Shenandoah Telecommunications Co · NASDAQ:SHEN
Shenandoah Telecommunications — Raymond James Investor Conference 2009
43 slides from Shenandoah Telecommunications's conference presentation, Mar 11, 2009
Slide 1: Raymond James Investor Conference
Raymond James Investor Conference March 11, 2009 Exhibit 99.1
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 - COO Overview of PCS Overview of Wireline Financials – Adele Skolits – CFO
Slide 5: Shenandoah Telecommunications Company
Allocation Subsidiary Wireline Entities Wireless Entities Shenandoah Telecommunications Company Shentel Cable Company Shentel Service Company Shenandoah Mobile Company Shenandoah Cable Television Company Shentel Management Company Shentel Communications Company Shenandoah Telephone Company Shenandoa
Slide 6: Growth Strategy – Capitalize on Core Competencies
Growth Strategy – Capitalize on Core Competencies Wireless Increase penetration in existing PCS footprint Look for new wireless opportunities in surrounding geographic areas Telephone Attractive markets at reasonable prices Cable Focus on smaller less competitive markets Build clusters to gain opera
Slide 7: Business Overview
Business Overview Public company with 4,400+ shareholders 70% individual/30% institutional Profitable Strong growth Healthy balance sheet Continuity of ownership & management Focused business plan New opportunity in fiber/coax wireline triple play
Slide 8: 2008 OIBDA and Revenues by Segment
2008 OIBDA by Segment 2008 Revenues by Segment Business Overview Total OIBDA = $72 million Total External Revenues = $144 million
Slide 9: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Financials
Slide 10: PCS Overview
PCS Overview One of 3 remaining Sprint Nextel affiliates 2.3 million licensed POPs 1.9 million covered POPs 211k total subscribers 10.5% penetration 411 CDMA base stations 211 EVDO enabled cell sites 86% EVDO covered POPs $41,000 Estimated Average household income
Slide 11: Key Operational Metrics – PCS
Retail Subscribers (000s) Number of Cell Sites Churn (%) Penetration (%) Key Operational Metrics – PCS - Total POPs as of 2008: 2.3 million - Covered POPs as of 2008: 1.9 million 20% CAGR - EVDO coverage as of 2008: 86% of covered POP - EVDO coverage as of 2009E: 92% of covered POP
Slide 12: Attractive Service Revenue Growth - PCS
Gross Billed PCS Revenue ($ millions) 1 Attractive Service Revenue Growth - PCS 1 Before credits and fees 21% CAGR
Slide 13: PCS Revenues
Billed Revenues ($ millions) PCS Revenues Up 19% Bad Debt Management Fee Service Credits Service Fee Net Revenue
Slide 14: PCS Revenue per Subscriber
Gross Billed Revenues per Subscriber 1 PCS Revenue per Subscriber 1 Before credits and fees 2 Data ARPU was $15.90 in Q4 - 2008 Voice Data
Slide 15: PCS Distribution
PCS Gross Adds Breakdown (%) PCS Distribution Current Distribution 17 company stores 17 branded stores 44 exclusive agents (Shentel) 61 Regional/National (Sprint)
Slide 16: Mobile Business Overview
Revenue ($ millions) OIBDA ($ millions) Mobile Business Overview 118 towers 183 non-affiliate leases $5.3 $6.2 $6.7 11% CAGR Non-affiliate Affiliate
Slide 17: Capital Expenditures - Wireless
Capital Expenditures by Category ($ million) Capital Expenditures - Wireless Other Capacity Coverage EVDO Mobile # Cell Sites % Covered POPs 77% 79% 85% 89% # EVDO Sites % POPs Covered N/A 27% 86% 92%
Slide 18: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Financials
Slide 19: Wireline Customers
Wireline Customers 24.2k LEC access lines 5.2k dial-up Internet subscribers 10k DSL subscribers 25.4k cable TV subscribers 10.8k long distance subscribers One FTTH community in service Network Route miles: 756 Fiber miles: 46,733
Slide 20: Wireline Overview
Wireline OIBDA 2008 Wireline Revenue 2008 Wireline Overview Total Wireline OIBDA = $19 million Total Wireline Revenues = $40 million
Slide 21: Telephone
Access lines (000s) Revenue ($ millions) 1 OIBDA ($ millions with % margin) Telephone -0.7% CAGR 1 Includes internal revenues 2 Excludes stock-based compensation and one-time ERO and pension closing expenses of $2.7 million Local Subs Access Other
Slide 22: Shentel Services
Customers (000s) Revenues ($ millions) Shentel Services DSL Dial-up 1 DSL only available within LEC area 2 Dial-up offered inside and outside the LEC area
Slide 23: Cable TV Overview
Overview Subscribers (000s) Revenue ($ millions) OIBDA ($ millions) Cable TV Complimentary (with LEC business) Offensive positioning (Outside ILEC) 60,000 homes passed One-way now, two way in 2009/2010 YE09 – HD, DVR, VOD, Internet, Voice 1 Includes Rapid Communications acquisition – December 2008 D
Slide 24: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Financials – Adele Skolits - CFO
Slide 25: Consolidated Financial Results
