,074) (28,414) (48,732) (57,099)
Income tax (expense)
benefit (11,368) 56,374 (18,388) 57,027
--------- --------- --------- ---------
Income (loss) from
continuing operations 18,551 (111,136) 30,005 (119,426)
Discontinued operations:
Income from discontinued
operations, net of
taxes (b) 3,606 2,894 7,198 10,149
Loss from discontinued
operations from
investment in joint
venture -- -- -- (327)
Gain from disposal of
discontinued operations,
net of taxes 27,508 -- 27,508 88,315
Gain from disposal of
discontinued operations
from investment in
joint venture -- -- -- 6,736
--------- --------- --------- ---------
Income (loss) before
cumulative effect of
change in accounting
principle 49,665 (108,242) 64,711 (14,553)
Cumulative effect of
change in accounting
principle, net of taxes -- -- -- (33,294)
Cumulative effect of
change in accounting
principle from
investment in
joint venture -- -- -- (140,820)
--------- --------- --------- ---------
Net Income (loss) 49,665 (108,242) 64,711 (188,667)
Dividends on preferred
stock (20,013) (23,860) (40,543) (46,860)
Excess of face value over
repurchase price of
preferred stock -- -- 23,615 --
Gain on redemption of
preferred stock 196,264 -- 196,264 --
--------- --------- --------- ---------
Net Income (loss)
applicable to common
shareholders $ 225,916 $(132,102) $ 244,047 $(235,527)
========= ========= ========= =========
Basic net income (loss)
applicable to common
shareholders
per common share:
Continuing operations $ 0.20 $ (1.22) $ 0.33 $ (1.31)
Discontinued operations 0.35 0.03 0.39 1.15
Change in accounting
principle -- -- -- (1.91)
Dividends on and
redemption of
preferred stock 1.95 (0.26) 1.99 (0.51)
--------- --------- --------- ---------
Total basic net income
(loss) applicable to
common shareholders per
common share $ 2.50 $ (1.45) $ 2.71 $ (2.58)
========= ========= ========= =========
Basic weighted average
common shares
outstanding 90,254,127 90,806,645 90,183,364 91,222,067
========== ========== ========== ==========
Total diluted net income
(loss) applicable to
common shareholders per
common share $ 2.43 $ (1.45) $ 2.64 $ (2.58)
========= ========= ========= =========
Diluted weighted average
common shares
outstanding 92,896,931 90,806,645 92,377,978 91,222,067
========== ========== ========== ==========
(a) EBITDA is defined as earnings (loss) from continuing operations
before interest income, interest expense, income taxes,
depreciation, amortization, and other income. We believe EBITDA
and EBITDA margin to be relevant and useful information as these
are important performance measurements used by our management to
measure the operating profits or losses of our business. In
addition, EBITDA is a metric used to measure the performance of
our management team and to determine how and where to invest
additional capital or other resources. EBITDA and EBITDA margin
should be considered in addition to, but not as a substitute for,
other measures of financial performance reported in accordance
with accounting principles generally accepted in the United
States of America. EBITDA and EBITDA margin, as we have defined
them, may not be comparable to similarly titled measures
reported by other companies.
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
(b) Operating results from
income from
discontinued
operations:
Service revenue $ 6,343 $ 7,423 $ 13,894 $ 18,549
Roaming revenue 8,387 9,601 17,285 26,217
Equipment & other
revenue 381 511 784 1,203
--------- --------- --------- ---------
Total operating
revenue 15,111 17,535 31,963 45,969
--------- --------- --------- ---------
Cost of service 3,144 4,528 6,817 9,406
Cost of equipment 648 957 1,523 2,449
Marketing & selling 988 1,741 2,186 3,651
General &
administrative 1,579 1,842 3,382 4,879
--------- --------- --------- ---------
Total operating
expenses (excluding
depreciation and
amortization) 6,359 9,068 13,908 20,385
--------- --------- --------- ---------
EBITDA 8,752 8,467 18,055 25,584
--------- --------- --------- ---------
Depreciation &
amortization (1,851) (1,895) (4,040) (3,619)
Interest expense
& other (1,085) (1,904) (2,405) (5,595)
Income tax expense (2,210) (1,774) (4,412) (6,221)
--------- --------- --------- ---------
Income from dis-
continued operations $ 3,606 $ 2,894 $ 7,198 $ 10,149
========= ========= ========= =========
Table 2
Dobson Communications Corporation
Selected Balance Sheet and Statistical Data
Balance Sheet Data: June 30, 2003 Dec. 31, 2002
-------- --------
($ in millions) ($ in millions)
(unaudited)
Cash and cash equivalents (unrestricted) $ 256.2 $ 294.2
======== ========
Total Debt:
Dobson Operating Co., L.L.C.
