Twtelecom.detailed.it.exec overview2011 staicer

tw telecom

February, 2012

IT Executive OverviewAndrew M. StaicerAccount Executive9665 Granite Ridge Dr. Suite 500San Diego, CA 92123T 858.805.6041C [email protected]

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A Unique Set of Network Assets

Over 27,000 local and regional fiber route miles across 75 marketsNearly 15,500 buildings with fiber based services and connectivityNational footprint interconnected with fiber and 10 Gig IP backbone

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We Have A Fully Differentiated Asset

•Massive Local Optical Network

Connecting nearly 15,500 enterprise buildings

Largest competitive fiber based provider (lit buildings)

True fiber based alternative to the incumbent

Managed Quality of Service

Robust portfolio of services

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Strong Financial Performance• 2011 Financial Results

• $1.367 Billion in Revenue• $497.7 Million in POSITIVE M-EBITDA• $91.3 Million in Levered Free Cashflow• $57.9 Million in Net Income• 2.0% Sequential Revenue Growth• 7.4% Y/Y Revenue Growth

• Financially Disciplined• EBIDTA Positive since 1999• Manageable Debt Structure• $484.9 Million Cash and Equivalents on

Hand• Investing 20-25% of Revenues in Capital

Expenditures, the majority of which is to reach enterprise locations

Our Revenue Mix Is Increasingly Enterprise Focused…

While Data & IP Revenue Grew 18.2%* 2011 over 2010

tw telecom 4Q/EoY2011 Results

*(1) Adjusted revenue for end of year 2011 and 2010.

(2) For a reconciliation to GAAP related numbers please see the supplemental earnings information on the Company’s website, www.twtelecom.com.

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Strategic Direction&

Corporate History

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tw telecom – A Corporate History

1993 1996 1998 1999 2000 2001 2003 2006

Time Warner Communications Formed as a JV

between U S WEST and Time Warner to deliver residential cable telephony

(April, 1993)

Time Warner Communications renamed

Time Warner Telecom

Larissa Herda named President and CEO of Time Warner Telecom

(July, 1998)

Time Warner Telecom completes offering of $400M in

High Yield Notes(July, 1998)

Time Warner Telecom completes IPO raising $290M

(May, 1999)

Time Warner Telecom completes IPO raising $290M

(May, 1999)

Time Warner Telecom completes purchase of GST Communications, completing

expansion into 15 new markets(January, 2001)

Time Warner Telecom announces expansion into 5 new markets - Minneapolis, Chicago, Atlanta,

Columbia, Denver(May, 2000)

Time Warner Telecom launches Metro Ethernet product

portfolio (March, 2003)

Time Warner Telecom completes becomes

EBITDA Positive(2Q99)

Time Warner Telecom completes Secondary offering raising $925M

(April, 2000)

Time Warner Telecom completes secondary offering eliminating

controlling shareholders becoming fully

independent (Sept., 2006)

Time Warner Telecom separates from Time Warner

Cable(July, 1998)

Time Warner Telecom separates from Time Warner

Cable(July, 1998)

Time Warner Telecom acquires Xspedius

Communications, completing expansion into 31 new

markets (October, 2006)

2007

Time Warner Telecom rebranded

“tw telecom”(March, 2008)

2008

Time Warner Telecom

acquires ISP inc.net

(Sept, 1998)

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Critical Differentiators

• We operate our own fiber network• Over 27,000 route miles of fiber – over 70% within the

metro• Ability to construct unique footprint, scale bandwidth,

deliver robust array of network services

• We offer a robust set of products and services• Industry leadership position in Ethernet Services – metro

and wide area

• We strive for world class customer care• Local management – sales & operations, coupled 2

national operations centers create a unique coverage model

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Product Portfolio

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How We Think About It

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Ethernet and MPLS Service Classes

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Co-location ServicesLocalized Disaster Recovery &

Business Continuity Strategy

Co-location services include:• Dedicated Internet Access• Storage Transport• Private Line Transport• IP VPN• Native LAN solutions • Local dial-tone• Business continuity• Hardened / central office facility

