Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Sidoti Emerging Growth Institutional Investor Forum (March 2010)
37 slides from Shenandoah Telecommunications's conference presentation, Mar 23, 2010
Slide 1: Sidoti Emerging Growth Institutional Investor Forum
Sidoti Emerging Growth Institutional Investor Forum March 23, 2010
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes “forward-looking statements” within the meaning of Section 27A of the S Securities iti Act A t andd Section S ti 21E off ththe S Securities iti Exchange E h Act A t off 1934, 1934 as amended,d d regarding, di among other things, our business strategy,
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Non GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures that are not determined in accordance d with ith US generally ll accepted t d accounting ti principles. i i l Th These fi financial i l performance f measures are not indicative of cash
Slide 4: Agenda
Agenda Introduction and Shentel Overview – Earle MacKenzie – EVP/COO Overview of Wireless Overview of Cable Overview of Wireline Financials – Adele Skolits - CFO 3
Slide 5: Shenandoah Telecommunications Company
Shenandoah Telecommunications Company Wireless Entities Cable Entities Shenandoah Telecommunications Wireline Entities Company Allocation Subsidiary Shenandoah Personal Shenandoah Mobile Shentel Management Shenandoah Cable Shentel Cable Communications Company Company Television Company Company Compa
Slide 6: Business Overview
Business Overview Public company with 4,400 4,400+ shareholders X ≈ 70% individual / 30% institutional Sprint PCS Affiliate of Sprint Nextel Profitable Strong growth Healthy balance sheet Continuity of ownership & management Focused business plan 5
Slide 7: Growth Strategy – Capitalize on Core Competencies
Growth Strategy – Capitalize on Core Competencies Wireless X Increase penetration in existing PCS footprint X Look for new wireless opportunities in surrounding geographic hi areas Cable X F Focus on smaller ll less l competitive i i markets k X Build clusters to gain operating efficiencies X Up
Slide 8: Segment Overview
Segment g Overview Year Ending December 31, 2009 Operating Income Before Depreciation & Revenue by Segment Amortization (OIBDA) by Segment Cable % Margin % of Total 10% Segment OIBDA Wireless $60.5 $60 5 53% 80% Wireline 20.9 65% 28% Wireline Cable (2.4) -18% -3% 20% Other (3.5) N/A -5% 5% Total $75
Slide 9: Agenda
Agenda Introduction and Shentel Overview Overview of Wireless Overview of Cable Overview of Wireline Financials 8
Slide 10: PCS Overview
PCS CS O Overview e e Only remaining public Sprint Nextel affiliate 2.3 million licensed POPs 2 0 million covered POPs 2.0 223k total subscribers X 11.0% penetration of covered POPs 476 CDMA base stations 334 EVDO enabled cell sites X 95% EVDO covered POPs $41,000 Estimated Average hou
Slide 11: Profile of the Sprint Nextel Relationship
Profile of the Sprint Nextel Relationship • Current contract through g 2019 with two 10 year y extensions • Upon expiration of contract – Shentel compensated based on enterprise value • Settlement simplification in place through contract unless amended d d by b both b th parties ti ¾8% of Revenue –
Slide 12: Key Operational Metrics – PCS
