Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Shareholder Meeting (April 2020)
36 slides from Shenandoah Telecommunications's shareholder meeting presentation, Apr 23, 2020
Slide 1: 2020 Shareholder Meeting
April 21, 2020 2020 Shareholder Meeting
Slide 2: Board of Directors
2 Board of Directors Name Age Director Since Principal Occupation Thomas A. Beckett 52 2018 SVP, GC and Secretary of American Public Education, Inc. Tracy Fitzsimmons 53 2005 President of Shenandoah University John W. Flora 65 2008 Attorney and Shareholder of Flora Pettit PC Christopher E. French 62
Slide 3: Proposals
3 Proposals 1. Election of directors To elect Tracy Fitzsimmons, John W. Flora and Kenneth L. Quaglio for a three - year term that will expire at the annual meeting of shareholders in 2023 2. Ratification of auditors To ratify the Audit Committee’s selection of KPMG LLP as the Company’s independent
Slide 4: Safe Harbor Statement
4 Safe Harbor Statement This presentation includes “forward - looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our business strategy, our prospects and our financial position
Slide 5: Use of Non-GAAP Financial Measures
5 Use of Non - GAAP Financial Measures Included in this presentation are certain non - GAAP financial measures that are not determined in accordance with US generally accepted accounting principles. These financial performance measures are not indicative of cash provided or used by operating activit
Slide 6: Jim Volk, Sr. VP of Finance and CFO
Jim Volk Sr. VP of Finance and CFO
Slide 7: Consolidated Financial Highlights
7 $244.6 $264.6 $260.9 2017 2018 2019 Excluding Travel Travel Revenue 40.% margin 41.9% margin 41.2% margin $612.0 $630.9 $633.9 2017 2018 2019 Excluding Travel Travel Revenue Consolidated Financial Highlights x x Adjusted OIBDA (in millions) Revenue (in millions)
Slide 8: Consolidated Financial Highlights: EPS and Operating Income
8 $1.33 $0.93 $1.10 2017 2018 2019 $46.5 $93.2 $97.0 2017 2018 2019 Excluding Travel Travel Revenue Consolidated Financial Highlights x x Net Income Per Diluted Share Operating Income (in millions) In 2017, $1.07 of EPS was attributable to a one - time non - cash tax benefit that was recorded princi
Slide 9: Net Income Per Diluted Share History
9 Net Income Per Diluted Share History (Split Adjusted) x x x $0.38 $0.27 $0.34 $0.61 $0.70 $0.83 ($0.02) $1.33 $0.93 $1.10 -$0.20 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2017 figures break out tax reform impact of $1.05 for comparison
Slide 10: Cash Dividend History
10 Cash Dividend History (per Share, Split Adjusted) x x $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Regular Special
Slide 11: Normalized Free Cash Flow and Uses
11 Normalized Free Cash Flow and Uses ($ in millions) Normalized Free cash flow is cash provided by operating activities less capital expenditures (excluding Glo Fiber and Fixed Wireless). $76 $129 $139 2017 2018 2019 69% 8% $52 $10 $19 $17 $12 $13 $14 $7 $36 $51 $53 $4 $59 $123 $123 2017 2018 2019
Slide 12: Wireless Financial Highlights
12 Wireless Financial Highlights ($ in millions) See Appendix for reconciliation of Adjusted OIBDA to Operating Income 42% 48% 47% Revenue Adjusted OIBDA and margin % $443 $450 $443 2017 2018 2019 Excluding Travel Travel Revenue 2% $185 $213 $205 2017 2018 2019 Excluding Travel Travel Revenue 15% 42
Slide 13: Broadband Financial Highlights
13 $114 $124 $134 $25 $24 $28 $27 $26 $23 $174 $183 $194 2017 2018 2019 Other & equipment RLEC Fiber - enterprise & wholesale Cable residential & SMB 5% 6% Broadband Financial Highlights ($ in millions) See Appendix for reconciliation of Adjusted OIBDA to Operating Income 34% 38% 37% $75 $80 $84 43%
Slide 14: Tower Financial Highlights
14 Tower Financial Highlights See Appendix for reconciliation of Adjusted OIBDA to Operating Income. 62% 60% 61% $12 $12 $13 2017 2018 2019 1% 6% $8 $7 $8 2017 2018 2019 62% 60% 61% Revenue Adjusted OIBDA and margin %
Slide 15: Capitalization – Total Debt and Liquidity, Debt Maturity
15 Capitalization – As of 12/31/19 (in millions) $101.7 $75.0 $732.0 Total Debt Total Liquidity Total Debt Available Revolving Line of Credit Cash & Cash Equivalents $176.7 Effective Interest Rate of 3.26% Net Leverage Ratio of 2.48 $29.1 $29.1 $32.8 $167.5 $5.0 $5.0 $5.0 $5.0 $34.1 $34.1 $37.8 $172
Slide 16: Dave Heimbach, EVP and COO
AXSHENTEL Always connected to you ee Dave Heimbach ~ SS EVP and COO
Slide 17: PCS Postpaid Subscribers and ARPU
17 678,096 723,455 740,958 58,501 71,721 103,236 736,597 795,176 844,194 2017 2018 2019 Phone Devices PCS Postpaid Subscribers Subscribers (year - end) ARPU* * Refer to the Appendix for a reconciliation of Wireless segment revenue to Postpaid ARPU. $45.05 $43.54 $42.08 2017 2018 2019
