Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Investor Presentation (October 2019)
23 slides from Shenandoah Telecommunications's investor presentation, October 2019
Slide 1: Shenandoah Telecommunications Company
NASDAQ: SHEN Shenandoah Telecommunications Company October 2019
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 • Diversified facilities-based telecom services provider in tier 2/3 markets in the Mid-Atlantic region • 1.1 million wireless subscribers operating as a Sprint affiliate • 84,000 cable customers and 139,000 Revenue Generating Units (RGUs) • ~ 6,000 fiber route miles and 300,000 fiber stran
Slide 4: Complementary Business Segments
Complementary Business Segments $ in millions $631 Wireline $49 $265 Cable Wireline $124 $32 Cable $48 Wireless Wireless $458 $220 Corporat e ($36) 2018 Revenue 2018 Adj. OIBDA Cable Cable 20% 16% Wireline Wireline 11% Wireless 8% • See Appendix for reconciliation of Adjusted Wireless 72% OIBDA to O
Slide 5: Consolidated Financial Highlights
Consolidated Financial Highlights $ in millions Revenue Adjusted OIBDA $612 $631 $265 3% $245 8% $318 $135 2017 2018 2019 1H 2017 2018 2019 1H Free Cash Flow Uses of Free Cash Flow $129 $123 69% $51 $76 $59 $4 $13 $51 $38 $36 $52 $25 $12 $10 $6 2017 2018 2019 1H 2017 2018 2019 1H Acquisitions Divide
Slide 6: Wireless Network Coverage
Wireless Network Coverage • 7.2 million Market POPs • 6.3 million Covered POPs • 1.1 million total subscribers • 17.2% penetration of covered POPs • 1,910 CDMA base stations (sites) • 217 Towers Owned 6
Slide 7: Wireless Financial Highlights
Wireless Financial Highlights $ in millions Revenue Adjusted OIBDA $455 2% $463 $220 $193 14% $230 $111 2017 2018 2019 1H 2017 2018 2019 1H Subscribers AOIBDA Margin 10% 1,053,880 3% 1,080,758 962,419 48% 48% 258,704 269,039 42% 225,822 736,597 795,176 811,719 2017 2018 2019 1H Postpaid Subscribers
Slide 8: Wireless – Key Affiliate Terms
Wireless – Key Affiliate Terms SPRINT PROVIDES Management Fee Net Service Fee ▪ Spectrum ▪ Billing/Collections ▪ Brands ▪ Customer Care ▪ Exclusive Sprint provider in our ▪ Long Distance service area ▪ Equipment Financing ▪ Access to Sprint vendors ▪ Shentel pays Sprint 8.6% of ▪ Shentel pays Sprint
Slide 9: 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 10: Tower Financial Highlights
Tower Financial Highlights $ in millions Revenue OIBDA $12 1% $12 $7 $7 $6 $4 2017 2018 2019 1H 2017 2018 2019 1H Towers Owned OIBDA Margin 217 62% 60% 60% 192 208 8% 4% 2017 2018 2019 1H 2017 2018 2019 1H See Appendix for reconciliation of Adjusted OIBDA to Operating Income. Note that Tower results
Slide 11: Cable & Fiber Network
Cable & Fiber Network ▪ Acquired 2.5 GHz spectrum for $17M enables fixed wireless broadband deployment to over 1M POPs in rural areas out of reach of cable or fiber providers. ▪ Will deploy carrier grade 5G ready LTE standard technology. 11
Slide 12: Cable Financial Highlights
Cable Financial Highlights $ in millions Revenue Adjusted OIBDA $129 $119 $48 8% $41 19% $68 $26 2017 2018 2019 1H 2017 2018 2019 1H RGUs AOIBDA Margin 138,572 38% 37% 34% 3% 135,145 2% 133,086 2017 2018 2019 1H 2017 2018 2019 1H See Appendix for reconciliation of Adjusted OIBDA to Operating Income
Slide 13: Wireline Financial Highlights
Wireline Financial Highlights $ in millions Revenue Adjusted OIBDA $79 $77 $34 $32 $50 $49 $38 $16 $25 $25 $25 $12 2017 2018 2019 1H RLEC Fiber Other 2017 2018 2019 1H RGUs AOIBDA Margin 43% 41% 43% 28,450 1% 28,658 28,624 2017 2018 2019 1H 2017 2018 2019 1H See Appendix for reconciliation of Adjust
Slide 14: Capital Expenditures – Investing in the Future
Capital Expenditures – Investing in the Future Capex Spending (in millions) FTTH -$22M Fixed Wireless - $20M Cable - $33M 2019 Guidance 14
Slide 15: Capitalization
Capitalization Total Liquidity & Debt (in millions) Debt Maturity (in millions) $458.1 $178.0 $5.0 Effective 2.61x $458.1 Interest Rate of $37.8 Leverage Ratio 3.79% $34.1 $34.1 $5.0 $5.0 $5.0 $173.0 $13.4 $2.5 $32.8 Net Leverage $29.1 $29.1 Ratio of 2.25x $10.9 $5.0 ▪ See Appendix for the calculati
Slide 16: Q&A
AQSHENTEL Q&A
Slide 17: Appendix
AQSHENTEL Appendix
Slide 18: 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 19: 2017 Adjusted OIBDA by Segment
2017 Adjusted OIBDA by Segment Twelve Months Ended December 31, 2017 (in thousands) Wireless Cable Wireline Other Consolidated Operating income $ 34,139 $ 15,846 $ 20,965 $ (24,440) $ 46,510 Depreciation and amortization 139,610 23,968 12,829 600 177,007 OIBDA 173,749 39,814 33,794 (23,840) 223,517
Slide 20: 2018 Adjusted OIBDA by Segment
2018 Adjusted OIBDA by Segment Twelve Months Ended December 31, 2018 (in thousands) Wireless Cable Wireline Other Consolidated Operating income $ 92,847 $ 23,755 $ 17,865 $ (41,221) $ 93,246 Depreciation and amortization 127,521 24,644 13,673 567 166,405 OIBDA 220,368 48,399 8,166 (40,654) 259,651 S
Slide 21: 2019 1st Half Adjusted OIBDA by Segment
2019 1st Half Adjusted OIBDA by Segment Six Months Ended June 30, 2019 (in thousands) Wireless Cable Wireline Other Consolidated Operating income $ 47,361 $ 12,489 $ 9,440 $ (20,483) $ 48,807 Depreciation and amortization 63,269 13,013 6,980 270 83,532 OIBDA 110,630 25,502 16,420 (20,213) 132,339 Sh
Slide 22: Net Leverage Ratio
Net Leverage Ratio ($ in thousands) Q2'19 Total Debt $ 760,459 Cash* $ 50,000 Total Debt less Cash $ 710,459 LTM EBITDA per Credit Facility Agreement** $ 315,519 Net leverage ratio 2.25x * Cash is limited to $50.0 million for purposes of this calculation under the terms of the credit facility agreem
Slide 23: Free Cash Flow
Free Cash Flow ($ in thousands) 2017 2018 2019 1H Net Cash Provided by Operations $222,930 $265,647 $129,632 Less: Capital Expenditures (146,489) (136,641) (79,124) Free Cash Flow $76,441 $129,006 $50,508 Free cash flow is a non-GAAP financial measure that, when viewed with our GAAP results, provide
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