shen-20230930
000035496312/312023Q3FALSEhttp://shentel.com/20230930#ServiceRevenueAndOtherMemberhttp://shentel.com/20230930#ServiceRevenueAndOtherMemberhttp://shentel.com/20230930#ServiceRevenueAndOtherMemberhttp://shentel.com/20230930#ServiceRevenueAndOtherMember111100003549632023-01-012023-09-3000003549632023-10-26xbrli:shares00003549632023-09-30iso4217:USD00003549632022-12-31iso4217:USDxbrli:shares00003549632023-07-012023-09-3000003549632022-01-012022-09-3000003549632022-07-012022-09-300000354963us-gaap:CommonStockMember2023-06-300000354963us-gaap:AdditionalPaidInCapitalMember2023-06-300000354963us-gaap:RetainedEarningsMember2023-06-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-3000003549632023-06-300000354963us-gaap:RetainedEarningsMember2023-07-012023-09-300000354963us-gaap:CommonStockMember2023-07-012023-09-300000354963us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000354963us-gaap:CommonStockMember2023-09-300000354963us-gaap:AdditionalPaidInCapitalMember2023-09-300000354963us-gaap:RetainedEarningsMember2023-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300000354963us-gaap:CommonStockMember2022-12-310000354963us-gaap:AdditionalPaidInCapitalMember2022-12-310000354963us-gaap:RetainedEarningsMember2022-12-310000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000354963us-gaap:RetainedEarningsMember2023-01-012023-09-300000354963us-gaap:CommonStockMember2023-01-012023-09-300000354963us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000354963us-gaap:CommonStockMember2022-06-300000354963us-gaap:AdditionalPaidInCapitalMember2022-06-300000354963us-gaap:RetainedEarningsMember2022-06-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000003549632022-06-300000354963us-gaap:RetainedEarningsMember2022-07-012022-09-300000354963us-gaap:CommonStockMember2022-07-012022-09-300000354963us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300000354963us-gaap:CommonStockMember2022-09-300000354963us-gaap:AdditionalPaidInCapitalMember2022-09-300000354963us-gaap:RetainedEarningsMember2022-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-3000003549632022-09-300000354963us-gaap:CommonStockMember2021-12-310000354963us-gaap:AdditionalPaidInCapitalMember2021-12-310000354963us-gaap:RetainedEarningsMember2021-12-310000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100003549632021-12-310000354963us-gaap:RetainedEarningsMember2022-01-012022-09-300000354963us-gaap:CommonStockMember2022-01-012022-09-300000354963us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-30shen:cell_site00003549632023-10-012023-09-3000003549632023-01-012022-12-3100003549632024-10-012023-09-3000003549632024-01-012022-12-310000354963shen:CobankMember2023-09-300000354963shen:CobankMember2023-07-012023-09-300000354963shen:CobankMember2022-07-012022-09-300000354963shen:CobankMember2023-01-012023-09-300000354963shen:CobankMember2022-01-012022-09-30xbrli:pure0000354963shen:ValleyNetworkPartnershipMember2023-09-300000354963shen:ValleyNetworkPartnershipMember2022-12-310000354963shen:ValleyNetworkPartnershipMember2023-04-012023-04-300000354963us-gaap:LandMember2023-09-300000354963us-gaap:LandMember2022-12-310000354963us-gaap:LandImprovementsMember2023-09-300000354963us-gaap:LandImprovementsMember2022-12-310000354963us-gaap:BuildingAndBuildingImprovementsMembersrt:MinimumMember2023-09-300000354963us-gaap:BuildingAndBuildingImprovementsMembersrt:MaximumMember2023-09-300000354963us-gaap:BuildingAndBuildingImprovementsMember2023-09-300000354963us-gaap:BuildingAndBuildingImprovementsMember2022-12-310000354963us-gaap:OtherMachineryAndEquipmentMembersrt:MinimumMember2023-09-300000354963us-gaap:OtherMachineryAndEquipmentMembersrt:MaximumMember2023-09-300000354963us-gaap:OtherMachineryAndEquipmentMember2023-09-300000354963us-gaap:OtherMachineryAndEquipmentMember2022-12-310000354963shen:EquipmentAndSoftwareMembersrt:MinimumMember2023-09-300000354963shen:EquipmentAndSoftwareMembersrt:MaximumMember2023-09-300000354963shen:EquipmentAndSoftwareMember2023-09-300000354963shen:EquipmentAndSoftwareMember2022-12-310000354963us-gaap:OtherPlantInServiceMember2023-09-300000354963us-gaap:OtherPlantInServiceMember2022-12-310000354963us-gaap:AssetUnderConstructionMember2023-09-300000354963us-gaap:AssetUnderConstructionMember2022-12-310000354963shen:BroadbandSegmentMember2023-09-300000354963shen:BroadbandSegmentMember2022-12-310000354963us-gaap:FranchiseRightsMember2023-09-300000354963us-gaap:FranchiseRightsMember2022-12-310000354963shen:FCCSpectrumLicensesMember2023-09-300000354963shen:FCCSpectrumLicensesMember2022-12-310000354963shen:RailroadCrossingRightsMember2023-09-300000354963shen:RailroadCrossingRightsMember2022-12-310000354963us-gaap:CustomerRelationshipsMember2023-09-300000354963us-gaap:CustomerRelationshipsMember2022-12-310000354963us-gaap:OtherIntangibleAssetsMember2023-09-300000354963us-gaap:OtherIntangibleAssetsMember2022-12-310000354963shen:SpectrumPurchaseAgreementsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-07-060000354963shen:SpectrumPurchaseAgreementsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-07-062023-07-060000354963us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMembershen:SpectrumPurchaseAgreementsMember2022-12-3100003549632023-06-012023-06-300000354963us-gaap:RevolvingCreditFacilityMember2021-07-010000354963us-gaap:RevolvingCreditFacilityMember2021-07-012021-07-010000354963shen:TermLoanA1Member2021-07-010000354963shen:TermLoanA1Member2021-07-012021-07-010000354963shen:TermLoanA2Member2021-07-010000354963shen:TermLoanA2Member2021-07-012021-07-010000354963shen:TermLoanA1Member2023-09-300000354963shen:TermLoanA1Member2022-12-310000354963shen:TermLoanA2Member2023-09-300000354963shen:TermLoanA2Member2022-12-310000354963shen:LIBORRateMembershen:TermLoanA2Member2023-01-012023-09-300000354963shen:LIBORRateMembershen:TermLoanA1Member2023-01-012023-09-300000354963shen:TermLoanA2Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-01-012023-09-300000354963shen:TermLoanA1Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-01-012023-09-3000003549632022-01-012022-12-310000354963shen:TermLoanA1Membersrt:ScenarioForecastMember2024-03-312024-06-300000354963shen:TermLoanA1Membersrt:ScenarioForecastMember2024-09-302026-03-310000354963shen:TermLoanA2Membersrt:ScenarioForecastMember2024-03-312028-03-310000354963us-gaap:InterestRateSwapMember2023-09-300000354963us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-09-300000354963shen:DeferredChargesandOtherAssetsNetMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-09-300000354963us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300000354963us-gaap:RestrictedStockUnitsRSUMember2023-09-300000354963shen:RelativeTotalShareholderReturnAwardsMember2023-01-012023-09-300000354963shen:RelativeTotalShareholderReturnAwardsMember2023-09-300000354963stpr:MD2023-01-012023-09-300000354963stpr:VA2023-01-012023-09-300000354963stpr:WVshen:MajorBroadbandProjectStrategiesMember2023-01-012023-09-300000354963shen:LineExtensionAdvancementAndDevelopmentProgramsMemberstpr:WV2023-01-012023-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:ResidentialAndSMBCableMarketsMember2023-07-012023-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:ResidentialAndSMBGloFiberMember2023-07-012023-09-300000354963shen:BroadbandSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:CommercialFiberMember2023-07-012023-09-300000354963shen:TowerLeaseMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerLeaseMember2023-07-012023-09-300000354963shen:CarrierAccessRevenueMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:CarrierAccessRevenueMember2023-07-012023-09-300000354963shen:ServiceandOtherMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:ServiceandOtherMember2023-07-012023-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2023-07-012023-09-300000354963shen:TowerSegmentMemberus-gaap:IntersegmentEliminationMember2023-07-012023-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2023-07-012023-09-300000354963us-gaap:IntersegmentEliminationMember2023-07-012023-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:BroadbandSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963shen:TowerSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2023-07-012023-09-300000354963us-gaap:ServiceMember2023-07-012023-09-300000354963us-gaap:CorporateNonSegmentMember2023-07-012023-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:ResidentialAndSMBCableMarketsMember2022-07-012022-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:ResidentialAndSMBGloFiberMember2022-07-012022-09-300000354963shen:BroadbandSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:CommercialFiberMember2022-07-012022-09-300000354963shen:TowerLeaseMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerLeaseMember2022-07-012022-09-300000354963shen:CarrierAccessRevenueMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:CarrierAccessRevenueMember2022-07-012022-09-300000354963shen:ServiceandOtherMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:ServiceandOtherMember2022-07-012022-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2022-07-012022-09-300000354963shen:TowerSegmentMemberus-gaap:IntersegmentEliminationMember2022-07-012022-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2022-07-012022-09-300000354963us-gaap:IntersegmentEliminationMember2022-07-012022-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:BroadbandSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963shen:TowerSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2022-07-012022-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2022-07-012022-09-300000354963us-gaap:ServiceMember2022-07-012022-09-300000354963us-gaap:CorporateNonSegmentMember2022-07-012022-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:ResidentialAndSMBCableMarketsMember2023-01-012023-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:ResidentialAndSMBGloFiberMember2023-01-012023-09-300000354963shen:BroadbandSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:CommercialFiberMember2023-01-012023-09-300000354963shen:TowerLeaseMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerLeaseMember2023-01-012023-09-300000354963shen:CarrierAccessRevenueMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:CarrierAccessRevenueMember2023-01-012023-09-300000354963shen:ServiceandOtherMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:ServiceandOtherMember2023-01-012023-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2023-01-012023-09-300000354963shen:TowerSegmentMemberus-gaap:IntersegmentEliminationMember2023-01-012023-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2023-01-012023-09-300000354963us-gaap:IntersegmentEliminationMember2023-01-012023-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:BroadbandSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963shen:TowerSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2023-01-012023-09-300000354963us-gaap:ServiceMember2023-01-012023-09-300000354963us-gaap:CorporateNonSegmentMember2023-01-012023-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBCableMarketsMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:ResidentialAndSMBCableMarketsMember2022-01-012022-09-300000354963shen:BroadbandSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerSegmentMembershen:ResidentialAndSMBGloFiberMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:ResidentialAndSMBGloFiberMember2022-01-012022-09-300000354963shen:BroadbandSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerSegmentMembershen:CommercialFiberMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:CommercialFiberMember2022-01-012022-09-300000354963shen:TowerLeaseMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerLeaseMember2022-01-012022-09-300000354963shen:CarrierAccessRevenueMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:CarrierAccessRevenueMember2022-01-012022-09-300000354963shen:ServiceandOtherMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:ServiceandOtherMember2022-01-012022-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2022-01-012022-09-300000354963shen:TowerSegmentMemberus-gaap:IntersegmentEliminationMember2022-01-012022-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2022-01-012022-09-300000354963us-gaap:IntersegmentEliminationMember2022-01-012022-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:BroadbandSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963shen:TowerSegmentMemberus-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2022-01-012022-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2022-01-012022-09-300000354963us-gaap:ServiceMember2022-01-012022-09-300000354963us-gaap:CorporateNonSegmentMember2022-01-012022-09-300000354963shen:HorizonAcquisitionParentLLCMemberus-gaap:SubsequentEventMember2023-10-240000354963shen:HorizonAcquisitionParentLLCMemberus-gaap:SubsequentEventMember2023-10-242023-10-240000354963shen:RevolvingCreditFacilityAmendedAndUpsizedCreditFacilityMemberus-gaap:SubsequentEventMember2023-10-242023-10-240000354963shen:GCMGrosvenorMembershen:ShenandoahTelecommunicationsCompanyMemberus-gaap:SubsequentEventMember2023-10-240000354963shen:ParticipatingExchangeablePerpetualPreferredStockMembershen:EnergyCapitalPartnersMemberus-gaap:SubsequentEventMember2023-10-242023-10-240000354963shen:EnergyCapitalPartnersMemberus-gaap:SubsequentEventMember2023-10-240000354963us-gaap:SubsequentEventMember2023-10-242023-10-24