Keyy Operational p Metrics – PCS Periods Ending December 31 Retail Subscribers (000s) Number of Cell Sites EVDO Sites Non-EVDO Sites 476 223 411 211 332 346 187 154 52 211 334 2006 2007 2008 2009 2006 2007 2008 2009 Churn (%) Penetration (%) 2.30% 10.9% 11.0% 2.09% 10.3% 1.90% 1.90% 8.8% 2006 2007 2
Slide 13: Attractive Service Revenue Growth – PCS
Attractive Service Revenue Growth – PCS 12 Months Ending Gross Billed PCS Revenue ($ millions)1 13 % CAGR $144.8 $134.2 $113.5 12/31/07 12/31/08 12/31/09 1 Before credits and fees 12
Slide 14: PCS Revenues
PCS Revenues 12 Months Ending Billed Revenue ($ millions) Up 8% $144.8 $134.2 $6.8 $8.1 $10.0 Bad Debt $9 0 $9.0 $11 1 $11.1 Management Fee $9.9 $14.7 Service Fee $15.0 Service Credits Net Revenue $102.2 $92 2 $92.2 12/31/08 12/31/09 13
Slide 15: PCS Revenue per Subscriber
PCS Revenue p per Subscriber Period Ending Gross Billed Revenue per Subscriber1 Voice Data $55.10 $56.35 $55.84 $54.86 $39.21 $37.49 $35.16 $41.58 $41 58 $17.14 $18.35 $19.70 $13.52 2Q08 4Q08 2Q09 4Q09 1 Before credits and fees 14
Slide 16: Wireless Segment
Wireless Segment 12 Months Ending Reported Revenue ($ millions) OIBDA ($ millions) 13% CAGR $115.7 $ 5 $106 9 $106.9 $60 5 $60.5 $93.5 $53.3 $47.3 12/31/07 12/31/08 12/31/09 12/31/07 12/31/08 12/31/09 15
Slide 17: Capital Expenditures – Wireless
Capital p Expenditures p – Wireless 12 Months Ending Capital Expenditures by Category ($ millions) Coverage Other Capacity EVDO Towers $50 $45.1 $40 $30 $27.5 $20 $14.1 $12.5 $10 $0 2007 2008 2009 2010E # Cell Sites 346 411 476 503 % Covered POPs 79% 85% 87% 88% # EVDO Sites 52 211 334 365 % POPs Co
Slide 18: Agenda
Agenda A g e n d a Introduction and Shentel Overview Overview of Wireless Overview of Cable Overview of Wireline Financials 17
Slide 19: Cable TV Overview
Cable TV Overview Complimentary (with LEC business) X 15k Homes Passed X 8k Video Subscribers Offensive positioning (Outside ILEC) X 36k Homes Passed X 15k Video and 2k Internet Subscribers All two-way by b Q3 2010 18
Slide 20: Cable TV
Cable TV RGUs (000s) Internet Basic 24.3 24.2 24.2 24.9 23.9 Digital 1.1 1.1 1.3 2.1 1.5 4.6 4.8 4.8 5.1 6.5 18.6 18.3 18.1 17.3 16.3 12/31/08 3/31/09 6/30/09 9/30/09 12/31/09 Excludes markets sold in November 2009 for all periods shown and only includes internet for areas outside ILEC service area
Slide 21: Cable TV
Cable TV 12 Months Ending Revenue ($ millions) OIBDA ($ millions) $0.3 $15.6 ($0.8) $5.1 $6.1 ($2.4) 12/31/07 12/31/08 12/31/09 12/31/07 12/31/08 12/31/09 Includes Rapid Communications acquisition December 1, 2008 20
Slide 22: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Cable Overview of Wireline Financials 21
Slide 23: Wireline Customers
Wireline Customers December 31, 2009 24.4k 24 4k LEC access lines One FTTH community in service outside of LEC area Acquisition of North River Telephone closed November Fiber Network 2ndd X Route miles: 1,558 X 0.9k access lines 11.0k 11 0k DSL subscribers b ib X 45% Penetration of Access
Slide 24: Wireline Customers
Wireline Customers Access lines (000s) Internet Customers (000s) -0.2% CAGR DSL 1 Dial-up 2 11.0 9.9 24.5 24.0 24.4 8.1 7.5 4.9 49 3.4 12/31/07 12/31/08 12/31/09 12/31/07 12/31/08 12/31/09 1 DSL only available within LEC area NRTC 0.9K access lines acquired 11/2/2009 2 Dial-up offered inside and out
