Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Investor Presentation (January 2020)
26 slides from Shenandoah Telecommunications's investor presentation, January 2020
Slide 1: Shenandoah Telecommunications Company
NASDAQ: SHEN Shenandoah Telecommunications Company January 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 Cable MSO Carrier Operating as a Sprint affiliate 200,000 + homes passed 6.3 million covered POPs ~ 170,000 RGUs 1.1 million wireless subscribers FTTH expansion to cover 60,000 homes in 6 new markets Valuable Communication Strong Free Cash Flow
Slide 4: Shentel Networks
A\SHENTEL’ Shentel Networks Hershey ) Harrisbur 5 Mechanicsburg j Shippensburg a Greencastle fagerstown Morgantow, Y ; a MD G Ny fyville Ashburn (Equinix) Waynesboro. <—. Bridgeport burg c OH ~——! charlottesville Waynesboro KY" VA Van Lea, KY Amherst Dillwyn Richmond Map Key: treet, Shentel Fiber Ro
Slide 5: Consolidated Financial Highlights
Consolidated Financial Highlights $ in millions Revenue Adjusted OIBDA $612 $631 $265 3% $245 8% $473 $197 2017 2018 2019 3Q YTD 2017 2018 2019 3Q YTD Free Cash Flow Uses of Free Cash Flow $129 $123 69% $86 $51 $74 $76 $59 $4 $13 $45 $36 $52 $17 $12 $10 2017 2018 2019 3Q YTD 2017 2018 2019 3Q YTD Ac
Slide 6: Wireless Highlights
Wireless Highlights Significant Investment in Network Nation’s 6th Largest Carrier ~$300M in capital deployed Shentel’s ~2K Cell Sites cover more than 6.3 million people densifying the network and upgrading to 100% and over 1.1 million wireless customers LTE over the last three years ($48 / POP) Dif
Slide 7: Wireless Financial Highlights
Wireless Financial Highlights $ in millions Revenue Adjusted OIBDA $455 2% $463 $220 $193 14% $340 $162 42% 48% 47% 2017 2018 2019 3Q YTD 2017 2018 2019 3Q YTD Subscribers (000’s) Travel Revenue 10% 1,054 4% 1,095 $18 $18 962 259 272 226 737 795 823 $6 * 2017 2018 2019 3Q YTD Postpaid Subscribers Pr
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 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 2018 2018 2017 2018 Wireless Sector Average Legac
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: Tower Financial Highlights
Tower Financial Highlights $ in millions Revenue OIBDA $12 1% $12 $7 $7 $9 $6 62% 60% 61% 2017 2018 2019 3Q YTD 2017 2018 2019 3Q YTD Towers Tenants 221 367 4% 380 208 6% 363 8% 1% 192 2017 2018 2019 3Q YTD 2017 2018 2019 3Q YTD See Appendix for reconciliation of Adjusted OIBDA to Operating Income.
Slide 14: Cable Financial Highlights
Cable Financial Highlights $ in millions Revenue Adjusted OIBDA $129 $119 $48 8% $104 $41 19% $38 34% 38% 38% 37% 34% 37% 2017 2018 2019 3Q YTD 2017 2018 2019 3Q YTD Homes Passed (000s) and Broadband RGUs (000s) 146 147 150 Penetration 1% 2% 190 185 185 23 24 24 66 70 76 35% 38% 40% 57 53 38% 41% 36
Slide 15: Wireline Financial Highlights
Wireline Financial Highlights $ in millions Adjusted OIBDA Revenue $79 $77 $34 $32 $24 $23 $58 $24 $8 $10 $18 $9 $47 $44 43% 41% 42% $31 2017 2018 2019 3Q YTD RLEC Cable Fiber 2017 2018 2019 3Q YTD Homes Passed (000s) and Broadband Cable RGUs (000s) Penetration 18 18 17 17 17 7 7 10 1 5 6 17% 32% 38
Slide 16: Capital Expenditures – Investing in the Future
Capital Expenditures – Investing in the Future Capex Spending (in millions) $146 $5 $137 $8 $23 $16 $107 $35 $5 $27 $12 $30 $83 $86 $60 2017 2018 2019 Q3 YTD Wireless Cable Wireline Other 16
Slide 17: Capitalization
Capitalization Total Liquidity & Debt (in millions) Debt Maturity (in millions) $172.5 $5.0 Effective 2.61x $448.5 Interest Rate of Leverage $167.5 Ratio 3.63% $34.1 $34.1 $37.8 $5.0 $5.0 $5.0 Net Leverage Ratio of 2.56 $8.5 $29.1 $32.8 $29.1 $5.0 ▪ See Appendix for the calculation of the net levera
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 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 22: 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 23: 2019 3Q YTD Adjusted OIBDA by Segment
2019 3Q YTD Adjusted OIBDA by Segment Nine Months Ended September 30, 2019 (in thousands) Wireless Cable Wireline Other Consolidated Operating income $ 71,092 $ 18,785 $ 14,367 $ (30,078) $ 74,166 Depreciation and amortization 90,469 19,239 10,057 393 120,158 OIBDA 161,561 38,024 24,424 (29,685) 194
Slide 24: Net Leverage Ratio
Net Leverage Ratio ($ in thousands) Q3'19 Total Debt $ 740,570 Cash 97,415 Total Debt less Cash 643,155 Adjusted OIBDA 62,836 x4 Adjusted OIBDA (last quarter annualized) $ 251,344 Net leverage ratio 2.56 24
Slide 25: Free Cash Flow
Free Cash Flow ($ in thousands) 2017 2018 2019 3Q YTD Net Cash Provided by Operations $222,930 $265,647 $193,459 Less: Capital Expenditures (146,489) (136,641) (107,038) Free Cash Flow $76,441 $129,006 $86,421 Free cash flow is a non-GAAP financial measure that, when viewed with our GAAP results, pr
Slide 26: Change in RGU counting methodology
Change in RGU counting methodology 2017 2018 Q3 2019 Cable RGUs former methodology 133,086 135,145 138,524 Bulk adjustment 12,586 11,934 11,667 Cable RGUs revised methodology 145,672 147,079 150,191 Wireline RGUs former methodology 37,617 38,337 37,634 Less: RLEC (28,339) (23,748) (22,706) Bulk adju
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