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 2, 2012
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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
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 March 2, 2012, Shenandoah Telecommunications Company held its fourth 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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Fourth 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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March 2, 2012
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/S/ Adele M. Skolits | |
| Adele M. Skolits | ||
| Vice President - Finance and | ||
| Chief Financial Officer | ||
| (Duly Authorized Officer) | ||
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4Q 2011 Earnings Conference Call
March 2, 2012
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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4Q’11 Highlights
q Customer Growth
q Revenue Growth
Revenues reach one-quarter billion
Revenue grew 15% over 4Q’10 to $66.5 million.
q Cash Dividend
52nd consecutive year of annual dividends
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Wireless Highlights
PCS Customers (000s)
q Rapid Prepaid Growth
Q4’11 net additions of 8,828;
107,100 prepaid subs at
12/31
Q4’11 net additions of 8,828;
107,100 prepaid subs at
12/31
q Steady Postpaid growth
Postpaid customers up 6% in
the last year
Postpaid customers up 6% in
the last year
q Postpaid Churn improves
Annual churn of 1.8%
compared to 1.9% for 2010
Annual churn of 1.8%
compared to 1.9% for 2010
q Earnings Improve
Annual operating income up
by $5.0 million over 2010
Annual operating income up
by $5.0 million over 2010
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Cable Highlights
q Cable Upgrades
u Former JetBroadband markets acquired in mid-2010
are approximately 51% complete
are approximately 51% complete
u Remainder scheduled for 2012
q RGU Growth
u Total RGU growth of 7% during 2011
u 137,238 RGUs at 12/31/2011
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2011 Financial Highlights
Net Income
(in millions)
Net Income from Continuing Operations
(in millions)
(in millions)
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Adele Skolits
CFO and VP of Finance
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Profitability
Adjusted OIBDA ($ thousands)
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Adjusted OIBDA by Segment
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Wireless Segment - Change in Adjusted
OIBDA Q4’11 vs. Q4’10
OIBDA Q4’11 vs. Q4’10
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Cable Segment - Change in Adjusted
OIBDA Q4’11 vs. Q4’10
OIBDA Q4’11 vs. Q4’10
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Wireline Segment - Change in Adjusted
OIBDA Q4’11 vs. Q4’10
OIBDA Q4’11 vs. Q4’10
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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
Annual Gross Additions - Postpaid
Annual Net Additions - Postpaid
n 6% YOY postpaid net
growth
growth
n Q4 2011 net adds of
5,072, a 21% increase
over Q4 2010.
5,072, a 21% increase
over Q4 2010.
n Q4 2011 churn of 1.89%
up from 1.85% in Q4 2010
up from 1.85% in Q4 2010
n 2011 annual churn of
1.78% improved from
1.89% in 2010
1.78% improved from
1.89% in 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
Annual Gross Billed Revenues - Postpaid ($ millions)
$151.2
$166.2
* The Net Service Fee percentage increased from 8.8% to 12% effective 6/1/2010
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Postpaid PCS Customers Top Picks Q4 2011
n Smartphones made up 53% of
the Postpaid base in Q4 2011,
up from 48% in Q3 2011 and
34% in Q4 2010
the Postpaid base in Q4 2011,
up from 48% in Q3 2011 and
34% in Q4 2010
n Top Service Plans - Gross Adds
u Everything Data Family
1500 - 56%
1500 - 56%
u Everything 450 - 18%
u Everything Messaging
Family 1500 - 2%
Family 1500 - 2%
n Top Devices - New Activations
- All Channels
- All Channels
u iPhone 16%
u HTC EVO 4G 10%
u HTC EVO 3D 8%
u LG Optimus S 7%
u Nexus S 6%
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iPhone Statistics - Q4’11
n 16% of Q4 Gross Adds
n 36% of iPhones were sold or upgraded in Shentel-
controlled channels
controlled channels
n 3.6% of 12/31/11 Postpaid customers had the iPhone
u 58% iPhone 4S
u 42% iPhone 4
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PCS Prepaid Statistics
Gross Additions (000s)
Cumulative Customers
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PCS Prepaid Statistics
Churn %
Average Gross Billed Revenue
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Cable - RGU Growth by Quarter
Customers 74,178 74,657 73,930 75,131 75,348
RGU's/Customer 1.73 1.75 1.77 1.81 1.82
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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 provided by the Wireline segment.
voice services are provided by the Wireline segment.
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Key Operational Results - Wireline
n Modest access line loss of
3% in past 12 months
3% in past 12 months
n Continued broadband
penetration in LEC area to
53%
penetration in LEC area to
53%
n 3% growth in DSL
customers since 12/31/10,
partially offsetting access
line losses, resulting in
total connections of 35.4
thousand, down from 35.6
thousand at 12/31/10
customers since 12/31/10,
partially offsetting access
line losses, resulting in
total connections of 35.4
thousand, down from 35.6
thousand at 12/31/10
Access lines (000s)
Internet Customers (000s)
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Investing in the Future
n Upgrade of Jet Network is
approximately 51% complete
approximately 51% complete
n All remaining systems in
Virginia, West Virginia and
Maryland to have upgrades
completed in 2012
Virginia, West Virginia and
Maryland to have upgrades
completed in 2012
n Network Vision expected to
drive $60M of spend in 2012
drive $60M of spend in 2012
Capex Spending
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Investing in the Future - Network Vision
n Plan to upgrade 274 cell sites in 2012 and the remaining
236 in 2013 including:
236 in 2013 including:
u Multi-modal base station at each site
u Expanded backhaul capacity
u LTE in the PCS G-block
u Voice service in the 800Mhz block
n Expect to accelerate depreciation by
u $7.3M in 2012
u $5.3M in 2013
n Expect to launch LTE as early as Q3 2012
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Q&A
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Appendix
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Non-GAAP Financial Measure - Billed Revenue per Postpaid Subscriber