Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Investor Presentation (March 2020)
25 slides from Shenandoah Telecommunications's investor presentation, March 2020
Slide 1: Shenandoah Telecommunications Company
NASDAQ: SHEN Shenandoah Telecommunications Company March 2020
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: Overview
Overview Nation’s 6th Largest Wireless Leading Regional Broadband Carrier Provider Operating as a Sprint affiliate ~210,000 homes passed 6.3 million covered POPs FTTH expansion to cover 77,000 homes in 7 new markets 1.1 million wireless subscribers Favorable competitive environment Valuable Communic
Slide 4: Shentel Networks
SHENTEL Shentel Networks Morgantown, Berkeley. / = ‘Springs ‘Shepherdstown MD y < Mis > ‘ Ashburn (Ec OH a eesburg shBuen Equtalay Herndon raking Harrisonburg <aharieston ———— Charlottesville KY Waynesbor6 VA Amherst Dillwyn Van Lear, KY Richmond Mapkev, Shentel Fiber Routes Cable Market Coverage Wi
Slide 5: Consolidated Financial Highlights
Consolidated Financial Highlights $ in millions Revenue Adjusted OIBDA $265 $261 $631 $634 $612 3% 17% $227 2017 2018 2019 2017 2018 2019 Normalized Free Cash Flow Uses of Free Cash Flow 8% $139 $123 $123 $129 69% Other $51 $53 Debt Repayments $76 $59 Shares Repurchased $4 $13 $7 Dividends $14 Spect
Slide 6: Wireless Overview
Wireless Overview Nation’s 6th Largest Carrier Scalable Network Shentel’s ~2K Cell Sites cover more than 6.3 million people Expect capital intensity to decline from 17% to 10% and over 1.1 million wireless customers Track Record of Growth Differentiated Market Expertise Grew postpaid subscribers by
Slide 7: Wireless Financial Highlights
Wireless Financial Highlights $ in millions Revenue Adjusted OIBDA $213 2% $450 $205 $443 $443 27% $168 47% 46% 42% 38% 48% 47% 2017 2018 2019 2017 2018 2019 Subscribers (000's) Travel Revenue 1,054 6% 1,118 $18 $18 10% 962 259 274 226 737 795 844 $6* 2017 2018 2019 Postpaid Subscribers Prepaid Subs
Slide 8: Key Drivers of Performance
Key Drivers of Performance Commentary Data / Metrics ▪ Best-in-region network 100% LTE network leveraging Sprint 4G Core • Largest LTE coverage footprint in region Network / • Track record of network integrations and upgrades Coverage • Proven success deploying new technologies RootMetrics Overall P
Slide 9: Leading Network and Distribution
Leading Network and Distribution Shentel Footprint T Footprint Shentel 2018 / 2019 Shentel covered, Expansion Markets No T coverage Corporate 28 Corporate 54 Postpaid Dealer 138 Postpaid Dealer 74 Prepaid Dealer 159 Prepaid Dealer 61 Total 325 Total 189 TMUS Footprint VZ Footprint Shentel covered, S
Slide 10: Shentel Outperforms on Customer Satisfaction
Shentel Outperforms on Customer Satisfaction Net Promoter Scores by Region Shentel is more than triple Sprint’s National NPS 28% 22% Shentel tripled the NPS of its acquired regions from nTelos (Sprint and nTelos subscribers) in the first year of ownership Acquired from nTelos in 2016 10% ~8% 3% 2018
Slide 11: Affiliate Agreement Key Settlement Terms
Affiliate Agreement Key Settlement Terms Sprint Charges / Provides Shentel Earns / Provides Postpaid & Prepaid Management Fee Spectrum Sprint Receives: Roaming & MVNO Brand (Boost, Sprint and Virgin) 8.0% of Postpaid & Usage based on Other carriers use Shentel network Sprint rates Exclusivit
Slide 12: Contract Term and Sprint Merger Options
Contract Term and Sprint Merger Options 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-Mob
Slide 13: Broadband Overview
Broadband Overview Competitors 1% 8% No Competition 91% DSL DSL & Cable Nation’s 20th Largest Broadband Incumbent Cable MSO Provider 200,000+ homes passed Favorable competitive environment DOCSIS 3.1 upgraded network can offer 1GB broadband Rural markets likely to limit threat of fiber overbuilders
Slide 14: Broadband Financial Highlights
Broadband Financial Highlights $ in millions Revenue Adjusted OIBDA & Margin % $80 5% $84 $183 6% $194 $75 $174 5% 7% $26 $23 $27 $28 Other & equipment $25 $24 RLEC Fiber - enterprise & wholesale 43% 44% 38% 43% $134 34% 37% $114 $124 Cable residential & SMB 2017 2018 2019 2017 2018 2019 Cable RGUs
Slide 15: Tower Financial Highlights
Tower Financial Highlights $ in millions Revenue Adjusted OIBDA & Margin % 6% $13 $8 $12 1% $12 $8 $7 62% 62% 60% 61% 61% 60% 2017 2018 2019 2017 2018 2019 Towers Tenants 8% 225 404 8% 208 367 10% 192 363 1% 2017 2018 2019 2017 2018 2019 See Appendix for reconciliation of Adjusted OIBDA to Operating
Slide 16: Capital Expenditures
Capital Expenditures Capex Spending (in millions) $146 $136 - $154 $137 $139 $3 - $6 $8 $6 $6 $19 $57 $50 - $55 Other $43 $41 Tower Glo Fiber & Fixed Wireless $40 - $45 Broadband* Wireless $82 $80 $72 $40 - $45 2017 2018 2019 2020 Guidance *Broadband excludes capex for Glo Fiber and Fixed Wireless 1
Slide 17: Capitalization
Capitalization ▪ See Appendix for the calculation of the net leverage ratio. 17
Slide 18: Q&A
AQSHENTEL Q&A
Slide 19: Appendix
AQSHENTEL Appendix
Slide 20: 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 21: 2017 Adjusted OIBDA by Segment
2017 Adjusted OIBDA by Segment Twelve Months Ended December 31, 2017 (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 Amortization of intangible assets 25,166 778 25,944 OIBDA 166,2
Slide 22: 2018 Adjusted OIBDA by Segment
2018 Adjusted OIBDA by Segment Twelve 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 213,0
Slide 23: 2019 Adjusted OIBDA by Segment
2019 Adjusted OIBDA by Segment Twelve Months Ended December 31, 2019 (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 OIBDA 20
Slide 24: Net Leverage Ratio
Net Leverage Ratio ($ in thousands) Q4'19 Total Debt $ 732,040 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 24
Slide 25: Normalized Free Cash Flow & Free Cash Flow
Normalized Free Cash Flow & 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 - - (18,838
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