credit facility (a) $ 484.1 $ 501.0
Dobson/Sygnet credit facility (b) 267.1 285.4
DCC 10.875% Senior Notes, net 298.3 298.2
Dobson/Sygnet Senior Notes 188.5 188.5
-------- --------
Total debt $1,238.0 $1,273.1
======== ========
Preferred Stock:
Series AA Preferred Stock, 5.96% $ -- $ 200.0
Senior Exchangeable Preferred Stock,
12.25%, net (c) 343.5 362.3
Senior Exchangeable Preferred Stock,
13.00%, net (d) 181.4 196.0
-------- --------
Total preferred stock $ 524.9 $ 758.3
======== ========
Six Months Ended Six Ended
June 30, 2003 June 30, 2002
-------- --------
($ in millions) ($ in millions)
Capital Expenditures: $ 50.3 $ 37.7
======== ========
(a) Does not include the $95.5 million of availability under this
credit facility
(b) Does not include $25.9 million of availability under this
credit facility
(c) Net of deferred financing costs of $(3.5) million and $(4.2)
million and discount of $(7.2) million and $(8.4) million at
June 30, 2003 and December 31, 2002, respectively.
(d) Net of deferred financing costs of $(2.2) million and
$(2.8) million at June 30, 2003 and December 31, 2002,
respectively.
Table 3
Dobson Communications Corporation
For the Quarter
Ended 6/30/2002 9/30/2002 12/31/2002 3/31/2003 6/30/2003
--------- --------- --------- --------- ---------
( $ in thousands except per subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 86,867 $ 89,700 $ 86,717 $ 87,305 $ 93,614
Roaming revenue 51,274 55,827 50,141 45,400 54,426
Equipment &
other revenue 4,205 5,531 4,382 5,388 6,202
--------- --------- --------- --------- ---------
Total 142,346 151,058 141,240 138,093 154,242
--------- --------- --------- --------- ---------
Operating Expenses
(excluding
depreciation &
amortization)
Cost of service 38,701 37,910 35,618 32,775 35,803
Cost of equipment 10,341 11,298 10,401 9,032 9,947
Marketing &
selling 17,457 17,683 16,022 14,458 15,347
General &
administrative 17,653 18,617 18,734 17,921 17,436
--------- --------- --------- --------- ---------
Total 84,152 85,508 80,775 74,186 78,533
--------- --------- --------- --------- ---------
EBITDA (a) (b) $ 58,194 $ 65,550 $ 60,465 $ 63,907 $ 75,709
========= ========= ========= ========= =========
Pops 5,711,500 5,711,500 5,711,500 5,711,500 6,094,600
Post-paid
Gross Adds 56,700 55,000 53,600 38,700 40,100
Net Adds 23,800 15,400 17,900 4,800 9,700
Subscribers 647,500 662,900 680,800 685,600 810,600
Churn 1.7% 2.0% 1.8% 1.6% 1.5%
Average Service
Revenue per
Subscriber (ARPU) $ 45 $ 45 $ 42 $ 42 $ 43
Average Service
and Roaming
Revenue per
Subscriber $ 72 $ 74 $ 67 $ 64 $ 69
Pre-paid
Net Adds (3,800) (4,200) (1,100) 2,300 900
Subscribers 11,700 7,500 6,400 8,700 22,300
Reseller
Net Adds 100 3,500 1,900 3,200 2,400
Subscribers 16,000 19,500 21,400 24,600 34,700
Total
Net Adds 20,100 14,700 18,700 10,300 13,000
Subscribers 675,200 689,900 708,600 718,900 867,600
Penetration 11.8% 12.1% 12.4% 12.6% 14.2%
(a) Includes $1.8 million, $1.9 million, $1.8 million, $1.9 million
and $2.1 million of EBITDA for the quarters ended June 30, 2002,
September 30, 2002, December 31, 2002, March 31, 2003 and June
30, 2003, respectively, related to minority interests.