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________ to __________

Commission File No.: 000-09881

https://cdn.kscope.io/cabbfe0091091b1f475bce4b61eea508-shentela06.jpg
SHENANDOAH TELECOMMUNICATIONS COMPANY
(Exact name of registrant as specified in its charter)
Virginia 54-1162807
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

500 Shentel Way, Edinburg, Virginia    22824
(Address of principal executive offices)  (Zip Code)

(540) 984-4141 
(Registrant's telephone number, including area code) 
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
 
Common Stock (No Par Value)SHENNASDAQ Global Select Market50,264,466
(Title of Class)(Trading Symbol)(Name of Exchange on which Registered)(The number of shares of the registrant's common stock outstanding on October 26, 2023)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer Non-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes   No 




SHENANDOAH TELECOMMUNICATIONS COMPANY
INDEX

  Page
Numbers
PART I.FINANCIAL INFORMATION 
   
Item 1.Financial Statements 
   
 Unaudited Condensed Consolidated Balance Sheets
  
 Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
  
 Unaudited Condensed Consolidated Statements of Shareholders’ Equity
  
 Unaudited Condensed Consolidated Statements of Cash Flows
  
 Notes to Unaudited Condensed Consolidated Financial Statements
  
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
  
Item 3.Quantitative and Qualitative Disclosures about Market Risk
  
Item 4.Controls and Procedures
  
PART II.OTHER INFORMATION
  
Item 1.Legal Proceedings
Item 1A.Risk Factors
  
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
  
Item 5.
Other Information
Item 6.Exhibits
  
 Signatures
  
2

Table of Contents

SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)September 30,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$35,966 $44,061 
Accounts receivable, net of allowance for doubtful accounts of $767 and $776, respectively
18,851 20,615 
Income taxes receivable4,647 29,755 
Prepaid expenses and other14,394 11,509 
Current assets held for sale596 22,622 
Total current assets74,454 128,562 
Investments12,918 12,971 
Property, plant and equipment, net822,494 687,553 
Goodwill and intangible assets, net81,187 81,515 
Operating lease right-of-use assets51,832 53,859 
Deferred charges and other assets15,825 13,259 
Total assets$1,058,710 $977,719 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt, net of unamortized loan fees$2,412 $648 
Accounts payable43,360 49,173 
Advanced billings and customer deposits13,120 12,425 
Accrued compensation10,640 9,616 
Current operating lease liabilities3,126 2,829 
Accrued liabilities and other11,763 17,906 
Current liabilities held for sale 3,824 
Total current liabilities84,421 96,421 
Long-term debt, less current maturities, net of unamortized loan fees147,494 74,306 
Other long-term liabilities:
Deferred income taxes88,938 84,600 
Asset retirement obligations9,942 9,932 
Benefit plan obligations3,972 3,758 
Non-current operating lease liabilities49,502 50,477 
Other liabilities20,078 20,218 
Total other long-term liabilities172,432 168,985 
Commitments and contingencies (Note 13)
Shareholders’ equity:
Common stock, no par value, authorized 96,000; 50,264 and 50,110 issued and outstanding at September 30, 2023 and December 31, 2022, respectively
  
