UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 4, 2010
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Shenandoah Telecommunications Company
(Exact name of registrant as specified in its charter)
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Virginia
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0-9881
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54-1162807
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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500 Shentel Way
P.O. Box 459
Edinburg, VA
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22824
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (540) 984-4141
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 7.01 Regulation FD Disclosure.
The following information is furnished pursuant to Regulation FD: On March 4, 2010, Shenandoah Telecommunications Company held its fourth quarter and year end 2009 earnings release conference call. The materials attached hereto as Exhibit 99.1 were utilized during the conference call. These materials are also available on the Company’s website.
These materials may contain forward-looking statements about Shenandoah Telecommunications regarding, among other things, our business strategy, our prospects and our financial position. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “should,” “could,” or “anticipates” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. Shenandoah Telecommunications undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.
Item 9.01 Financial Statements and Exhibits.
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(c)
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Exhibits
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The following exhibit is furnished with this Current Report on Form 8-K.
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Fourth Quarter and Year End 2009 Earnings Release Conference Call Slides
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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SHENANDOAH TELECOMMUNICATIONS COMPANY
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(Registrant)
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March 4, 2010
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/S/ Adele M. Skolits
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Adele M. Skolits
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Vice President - Finance and
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Chief Financial Officer
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(Duly Authorized Officer)
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Exhibit 99.1
4Q 2009 Earnings Conference Call
March 4, 2010
1
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. These
statements can be identified by the use of forward-looking terminology such as “believes,”
“estimates,” “expects,” “intends,” “may,” “will,” “should,” “could,” or “anticipates” or the negative or
other variation of these similar words, or by discussions of strategy or risks and uncertainties. These
statements are based on current expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the
Company’s expectations and projections. Important factors that could cause actual results to differ
materially from such forward-looking statements include, without limitation, risks related to the
following:
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. These
statements can be identified by the use of forward-looking terminology such as “believes,”
“estimates,” “expects,” “intends,” “may,” “will,” “should,” “could,” or “anticipates” or the negative or
other variation of these similar words, or by discussions of strategy or risks and uncertainties. These
statements are based on current expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the
Company’s expectations and projections. Important factors that could cause actual results to differ
materially from such forward-looking statements include, without limitation, risks related to the
following:
qIncreasing competition in the communications industry; and
qA complex and uncertain regulatory environment.
A further list and description of these risks, uncertainties and other factors can be found in the
Company’s SEC filings which are available online at www.sec.gov, www.shentel.com or on request
from the Company. The Company does not undertake to update any forward-looking statements as
a result of new information or future events or developments
Company’s SEC filings which are available online at www.sec.gov, www.shentel.com or on request
from the Company. The Company does not undertake to update any forward-looking statements as
a result of new information or future events or developments
2
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 and exclude the effects of certain
operating, capital and financing costs and may differ from comparable information provided by other
companies, and they should not be considered in isolation, as an alternative to, or more meaningful
than measures of financial performance determined in accordance with US generally accepted
accounting principles. These financial performance measures are commonly used in the industry and
are presented because Shentel believes they provide relevant and useful information to investors.
Shentel utilizes these financial performance measures to assess its ability to meet future capital
expenditure and working capital requirements, to incur indebtedness if necessary, return investment
to shareholders and to fund continued growth. Shentel also uses these financial performance
measures to evaluate the performance of its businesses and for budget planning purposes.
accordance with US generally accepted accounting principles. These financial performance measures
are not indicative of cash provided or used by operating activities and exclude the effects of certain
operating, capital and financing costs and may differ from comparable information provided by other
companies, and they should not be considered in isolation, as an alternative to, or more meaningful
than measures of financial performance determined in accordance with US generally accepted
accounting principles. These financial performance measures are commonly used in the industry and
are presented because Shentel believes they provide relevant and useful information to investors.
Shentel utilizes these financial performance measures to assess its ability to meet future capital
expenditure and working capital requirements, to incur indebtedness if necessary, return investment
to shareholders and to fund continued growth. Shentel also uses these financial performance
measures to evaluate the performance of its businesses and for budget planning purposes.