(b) A reconciliation of EBITDA to net (loss) income from continuing
operations as determined in accordance with generally accepted
accounting principles is as follows:
(Loss) income from
continuing
operations $ (111,136) $ 10,408 $ 4,522 $ 11,454 $ 18,551
Add back non-EBITDA
items included in
(loss) income from
continuing operations:
Depreciation &
amortization (20,156) (20,876) (19,730) (21,114) (22,468)
Interest expense (28,414) (29,139) (26,408) (24,659) (24,074)
Minority Interest (1,507) (1,946) (1,652) (1,619) (1,785)
Loss from
investment in JV (177,158) -- -- -- --
Other income
(expense) 1,531 3,199 (5,373) 1,959 2,537
Income tax benefit
(expense) 56,374 (6,380) (2,780) (7,020) (11,368)
--------- --------- --------- --------- ---------
EBITDA $ 58,194 $ 65,550 $ 60,465 $ 63,907 $ 75,709
========= ========= ========= ========= =========
Table 4
Dobson Operating Company LLC
For the Quarter
Ended 6/30/2002 9/30/2002 12/31/2002 3/31/2003 6/30/2003
--------- --------- --------- --------- ---------
( $ in thousands except per subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 49,576 $ 50,583 $ 48,957 $ 48,997 $ 54,100
Roaming revenue 38,757 42,631 37,826 34,646 42,322
Equipment & other
revenue 2,907 3,451 2,720 4,203 4,809
--------- --------- --------- --------- ---------
Total 91,240 96,665 89,503 87,846 101,231
--------- --------- --------- --------- ---------
Operating Expenses
(excluding
depreciation &
amortization)
Cost of service 27,112 26,627 24,770 23,294 26,151
Cost of equipment 5,910 6,321 6,301 5,451 5,910
Marketing &
selling 10,975 11,217 9,770 9,397 9,834
General &
administrative 10,504 11,120 10,952 9,951 10,189
--------- --------- --------- --------- ---------
Total 54,501 55,285 51,793 48,093 52,084
--------- --------- --------- --------- ---------
EBITDA (a) (b) $ 36,739 $ 41,380 $ 37,710 $ 39,753 $ 49,147
========= ========= ========= ========= =========
Pops 3,353,800 3,353,800 3,353,800 3,353,800 3,736,900
Post-paid
Gross Adds 34,700 33,000 31,700 24,400 25,000
Net Adds 14,000 6,100 7,400 1,300 5,100
Subscribers 349,200 355,300 362,700 364,000 484,400
Churn 2.0% 2.5% 2.3% 2.1% 1.8%
Average Service
Revenue per
Subscriber (ARPU) $ 47 $ 47 $ 45 $ 44 $ 45
Average Service and
Roaming Revenue
per Subscriber $ 85 $ 87 $ 80 $ 76 $ 82
Pre-paid
Net Adds (3,700) (4,200) (1,400) 1,500 400
Subscribers 11,100 6,900 5,500 7,000 20,100
Reseller
Net Adds 500 3,800 2,100 3,100 2,400
Subscribers 11,000 14,800 16,900 20,000 30,100
Total
Net Adds 10,800 5,700 8,100 5,900 7,900
Subscribers 371,300 377,000 385,100 391,000 534,600
Penetration 11.1% 11.2% 11.5% 11.7% 14.3%
(a) Includes $1.8 million, $1.9 million, $1.8 million, $1.9 million
and $2.1 million of EBITDA for the quarters ended June 30, 2002,
September 30, 2002, December 31, 2002, March 31, 2003 and June
30, 2003, respectively, related to minority interests.
(b) A reconciliation of EBITDA to net income from continuing
operations as determined in accordance with generally accepted
accounting principles is as follows:
Income from
continuing
operations $ 8,924 $ 11,125 $ 11,412 $ 12,364 $ 18,381
Add back non-EBITDA
items included in
net income from
continuing operations:
Depreciation &
amortization (12,838) (13,232) (12,589) (13,408) (14,545)
Interest expense (9,488) (10,017) (6,787) (6,245) (6,319)
Minority Interest (1,507) (1,946) (1,652) (1,620) (1,785)
Other income 1,488 1,760 1,733 1,462 3,149
Income tax expense (5,470) (6,820) (7,003) (7,578) (11,266)
--------- --------- --------- --------- ---------
EBITDA $ 36,739 $ 41,380 $ 37,710 $ 39,753 $ 49,147
========= ========= ========= ========= =========
Table 5
Dobson/Sygnet Communications Company
For the Quarter
Ended 6/30/2002 9/30/2002 12/31/2002 3/31/2003 6/30/2003
--------- --------- --------- --------- ---------
( $ in thousands except per subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 37,097 $ 39,118 $ 37,760 $ 38,308 $ 39,514
Roaming revenue 12,516 13,196 12,315 10,753 12,104
Equipment & other
revenue 1,298 2,079 1,662 1,650 1,858
--------- --------- --------- --------- ---------
Total 50,911 54,393 51,737 50,711 53,476
--------- --------- --------- --------- ---------
Operating Expenses
(excluding
depreciation &
