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
Exhibit 99.1 Raymond James Investor Conference March 11, 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- 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 activiti
Slide 4: Agenda
Agenda Introduction and Shentel Overview – Earle MacKenzie - COO Overview of PCS Overview of Wireline Financials – Adele Skolits – CFO 3
Slide 5: Shenandoah Telecommunications Company
Shenandoah Telecommunications Company Wireless Entities Shenandoah Telecommunications Wireline Entities Company Allocation Subsidiary Shenandoah Personal Shenandoah Mobile Shenandoah Shenandoah Cable Shentel Cable Shentel Converged Communications Company Telephone Company Television Company Company
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 6
Slide 8: Business Overview
Business Overview 2008 Revenues by Segment 2008 OIBDA by Segment Cable Other - Cable 1% 1% 4% Other 7% STC STC 26% 16% PCS 70% PCS Mobile Mobile 67% 3% 5% Total External Revenues = $144 million Total OIBDA = $72 million 7
Slide 9: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Financials 8
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 $41,000 Estimated Average household income 9
Slide 11: Key Operational Metrics – PCS
Key Operational Metrics – PCS Retail Subscribers (000s) Number of Cell Sites 20% CAGR Total EVDO 211 187 154 411 332 346 52 211 2006 2007 2008 2006 2007 2008 Churn (%) Penetration (%) 2.3% 1.9% 1.9% 10.3% 10.5% 8.8% 2006 2007 2008 2006 2007 2008 - Total POPs as of 2008: 2.3 million - EVDO coverage a
Slide 12: Attractive Service Revenue Growth - PCS
Attractive Service Revenue Growth - PCS Gross Billed PCS Revenue ($ millions)1 21% CAGR $134.2 $114.2 $91.4 2006 2007 2008 1 Before credits and fees 11
Slide 13: PCS Revenues
PCS Revenues Billed Revenues ($ millions) Up 19% $134.2 $8.1 $114.2 $9.0 $6.9 $15.0 $7.7 $11.1 $9.9 Service Credits $8.5 Bad Debt Management Fee $92.1 Service Fee $80.1 Net Revenue 2007 2008 12
Slide 14: PCS Revenue per Subscriber
PCS Revenue per Subscriber Gross Billed Revenues per Subscriber1 Voice Data $55.61 $55.98 $12.58 $13.63 $43.03 $42.35 2 2007 2008 1 Before credits and fees 2 Data ARPU was $15.90 in Q4 - 2008 13
Slide 15: PCS Distribution
PCS Distribution PCS Gross Adds Breakdown (%) Shentel Controlled Sprint Controlled 40% 38% 39% 60% 62% 61% 2006 2007 2008 Current Distribution 17 company stores 44 exclusive agents (Shentel) 17 branded stores 61 Regional/National (Sprint) 14
Slide 16: Mobile Business
Mobile Business Revenue ($ millions) OIBDA ($ millions) 11% CAGR Non-affiliate Affiliate $6.7 $6.2 $5.3 $2.4 $2.2 $1.7 $3.5 $3.7 $3.0 $3.6 $3.9 $4.3 2006 2007 2008 2006 2007 2008 Overview 118 towers 183 non-affiliate leases 15
Slide 17: Capital Expenditures - Wireless
Capital Expenditures - Wireless Capital Expenditures by Category ($ million) Coverage Other Capacity EVDO Mobile $50 $45.1 $40 $30.6 $30 $20 $14.1 $10 $7.8 $0 2006 2007 2008 2009E # Cell Sites 332 346 411 489 % Covered POPs 77% 79% 85% 89% # EVDO Sites 0 52 211 318 % POPs Covered N/A 27% 86% 92% 16
Slide 18: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Financials 17
Slide 19: Wireline Customers
Wireline Customers 24.2k LEC access lines One FTTH community in service 5.2k dial-up Internet subscribers Network Route miles: 756 10k DSL subscribers Fiber miles: 46,733 25.4k cable TV subscribers 10.8k long distance subscribers 18
Slide 20: Wireline Overview
Wireline Overview Wireline Revenue 2008 Wireline OIBDA 2008 Cable 2% Other -4% Other 27% STC 58% Cable 15% STC 94% Total Wireline Revenues = $40 million Total Wireline OIBDA = $19 million 19
Slide 21: Telephone
Telephone Revenue ($ millions)1 OIBDA ($ millions with % margin) Local Subs Access Other $30.5 $30.5 $30.7 $19.1 $19.1 $10.6 $10.7 $11.7 $16.5 $12.5 $12.5 $12.1 $7.4 $7.3 $7.2 63% 54% 62% 2006 2007 2008 2006 2007 2 2008 Access lines (000s) -0.7% CAGR 24.8 24.5 24.2 2006 2007 2008 1 Includes internal
Slide 22: Shentel Services
Shentel Services Customers (000s) Revenues ($ millions) 1 DSL Dial-up 2 DSL 1 Dial-up 2 $5.4 $5.5 9.9 10.0 $5.0 8.1 7.5 6.6 $2.8 $3.7 $4.3 5.2 $2.2 $1.7 $1.2 2006 2007 2008 2006 2007 2008 1 DSL only available within LEC area 2 Dial-up offered inside and outside the LEC area 21
Slide 23: Cable TV
