NTELOS Holdings Corp. Reports Third Quarter 2009 Operating Results

http://www.businesswire.com/news/home/20091105006475/en

NTELOS` Third Quarter Net Income of $14.3 million, or $0.34 per share

Increased Dividend Reflects High Free Cash Flow Generation

Company Updates 2009 Guidance
WAYNESBORO, Va.--(Business Wire)--
NTELOS Holdings Corp. (NASDAQ:NTLS), a leading provider of wireless and wireline
communications services (branded as NTELOS) in Virginia and West Virginia, today
announced operating results for its third quarter of 2009.

Operating highlights for the quarter include:

* Operating revenues for third quarter 2009 of $135.7 million
* Adjusted EBITDA (a non-GAAP measure) of $56.6 million, representing a 41.7%
margin
* Adjusted EBITDA less capital expenditures of $35.2 million for third quarter
2009; $84.0 million year to date
* Wireless total sales (gross additions) of 43,373, up 5% from third quarter
2008 and up 14% from second quarter 2009
* FRAWG unlimited prepay sales (gross additions) of 17,926
* Smart phone and data card sales were 30% of postpay gross additions, up from
23% in third quarter 2008
* Wireless postpay data ARPU (a non-GAAP measure) up $0.38 or 4% from last
quarter; up 29% from third quarter 2008
* Wireline adjusted EBITDA of $18.6 million, a quarterly record, up 8% from
third quarter 2008
* Competitive Wireline adjusted EBITDA sets quarterly record at $7.5 million, up
24% from third quarter 2008

"We continue to experience year-to-date sales growth and we are especially
pleased with the early success of our new FRAWG product," said James S.
Quarforth, CEO of NTELOS Holdings Corp. "It is clear from our third quarter
sales results that prepay unlimited plans are preferred by many customers and
our FRAWG products are meeting their needs. Our postpay data ARPU continued its
growth trend through the quarter - up 29% year over year and now solidly over
ten dollars. Our wireline business performed impressively again for the quarter
with significant revenue growth from several of our strategic products driving
another record level of adjusted EBITDA."

Recent Developments

Increase and Declaration of Dividend: On November 3, 2009, the Board of
Directors of NTELOS Holdings Corp. declared a quarterly cash dividend on its
common stock in the amount of $0.28 per share, an increase of 8%, to be paid on
January 12, 2010 to stockholders of record on December 14, 2009.

Closing of Refinancing: On August 7, 2009 the Company closed on the refinancing
of the existing first lien term loan of its wholly-owned subsidiary, NTELOS Inc.
In connection with the refinancing, NTELOS Inc. entered into a new $635 million
first lien term loan maturing August 7, 2015, together with a $35 million
revolving credit facility maturing August 7, 2014. NTELOS Inc. used proceeds of
the new first lien term loan to pay off its outstanding $603 million first lien
term loan and to pay closing costs and other expenses related to the
transaction, including unwinding its interest rate swap agreement, with the
remaining proceeds of approximately $4 million available for general corporate
purposes. Pricing on the new first lien term loan was set at LIBOR plus 3.75%
with a LIBOR minimum of 2%, and sold at $99 per $100 of principal amount, or 1%
OID.

Share Repurchase Program: On August 24, 2009, the Company announced that its
Board of Directors had approved a share repurchase program authorizing
management to repurchase up to $40 million of NTELOS` common stock. During the
third quarter of 2009, 118,340 shares were repurchased for $1.9 million.

Fiber Network Expansion: In September 2009, NTELOS completed a fiber optic route
from Charlottesville to Ashburn, Virginia, replacing leased services and
providing interconnection to the Internet hub in Ashburn. In addition to cost
savings from bringing traffic on-network, this route creates revenue
opportunities for both wholesale and enterprise sales in three new key markets.
The capital expenditure for this expansion was approximately $4.5 million.

Agreement to Acquire Fiber Optic Assets: The Company announced on October 6,
2009 that it executed an agreement to purchase certain fiber optic and network
assets and related transport and data service contracts from Allegheny Energy,
Inc. The purchase includes approximately 2,200 route-miles of fiber located
primarily in central and western Pennsylvania and West Virginia, with portions
also in Maryland, Kentucky and Ohio. Closing, which is expected by year-end
2009, is subject to regulatory approvals and customary closing conditions.
Projected 2009 service revenues, including revenues from NTELOS, and adjusted
EBITDA, pro forma for the terms and conditions of the agreement, on this fiber
network are approximately $8.0 million and $4.5 million, respectively. The
purchase price for the transaction assets is approximately $27 million.

FRAWG Wireless: Third quarter 2009 represents the first full quarter results for
the FRAWG Unlimited Wireless sub-brand in the Richmond and Hampton Roads,
Virginia markets. FRAWG plans feature competitive price points, but acquisition
costs for the Company are substantially lower than with traditional offerings
due to reduced handset subsidy and sales costs. FRAWG gross additions for the
quarter were 17,926, with 84% of sales at the top two price tiers of $40 and $50
per month.