Additional paid in capital65,118 57,453 
Retained earnings586,003 580,554 
Accumulated other comprehensive income, net of taxes3,242  
Total shareholders’ equity654,363 638,007 
Total liabilities and shareholders’ equity$1,058,710 $977,719 

See accompanying notes to unaudited condensed consolidated financial statements.
3

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share amounts)Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Service revenue and other$71,842 $66,924 $214,869 $197,359 
Operating expenses:
Cost of services exclusive of depreciation and amortization27,751 27,477 80,394 80,572 
Selling, general and administrative24,402 22,227 76,702 69,152 
Restructuring expense 641  1,031 
Impairment expense1,532 477 2,552 4,884 
Depreciation and amortization16,670 17,873 48,637 47,008 
Total operating expenses70,355 68,695 208,285 202,647 
Operating income (loss)1,487 (1,771)6,584 (5,288)
Other income (expense):
Other income (expense), net826 (1,208)2,120 (1,967)
Income (loss) before income taxes2,313 (2,979)8,704 (7,255)
Income tax expense (benefit)720 (251)3,255 (699)
Net income (loss)$1,593 $(2,728)$5,449 $(6,556)
Other comprehensive income:
Unrealized income on interest rate hedge, net of tax1,115  3,242  
Comprehensive income (loss)$2,708 $(2,728)$8,691 $(6,556)
Net income (loss) per share, basic and diluted:
Basic net income (loss) per share$0.03 $(0.05)$0.11 $(0.13)
Diluted net income (loss) per share$0.03 $(0.05)$0.11 $(0.13)
Weighted average shares outstanding, basic50,379 50,183 50,346 50,153 
Weighted average shares outstanding, diluted50,836 50,183 50,623 50,153 

See accompanying notes to unaudited condensed consolidated financial statements.

4

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Balance, June 30, 202350,264 $62,888 $584,410 $2,127 $649,425 
Net income— — 1,593 — 1,593 
Stock-based compensation 2,220 — — 2,220 
Common stock issued— 10 — — 10 
Unrealized income on interest rate hedge, net of tax— — — 1,115 1,115 
Balance, September 30, 202350,264 $65,118 $586,003 $3,242 $654,363 
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Balance, December 31, 202250,110 $57,453 $580,554 $ $638,007 
Net income— — 5,449 — 5,449 
Stock-based compensation220 8,950 — — 8,950 
Common stock issued1 32 — — 32 
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards(67)(1,317)— — (1,317)
Unrealized income on interest rate hedge, net of tax— — — 3,242 3,242 
Balance, September 30, 202350,264 $65,118 $586,003 $3,242 $654,363 
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Balance, June 30, 202250,077 $54,274 $589,096 $ $643,370 
Net loss— — (2,728)— (2,728)
Stock-based compensation25 1,942 — — 1,942 
Common stock issued— 11 — — 11 
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards(4)(84)— — (84)
Balance, September 30, 202250,098 $56,143 $586,368 $ $642,511 
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Balance, December 31, 202149,965 $49,351 $592,924 $ $642,275 
Net loss— — (6,556)— (6,556)
Stock-based compensation176 7,751 — — 7,751 
Common stock issued1 27 — — 27 
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards(44)(986)— — (986)
Balance, September 30, 202250,098 $56,143 $586,368 $ $642,511 

See accompanying notes to unaudited condensed consolidated financial statements.
5

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)Nine Months Ended
September 30,
20232022
Cash flows from operating activities:
Net income (loss)$5,449 $(6,556)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization48,637 47,008 
Stock-based compensation expense, net of amount capitalized8,364 7,299 
Impairment expense2,552 4,884 
Deferred income taxes3,211 (1,374)
Bad debt expense1,837 1,252 
Gain on sale of FCC spectrum licenses(1,328) 
Other, net439 1,638 
Changes in assets and liabilities:
Accounts receivable1,407 1,157 
Current income taxes25,108 731 
Operating lease assets and liabilities, net512 618 
Other assets2,515 (1,056)
Accounts payable(3,431)(608)
Other deferrals and accruals(3,583)1,212 
Net cash provided by operating activities91,689 56,205 
Cash flows from investing activities:
Capital expenditures(190,354)(132,357)
Proceeds from the sale of FCC spectrum licenses17,300  
Proceeds from sale of investments 793 
Proceeds from sale of assets and other566 922 
Net cash used in investing activities(172,488)(130,642)
Cash flows from financing activities:
Proceeds from credit facility borrowings75,000 25,000 
Payments for debt issuance costs(300) 
Taxes paid for equity award issuances(1,317)(986)
Payments for financing arrangements and other(679)(888)
Net cash provided by financing activities72,704 23,126 
Net decrease in cash and cash equivalents(8,095)(51,311)
Cash and cash equivalents, beginning of period44,061 84,344 
Cash and cash equivalents, end of period$35,966 $33,033 
Supplemental Disclosures of Cash Flow Information
Interest paid$5,424 $243 
Income tax refunds received, net$25,481 $ 