3
Chris French
CEO and President
4
2009 Highlights
q Strong operating results - Net income
from continuing operations of $25.1 million
from continuing operations of $25.1 million
q Returning value to shareholders -
Dividend of $.32/share up 7%
Dividend of $.32/share up 7%
q Positioning the consolidated
enterprise to maximize shareholder
returns - Invested in upgrade of acquired
cable networks; sale of outlying cable
systems completed; North River acquisition
completed and DSL roll-out nearly complete
enterprise to maximize shareholder
returns - Invested in upgrade of acquired
cable networks; sale of outlying cable
systems completed; North River acquisition
completed and DSL roll-out nearly complete
Net Income from Continuing Operations
(in millions)
(in millions)
5
2009 Highlights
q Acquired networks - Completed
integration of 17,000 customers and
42,000 homes passed
integration of 17,000 customers and
42,000 homes passed
q Enhanced networks - 64% of
acquired homes passed upgraded at
12/31/09
acquired homes passed upgraded at
12/31/09
q Sales results improving -The cable
network upgrades which began in
late June are beginning to improve
sales/retention
network upgrades which began in
late June are beginning to improve
sales/retention
Cable Segment RGU’s Growth(1)
(1) - Excludes the impact of RGU’s in markets sold in 4Q’09
Cable Segment Operating Losses
6
2009 Highlights (Continued)
q Wireless growth drives results -
3,465 net subscriber additions for
4Q’09 to 222,818 at year end;
average subs up 8% for 2009
3,465 net subscriber additions for
4Q’09 to 222,818 at year end;
average subs up 8% for 2009
q Investment in wireless for
sustained growth - Expansion of
EVDO to 95% of the PCS footprint,
15% growth in cell sites
sustained growth - Expansion of
EVDO to 95% of the PCS footprint,
15% growth in cell sites
q Providing a quality local
customer experience - PCS churn
2.0% in 4Q’09, 1.9% in 4Q’08
customer experience - PCS churn
2.0% in 4Q’09, 1.9% in 4Q’08
PCS Subscribers (000s)
Number of Cell Sites
7
Adele Skolits
CFO and VP of Finance
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EPS
Earnings Per Share - Year over Year
Earnings per Share from Continuing
Operations
Operations
- Quarter over Quarter
n Delivering value for
Shareholders- EPS growth of 9%
in 4Q’09 over 4Q’08
Shareholders- EPS growth of 9%
in 4Q’09 over 4Q’08
*-Includes gain on sale of Rural Telephone Bank stock of $.27 in EPS from Continuing
Operations and EPS
Operations and EPS
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Profitability
Results ($’s in millions)
Maintaining profitability while investing in growth -
OIBDA up 5% for 2009 over 2008
OIBDA up 5% for 2009 over 2008
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OIBDA
Change between 2008 and 2009
Change between 4Q’08 and 4Q’09
in millions
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Cash Flows
Cash Flows ($ millions)
n Record operating cash flow -
48% growth in cash generated by
operations
48% growth in cash generated by
operations
n Extended debt facility supports
sustained growth - Increased
capital expenditures supports cable
upgrades and PCS development
sustained growth - Increased
capital expenditures supports cable
upgrades and PCS development
n Manageable debt service - Debt
facility has equal amortization over
five years beginning next year
facility has equal amortization over
five years beginning next year
n Positioned to deliver for
shareholders - Debt capacity and
cash flow generation will enable
the company to be opportunistic or
return value to shareholders
shareholders - Debt capacity and
cash flow generation will enable
the company to be opportunistic or
return value to shareholders
12
Earle MacKenzie
COO and EVP
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Key Operational Results - Wireless
PCS Retail Subscribers (000s)
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Key Operational Results - Wireless
PCS Gross Additions
PCS Net Additions
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Key Operational Results - Wireless
PCS Gross Billed Revenue per User
Data & Voice
Quarter over Quarter
n Billed revenue per subscriber
declining
declining
n Data revenue growth not enough
to compensate
to compensate
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Key Operational Results - Wireless
PCS Gross Billed Revenue per User
Data & Voice
Year over Year
n Billed revenue per subscriber
declines slightly due to add-a-
phone
declines slightly due to add-a-
phone
n Data revenue continues to grow
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Wireless Revenues
PCS Quarterly Billed Service Revenues ($ millions)
$35.1
$36.4
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PCS Revenues
PCS Annual Billed Service Revenues ($ millions)
$134.2
$144.8
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PCS Customers Top Picks - Q4’09
n Service Plans
u Everything Data
Family 1500
Family 1500
u Everything Messaging
Family 1500
Family 1500
u Everything Data 450
u 3G Connector Card
n Handsets
u Samsung Exclaim
u Blackberry 8330
u LG Rumor 2
u Data Cards
u Sanyo 3810
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Meeting PCS Customer Needs
n Expanded data
offering
offering
u Over 95% POP’s have
EVDO coverage
EVDO coverage
n PA coverage
improved
improved
n Capacity increased
Number of Cell Sites
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Key Operational Results - Wireline
n Added approximately
935 NRTC access
lines 11/1/2009
935 NRTC access
lines 11/1/2009
n Modest access line
loss
loss
n 45% data penetration
n Increased broadband
speeds - most
customers able to get
up to 10 Mbps
speeds - most
customers able to get
up to 10 Mbps
Access lines (000s)
-.7% CAGR
Internet Customers (000s)
22
Key Operational Results - Cable
n Acquisition of 18,000
new RGUs in Q4’08; sold
1,750 in Q4’09
new RGUs in Q4’08; sold
1,750 in Q4’09
n 64% of acquired homes
passed upgraded as of
12/31/09
passed upgraded as of
12/31/09
n Expect to offer triple play
to 100% of acquired
homes passed by third
quarter 2010
to 100% of acquired
homes passed by third
quarter 2010
Number of RGUs (000’s)
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Investing in the Future
n Expanding wireless coverage
& capacity with 64 new cell
sites and data with 125
EVDO sites in 2009
& capacity with 64 new cell
sites and data with 125
EVDO sites in 2009
n Increasing broadband
speeds to 10 MB in LEC area
speeds to 10 MB in LEC area
n Increased miles and capacity
of fiber
of fiber
n Upgrade of cable systems to
2-way to provide triple play
of services
2-way to provide triple play
of services
Capex Spending
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Q&A
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Appendix
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Non-GAAP Financial Measure - Billed Revenue per Subscriber
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Dollars in thousands (except subscribers and revenue per subscriber)
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2008
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2009
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Gross billed revenue
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Wireless segment total operating revenues
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$ 106,885
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$115,695
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Tower lease revenue
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(6,480)
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(7,144)
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Equipment revenue
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(5,214)
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(4,522)
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Other revenue
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(3,042)
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(1,833)
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Wireless service revenue
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92,149
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102,196
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Service credits
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15,018
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14,725
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Write-offs
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8,064
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6,782
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Management fee
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9,034
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10,028
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Service fee
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9,938
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11,030
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Gross billed revenue
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134,203
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144,761
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Average subscribers
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199,794
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216,143
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Billed revenue per subscriber
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$ 55.98
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$ 55.81
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