Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Capstone Investments 2009 Small-Cap Investor Conference
35 slides from Shenandoah Telecommunications's conference presentation, Jul 30, 2009
Slide 1: Capstone Investments 2009 Small-Cap Investor Conference
Capstone Investments 2009 Small - Cap Investor Conference July 30, 2009
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: 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 4: Agenda
Agenda Introduction and Shentel Overview – Earle MacKenzie – EVP/COO Overview of Wireless Overview of Wireline Overview of Cable Financials – Adele Skolits - CFO 3
Slide 5: Shenandoah Telecommunications Company
Shenandoah Telecommunications Company Cable Entities Wireless 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+ 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 areas Wireline X Attractive markets at reasonable prices Cable X Focus on smaller less competitive markets X Build cluster
Slide 8: Segment Overview
Segment Overview 12 Months Ending June 30, 2009 Operating Income Before Depreciation & Revenue by Segment Amortization (OIBDA) by Segment Segment OIBDA % Margin % of Total Wireless $58.8 53% 78% Wireline 21.7 65% 29% Cable (0.5) -5% -1% Other (4.3) N/A -6% Total $75.6 49% Total External Revenues = $
Slide 9: Agenda
Agenda Introduction and Shentel Overview Overview of Wireless Overview of Wireline Overview of Cable Financials 8
Slide 10: PCS Overview
PCS Overview One of 3 remaining Sprint Nextel affiliates 2.3 million licensed POPs 2.0 million covered POPs 216k total subscribers X 11.0% penetration of covered POPs 432 CDMA base stations 278 EVDO enabled cell sites X 94.4% EVDO covered POPs $41,000 Estimated Average household income
Slide 11: Key Operational Metrics – PCS
Key Operational Metrics – PCS Period Ending Retail Subscribers (000s) Number of Cell Sites EVDO Sites Non-EVDO Sites Churn (%) Penetration (%) 10
Slide 12: Attractive Service Revenue Growth – PCS
Attractive Service Revenue Growth – PCS 12 Months Ending Gross Billed PCS Revenue ($ millions)1 18.4% CAGR 1 Before credits and fees 11
Slide 13: PCS Revenues
PCS Revenues 12 Months Ending Billed Revenue ($ millions) Up 15.1% Bad Debt Management Fee Service Credits Service Fee Net Revenue 12
Slide 14: PCS Revenue per Subscriber
PCS Revenue per Subscriber Period Ending Gross Billed Revenue per Subscriber1 Data Voice 1 Before credits and fees 13
Slide 15: Wireless Segment
Wireless Segment 12 Months Ending Reported Revenue ($ millions) OIBDA ($ millions) 20.1% CAGR 1 1 Decrease in revenue between 6/30/2007 and 6/30/2008 is the result of the change in accounting for the Sprint Nextel contract amendment. 14
Slide 16: Capital Expenditures – Wireless
Capital Expenditures – Wireless 12 Months Ending Capital Expenditures by Category ($ millions) Coverage Other Capacity EVDO Mobile # Cell Sites 332 346 411 486 % Covered POPs 77% 79% 85% 88% # EVDO Sites 0 52 211 338 % POPs Covered N/A 27% 86% 94% 15
Slide 17: Agenda
Agenda Introduction and Shentel Overview Overview of Wireless Overview of Wireline Overview of Cable Financials 16
Slide 18: Wireline Customers
Wireline Customers 12 Months Ending June 30, 2009 24.0k LEC access lines One FTTH community in service outside of LEC area Pending Acquisition of North River Telephone Fiber Network X 1.0k access lines X Route miles: 767 X Fiber miles: 47,654 10.5k DSL subscribers 4.4k dial-up Internet s
Slide 19: Wireline Customers
Wireline Customers 12 Months Ending Access lines (000s) Internet Customers (000s) -1.4% CAGR 1 2 1 DSL only available within LEC area 2 Dial-up offered inside and outside the LEC area 18