• Communications• Power (Generator & UPS)• Security• Fire Detection / Suppression• Environment / HVAC

tw telecom Customer Site and Co-Location Cabinet

tw telecom Customer Site and Co-Location Cabinet

Optical & IP NetworkOptical & IP Network

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Our Ethernet Position• Leading & innovating with our Ethernet &

IP strategy• Growth engine for enterprise business• Taking share from the incumbents

• Leveraging our fiber footprint and connected buildings

• Nearly 15,500 fiber connected buildings can have Ethernet Services

• Delivering a differentiated value proposition

• Highlighting convergence• Delivering Data, Internet AND Voice over IP

• Industry Leader• 2011 Frost & Sullivan Growth Leadership

Award for Retail Carrier Ethernet Services• 2010 MEF 9 & 14 Certification

• 10 Gig, Fractional 10 Gig, Long haul• 2006 Awarded “Best in Class” for metro

Ethernet Services -Atlantic ACM

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Fractional 10 Gig Ethernet Services

Storage & ServerSystems

A Unique tw telecom OfferFractional 10 Gigabit Ethernet Access (2 to 9 Gig) offering more cost effective capacity, scalability, &

Class of Service to support growing Enterprise bandwidth demands for multiple, differing

applications

4 Gig Ethernet forTelepresence, Storage

IP Access

2 Gig Ethernet forServers, Storage

4 Gig Ethernet forTelepresence, IP Access

10 Gig Ethernet forData Center AppsMPLS, IP Access

2 Gig Ethernet forTelepresence, Office Apps

IP Access

Central Office

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Ethernet EcosystemOn-Net Access

-Nearly 15,500 On-Net Enterprise Buildings

Cloud Access~ 350 3rd Party Data

Centers

Enterprise Networking- Thousands of

Enterprise owned Corporate Data Centers

Internet Platform

Local Reach-Access to 50%+ of all U.S.

BusinessesGlobal Reach

-Top 10 Most Connected Internet Backbone-MPLS IP VPN Partners with Global Reach

•Industry Leading Ethernet Services Portfolio

•World Class Customer Care•27,000 Fiber Miles

- Ethernet NNI- Special Access

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Internet Services Suite

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IP Network Services

• Variety of Connectivity - DS-1 to 10 Gigabit Ethernet• TDM Services to T1 to OC-N• Ethernet – Available in Fractional and Burstable

• From 2 Mbps to 10,000 Mbps

tw telecom - one of the 10 most

interconnected IP networks

WorldWide

tw telecom - one of the 10 most

interconnected IP networks

WorldWide

• Robust Service Suite• Dedicated, Switched Solution Options

• Service Level Commitments• 24 x 7 support – Locally, Nationally

• Primary, Secondary DNS, BGP support• Bandwidth Performance Reports

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IPv6 from tw telecom

• tw telecom has been successfully implementing customer solutions with IPv6 since 2008

• tw telecom uses a dual-stack arrangement, where both IPv4 and IPv6 traffic are handled across the same Internet circuit. • A single direct network will be assigned a /64

• /64 is size of today’s IPv4 Internet – squared!

• A network with a routed connection will receive a /56• /48 available with documented support provided to ARIN.• BGP is supported with Provider Independent space. These

/48 netblocks may be requested directly from ARIN.

• Customers may tunnel IPv4 / IPv6 networks directly

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tw telecom VPN Solutions

• MPLS Standards Based• RFC 2547 Compliance

• Fully Meshed Architecture• Entirely Scalable

• TDM - DS-1 to OC-12 (622 Mbps)• Ethernet to Gigabit (1,000 Mbps) Speeds

• Wide Applications Support• 5 Classes of Service supporting Best Effort to

Latency Sensitive Voice, Video

• Compliments Ethernet WAN (City-to-City) Solutions

• Business Class Capabilities• Branch Office Connectivity• Multimedia Support• VoIP

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Converged Services

Fully integrate Voice (lines, & PRI or Digital Trunks), secure Internet access, IP VPN and

managed services onto a single IP connection.

