Shenandoah Telecommunications Co · NASDAQ:SHEN

Shenandoah Telecommunications — Shareholder Meeting (April 2012)

31 slides from Shenandoah Telecommunications's shareholder meeting presentation, Apr 17, 2012

  1. Slide 1: Annual Shareholder Meeting

    Annual Shareholder Meeting April 17, 2012

  2. 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

  3. 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

  4. Slide 4: Annual Shareholder Meeting

    Annual Shareholder Meeting April 17, 2012

  5. Slide 5: Broadband Is:

    Broadband Is: Email Web Maps Gaming Shopping Music Video 54

  6. Slide 6: PCS Subscriber Growth History

    PCS Subscriber Growth History Postpaid Prepaid 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 6

  7. Slide 7: Total Change in Stock Price

    Total Change in Stock Price 200% 150% 100% 50% 0% -50% 5 YRS 10 YRS 15 YRS 20 YRS Note: Adjusted for stock splits and as of the end of year close. 7

  8. Slide 8: Total Change in Dividends per Share

    Total Change in Dividends per Share 800% 700% 600% 500% 400% 300% 200% 100% 0% 5 YRS 10 YRS 15 YRS 20 YRS Note: Adjusted for stock splits. 8

  9. Slide 9: Earle MacKenzie COO and EVP

    Earle MacKenzie COO and EVP 9

  10. Slide 10: Key Operational Results – Wireless

    Key Operational Results – Wireless PCS Retail Subscribers (000s) 356 303 277 107 67 211 223 50 187 227 236 249 2007 2008 2009 7/1/2010 12/31/2010 12/31/2011 Postpaid Prepaid 10

  11. Slide 11: Key Operational Results – Wireless

    Key Operational Results – Wireless PCS Net Additions 53,955 29,950 40,144 17,071 12,879 13,811 2010 2011 Postpaid Prepaid 11

  12. Slide 12: How Does Shentel’s Wireless Compare?

    How Does Shentel’s Wireless Compare? 2011 Results (in thousands) US Alltel T- Verizon AT&T Sprint Shentel Cellular (ATNI) Mobile nTelos Covered POPs 296,000 313,000 277,800 2,055.. 46,888 4,500 280,200 5,915 2011 Net Adds or (Loss) 5,419 7,699 5,111 54.. (186) (10) (1,232) (18) Total Subs 107,798 10

  13. Slide 13: Key Operational Results – Wireless

    Key Operational Results – Wireless PCS Gross Billed Data & Voice $59.44 $55.54 $22.63 $27.47 $22.33 $17.60 $32.91 $31.97 Postpaid Q4'10 Postpaid Q4'11 Prepaid 2010 Prepaid 2011 13

  14. Slide 14: Investing in the Future

    Investing in the Future  Keeps Shentel’s network aligned with Sprint’s  Allows Shentel to remain competitive with Verizon and AT&T  Improve customers’ experience  Provide 4G LTE service in entire coverage area  Provide better in building and overall coverage  Gives Shentel potential to leverag

  15. Slide 15: Profile of the Sprint Nextel Relationship - Postpaid

    Profile of the Sprint Nextel Relationship - Postpaid  Contract  Access to Additional  Initial term to 2024 Spectrum  Two 10 year renewals  G Block – PCS  800Mhz – iDEN  Defined exit value based on DCF  Management Fee of 8%  Net Service Fee of 12% (Fixed for life of contract) (14% maximum):

  16. Slide 16: Network Vision – 2012 & 2013

    Network Vision – 2012 & 2013  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 launch LTE as early as Q3 2012 16

  17. Slide 17: Cable Service Areas

    SHENTEL Cable Service Areas SHENTEL "crenensoan county © ja and Communications Solutions Former Rapid @ Former Jet Broadband @ Former Suddenlink @ Advanced Mi Cable & Fiber Optic Network nH cen 2. 6 1G i = cerry dinburg (NOC) New Market charleston ‘Harrisonourg ‘Summersville Charlottesville Pinevill

  18. Slide 18: Cable Revenue Generating Units (in thousands)

    Cable Revenue Generating Units (in thousands) 137.2 128.3 9.9 6.3 31.8 37.0 32.1 90.1 90.3 2.5 29.5 2009 2010 2011 Video Data Voice 18

  19. Slide 19: How Does Shentel Cable Compare? Video Homes Passed

    How Does Shentel Cable Compare? Industry 12/31/2010 12/31/2011 Average * Video Homes Passed 178,763 182,156 Penetration 38% 36% 43% High-speed Internet Available Homes 144,099 156,119 Penetration 21% 24% 36% Voice Available Homes 118,652 143,235 Penetration 5% 7% 19% * Industry Averages are from SNL

  20. Slide 20: Why Cable has a Competitive Advantage

    Why Cable has a Competitive Advantage  Issues with the Local Telephone Company  Limits of DSL – Is it the new dial up?  Requires significant capital investment to offer comparable  Loss of cash flow from shrinking voice service  Long-term pricing advantages as access revenues decrease  Bundlin

  21. Slide 21: Shentel’s Cable Advantage

    Shentel’s Cable Advantage  We know Telephone – Our primary competitor  Needs to spend lots of capital to match our service  Unfavorable changes in economics  Own/control our backbone fiber network  Own our telephone switch  Regional focus on small markets 21

  22. Slide 22: Investing in the Future – CapEx Spending (in millions)

    Investing in the Future – CapEx Spending (in millions) Wireless Wireline Cable Other Broadband Other $138.4 $138.4 $28.9 $34.2 $74.6 $15.3 $74.6 $54.3 $51.1 $54.3 $24.5 $51.1 $36.4 $109.5 $81.9 $20.9 $19.4 $16.5 $27.4 $8.8 $10.2 $50.1 $11.2 $30.2 $34.9 $21.9 $24.5 $12.8 2009 2010 2011 2012 2009 2010

  23. Slide 23: Adele Skolits CFO and VP of Finance

    Adele Skolits CFO and VP of Finance 23

  24. Slide 24: 2011 Financial Highlights

    2011 Financial Highlights Net Income from Continuing Net Income (in millions) Operating (in millions) $18.1 $18.8 $13.0 $13.5 2010 2011 2010 2011 24

  25. Slide 25: Revenues (in millions)

    Revenues (in millions) $300 $250 $200 $150 $100 $50 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Note: Effective 2007, Shentel amended its agreement with Sprint Nextel. The net effect of this amendment was a reduction in both revenues and expenses. 25

  26. Slide 26: Mix of Revenues by Quarter (in millions)

    Mix of Revenues by Quarter (in millions) Wireline Wireless Cable $70 $60 $50 $40 $30 $20 $10 $0 26

  27. Slide 27: Change in Mix of Revenues 1Q 2008 4Q 2011

    Change in Mix of Revenues 1Q 2008 4Q 2011 4% 27% 25% 60% 71% 13% Wireline Wireless Cable 27

  28. Slide 28: Expenses by Quarter (in millions)

    Expenses by Quarter (in millions) Cost of goods and services Selling, general and administrative Depreciation and amortization Income tax expense Other Interest expense $65 $55 $45 $35 $25 $15 $5 ($5) 28

  29. Slide 29: Debt to Operating Cash Flow

    Debt to Operating Cash Flow 5.0x 4.5x 4.0x 3.5x 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x 29

  30. Slide 30: Cash Dividends Per Share

    Cash Dividends Per Share $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 30

  31. Slide 31: Annual Shareholder Meeting

    Annual Shareholder Meeting April 17, 2012

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