Slide 20: Wireline Overview
Wireline Overview 12 Months Ending Revenue ($ millions) OIBDA ($ millions) 19
Slide 21: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Overview of Cable Financials 20
Slide 22: Cable TV Overview
Cable TV Overview Complimentary (with LEC business) X 16k Homes Passed X 8.3k Video Subscribers Offensive positioning (Outside ILEC) X 44k Homes Passed X 17k Video, 1.3k Internet, 0 Voice Subscribers One-way now, two way in 2009/2010 YE09 – HD, DVR, VOD, Internet, Voice 21
Slide 23: Cable TV
Cable TV 12 Months Ending Subscribers (000s) Revenue ($ millions) Digital Basic 1 OIBDA ($ millions) 1 1 1 Includes Rapid Communications acquisition – December 2008 22
Slide 24: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Overview of Cable Financials – Adele Skolits - CFO 23
Slide 25: Key Financial Results – Continuing Operations
Key Financial Results – Continuing Operations1 12 Months Ending Net Income from Continuing Operations Revenue ($ millions) ($ millions) Wireless Cable Wireline 16.9% CAGR 2 1 Shentel Converged Services has been reclassed as discontinued operations. All results have been restated. 2 Decrease in reven
Slide 26: Key Financial Results – Continuing Operations
Key Financial Results – Continuing Operations1 12 Months Ending Operating Income Before Depreciation & Operating Income ($ millions) Amortization ($ millions) 1 Shentel Converged Services has been reclassed as discontinued operations. All results have been restated. 25
Slide 27: Key Financial Results – Consolidated
Key Financial Results – Consolidated 12 Months Ending Earnings Per Share Earnings Per Share - Continuing Operations1 - Net Income 2 1 Shentel Converged Services has been reclassed as discontinued operations. All results have been restated. 2 Includes $10.7 million write down of Converged Service Bus
Slide 28: Total Capex
Total Capex 12 Months Ending Capital Expenditures by Segment ($ millions) Cable Wireline Wireless 27
Slide 29: Shentel Q&A
SHENTEL Q&A
Slide 30: Appendix
Appendix 29
Slide 31: Non-GAAP Financial Measure – Billed Revenue per Subscriber
Non-GAAP Financial Measure – Billed Revenue per Subscriber Period Ending Dollars in thousands (except subscribers and revenue per subscriber) Gross billed revenue 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Wireless segment total operating revenues $24,407 $27,341 $27,526 $27,611 $28,804 $29,060 Equipment revenue
Slide 32: Non-GAAP Financial Measure – OIBDA 12 Months Ended 6/30/2009
Non-GAAP Financial Measure – OIBDA 12 Months Ended 6/30/2009 Dollars in thousands Wireless Wireline Cable Other Consolidated Operating Income $40,055 $13,278 ($2,897) ($4,642) $45,794 Depreciation and amortization 18,749 8,389 2,350 327 29,815 OIBDA $58,804 $21,667 ($547) ($4,315) $75,609 31
Slide 33: Non-GAAP Financial Measure – OIBDA 12 Months Ended 6/30/2008
Non-GAAP Financial Measure – OIBDA 12 Months Ended 6/30/2008 Dollars in thousands Wireless Wireline Cable Other Consolidated Operating Income $32,522 $13,622 ($1,182) ($4,901) $40,061 Depreciation and amortization 16,819 6,897 1,031 283 25,030 OIBDA $49,341 $20,519 ($151) ($4,618) $65,091 32
Slide 34: Non-GAAP Financial Measure – OIBDA 12 Months Ended 6/30/2007
Non-GAAP Financial Measure – OIBDA 12 Months Ended 6/30/2007 Dollars in thousands Wireless Wireline Cable Other Consolidated Operating Income $24,814 $14,528 ($1,244) ($5,328) $32,770 Depreciation and amortization 15,983 5,617 1,078 236 22,914 OIBDA $40,797 $20,145 ($166) ($5,092) $55,684 33
Slide 35: Capstone Investments 2009 Small-Cap Investor Conference
Capstone Investments 2009 Small - Cap Investor Conference July 30, 2009