Cable TV Overview Subscribers (000s) Complimentary (with LEC business) 30.0 Digital Basic 25.4 Offensive positioning (Outside ILEC) 20.0 60,000 homes passed 20.3 10.0 8.4 8.3 6.3 5.7 One-way now, two way in 2009/2010 0.0 5.0 2.1 2.6 YE09 – HD, DVR, VOD, Internet, Voice 2006 2007 2008 1 Revenue ($ mi
Slide 24: Agenda
Agenda Introduction and Shentel Overview Overview of PCS Overview of Wireline Financials – Adele Skolits - CFO 23
Slide 25: Consolidated Financial Results
Consolidated Financial Results Revenues Net Income from Continuing Operations In millions PCS Other PCS Other $175 $30 $158.9 27% CAGR $26.3 $150 $146.3 $144.4 $25 $130.4 $22.2 $120.9 $20.7 $125 $20 $100 $15 $75 $10.9 $10.1 $10 $50 $5 $25 $0 $0 2004 2005 2006 2007 2008 2004 2005 20061 2007 2008 1 20
Slide 26: Key Financial Results – Consolidated
Key Financial Results – Consolidated Operating Income Before Depreciation & Operating Income Amortization (OIBDA) In millions $80 PCS Other $72.1 PCS Other $70 $60.1 $60 $50 $48.1 $45.6 $39.5 $40 $37.0 $36.7 $30 $25.7 $18.2 $19.6 $20 $10 $0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 25
Slide 27: Key Financial Results – Consolidated
Key Financial Results – Consolidated Earnings Per Share Earnings Per Share - Continuing Operations - Net Income $1.12 $1.04 $0.94 $0.89 $0.77 $0.80 $0.44 $0.47 $0.44 $0.46 2004 2005 2006 1 2007 2008 2004 2005 2006 1 2007 2008 1 EPS and Fully Diluted EPS include $0.27 per share as a result of the one
Slide 28: Cash Flows
Cash Flows Cash Flows ($ millions) 2007 2008 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 i
Slide 29: Total Capex
Total Capex Wireless – PCS/Mobile $74.0 $65.5 Wireline - Cable $0.4 Wireline - Other $23.8 $20.0 $19.6 $29.1 $0.2 $14.8 $45.1 $30.6 $14.1 2007 2008 2009E 28
Slide 30: Q&A
SHENTEL Q&A 29
Slide 31: Appendix
<a? SHENTEL Appendix
Slide 32: Consolidated P&L
Consolidated P&L1 ($ millions) 20062 20073 2008 Revenue1 $158.9 $130.4 $144.4 % growth1 -17.9% 10.7% Gross profit4 $94.5 $89.7 $100.7 % margin1 59.5% 68.8% 69.7% Operating Income $25.7 $36.7 $45.6 % margin1 16.2% 28.1% 31.6% OIBDA $48.1 $60.1 $72.1 % margin1 30.3% 46.1% 49.9% Net Income from Continu
Slide 33: PCS Financial Performance
PCS Financial Performance ($ millions) 2006 20071 2008 Revenue $115.5 $87.3 $100.2 % growth -24.4% 14.7% Operating Income $15.7 $28.8 $33.5 % margin 13.6% 33.0% 33.4% Per subscriber $116 $168 $168 OIBDA $30.0 $43.9 $49.8 % margin 26.0% 50.3% 49.7% Per subscriber $221 $257 $249 Capital Expenditures $
Slide 34: Mobile Financial Performance
Mobile Financial Performance1 ($ millions) 2006 2007 2008 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 $1.3 1 Includes internal revenue 33
Slide 35: Telephone Financial Performance
Telephone Financial Performance1 ($ millions) 2006 20072 2008 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% OIBDA $19.1 $16.5 $19.1 % margin 62.7% 54.1% 62.4% Capital Expenditures $3.4 $6.2 $8.2 1 Includes internal revenue 2 Excludes stock
Slide 36: Cable Financial Performance
Cable Financial Performance ($ millions) 2006 20071 20082 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% Capital Expenditures $0.3 $0.2 $0.4 1 Excludes stock-based compensation one-time ERO and pensi
Slide 37: Non-GAAP Financial Measure – Billed Revenue per Subscriber
Non- Non-GAAP Financial Measure – Billed Revenue per Subscriber Dollars in thousands (except subscribers and revenue per subscriber) 2008 2007 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 se
Slide 38: Non-GAAP Financial Measure – 2008 OIBDA
Non- 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 6,594 884 1,250 1,376 26,434 OIBDA $49,804 $19,124 $3,723 $334 ($905) $72,080 37
Slide 39: Non-GAAP Financial Measure – 2007 OIBDA
Non- 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 5,217 923 1,050 1,156 23,453 OIBDA $43,931 $16,524 $3,534 ($762) ($3,087) $60,140 38
Slide 40: Non-GAAP Financial Measure – 2006 OIBDA
Non- 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 4,755 878 1,104 1,303 22,366 OIBDA $29,986 $19,111 $2,969 $556 ($4,527) $48,095 39
Slide 41: Non-GAAP Financial Measure – 2005 OIBDA
Non- 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 40
Slide 42: Non-GAAP Financial Measure – 2004 OIBDA
Non- 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 41
Slide 43: Raymond James Investor Conference
Raymond James Investor Conference March 11, 2009
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