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Presentation (PowerPoint)

  1. 1. February 12, 2004
  2. 2. Statement of Operations
  3. 3. Balance Sheet
  4. 4. Business Overview <ul><li>Operations in Los Angeles, San Diego, Las Vegas, Chicago and Northern California </li></ul><ul><li>“Smart-build” CLEC </li></ul><ul><ul><li>A facilities-based network integrating state-of-the-art voice and high-speed data applications </li></ul></ul><ul><ul><li>No resale or UNE-P </li></ul></ul><ul><li>Customer profile </li></ul><ul><ul><li>Retail only </li></ul></ul><ul><ul><ul><li>No wholesale customers </li></ul></ul></ul><ul><ul><li>Small-to-Medium Enterprise (“SME”) </li></ul></ul><ul><ul><ul><li>Some residential, mostly in Las Vegas </li></ul></ul></ul><ul><ul><li>Largely acquired through direct sales force </li></ul></ul><ul><ul><ul><li>Some agent relationships </li></ul></ul></ul><ul><ul><ul><li>Some telemarketing </li></ul></ul></ul>
  5. 5. Market Overview As of December 31, 2003
  6. 6. Service Overview <ul><li>Integrated Voice and High Speed Internet Access </li></ul><ul><ul><li>4 to 24 voice lines with high speed Internet access over a UNE T1 loop </li></ul></ul><ul><li>Dedicated High Speed Internet Access </li></ul><ul><ul><li>1.54 Mbps of synchronous speed Internet access over a UNE T1 loop </li></ul></ul><ul><ul><li>Variable Synchronous speed Internet access over a UNE DSL loop </li></ul></ul><ul><li>Voice Transport </li></ul><ul><ul><li>Trunks & PRI </li></ul></ul><ul><ul><li>Inbound and Outbound </li></ul></ul><ul><ul><li>2-way </li></ul></ul><ul><ul><li>DID </li></ul></ul><ul><li>Plain Old Telephone Service (“POTS”) </li></ul><ul><li>Complementary Services </li></ul><ul><ul><li>Long Distance </li></ul></ul><ul><ul><li>Centrex </li></ul></ul><ul><ul><li>Calling card </li></ul></ul><ul><ul><li>Toll-free </li></ul></ul><ul><ul><li>Full voice features including voicemail, call forwarding, caller ID, etc. </li></ul></ul><ul><ul><li>Full data features including web hosting, dial-up, and remote access </li></ul></ul>
  7. 7. Components of Revenue <ul><li>Recurring Customer </li></ul><ul><ul><li>Revenue received from customers every month for services described on prior page </li></ul></ul><ul><li>Recurring Switched Access </li></ul><ul><ul><li>Revenue received from inter-exchange carriers (“IXCs”), or long distance companies </li></ul></ul><ul><ul><li>Arises from long distant usage by our customers who pick a carrier other than Mpower for their long distance service </li></ul></ul><ul><li>Non-Recurring Customer </li></ul><ul><ul><li>Revenue received from customers for installation of new service </li></ul></ul><ul><ul><li>Offsets our cost of acquiring the customer </li></ul></ul>
  8. 8. Ending Access Lines in Service
  9. 9. Average Access Lines in Service
  10. 10. Gross Access Line Additions
  11. 11. Gross Access Line Disconnects
  12. 12. Access Line Churn
  13. 13. Access Line Churn
  14. 14. Revenue NOTES: 1. Non-Recurring Revenue is revenue billed to customers for the initial installation of service. 2. Residential Recurring Revenue is the total amount of revenue billed to residential customers plus a portion of switched access revenue allocated between business and residential lines on a pro-rata basis. 3. Business Recurring Revenue is the total amount of revenue billed to business customers plus a portion of switched access revenue allocated between business and residential lines on a pro-rata basis.
  15. 15. Revenue Metrics NOTES: 1. Average Monthly Recurring Revenue per Business Access Line is calculated by taking the average number of Business lines in service for the quarter divided by the Recurring Business Revenue for the quarter divided by 3. 2. Average Monthly Recurring Revenue per Residential Access Line is calculated by taking the average number of Residential lines in service for the quarter divided by the Recurring Residential Revenue for the quarter divided by 3.
  16. 16. Cost of Operating Revenue NOTES: 1. Non-Recurring Customer Costs are one-time costs we are billed by the LEC for initiating new service for our customers. 2. Real Estate Costs are costs associated with our collocations and our switch sites. 3. Network Costs are costs associated with connecting our collocations to our switch sites and our switch sites to other carriers. 4. Recurring Customer Costs are costs directly associated with customer lines including monthly loop expenses, toll charges, and other recurring customer costs.
  17. 17. Operating Cost Metrics NOTES: 1. Monthly Recurring Customer Costs per Average Access Line in Service is the quarterly Recurring Customer Cost of Operating Revenue divided by the average number of total access lines in service for the quarter divided by 3. 2. Monthly Network Costs per Average Access Line in Service is the quarterly Network Cost of Operating Revenue divided by the average number of total access lines in service for the quarter divided by 3. 3. Monthly Real Estate Costs per Average Access Line in Service is the quarterly Real Estate Cost of Operating Revenue divided by the average number of total access lines in service for the quarter divided by 3.
  18. 18. Gross Margin
  19. 19. Selling, General & Administrative NOTES: 1. Acquisition SG&A is all of the SG&A incurred in connection with the sale and installation of new lines during the quarter. 2. Maintenance SG&A is all other SG&A not included in Acquisition SG&A.
  20. 20. SG&A Metrics NOTES: 1. Acquisition Expense per Gross Business Access Line Addition is equal to Acquisition SG&A (associated with Business Lines) plus Non- Recurring Customer Cost of Operating Revenue (associated with Business Lines) minus Non-Recurring Customer Revenue (associated with Business Lines) all divided by the Gross Business Access Line Additions. 2. Acquisition Expense per Gross Residential Access Line Addition is equal to Acquisition SG&A (associated with Residential Lines) plus Non- Recurring Customer Cost of Operating Revenue (associated with Residential Lines) minus Non-Recurring Customer Revenue (associated with Residential Lines) all divided by the Gross Residential Access Line Additions.
  21. 21. SG&A Metrics
  22. 22. SG&A Metrics
  23. 23. SG&A Metrics NOTES: 1. Monthly Maintenance Expense per Average Access Line in Service is equal to the Maintenance SG&A divided by the Average Access Lines in Service divided by 3.
  24. 24. Adjusted EBITDA
  25. 25. GAAP Reconciliation
  26. 26. Net Income / (Loss)
  27. 27. Capital Expenditures
  28. 28. Independent Asset Appraisal NOTE: 1. As of July 31, 2002, prior to Fresh Start Accounting implemented with our emergence from bankruptcy. This is not intended to be a comparison of our current gross or net PP&E on our balance sheet as of December 31, 2003, which was $32,394,000.
  29. 29. Stock Options Outstanding As of December 31, 2003
  30. 30. Current Adjusted Enterprise Valuation As of February 11, 2004

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