"The power of n" Marketing Campaign: A new marketing campaign was launched
during third quarter emphasizing the strength of NTELOS` newly upgraded network
and focusing on "worry-free wireless," highlighting new overage alerts and
increased flexibility for wireless customers and customer service that is always
local and always best in class. Concepts of the campaign may be viewed on the
NTELOS web site at http://www.nteloswireless.com/powerofn/.

Business Segment Highlights

Wireless

* Wireless operating revenues for the third quarter 2009 were $104.2 million,
compared to $103.9 million for the third quarter 2008. Adjusted EBITDA for
Wireless was $39.1 million and $40.6 million for the third quarters of 2009 and
2008, respectively. Revenues from the Sprint wholesale agreement were $27.1
million, supported by the $9.0 million per month minimum and reflecting the
previously announced travel data rate reset effective July 1, 2009. This rate
reset, based on 90% of Sprint`s revenue yield, was provided for in the Sprint
wholesale agreement in recognition of significantly increased throughput that
would occur upon the completion of the EV-DO upgrade.
* Retail wireless subscribers were 438,303 at September 30, 2009, a 3% increase
from 427,028 at September 30, 2008. Wireless gross subscriber additions for
third quarter 2009 were 43,373, up 5% from 41,322 in third quarter 2008,
reflecting the significant sales success of the new FRAWG prepay product in the
Virginia East markets. Net wireless subscriber change for third quarter 2009 was
a loss of 3,786. Churn rates for the third quarter 2009 reflected typical
seasonal increases and also continued to be influenced by macro economic
conditions, with total monthly subscriber churn of 3.6% and postpay churn of
2.4%, both higher than churn from third quarter last year. Involuntary postpay
churn levels remain higher year over year, representing 43% of the churn in
third quarter 2009 compared to 34% in third quarter 2008.
* Postpay ARPU was $57.53 for the third quarter of 2009, compared to $57.85 for
the third quarter 2008 and up from $57.28 in the previous quarter. Postpay data
ARPU continued to show solid growth, increasing $2.33, or 29%, from $7.93 in
third quarter 2008 to $10.26 in third quarter 2009. Sequentially, postpay data
ARPU is up 4%, or $0.38, compared to second quarter 2009. On a total customer
basis, ARPU for third quarter 2009 was $53.22, down $1.87 from third quarter
last year reflecting declining prepay ARPU driven in part by the transition to
the FRAWG model of lower prices but also low subsidies and sales costs.
* A new prepay billing platform, which provides increased functionality for
customers, was successfully implemented in the third quarter 2009.
Significantly, the use of data cards and true pay-per-day functionality became
available to prepay customers for the first time beginning October 1, 2009.

"Churn remains a challenge, but we are confident that it will improve with the
economic recovery, especially in levels of involuntary churn," said Quarforth.
"This, combined with our continued sales strength due to our EV-DO capabilities,
robust handset line-up, broader distribution and generally positive fourth
quarter seasonal trends, provides optimism for the remainder of the year with
regard to wireless subscribers."

Wireline

* Wireline operating revenues for the third quarter 2009 were $31.3 million,
compared to $31.1 million for the third quarter 2008. Adjusted EBITDA for
Wireline increased 8% year over year, from $17.1 million in third quarter 2008
to $18.6 million in third quarter 2009.
* RLEC: RLEC revenues for the third quarter of 2009 were $14.4 million, down 5%
from third quarter 2008 as an increase in tandem switched access revenues from
other carriers partially offset a 7% decline in access lines. Despite line
losses, RLEC adjusted EBITDA remained at levels consistent with the prior year,
reflecting impacts from expense reduction initiatives.
* Competitive Wireline: Revenues from wireline strategic products increased
approximately $0.9 million, or 7%, to $14.0 million in third quarter 2009 from
$13.1 million in third quarter 2008, due to customer growth and continued growth
in data connectivity and bandwidth demand. Several high-speed data and transport
products showed significant revenue growth year over year: Private
Line/Transport, up 12%; Integrated Access, up 7%; Metro Ethernet, up 30%;
Broadband over fiber, up 82%; and IPTV video, up 183%. Broadband growth in the
RLEC footprint continued with a year-over-year gain of 1,020 customers,
increasing customer penetration from 44% at September 30, 2008 to 52% at the end
of third quarter 2009. Third quarter 2009 adjusted EBITDA for Competitive
Wireline was up 24% from third quarter last year.