Slide 25: Wireline Overview
Wireline Overview 12 Months Ending Revenue ($ millions)) OIBDA ($ millions) O o s) $44.1 $45.4 $45.1 $22.4 $20.9 $18.6 12/31/07 12/31/08 12/31/09 12/31/07 12/31/08 12/31/09 24
Slide 26: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Overview of Cable Financials – Adele Skolits - CFO 25
Slide 27: Key Financial Results – Continuing Operations
Keyy Financial Results – Continuing g Operations p 1 12 Months Ending Net Income from Continuing Operations Revenue ($ ( millions)) ($ millions) Wireless Cable Wireline $175 $160.6 $150 $ $144.4 $26.1 $130.4 $25.1 $125 $21.9 $100 $75 $50 $25 $0 12/31/07 12/31/08 12/31/09 12/31/07 12/31/08 12/31/09 1
Slide 28: Key Financial Results – Continuing Operations
Keyy Financial Results – Continuing g Operations p 1 12 Months Ending Operating Income Before Depreciation & Operating p g Income ($ ( millions)) Amortization ($ millions) $45.2 $75.5 $42 8 $42.8 $71 9 $71.9 $36.3 $60.0 12/31/07 12/31/08 12/31/09 12/31/07 12/31/08 12/31/09 1 Shentel Converged Servic
Slide 29: Key Financial Results – Consolidated
Key Financial Results – Consolidated 12 Months Ending Earnings Per Share Earnings Per Share -C Continuing ti i O Operations ti 1 - N Nett IIncome $1.11 $1.06 $ $1.03 $ 03 $0.93 $0.79 $0.64 $ 12/31/07 12/31/08 12/31/09 12/31/07 12/31/08 12/31/09 2 1 Shentel Converged Services has been reclassed as di
Slide 30: Total Capex
Total Capex p 12 Months Ending Capital Expenditures by Segment ($ millions) Wireless Wireline Cable Other 65.5 9.5 10.0 53.2 10.5 3.5 41.1 Cable 45.1 13.5 3.1 0.2 12 1 12.1 29.1 8.7 7.0 27.5 8.1 13.5 13 8 13.8 12 4 12.4 2007 Actual 2008 Actual 2009 Actual 2010 Estimated 29
Slide 31: Q&A
SHENTEL Q&A 30
Slide 32: Appendix
<a” SHENTEL Appendix
Slide 33: Non-GAAP Financial Measure – Billed Revenue per Subscriber
Non-GAAP Non GAAP Financial Measure – Billed Revenue per Subscriber Period Ending Gross billed revenue 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Wireless segment total operating revenues $27,341 $27,526 $27,611 $28,804 $29,060 $28,690 $29,142 Equipment revenue (1,511) (1,410) (994) (1,270) (1,169) (1,046)
Slide 34: Non-GAAP Financial Measure – OIBDA
Non-GAAP Non GAAP Financial Measure – OIBDA 12 Months Ended 12/31/2009 Dollars in thousands Wireless Wireline Cable Other Consolidated O Operating ti Income I $40 175 $40,175 $12 576 $12,576 ($6 070) ($6,070) ($3 854) ($3,854) $42 827 $42,827 Depreciation and amortization 20,293 8,317 3,700 320 32,6
Slide 35: Non-GAAP Financial Measure – OIBDA
Non-GAAP Non GAAP Financial Measure – OIBDA 12 Months Ended 12/31/2008 Dollars in thousands Wireless Wireline Cable Other Consolidated O Operating ti Income I $35 877 $35,877 $14 749 $14,749 ($916) ($4 499) ($4,499) $45 211 $45,211 Depreciation and amortization 17,450 7,666 1,250 304 26,670 OIBDA $5
Slide 36: Non-GAAP Financial Measure – OIBDA
Non-GAAP Non GAAP Financial Measure – OIBDA 12 Months Ended 12/31/2007 Dollars in thousands Wireless Wireline Cable Other Consolidated O Operating ti Income I $31 024 $31,024 $12 428 $12,428 ($1 813) ($1,813) ($5 365) ($5,365) $36 274 $36,274 Depreciation and amortization 16,254 6,138 1,050 235 23,6
Slide 37: Sidoti Emerging Growth Institutional Investor Forum
Sidoti Emerging Growth Institutional Investor Forum March 23, 2010