Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Raymond James Investor Conference 2012
22 slides from Shenandoah Telecommunications's conference presentation, Mar 7, 2012
Slide 1: Shenandoah Telecommunications
Shenandoah Telecommunications Raymond James Investor Conference March 7, 2012
Slide 2: Safe Harbor Statement
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. Th
Slide 3: Use of Non-GAAP Financial Measures
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 activities an
Slide 4: Adele Skolits, CFO and VP of Finance
Adele Skolits CFO and VP of Finance 3
Slide 5: Shentel Initiatives
Shentel Initiatives Diversify Cable – Improve Profitability from 2008 & 2010 Acquisitions Upgrade acquired networks to offer “Triple Play” with robust high speed data offering Increase penetration to market levels Capitalize on ILEC and satellite limitations Build clusters/streamline net
Slide 6: Diversification
Diversification Revenue by Segment – Twelve Months Ending: December 31, 2011 December 31, 2010 Cable 19% Cable 27% Wireline Wireless 17% Wireless Wireline 60% 70% 13% Total External Revenues = $251 million Total External Revenues = $195 million 5
Slide 7: Segment Overview
Segment Overview Twelve Months Ending December 31, 2011 Operating Income Before Depreciation & Amortization (OIBDA) by Segment ($millions) Adjusted % of % of Segment OIBDA % Margin Total Revenues Wireless $66.0 44% 75% 60% Wireline 22.9 69% 26% 13% Cable 2.6 4% 3% 27% Other (3.2) N/A -4% 0% Total $8
Slide 8: Profitability
Profitability Adjusted OIBDA ($ thousands) Adjusted OIBDA $88,258 $82,759 2010 2011 7
Slide 9: Adjusted OIBDA by Segment
Adjusted OIBDA by Segment Wireless Cable Wireline (in thousands) 2010 2011 2010 2011 2010 2011 Operating Income $ 38.3 $ 43.4 $ (15.2) $ (21.4) $ 17.0 $ 13.8 Depreciation and Amortization 23.2 23.9 11.3 23.2 7.9 8.5 OIBDA 61.5 67.3 (3.9) 1.8 24.9 22.3 Less gain on sale of directory - - - - (4.0) - L
Slide 10: Earle MacKenzie, EVP and COO
SHENTEL Earle MacKenzie EVP and COO
Slide 11: Cable TV Growth Potential
Cable TV Growth Potential Industry 12/31/2011 12/31/2010 12/31/2009 Homes Passed 182,156 178,763 56,268 Basic Video Customers 64,979 67,235 23,022 Penetration 44% 36% 38% 41% Digital video customers 25,357 22,855 6,487 Digital video penetration* 39% 34% 28% High-speed Internet Available Homes 156,11
Slide 12: Advantages of Cable
Advantages of Cable Issues with Satellite Bundling with telco DSL and voice Satellite internet is fast but has limited capacity No local presence Issues with ILEC Loss of cash flow from shrinking voice service Bundling of video with voice and DSL Limits of DSL – Is it the new dial up
Slide 13: Cable and Fiber Map
a? SHENTEL Cable and Fiber Map SHENTEL Advanced Media and Communications Solutions Cable & Fiber Optic Network Map Key: Shenandoah County Former Rapid Former Jet Broadband Former Suddenlink Lebanon, 12
Slide 14: PCS Prepaid Statistics – Total Net Contribution
PCS Prepaid Statistics – Total Net Contribution Amortization of Acquired Sub Base Cost to Acquire New Subs Cost of Maintaining Existing Subs Sprint Fees - 6% $8,000,000 REVENUES $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 ($1,000,000) NET CONTRIBUTION ($2,000,000)
Slide 15: PCS Prepaid Statistics
PCS Prepaid Statistics Average Gross Billed Revenue Cumulative Customers 107,100 $22.31 $22.33 $21.72 66,956 $21.42 49,885 $18.73 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Dec 2009 Jul 2010 Dec 2010 Dec 2011 14
Slide 16: Key Operational Metrics – PCS
Key Operational Metrics – PCS Periods Ending Postpaid Retail Subscribers (000s) Retail Subs 249 235 223 211 187 2007 2008 2009 2010 2011 15
Slide 17: Profile of the Sprint Nextel Relationship - Postpaid
Profile of the Sprint Nextel Relationship - Postpaid Contract Management Fee of Initial term to 2024 8% (Fixed for life of Two 10 year renewals contract) Deferred exit value based Spectrum on DCF Brand Net Service fee – 12% National Platform (14% maximum) Access to Sprint vendors
Slide 18: iPhone Statistics – Q4'11
iPhone Statistics – Q4’11 16% of Q4 Gross Adds 36% of iPhones were sold or upgraded in Shentel- controlled channels 3.6% of 12/31/11 Postpaid customers had the iPhone 58% iPhone 4S 42% iPhone 4 53% of Postpaid base has a smartphone 17
Slide 19: Key Operational Results – PCS
Key Operational Results – PCS Gross Billed Revenue per Postpaid User – Data & Voice 1 Voice Data $59.44 $55.54 $22.63 $27.47 $32.91 $31.97 Q4'10 Q4'11 1 – Before Service credits, bad debt, Sprint Nextel fees. 18
Slide 20: Investing in the Future – Network Vision
Investing in the Future – Network Vision Plan to upgrade 274 cell sites in 2012 and the remaining 236 in 2013 including: Multi-modal base station at each site Expanded backhaul capacity LTE in the PCS G-block* Voice service in the 800Mhz block* Expect to accelerate depreciation by $7.3
Slide 21: Investing in the Future
Investing in the Future Capex Spending Upgrade of Jet Network is approximately 51% complete All remaining systems in Virginia, West Virginia and Maryland to have upgrades completed in 2012 Network Vision expected to drive $60M of spend in 2012 20
Slide 22: Q&A
SHENTEL Q&A
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