Net Income from Continuing Operations Revenues Consolidated Financial Results 27% CAGR In millions 1 2006 Net income includes $6.4 million of gain related to the liquidation of the Rural Telephone Bank (RTB) PCS Other PCS Other
Slide 26: Key Financial Results – Consolidated
Operating Income Operating Income Before Depreciation & Amortization (OIBDA) Key Financial Results – Consolidated In millions PCS Other PCS Other
Slide 27: Key Financial Results – Consolidated EPS
Earnings Per Share - Continuing Operations Earnings Per Share - Net Income Key Financial Results – Consolidated 1 EPS and Fully Diluted EPS include $0.27 per share as a result of the one time gain related to the liquidation of the Rural Telephone Bank
Slide 28: Cash Flows
Cash Flows ($ millions) Cash Flows Change Net Cash from Operations $43.7 $50.1 $6.4 Capital Expenditures ($29.1) ($65.5) ($36.4) Cable TV Acquisition ($10.9) ($10.9) Borrowings $23.7 $23.7 Debt Repayments ($4.1) ($4.2) ($0.1) Dividends ($5.8) ($6.5) ($0.7) Other ($0.9) $1.3 $2.2 Increase in Cash Bal
Slide 29: Total Capex
Total Capex Wireless – PCS/Mobile Wireline - Cable Wireline - Other
Slide 30: Shentel
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Slide 31: Shentel
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Slide 32: Consolidated P&L
($ millions) 2006 2 2007 3 2008 Consolidated P&L 1 Note: 1 In March 2007, the company entered into a new Affiliate Agreement with Sprint Nextel which modified the way PCS revenues and expenses were previously accounted for. Therefore, beginning in 2007, financial metrics, particularly revenue and re
Slide 33: PCS Financial Performance
($ millions) 2006 2007 1 2008 PCS Financial Performance Note: In March 2007, the company entered into a new Affiliate Agreement with Sprint Nextel which modified the way PCS revenues and expenses were previously accounted for. Therefore, financial metrics beginning in 2007 are not comparable to resu
Slide 34: Mobile Financial Performance
($ millions) 2006 2007 2008 Mobile Financial Performance 1 1 Includes internal revenue Revenue $5.3 $6.2 $6.7 % growth 17.4% 11.4% Operating Income $2.1 $2.6 $2.8 % margin 39.8% 42.4% 46.9% OIBDA $3.0 $3.5 $3.7 % margin 56.6% 58.1% 61.2% Capital Expenditures $2.1 $0.4 $1.3
Slide 35: Telephone Financial Performance
($ millions) 2006 2007 2 2008 Telephone Financial Performance 1 1 Includes internal revenue 2 Excludes stock-based compensation and one-time ERO and pension closing expenses of $2.7 million Revenue $30.5 $30.5 $30.7 % growth 0.2% 0.4% Operating Income $14.4 $11.3 $12.5 % margin 47.1% 37.0% 40.9% OIB
Slide 36: Cable Financial Performance
($ millions) 2006 2007 1 2008 2 Cable Financial Performance 1 Excludes stock-based compensation one-time ERO and pension closing expenses of $0.6 million Revenue $5.0 $5.1 $6.1 % growth 1.2% 6.0% Operating Income ($0.6) ($1.8) ($0.9) % margin NM NM NM OIBDA $0.6 ($0.8) $0.3 % margin 11.1% -15.1% 5.4
Slide 37: Non-GAAP Financial Measure – Billed Revenue per Subscriber
Non-GAAP Financial Measure – Billed Revenue per Subscriber Dollars in thousands (except subscribers and revenue per subscriber) Gross billed revenue Wireless segment total operating revenues $ 100,151 $ 87,307 Equipment revenue (5,214) (5,015) Other revenue (2,788) (2,238) Wireless service revenue 9
Slide 38: Non-GAAP Financial Measure – 2008 OIBDA
Non-GAAP Financial Measure – 2008 OIBDA Dollars in thousands PCS Telephone Mobile Cable Other Consolidated Operating Income $33,474 $12,530 $2,839 ($916) ($2,281) $45,646 Depreciation and amortization 16,330 6,594 1,250 1,376 26,434 OIBDA $49,804 $19,124 $3,723 $334 ($905) $72,080
Slide 39: Non-GAAP Financial Measure – 2007 OIBDA
Non-GAAP Financial Measure – 2007 OIBDA Dollars in thousands PCS Telephone Mobile Cable Other Consolidated Operating Income $28,824 $11,307 $2,611 ($1,812) ($,4,243) $36,687 Depreciation and amortization 15,107 5,217 1,050 1,156 23,453 OIBDA $43,931 $16,524 $3,534 ($762) ($3,087) $60,140
Slide 40: Non-GAAP Financial Measure – 2006 OIBDA
Non-GAAP Financial Measure – 2006 OIBDA Dollars in thousands PCS Telephone Mobile Cable Other Consolidated Operating Income $15,660 $14,356 $2,091 ($548) ($5,830) $25,729 Depreciation and amortization 14,326 4,755 1,104 1,303 22,366 OIBDA $29,986 $19,111 $2,969 $556 ($4,527) $48,095
Slide 41: Non-GAAP Financial Measure – 2005 OIBDA
Non-GAAP Financial Measure – 2005 OIBDA Dollars in thousands PCS Other Consolidated Operating Income $9,730 $9,827 $19,577 Depreciation and amortization 12,692 7,210 19,902 OIBDA $22,422 $17,037 $39,459
Slide 42: Non-GAAP Financial Measure – 2004 OIBDA
Non-GAAP Financial Measure – 2004 OIBDA Dollars in thousands PCS Other Consolidated Operating Income $6,188 $11,989 $18,177 Depreciation and amortization 11,915 6,872 18,787 OIBDA $18,103 $18,861 $36,964
Slide 43: Raymond James Investor Conference
Raymond James Investor Conference March 11, 2009
Shenandoah Telecommunications — Raymond James Investor Conference 2009 on 6ix