Slide 18: PCS Prepaid Subscribers and ARPU
18 PCS Prepaid Subscribers Subscribers (year - end) ARPU* * Refer to the Appendix for a reconciliation of Wireless segment revenue to Prepaid ARPU. 225,822 258,704 274,012 2017 2018 2018 $39.32 $37.28 $37.83 2017 2018 2019
Slide 19: Contract Term and Sprint Merger Options
19 ▪ Contract through November 2029 ▪ Two 10 - year renewals ▪ Upon non - renewal by either party, parties have put/call options for Sprint to acquire the operating assets of our PCS business for 90% of EBV (entire business value) ▪ Contract options if Sprint / T - Mobile merger is closed ▪ New T -
Slide 20: Broadband Operating Results
20 62,964 58,672 53,673 68,379 75,389 84,045 24,138 29,474 31,380 155,481 163,535 169,098 Q4'17 Q4'18 Q4'19 Video Broadband Voice Broadband Operating Results Revenue Generating Units (RGUs) Average Revenue per Customer* * Refer to the Appendix for a reconciliation of Broadband segment revenue to ave
Slide 21: Broadband Penetration and Churn
21 Broadband Operating Results Broadband Penetration Broadband Churn 34.0% 37.4% 40.3% 2017 2018 2019 2.12% 2.02% 1.82% 2017 2018 2019
Slide 22: Towers
22 Towers 42% 48% 47% Towers Tenants 192 208 225 2017 2018 2019 8% 8% 363 367 404 2017 2018 2019 1% 10%
Slide 23: Cable, Fiber, & Fixed Wireless Networks
23 Target Passings * Planned Launch Harrisonburg 10,377 Active Staunton 10,202 Active Front Royal 5,018 Active Winchester 9,407 Active Salem 7,744 1H21 Lynchburg 9,824 1H21 Roanoke 24,742 1H21 Total 77,314 *Target passings defined as Single Family Households (SFU) and single tenant commercial buildi
Slide 24: Capital Expenditures
24 Capital Expenditures (in millions) $82 $80 $72 $40 - $45 $57 $43 $41 $40 - $45 $19 $50 - $55 $6 $3 - $6 $8 $6 $146 $137 $139 $136 - $154 2017 2018 2019 2020 Guidance Other Tower Glo Fiber & Fixed Wireless Broadband* Wireless *Broadband excludes capex for Glo Fiber and Fixed Wireless
Slide 25: Chris French, President and CEO
Chris French President and CEO
Slide 26: Split-Adjusted Stock Price and Value of Original Share
26 Split - Adjusted Stock Price and Value of Original Share x $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Value of One Original Share of FMTS Split Adjusted Price
Slide 27: Questions & Answers
AXSHENTEL Questions & Answers 27
Slide 28: 2020 Shareholder Meeting
April 21, 2020 2020 Shareholder Meeting
Slide 29: Shentel Appendix
29 Shentel Appendix
Slide 30: 2017 Adjusted OIBDA by Segment
30 2017 Adjusted OIBDA by Segment T welve Months Ended December 31, 201 7 (in thousands) Wireless Tower Broadband Other Consolidated Operating income $ 28,532 $ 5,607 $ 36,811 $ ( 24,440 ) $ 46,510 Depreciation 112,559 1,885 36,019 600 151,063 A mortization of intangible assets 25,166 778 25,944 OIB
Slide 31: 2018 Adjusted OIBDA by Segment
31 2018 Adjusted OIBDA by Segment T welve Months Ended December 31, 2018 (in thousands) Wireless Tower Broadband Other Consolidated Operating income $ 88,004 $ 4,843 $ 41,620 $ ( 41,221 ) $ 93,246 Depreciation 100,950 2,454 38,140 567 142,111 Amortization of intangible assets 24,117 177 24,294 OIBDA
Slide 32: 2019 Adjusted OIBDA by Segment
32 2019 Adjusted OIBDA by Segment Twelve Months Ended December 31 , 201 9 (in thousands) Wireless Tower Broadband Other Consolidated Operating income $ 88,541 $ 5,899 $ 42,521 $ ( 39,915 ) $ 97,046 Depreciation 96,094 2,025 40,831 593 139,543 Amortization of intangible assets 20,062 — 473 — 20,535 O
Slide 33: Normalized Free Cash Flow and Free Cash Flow
33 Normalized Free Cash Flow and Free Cash Flow ($ in thousands) 2017 2018 2019 Net Cash Provided by Operations $222,930 $265,647 $259,145 Less : Capital Expenditures* (146,489) (136,641) (119,954) Normalized Free Cash Flow 76,441 129,006 139,191 Glo Fiber & Fixed Wireless Capital Expenditures - - (
Slide 34: Net Leverage Ratio
34 Net Leverage Ratio ($ in thousands) Q 4 '19 Total Debt $ 7 32,040 Cash 101,651 Total Debt less Cash 630,389 Adjusted OIBDA 63,459 X4 Adjusted OIBDA (last quarter annualized) $ 253,836 Net leverage ratio 2. 48
Slide 35: Wireless Average Revenue per User (ARPU)
35 Wireless Average Revenue per User (ARPU) * Average monthly billed revenue per subscriber = (billed revenue*1,000 ) / average subscribers / 12 months ($ in thousands, except subscribers and revenue per subscriber amounts) 2017 20 18 2019 Gross Postpaid Billings $ 393,571 $ 405,101 $ 410,532 Averag
Slide 36: Broadband Average Revenue Per Customer
36 Broadband Average Revenue Per Customer * Average Revenue Per Customer calculation = (Residential & SMB Revenue * 1,000) / average customer relationships / 12 months ($ in thousands, except customer and per customer amounts) 2017 20 18 20 19 Cable Residential & SMB Revenue $ 114,122 $ 124,072 $ 13
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