See accompanying notes to unaudited condensed consolidated financial statements.
6

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation and Other Information

Shenandoah Telecommunications Company and its subsidiaries (“Shentel”, “we”, “our”, “us”, or the “Company”) provide broadband data, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania and Kentucky, via fiber optic and hybrid fiber coaxial cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. The Company also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as a Rural Local Exchange Carrier (“RLEC”). These integrated networks are connected by a fiber network. All of these operations are contained within our Broadband reporting segment.

Our Tower segment owns 220 cell towers and leases colocation space on those towers to wireless communications providers.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. All normal recurring adjustments considered necessary for a fair presentation have been included. Certain disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an on-going basis we evaluate significant estimates and assumptions, including, but not limited to, revenue recognition, stock-based compensation, estimated useful lives of assets, impairment of goodwill and indefinite-lived intangible assets, intangible assets subject to amortization, the computation of income taxes and the fair value of interest rate swaps. Future events and their effects cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. Management evaluates and updates assumptions and estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Adoption of New Accounting Standards

There have been no material developments related to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s unaudited condensed consolidated financial statements and note disclosures from those disclosed in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2022, that would be expected to impact the Company.

Note 2. Revenue from Contracts with Customers
Contract Assets

The Company’s contract assets primarily include commissions incurred to acquire contracts with customers. The Company incurs commission expenses related to in-house and third-party vendors which are capitalized and amortized over the expected customer benefit period which is approximately six years. The Company’s current contract assets are included in prepaid expenses and other and the Company’s non-current contract assets are included in deferred charges and other assets in its unaudited condensed consolidated balance sheets. Amortization of capitalized commission expenses is recorded in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of comprehensive income (loss).

7

Table of Contents
The following tables present the activity of current and non-current contract assets:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2023202220232022
Beginning Balance$8,742 $8,427 $8,646 $8,147 
Commission payments755 983 2,439 2,630 
Contract asset amortization(822)(729)(2,410)(2,096)
Ending Balance$8,675 $8,681 $8,675 $8,681 

Contract Liabilities

The Company’s contract liabilities include services that are billed in advance and recorded as deferred revenue, as well as installation fees that are charged upfront without transfer of commensurate goods or services to the customer. The Company’s current contract liabilities are included in advanced billings and customer deposits and the Company’s non-current contract liabilities are included in other liabilities in its unaudited condensed consolidated balance sheets. Shentel’s current contract liability balances were $10.1 million and $9.5 million as of September 30, 2023 and December 31, 2022, respectively, and Shentel’s non-current contract liability balances were $1.0 million and $1.9 million as of September 30, 2023 and December 31, 2022, respectively. Shentel expects its current contract liability balances to be recognized within revenues during the twelve-month periods following the respective balance sheet dates and its non-current contract liability balances to be recognized within revenues after the twelve-month periods following the respective balance sheet dates.

Refer to Note 14, Segment Reporting, for a summary of the Company’s revenue streams.

Note 3. Investments

Investments consist of the following:
(in thousands)September 30,
2023
December 31,
2022
SERP investments at fair value$2,027 $1,889 
Cost method investments10,657 10,749 
Equity method investments234 333 
Total investments$12,918 $12,971 

SERP Investments at Fair Value: The fair value of the SERP investments are based on unadjusted quoted prices in active markets and are classified as Level 1 of the fair value hierarchy. Changes to the investments’ fair value are presented in Other income (expense), while the reciprocal changes in the liability are presented in selling, general and administrative expense.

Cost Method Investments: Shentel’s investment in CoBank’s Class A common stock, derived from the CoBank patronage program, represented substantially all of the Company’s cost method investments with a balance of $10.0 million at both September 30, 2023 and December 31, 2022, respectively. We recognized approximately $0.1 million and $13.7 thousand of patronage income in other income (expense) for the three months ended September 30, 2023 and 2022, respectively, and approximately $0.4 million and $40.5 thousand during the nine months ended September 30, 2023 and 2022, respectively. The Company expects that approximately 88% of the patronage distributions will be collected in cash and 12% in equity in 2023.

Equity Method Investments: At December 31, 2022, the Company had a 20.0% ownership interest in Valley Network Partnership (“ValleyNet”). During 2023, ValleyNet ceased operations and was dissolved. In April 2023, Shentel received a payment of $0.1 million, representing Shentel’s remaining capital in the partnership, and the investment balance was derecognized from Shentel’s unaudited condensed consolidated balance sheets. Prior to the commencement of dissolution proceedings, the Company and ValleyNet purchased capacity on one another’s fiber network, through related party transactions.