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Managed Services

• Service provides full ordering, provisioning, maintenance and management of customer edge router equipment

• Delivered in conjunction with tw telecom’s data service portfolio – Metro and National Ethernet, Internet Access, MPLS IP VPN

• Foundational capability for ongoing converged applications networks• To deliver Internal Data, Internet Access, Voice

• Service provides full ordering, provisioning, maintenance and management of customer edge router equipment

• Delivered in conjunction with tw telecom’s data service portfolio – Metro and National Ethernet, Internet Access, MPLS IP VPN

• Foundational capability for ongoing converged applications networks• To deliver Internal Data, Internet Access, Voice

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Managed Security ServicesCPE-Based

• L3SPI Firewall• Customer defined security policies at

customer premise• DDoS protection (limited to premise – doesn’t

protect bandwidth)• Point-to-point data encryption via IPSec VPN• Network Address Translation

Included Features:

• Comprehensive Security Consultation

• Installation of Service (inclusive of on-site technician for CPE installation)

• 24x7x365 Monitoring and Response

• Dedicated Team of Security Professionals

• Policy Change Management*• Monthly Executive Report*• Service Level Agreements

Network-Based

• L3SPI Firewall• “Clean-pipe” to the premise via customer

defined filters employed in the core• DDoS Mitigation through static filters• Augments CPE security solutions

• Allows higher efficiency of existing security tools

• Allows complex features to be used at the network edge

*Inclusive with Premium level service, additional charge for Business level service

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Managed Firewall Reportstw telecom

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Managed Security Services (DDoS Mitigation)

DDoS Mitigation Service

• Available in two options:• “Clean-bandwidth” via a combination of

‘learned’ traffic behaviors & alarmed customer defined thresholds for an entire circuit

• “Clean-IPs” via a combination of ‘learned’ traffic behaviors & alarmed customer defined thresholds for a specified IP Address

• Adapts to a dynamic data environment• False positives eliminated through ‘attack verification’ by tw telecom’s Security Operations Center

• Attacks blocked closest to origination of attack as technically feasible (furthest from the customer premise)

Included Features:

• Comprehensive Security Consultation

• Installation of service (non-intrusive)

• Proactive monitoring with customer confirmation and mitigation of attack

• Dedicated Team of Security Professionals

• Policy Change Management• Reporting Portal providing detailed

and executive service reports• Service Level Agreements

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IP Backbone Value Summary

• National Footprint with “Best of Breed” infrastructure

• Multiple 10 Gb/s backbone links

• Diverse / Redundant Network Connectivity• Within Network Backbone • To Customer Premise

• MPLS used within the core increases performance, enables additional services

• 60% utilization target for backbone links and connections.

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Intelligent NetworkStrategies

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Bridging the Gap

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Evolution Of The Cloud

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Applications Aware Networking

Dynamic Capacity

Enhanced Management

tw telecom’s Intelligent Network

Easy access to end-to-end network performance metrics including utilization, CoS, latency, jitter and packet delivery to assist with planning, trouble shooting and fine tuning your network for optimal application performance. Backed by comprehensive performance SLAs

Easy access to end-to-end network performance metrics including utilization, CoS, latency, jitter and packet delivery to assist with planning, trouble shooting and fine tuning your network for optimal application performance. Backed by comprehensive performance SLAs

Cost effective, on-demand, dynamic bandwidth capacity when and where you need it allowing your network to adopt to specific application traffic demands

Cost effective, on-demand, dynamic bandwidth capacity when and where you need it allowing your network to adopt to specific application traffic demands

Real-time, granular visibility of application traffic and the ability to adjust prioritization by specific application on the fly to optimize performance and minimize non-business impacting bandwidth consumption.

Real-time, granular visibility of application traffic and the ability to adjust prioritization by specific application on the fly to optimize performance and minimize non-business impacting bandwidth consumption.

