Q4 2006 Time Warner Telecom Earnings Conference Call - Part 2.

(From Fair Disclosure Wire)

LARISSA HERDA: And I think that, as we've said in the past with regard to, we have a lot more salespeople now. But they're primarily continuing to sell the product portfolio that they had with Xspedius. They're trying to sell some additional products, but it takes some time to get that product capability in each of the markets. And we're not, we have to focus in the areas where we think we can get the biggest bang for our buck the quickest, and so we've been very analytical about where we're putting our resources, where we're increasing resources, the training that the sales force is going through. It's a little overwhelming for the sales force of Xspedius at first because it's a lot of new things, different processes, a lot of things are changing for them and so we're very sensitive to that and wanting to make sure that they're focussed on trying to maintain the momentum that they have while layering on the new products and services. And that's why the little guidance that we've given on revenue synergies has been that we wouldn't expect to see the fruits of that labor until towards the end of the year because it just takes that much time between training and implementing new product capabilities. It's just something that takes time, but we're feeling good about it and we're on track. Next question. OPERATOR: Your next question comes from [Time Frites] with Lehman Brothers. TIME FRITES (ph), ANALYST, LEHMAN BROTHERS: Yes. Good morning. Thanks for taking the question. Can you spend a minute going into a bit more detail on the CapEx? Your forecast, even accounting for the Xspedius integration, is up pretty healthfully, healthy off this year's run rate. And I was wondering, is the spending related signed contracts exclusively? Are you putting fiber into buildings off metro rings in the Xspedius markets that -- that's not counted in the $20 to $25 million of integration CapEx? And I guess is, would you consider 2007 kind of a peak year for CapEx?

MARK PETERS: Yes, I think what I would draw you to is look at some trends in where we -- and how we CapEx and the size of our capital spending. Over the last couple of years -- let me back up. Remember, we're a growth company. We're going after a lot of new customers every day, bringing them, bringing them either from our existing buildings or adding new buildings to our network, building out to new business parks to reach those customers well within our threshold and our return criteria, and that philosophy's not changed. TIME FRITES (ph): Yes. MARK PETERS: And over the last two years, our CapEx has been approximately 23% of our total revenue. It's been actually pretty consistent over the last couple of years. And without giving any revenue guidance and backing out integration CapEx, it's in that same ballpark as we look forward into this year. Again, we give a range out there so it's all a function of our sales. We tie capital spending to sales. So when that actual revenue hits, it can be a timing issue, but it's all within trend lines. So frankly while the absolute dollars have increased, given where business is, given our projected sales activities, it's really on trend line. LARISSA HERDA: Yes, and I think, I think it also demonstrates that we see very strong opportunities -- TIME FRITES (ph): Okay. LARISSA HERDA: -- and we have been winning some nice opportunities, as well. They are capital intensive, but they are well within and in many cases exceeding our threshold, so we feel very good about them. And there are a few strategic things that we always do every year to line us up for growth opportunities with larger customers. And I think that the -- for a growth company, I think our CapEx guidance is good news, particularly with the discipline that we have always maintained. Clearly we don't just -- we have a long track record here of making -- of putting CapEx in the right places and driving the right behavior internally and that's not changing. We feel good about the opportunities that are out there and we're going to invest in them. TIME FRITES (ph): Great. Thank you very much. OPERATOR: Your next question comes from with Vance Edelson with Morgan Stanley. VANCE EDELSON, ANALYST, MORGAN STANLEY:…