8

Table of Contents
Note 4. Property, Plant and Equipment

Property, plant and equipment consist of the following:
 
($ in thousands)Estimated Useful LivesSeptember 30,
2023
December 31,
2022
Land$3,521 $3,722 
Land improvements
10 years
3,610 3,483 
Buildings and structures
10 - 45 years
95,170 93,461 
Cable and fiber
15 - 30 years
721,441 593,771 
Equipment and software
4 - 8 years
323,422 317,347 
Plant in service 1,147,164 1,011,784 
Plant under construction 167,389 144,534 
Total property, plant and equipment 1,314,553 1,156,318 
Less: accumulated depreciation and amortization(492,059)(468,765)
Property, plant and equipment, net $822,494 $687,553 

Property, plant and equipment, net increases were primarily attributable to capital expenditures in the Broadband segment due to expansion of Glo Fiber assets and market expansion. The Company’s accounts payable as of September 30, 2023 and December 31, 2022 included amounts associated with capital expenditures of approximately $41.4 million and $43.8 million, respectively. Depreciation and amortization expense was $16.5 million and $17.7 million during the three months ended September 30, 2023 and 2022, respectively, and $48.3 million and $46.4 million during the nine months ended September 30, 2023 and 2022, respectively.

Note 5. Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following:
 September 30, 2023December 31, 2022
(in thousands)Gross
Carrying
Amount
Accumulated Amortization and OtherNetGross
Carrying
Amount
Accumulated Amortization and OtherNet
Goodwill - Broadband$3,244 $— $3,244 $3,244 $— $3,244 
Indefinite-lived intangibles:
Cable franchise rights64,334 — 64,334 64,334 — 64,334 
FCC Spectrum licenses12,122 — 12,122 12,122 — 12,122 
Railroad crossing rights180 — 180 141 — 141 
Total indefinite-lived intangibles76,636 — 76,636 76,597 — 76,597 
Finite-lived intangibles:
Subscriber relationships28,425 (27,255)1,170 28,425 (26,910)1,515 
Other intangibles488 (351)137 488 (329)159 
Total finite-lived intangibles28,913 (27,606)1,307 28,913 (27,239)1,674 
Total goodwill and intangible assets$108,793 $(27,606)$81,187 $108,754 $(27,239)$81,515 

Amortization expense was $0.2 million during the three months ended September 30, 2023 and 2022, and $0.4 million and $0.6 million during the nine months ended September 30, 2023 and 2022, respectively.

On August 23, 2022, the Company entered into a definitive asset purchase agreement (the “Spectrum Purchase Agreement”) with a wireless carrier pursuant to which the Company agreed to sell certain Federal Communications Commission (“FCC”) spectrum licenses and leases previously utilized in the Company’s Beam branded fixed wireless service for total consideration of approximately $21.1 million, composed of $17.3 million cash and approximately $3.8 million of liabilities to be assumed by the wireless carrier (the “Spectrum Transaction”). The Spectrum Transaction closed on July 6, 2023.
9

Table of Contents

As a result of the expected sale, the Company concluded that the FCC spectrum licenses met the held for sale criteria. Accordingly, $13.8 million of indefinite-lived licenses and $5.9 million of finite-lived licenses are presented as held for sale, along with the corresponding $3.8 million of operating lease liabilities related to the finite-lived licenses, as of December 31, 2022. Upon the closing of the Spectrum Transaction, the respective balances were derecognized, resulting in a gain of $1.3 million recorded in other income (expense). The Company evaluated these events and determined that the Spectrum Transaction does not represent a strategic shift in the Company’s business.

Note 6. Other Assets and Accrued Liabilities

Prepaid expenses and other, classified as current assets, included the following:
(in thousands)September 30,
2023
December 31,
2022
Prepaid maintenance expenses$7,024 $7,444 
Broadband contract acquisition costs3,037 2,809 
Interest rate swaps1,321  
Other3,012 1,256 
Prepaid expenses and other$14,394 $11,509 

Deferred charges and other assets, classified as long-term assets, included the following:
(in thousands)September 30,
2023
December 31,
2022
Broadband contract acquisition costs$5,638 $5,837 
Interest rate swaps3,048  
Prepaid expenses and other7,139 7,422 
Deferred charges and other assets$15,825 $13,259 

Accrued liabilities and other, classified as current liabilities, included the following:
(in thousands)September 30,
2023
December 31,
2022
Accrued programming costs$2,967 $3,306 
Pension plan 3,341 
Other current liabilities8,796 11,259 
Accrued liabilities and other$11,763 $17,906 

Other liabilities, classified as long-term liabilities, included the following:
(in thousands)September 30,
2023
December 31,
2022
Noncurrent portion of deferred lease revenue$18,387 $18,679 
Noncurrent portion of financing leases1,397 1,500 
Other294 39 
Other liabilities$20,078 $20,218 

In 2021, Shentel’s Board of Directors adopted a resolution to terminate its pension plan. The Company terminated the pension plan and all benefits were distributed in June 2023 through the combination of lump sum payments and the purchase of non-participating annuity contracts at the option of the pension plan participants. The Company made an additional $2.9 million contribution from its cash balance as a result of the settlement and recognized a settlement gain of $0.7 million in other income (expense) for the nine months ended September 30, 2023.

