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): May 6, 2011
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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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1
Item 7.01 Regulation FD Disclosure.
The following information is furnished pursuant to Regulation FD: On May 6, 2011, Shenandoah Telecommunications Company held its first quarter 2011 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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First Quarter 2011 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.
SHENANDOAH TELECOMMUNICATIONS COMPANY
(Registrant)
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May 6, 2011
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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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1Q 2011 Earnings Conference Call
May 6, 2011
Exhibit 99.1
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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:
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:
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.
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.
3
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.
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.
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Chris French
CEO and President
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1Q’11 Highlights
q Total wireless customers increased by five percent to a total
of 318 thousand at end of the quarter
of 318 thousand at end of the quarter
q Over 13 thousand additional prepaid customers in Q1 2011,
over 30 thousand added since the initial purchase of
approximately 50 thousand Virgin Mobile customers in July
2010
over 30 thousand added since the initial purchase of
approximately 50 thousand Virgin Mobile customers in July
2010
q Postpaid net additions of nearly six percent since 3/31/10
q Total Cable RGUs 130,700 at end of Q1 2011
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Cable Highlights
q Sales Momentum
u 1Q 2011 net RGU additions of 2,438
q Triple Play
u Gains in digital video, high-speed Internet, and voice
services
services
q Cable Upgrades
u Former JetBroadband markets work underway
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Wireless Highlights
PCS Postpaid Customers (000s)
q Prepaid - Q1’11 net
additions of 13,287 and
80,243 prepaid subs at
12/31
additions of 13,287 and
80,243 prepaid subs at
12/31
q Postpaid Churn
improves - Annual churn
of 1.8% compared to
1.9% for Q1’10
improves - Annual churn
of 1.8% compared to
1.9% for Q1’10
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2011 Financial Highlights
q Prepaid Customer Growth
- Added $2.4 million to
acquisition costs, after taxes
acquisition costs, after taxes
q Cable Growth
- Added $1.0 million in after
tax acquisition costs
tax acquisition costs
Net Income
(in millions)
Net Income from Continuing Operations
(in millions)
(in millions)
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Adele Skolits
CFO and VP of Finance
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Profitability
Adjusted OIBDA ($ millions)
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Adjusted OIBDA by Segment
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Wireless Segment - Change in Adjusted
OIBDA Q1’10 vs. Q1’11
OIBDA Q1’10 vs. Q1’11
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Cable Segment - Change in Adjusted
OIBDA Q1’10 vs. Q1’11
OIBDA Q1’10 vs. Q1’11
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Earle MacKenzie
EVP and COO
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Key Operational Results - Wireless
PCS Postpaid Customers (000s)
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Key Operational Results - Wireless
Gross Additions - Postpaid
Net Additions - Postpaid
n Gross postpaid customer
additions up 4%
additions up 4%
n Q1 2011 net adds of
3,016, a 77% increase
over Q1 2010
3,016, a 77% increase
over Q1 2010
n Q4 2010 churn of 1.8%
improved from 1.9% in Q1
2010
improved from 1.9% in Q1
2010
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Key Operational Results - PCS
Gross Billed Revenue per Postpaid User - Data & Voice 1
1 - Before Service credits, bad debt, Sprint Nextel fees.
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PCS Revenues
Gross Billed Revenues - Postpaid ($ millions)
$37.1
$39.7
*-The Net Service Fee percentage increased from 8.8% to 12% effective 6/1/10
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Postpaid PCS Customers Top Picks Q1 2011
n Top Service Plans - 63% of
Gross Adds
Gross Adds
u Everything Data Family
1500 - 51%
1500 - 51%
u Everything 450 - 16%
u Everything Messaging
Family 1500 - 7%
Family 1500 - 7%
n Top Devices - New Activations
- All Channels
- All Channels
u LG Optimus 20%
u LG Rumor Touch 15%
u HTC EVO 4G 13%
u Sanyo Vero 5%
u HTC EVO Shift 4g 5%
u Mobile Data Cards 5%
u Mobile Computing 1%
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PCS Prepaid Statistics
ØAcquired 49,885 prepaid subscribers effective 7/1/10
§Paid $138 per sub
ØGross adds of 23,170 in Q1 2011 and 56,568 since
7/1/10
7/1/10
ØNet adds of 13,287 in Q1 2011 and 30,358 since 7/1/10
ØEnding subscribers of 80,243
ØChurn rate of 4.5% for Q1 2011 down from 4.6% for Q4
2010
2010
ØAverage Gross Billed Revenue of $21.91 for Q1 2011 up
from $18.42 in Q4 2010
from $18.42 in Q4 2010
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Key Operational Results - Wireline
n Modest access line loss
n Improved broadband
penetration in LEC area
to over 51%
penetration in LEC area
to over 51%
n 6% growth in DSL
customers since 3/31/10
customers since 3/31/10
Access lines (000s)
Internet Customers (000s)
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RGU Growth by Quarter - Cable
Net RGU growth excludes 1,754 RGU’s sold Q4’09 and 65,338 acquired Q3’10 and 4,245
acquired in Q4’10
acquired in Q4’10
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Key Operational Results - Cable
Note: Video homes passed includes 16K homes located in Shenandoah County, VA, where internet and
voice services are not available from the cable company.
voice services are not available from the cable company.
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Investing in the Future
n Completed hardening of Jet
Network in Q4 2010
Network in Q4 2010
n Upgrade of Farmville system
completed in Q1 2011 with
other eastern VA systems to
be completed in Q2 2011
completed in Q1 2011 with
other eastern VA systems to
be completed in Q2 2011
n All Virginia systems upgrades
projected to be completed in
2011
projected to be completed in
2011
n West Virginia systems
upgrades to be completed in
2012
upgrades to be completed in
2012
Capex Spending
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Q&A
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Appendix
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Non-GAAP Financial Measure - Billed Revenue per Postpaid Subscriber
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1Q 2010
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1Q 2011
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Gross billed revenue
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Wireless segment total operating revenues
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$30,233
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$36,469
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Equipment revenue
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(1,218)
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(1,569)
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Tower Lease Revenue
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(1,948)
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(2,177)
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Prepaid Net Service Revenues
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(4,424)
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Other revenue
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(540)
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(519)
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Wireless service revenue - postpaid
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26,527
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27,780
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Service credits
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3,756
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3,948
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Write-offs
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1,422
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1,060
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Management fee
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2,592
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2,701
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Service fee
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2,851
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4,214
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Gross billed revenue - postpaid
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$37,148
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$39,703
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Billed revenue per postpaid subscriber
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$55.38
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$56.05
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