"Our wireline business continues to outperform the industry with another solid
quarter," stated Quarforth. "Our high-bandwidth data products are the main
drivers of revenue and adjusted EBITDA growth. Our recent fiber network
expansion to the Internet hub in Ashburn and, when completed, the Allegheny
acquisition, will nearly double the route- miles of our fiber network, allowing
expansion of these same successful strategic products and services."

Capital expenditures for the third quarter 2009 were $21.5 million and were
$91.0 million for the first nine months of 2009. The year to date amount
reflects heavier spending levels in the first half of the year for several
projects, including the wireless EV-DO upgrade, fiber expansion and wireline
core data network upgrades, and corporate IT upgrades for the new prepay billing
platform and a web portal.

"Overall, our third quarter results demonstrated stability considering the
nearly $3 million revenue reduction related to the Sprint wholesale travel data
rate reset and sluggish macro economic conditions," said Quarforth. "Sales of
the new FRAWG wireless products are most encouraging and we are now preemptively
well-positioned against future competitive products in these markets. Trends in
data ARPU growth remain strong, surpassing the ten dollar level. Our wireline
segment continues its solid and growing contributions and network expansion will
be a significant further catalyst."

"We have updated our 2009 guidance to reflect our year to date results,"
concluded Quarforth. "While the economy has clearly been a factor in our
subscriber growth this year, we believe our net income and free cash flow growth
over previous year will be approximately 30% and 32%, respectively."

Business Outlook

The following statements are based on management`s current expectations. These
statements are forward-looking and actual results may differ materially. Please
see "Special Note from the Company Regarding Forward-Looking Statements."

The Company expects 2009 consolidated operating revenues to range between $549
million and $553 million; consolidated adjusted EBITDA to range between $227
million and $230 million; and capital expenditures to range between $107 million
and $108 million. Net income attributable to NTELOS Holdings Corp. for 2009 is
expected to be between $56 million and $60 million. Expenditures related to the
acquisition of fiber optic assets from Allegheny Energy, Inc. are not included
in 2009 Wireline capital expenditure outlook. Please see the Business Outlook
exhibit with this press release for additional guidance detail.

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, loss on interest rate swap agreement, net income
attributable to noncontrolling interests, other income, non-cash compensation
charges and voluntary early retirement charges.

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

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 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.

Note: Subsequent to the Company`s filing of its Annual Report on Form 10-K for
the year ended December 31, 2008, the Company discovered an error related to the
billing information used by the Company for billing services to Sprint under its
Strategic Network Alliance agreement. A portion of network usage by Sprint
customers had been incorrectly classified in the Company`s billing process. As a
result, wireless wholesale revenue was overstated by approximately $3.9 million
in 2008 ($2.4 million after tax, or $0.06 per share). Quarterly for 2008, this
amount is estimated to be $0.2 million, $0.9 million and $2.8 million in the
second, third and fourth quarters 2008, respectively. The Company assessed the
materiality and determined that the error was immaterial to previously reported
amounts contained in its periodic reports. The Company`s financial statements
for the fiscal 2008 quarterly periods have been adjusted to reflect the effect
of this immaterial error.

About NTELOS

NTELOS Holdings Corp. is an integrated communications provider with headquarters
in Waynesboro, VA. NTELOS provides products and services to customers in
Virginia, West Virginia, Kentucky, Ohio, Tennessee, Maryland and North Carolina,
including wireless phone service, local and long distance telephone services,
IPTV-based video services, and data services for internet access and wide area
networking. Detailed information about NTELOS is available at www.ntelos.com.

SPECIAL NOTE FROM THE COMPANY REGARDING FORWARD-LOOKING STATEMENTS

Any statements contained in this presentation that are not statements of
historical fact, including statements about our beliefs and expectations, are
forward-looking statements and should be evaluated as such. The words
"anticipates," "believes," "expects," "intends," "plans," "estimates,"
"targets," "projects," "should," "may," "will" and similar words and expressions
are intended to identify forward-looking statements. Such forward-looking
statements reflect, among other things, our current expectations, plans and
strategies, and anticipated financial results, all of which are subject to known
and unknown risks, uncertainties and factors that may cause our actual results
to differ materially from those expressed or implied by these forward-looking
statements. Many of these risks are beyond our ability to control or predict.
Because of these risks, uncertainties and assumptions, you should not place
undue reliance on these forward-looking statements. Furthermore, forward-looking
statements speak only as of the date they are made. We do not undertake any
obligation to update or review any forward-looking information, whether as a
result of new information, future events or otherwise. Important factors with
respect to any such forward-looking statements, including certain risks and
uncertainties that could cause actual results to differ from those contained in
the forward-looking statements, include, but are not limited to: rapid
development and intense competition in the telecommunications industry; adverse
economic conditions; operating and financial restrictions imposed by our senior
credit facilities and other indebtedness; our cash and capital requirements;
declining prices for our services; the potential to experience a high rate of
customer turnover; our dependence on our affiliation with Sprint Nextel
("Sprint"); a potential increase in our roaming rates and wireless handset
subsidy costs; the potential for Sprint to build networks in our markets;
federal and state regulatory fees, requirements and developments; loss of our
cell sites; the rates of penetration in the wireless telecommunications
industry; our reliance on certain suppliers and vendors and the transition of
our prepay billing services to a new vendor; and other unforeseen difficulties
that may occur. These risks and uncertainties are not intended to represent a
complete list of all risks and uncertainties inherent in our business, and
should be read in conjunction with the more detailed cautionary statements and
risk factors included in our SEC filings, including our Annual Reports filed on
Forms 10-K.