amortization)
Cost of service 11,589 11,284 10,847 9,946 10,117
Cost of equipment 4,431 4,977 4,100 3,581 4,037
Marketing &
selling 6,482 6,465 6,252 5,061 5,513
General &
administrative 6,980 7,326 7,695 7,963 7,241
--------- --------- --------- --------- ---------
Total 29,482 30,052 28,894 26,551 26,908
--------- --------- --------- --------- ---------
EBITDA (a) $ 21,429 $ 24,341 $ 22,843 $ 24,160 $ 26,568
========= ========= ========= ========= =========
Pops 2,357,700 2,357,700 2,357,700 2,357,700 2,357,700
Post-paid
Gross Adds 22,000 22,000 21,900 14,300 15,100
Net Adds 9,800 9,300 10,500 3,500 4,600
Subscribers 298,300 307,600 318,100 321,600 326,200
Churn 1.4% 1.4% 1.2% 1.1% 1.1%
Average Service
Revenue per
Subscriber (ARPU) $ 42 $ 43 $ 40 $ 40 $ 40
Average Service and
Roaming Revenue
per Subscriber $ 56 $ 57 $ 53 $ 51 $ 53
Pre-paid
Net Adds (100) -- 300 800 500
Subscribers 600 600 900 1,700 2,200
Reseller
Net Adds (400) (300) (200) 100 --
Subscribers 5,000 4,700 4,500 4,600 4,600
Total
Net Adds 9,300 9,000 10,600 4,400 5,100
Subscribers 303,900 312,900 323,500 327,900 333,000
Penetration 12.9% 13.3% 13.7% 13.9% 14.1%
(a) A reconciliation of EBITDA to net income as determined in
accordance with generally accepted accounting principles is as
follows:
Net income $ 1,969 $ 3,494 $ 2,616 $ 3,763 $ 5,007
Add back non-EBITDA
items included in
net income:
Depreciation &
amortization (7,011) (7,244) (7,423) (7,587) (7,807)
Interest expense (11,246) (11,396) (11,209) (10,575) (10,463)
Other income (loss) 3 (65) 8 71 (222)
Income tax expense (1,206) (2,142) (1,603) (2,306) (3,069)
--------- --------- --------- --------- ---------
EBITDA $ 21,429 $ 24,341 $ 22,843 $ 24,160 $ 26,568
========= ========= ========= ========= =========
Table 6
American Cellular Corporation
For the Quarter
Ended 6/30/2002 9/30/2002 12/31/2002 3/31/2003 6/30/2003
--------- --------- --------- --------- ---------
( $ in thousands except per subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 76,260 $ 79,430 $ 76,267 $ 75,176 $ 78,120
Roaming revenue 35,592 40,237 32,725 27,680 34,718
Equipment &
other revenue 3,958 4,535 3,943 3,634 4,099
--------- --------- --------- --------- ---------
Total 115,810 124,202 112,935 106,490 116,937
--------- --------- --------- --------- ---------
Operating Expenses
(excluding
depreciation &
amortization)
Cost of service 29,273 28,392 25,372 23,569 24,854
Cost of equipment 7,704 9,053 10,003 8,909 9,182
Marketing &
selling 14,813 15,031 14,205 12,391 12,442
General &
administrative 16,956 18,396 18,258 17,694 17,253
--------- --------- --------- --------- ---------
Total 68,746 70,872 67,838 62,563 63,731
--------- --------- --------- --------- ---------
EBITDA (a) $ 47,064 $ 53,330 $ 45,097 $ 43,927 $ 53,206
========= ========= ========= ========= =========
Pops 4,997,000 4,997,000 4,997,000 4,997,000 4,997,000
Post-paid
Gross Adds 48,700 49,900 53,000 38,500 37,900
Net Adds 16,400 11,200 14,800 (200) 3,500
Subscribers 631,800 643,000 657,800 657,600 661,100
Churn 1.7% 2.0% 2.0% 2.0% 1.7%
Average Service
Revenue per
Subscriber (ARPU) $ 40 $ 41 $ 39 $ 38 $ 39
Average Service and
Roaming Revenue
per Subscriber $ 59 $ 62 $ 55 $ 52 $ 56
Pre-paid
Net Adds (200) (300) 900 1,700 1,000
Subscribers 4,300 4,000 4,900 6,600 7,600
Reseller
Net Adds (500) 4,300 1,600 200 900
Subscribers 21,800 26,100 27,700 27,900 28,800
Total
Net Adds 15,700 15,200 17,300 1,700 5,400
Subscribers 657,900 673,100 690,400 692,100 697,500
Penetration 13.2% 13.5% 13.8% 13.9% 14.0%
(a) A reconciliation of EBITDA to net (loss) income as determined in
accordance with generally accepted accounting principles is as
follows:
Net (loss) income $(381,616) $ 4,280 $(422,908) $ (2,406) $ 2,103
Add back non-EBITDA
items included in
net (loss) income:
Depreciation &
amortization (16,763) (16,951) (17,050) (17,004) (17,573)
Interest expense (38,781) (29,926) (32,756) (31,254) (31,211)
Impairment of
goodwill (377,000) -- (423,894) -- --
Other income (loss) 787 680 423 321 (917)
Income tax benefit
(expense) 3,077 (2,853) 5,272 1,604 (1,402)
--------- --------- --------- --------- ---------
EBITDA $ 47,064 $ 53,330 $ 45,097 $ 43,927 $ 53,206
========= ========= ========= ========= =========