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What An Intelligent Network Enables

Phase 3Applications Aware

Networking

Phase 2Dynamic Capacity

Phase 1Enhanced Management

Traffic/Demands

ERP

Financial

Consumer Traffic

Telepresence

Storage

Instant Portal Visibility

Types of Applications

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Applications Aware Networking

Dynamic Capacity

Enhanced Management

Doorstep-to-Doorstep real time visibility

Granular visibility segment by segment

Ability to detect network congestion

Ability to make real time network decisions

Doorstep-to-Doorstep real time visibility

Granular visibility segment by segment

Ability to detect network congestion

Ability to make real time network decisions

VisibilityVisibility

The Capabilities of Intelligent NetworksThe Capabilities of Intelligent Networks

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Customer Network

Choose Time FrameChoose Time Frame

Choose Class of Service

Choose Class of Service

Key Metrics by Location,

Sort Ascending or Descending

Key Metrics by Location,

Sort Ascending or Descending

Click to view POP to POP Metrics

Click to view POP to POP Metrics

Click to View SiteSpecific Charts

Click to View SiteSpecific Charts

Click to Export DataClick to Export Data

Sample Summary ReportSample Summary Report

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Site Specific

• Actual data for a specific site:

• Bandwidth Utilization

• Jitter• Latency• Packet Delivery

• Measures Premise to POP traffic

• Reports available hourly, daily, weekly or monthly

• Data presented as frequent as every 5 minutes

• Easy export to Excel

Sample Latency ReportSample Latency Report

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Applications Aware Networking

Dynamic Capacity

Enhanced Management

• Ability to add “on-demand” capacity

• When & where customers need it

• More cost effective than fixed capacity

• Improved ROI - pay for what you use

TelepresenceTelepresence StorageStorage

The Capabilities of Intelligent NetworksThe Capabilities of Intelligent Networks

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Dynamic Capacity*• Ordering interface via

MyPortal (prototype)• Allows customers to

scale to line rate• Provides appropriate

budgeting information

* Prototype and proposed user interface screens

• Real time performance management

• Highlights bandwidth utilization during increased consumption period

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Applications Aware Networking

Dynamic Capacity

Enhanced Management

• Improves - critical application network

performance

• Mitigates - unwanted bandwidth

consumption

The Capabilities of Intelligent NetworksThe Capabilities of Intelligent Networks

ERP

Financial

Consumer Traffic

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Applications Enabling Platform

~350 3rd Party Data Centers Connected

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Voice over IP

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Our VoIP Product Strategy• Rapidly develop and implement new services that create new and

incremental value for our customers• Cap Legacy Switching Infrastructure – Grow Next-Gen Capabilities• Implemented Traditional Services• Implement Value Added Services

Packet/IP Infrastructure Gateway End User

Convergence Value Added ApplicationsLower Cost Voice

Digital TrunksPRIsLong DistanceDisaster RecoveryInternational TerminationCalling Cards

IP TrunksVoice VPN (Site-to-Site)VoIP Virtual Number ServiceVoIP “Features” to Digital PBXsVoIP Network PeeringNext-Gen IAD

Current CapabilitiesCurrent Capabilities Future Opportunities

Unified MessagingMultimedia ConferencingHosted TelephonyDistributed Call CenterMobilityIM, Presence ManagementWiFi IntegrationHD Voice

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Convergence

> 100% Bandwidth Increase

20 – 30% Savings on Monthly Spend

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What Makes tw telecomDifferent?