10

Table of Contents
Note 7. Leases

The Company leases various broadband network and telecommunications sites, fiber optic cable routes, warehouses, retail stores, and office facilities for use in our business.

The components of lease costs were as follows:

ClassificationThree Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2023202220232022
Finance lease cost
Amortization of leased assetsDepreciation$120 $119 $358 $357 
Interest on lease liabilitiesInterest expense20 21 59 63 
Operating lease cost
Operating expense1
1,693 2,680 5,298 8,342 
Lease cost$1,833 $2,820 $5,715 $8,762 
_________________________________________
(1)Operating lease expense is presented in cost of service or selling, general and administrative expense based on the use of the relevant facility.

The following table summarizes the expected maturity of lease liabilities as of September 30, 2023:
(in thousands)Operating LeasesFinance LeasesTotal
2023$1,265 $20 $1,285 
20245,862 178 6,040 
20255,529 180 5,709 
20264,682 153 4,835 
20273,854 155 4,009 
2028 and thereafter66,096 1,359 67,455 
Total lease payments87,288 2,045 89,333 
Less: Interest(34,660)(545)(35,205)
Present value of lease liabilities$52,628 $1,500 $54,128 

Other information related to operating and finance leases was as follows:

September 30,
2023
December 31,
2022
Operating leases
Weighted average remaining lease term (years)19.319.8
Weighted average discount rate4.9 %4.5 %
Finance leases
Weighted average remaining lease term (years)12.613.1
Weighted average discount rate5.2 %5.2 %

Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2023202220232022
Cash paid for operating lease liabilities$1,662 $1,513 $4,843 $4,616 
Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases)508 1,213 2,229 3,283 

11

Table of Contents

The Company recognized $4.7 million and $4.0 million of operating lease revenue for the three months ended September 30, 2023 and 2022, respectively, and $13.9 million and $13.8 million of operating lease revenue for the nine months ended September 30, 2023 and 2022, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in Service revenue and other in the unaudited condensed consolidated statements of comprehensive income (loss). Substantially all of our lease revenue relates to fixed lease payments.

Below is a summary of our minimum rental receipts under the lease agreements in place as of September 30, 2023:
(in thousands)Operating Leases
2023$4,311 
202416,206 
202515,126 
202612,086 
202710,596 
2028 and thereafter25,199 
Total $83,524 

Note 8. Debt

Our Credit Agreement, dated July 1, 2021 (the “Credit Agreement”) contains (i) a $100 million, five-year undrawn revolving credit facility (the “Revolver”), (ii) a $150 million five-year delayed draw amortizing term loan (“Term Loan A-1”) and (iii) a $150 million seven-year delayed draw amortizing term loan (“Term Loan A-2” and collectively with Term Loan A-1, the “Term Loans”). The following loans were outstanding under the Credit Agreement:

(in thousands)September 30,
2023
December 31,
2022
Term loan A-1$75,000 $37,500 
Term loan A-275,000 37,500 
Total debt150,000 75,000 
Less: unamortized loan fees(94)(46)
Total debt, net of unamortized loan fees$149,906 $74,954 

In May 2023, Shentel amended the Credit Agreement resulting in (a) a change of the floating index rate from the one-month term London Inter-Bank Offered Rate (“LIBOR”) to the one-month term Secured Overnight Financing Rate (“SOFR”), (b) an extension of the borrowing deadline under the Term Loans from June 30, 2023 to December 31, 2023, and (c) an extension of the first principal repayment date for the Term Loans from September 30, 2023 to March 31, 2024. Management evaluated the amendment and concluded that the amendment event represents a modification of the existing Credit Agreement; therefore, modification accounting was applied.

Both Term Loan A-1 and Term Loan A-2 bore interest at one-month LIBOR plus a margin of 1.50% until May 2023 and now bear interest at one-month term SOFR plus a margin of 1.50%. The margin of 1.50% is variable and determined by the Company’s net leverage ratio. The interest rate was 6.92% and 5.89% at September 30, 2023 and December 31, 2022, respectively. The Company incurred interest expense of $2.3 million and $0.5 million during the three months ended September 30, 2023 and 2022, respectively, and $5.4 million and $1.2 million during the nine months ended September 30, 2023 and 2022, respectively. Shentel is charged commitment fees on unutilized portions of its Revolver and Term Loans. The Company recorded $0.1 million and $0.2 million related to these fees during the three months ended September 30, 2023 and 2022, respectively, and $0.4 million and $0.6 million related to these fees for the nine months ended September 30, 2023 and 2022, respectively. Both interest expense and commitment fees are included in other income (expense), net in the unaudited condensed consolidated statements of comprehensive income (loss).

The Credit Agreement contains a borrowing deadline of December 31, 2023, after which the Company will not be able to borrow against the undrawn portion of the Term Loans.