Exhibits:

* Condensed Consolidated Balance Sheets
* Condensed Consolidated Statements of Operations
* Reconciliation of Net Income Attributable to NTELOS Holdings Corp. to
Operating Income
* Reconciliation of Operating Income to Adjusted EBITDA
* Business Outlook for the Year 2009

Additional exhibits include:

* Summary of Operating Results
* Customer Summary
* Wireless Customer Detail
* Wireless Key Performance Indicators (KPI)
* Wireless ARPU Reconciliation

These exhibits are available in the Company`s 8-K filing with the SEC or on the
Company`s Investor Relations website.

NTELOS Holdings Corp.
Condensed Consolidated Balance Sheets (unaudited)
September 30, 2009 December 31, 2008 1
(in thousands)

ASSETS
Current Assets
Cash $ 86,599 $ 65,692
Accounts receivable, net 41,573 47,270
Inventories and supplies 8,273 11,107
Other receivables 2,861 2,809
Income tax receivable 1,057 718
Prepaid expenses and other 11,162 8,843
151,525 136,439

Securities and investments 947 762

Property, plant and equipment, net 477,513 446,473

Other Assets
Goodwill 118,448 118,448
Franchise rights 32,000 32,000
Other intangibles, net 65,641 74,151
Radio spectrum licenses in service 115,449 115,449
Radio spectrum licenses not in service 16,847 16,931
Deferred charges and other assets 13,582 3,648
361,967 360,627

Total Assets $ 991,952 $ 944,301

LIABILITIES AND EQUITY
Current Liabilities
Current portion of long-term debt $ 6,893 $ 6,739
Accounts payable 29,771 31,645
Dividends payable 10,992 10,968
Advance billings and customer deposits 20,000 19,772
Accrued payroll 4,284 10,119
Accrued interest 26 290
Accrued operating taxes 4,374 3,439
Other accrued liabilities 4,928 3,787
81,268 86,759

Long-Term Liabilities
Long-term debt 623,531 601,173
Interest rate swap - 9,184
Other long-term liabilities 104,304 82,066
727,835 692,423

Equity 182,849 165,119

Total Liabilities and Equity $ 991,952 $ 944,301
right" id="t6093009_2_33_9900">
Shares used for computation:
Basic 14,538 14,621 14,515 15,080
Diluted 15,377 15,200 15,152 15,723

BLUE NILE, INC.
Condensed Consolidated Statements of Cash Flow
(Unaudited)
(in thousands)

Year to date ended
October 4, September 28,
2009 2008

Operating activities:
Net income $ 7,359 $ 8,111
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,868 1,512
Loss on disposal of property and equipment 62 20
Stock-based compensation 5,615 5,298
Deferred income taxes (767 ) (981 )
Tax benefit from exercise of stock options 214 511
Excess tax benefit from exercise of stock options (47 ) (141 )
Changes in assets and liabilities:
Receivables 331 1,195
Inventories 988 2,944
Prepaid federal income taxes - (440 )
Prepaid expenses and other assets (64 ) 30
Accounts payable (19,964 ) (45,380 )
Accrued liabilities (1,632 ) (5,093 )
Deferred rent and other (147 ) (78 )
Net cash used in operating activities (6,184 ) (32,492 )

Investing activities:
Purchases of property and equipment (2,063 ) (1,553 )
Proceeds from the sale of property and equipment - 10
Purchase of short-term investments (15,000 ) -
Net cash used in investing activities (17,063 ) (1,543 )

Financing activities:
Repurchase of common stock - (65,273 )
Proceeds from stock option exercises 1,195 2,984
Excess tax benefit from exercise of stock options 47 141
Principal payments under long-term financing obligation (30 ) (28 )
Net cash provided by (used in) financing activities 1,212 (62,176 )

Effect of exchange rate changes on cash and cash equivalents 78 9

Net decrease in cash and cash equivalents (21,957 ) (96,202 )

Cash and cash equivalents, beginning of period 54,451 122,793
Cash and cash equivalents, end of period $ 32,494 $ 26,591

NTELOS Holdings Corp.
Wesley B. Wampler
Director, Investor Relations
540-949-3447
wamplerwes@ntelos.com

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