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Customer Experience Strategy

tw telecom’s commitment to customer service excellence is based on:• passionate people in local and national customer service roles• customer service choices personalized to your preferences• voice of the customer programs that help us capture customer feedback

and use it to improve the service we provide

With every customer interaction, we strive to Listen, Collaborate and Improve

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Passionate People

Over two-thirds of our

employees are dedicated to

customer service

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Unique Approach to Customer Care

Network ApplicationOrganization

Customer ProjectManagement

ProvisioningInstallation

Maintenance & Repair

• Applications Engineering

• Solutions Design

• Consultative Approach

• Network Documentation

• Local Operations Implementation

• National Provisioning

• Testing

• Proactive Status

• Pro-Active Network Monitoring

• Centralized Trouble Ticket Coordination

• Service Assurance Follow Up

• Proactive Status

STRONG LOCAL OPERATIONS AND MANAGEMENT TEAMS

• Comprehensive Project Management

• Implementation Coordination

• Local Field Engineering

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My Portal – Transactional Services

• Comprehensive services “dashboard”• Allows customers to track and manage ongoing business with tw telecom

• On-Line access to variety of activities• View Invoices, Pay Bills, Track Orders, Manage Circuit Inventory, Initiate and Manage

Trouble Tickets• Delivers proactive level of customer care to facilitate a better service experience

• Comprehensive services “dashboard”• Allows customers to track and manage ongoing business with tw telecom

• On-Line access to variety of activities• View Invoices, Pay Bills, Track Orders, Manage Circuit Inventory, Initiate and Manage

Trouble Tickets• Delivers proactive level of customer care to facilitate a better service experience

tw telecom

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My Portal - Performance Portal• Network performance

data delivered graphically to highlight:

• Network bandwidth utilization

• Quality of network services

• Enabling applications management

• Compliments existing enterprise network management infrastructure to improve total service management

• Circuit by circuit level detail for Ethernet, MPLS IP VPN, Internet Access services

• Network performance data delivered graphically to highlight:

• Network bandwidth utilization

• Quality of network services

• Enabling applications management

• Compliments existing enterprise network management infrastructure to improve total service management

• Circuit by circuit level detail for Ethernet, MPLS IP VPN, Internet Access services

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Voice of the Customer

•Customers consistently said that tw telecom provides a superior customer experience compared to the other telecommunications providers they work with

*tw telecom and competitor satisfaction ratings from tw telecom's September 2009 Customer Relationship Survey

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Voice of the Customer Program• External validation - Top 10

Finalist for Forrester Voice of Customer (VoC) Award

• Cultural employee embracing of VoC through training and incentives

• Selling the VoC as critical pillar in CE strategy - empowering Sales to have a different conversation with customers

• Vision:• Master the improvements• Skip the plateau• Jump start innovation

Award winners: American Express, CDW, Dell

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Examples of Our Satisfied Customers

Public Sector Health Services Professional Services

Financial Media & Information Industry Leaders

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Summary

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tw telecom

• tw telecom’s nearly 20 year Track Record of Success Means…

• Financial Strength to Grow • Product and Service Innovation

• Industry Leading Data & IP Services• Metro Ethernet, IP Networks, VoIP

• Broad Fiber Optic Reach• Over 27,000 Route Miles of Fiber• Metro Ethernet available to nearly 15,500

Buildings in 75 Markets

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Links to related information tw telecom

GeneralAndrew M. StaicerCorporate Managementtw telecom NASDAQ Press ReleasesMy Portal Instructional Video

ReferencesOur Network Voice of the Customer Announcement Forrester’s Official Voice of The Customer Announcement Carrier Ethernet News Article Reviews from IT Professionals Financial Strength

Andrew M. StaicerAccount Executive  II TW Telecom Nasdaq: TWTC9665 Granite Ridge Drive, Suite 500San Diego, CA 92123  Tel: (858) 805-6041Fax:  (858) 309-0121Cell: (760) [email protected]

***Contact for softcopy of presentation for the active links on this page***

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Thank You

Semper Fi!                                                     Andrew M. StaicerAEII, San Diego

9665 Granite Ridge Dr, Suite 500San Diego, CA 92123T:  858.805.6041C:  760.586.9640 F:  [email protected]

Semper Fi!                                                     Andrew M. StaicerAEII, San Diego

9665 Granite Ridge Dr, Suite 500San Diego, CA 92123T:  858.805.6041C:  760.586.9640 F:  [email protected]