12

Table of Contents
The Credit Agreement includes various covenants, including total net leverage ratio and debt service coverage ratio financial covenants.

Shentel’s Term Loans require quarterly payments based on a percentage of the outstanding balance. Based on the outstanding balance as of September 30, 2023, Term Loan A-1 requires quarterly principal repayments of $0.5 million from March 31, 2024 through June 30, 2024; then increasing to $0.9 million quarterly from September 30, 2024 through March 31, 2026, with the remaining balance due June 30, 2026. Based on the outstanding balance as of September 30, 2023, Term Loan A-2 requires quarterly principal repayments of $0.2 million from March 31, 2024 through March 31, 2028, with the remaining balance due June 30, 2028.

The following table summarizes the expected payments of Shentel’s outstanding borrowings as of September 30, 2023:

(in thousands)Amount
2023$ 
20243,563 
20254,500 
202669,187 
2027750 
2028 72,000 
Total$150,000 

The Credit Agreement is fully secured by a pledge and unconditional guarantee from the Company and all of its subsidiaries, except Shenandoah Telephone Company. This provides the lenders a security interest in substantially all of the assets of the Company.

Note 9. Derivatives and Hedging

During the second quarter of 2023, Shentel entered into pay fixed (2.90%), receive variable (one-month term SOFR) interest rate swaps totaling $150.0 million of notional principal (the “Swaps”). The Swaps contain monthly payment terms beginning in May 2024, which extend through their maturity dates in June 2026. The Swaps are designated as cash flow hedges, representing 50% of the Company’s expected outstanding debt (including expected future borrowings under the Term Loans). The Company uses the Swaps to manage its exposure to interest rate risk for its long-term variable-rate Term Loans.

The table below presents the fair value of the Swaps as well as their classification in the unaudited condensed consolidated balance sheets. The fair value of these instruments was estimated using an income approach and observable market inputs (Level 2):
(in thousands)September 30,
2023
Balance sheet line item of derivative financial instruments:
Prepaid expenses and other$1,321 
Deferred charges and other assets3,048 
Total derivatives designated as hedging instruments$4,369 

The hedge was determined to be highly effective and therefore all change in the fair value of the swaps was recognized through other comprehensive income. The Company recognized $1.1 million and $3.2 million of unrealized gains, net of deferred taxes totaling $0.4 million and $1.1 million, for the three and nine months ended September 30, 2023, respectively. Since the Company did not have outstanding interest rate swaps in the prior year period, there were no gains or losses recorded for the three or nine months ended September 30, 2022. Shentel expects to begin reclassifying amounts related to the Swaps from accumulated other comprehensive income to interest expense in May 2024 when the payment periods of the Swaps begin.

13

Table of Contents
Note 10. Income Taxes

The Company files U.S. federal income tax returns and various state income tax returns. The Company is not subject to any state or federal income tax audits as of September 30, 2023. The Company’s income tax returns are generally open to examination from 2019 forward and the net operating losses acquired in the acquisition of nTelos are open to examination from 2002 forward.

The effective tax rates for the three and nine months ended September 30, 2023 and 2022, differ from the statutory U.S. federal income tax rate of 21% primarily due to the state income taxes, excess tax benefits and other discrete items.
 Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2023202220232022
Expected tax expense (benefit) at federal statutory$486 $(626)$1,828 $(1,524)
State income tax expense (benefit), net of federal tax effect124 (148)468 (361)
Revaluation of deferred tax liabilities (108) (108)
Excess tax deficiency from share-based compensation and other expense, net110 631 959 1,294 
Income tax expense (benefit)$720 $(251)$3,255 $(699)

The Company received $25.6 million in cash refunds for income taxes for the nine months ended September 30, 2023. The Company made no cash payments and received no cash refunds for income taxes for the nine months ended September 30, 2022.

Note 11. Stock Compensation and Earnings (Loss) per Share

The Company granted approximately 385,000 restricted stock units (“RSUs”) at a weighted average grant price of $19.05 to employees and directors during the nine months ended September 30, 2023. Approximately 190,000 RSUs with a weighted average grant price of $25.01 vested and 9,000 RSUs with a weighted average grant price of $21.65 were forfeited during the nine months ended September 30, 2023. The total fair value of RSUs vested was $4.8 million during the nine months ended September 30, 2023. Approximately 836,000 RSUs with a weighted average grant price of $21.21 remained outstanding as of September 30, 2023.

The Company granted approximately 134,000 Relative Total Shareholder Return RSUs (“RTSRs”) awards at a weighted average grant price of $23.64 to employees during the nine months ended September 30, 2023. Approximately 30,000 RTSRs with a weighted average grant price of $56.32 vested and no RTSRs were forfeited during the nine months ended September 30, 2023. The total fair value of RTSRs vested was $1.1 million during the nine months ended September 30, 2023. Approximately 293,000 RTSRs with a weighted average grant price of $25.80 remained outstanding as of September 30, 2023. The amount of RTSRs issued are determined on the vesting date based upon the Company’s stock performance compared to a group of peer companies. The vested amounts above exclude the vesting date adjustment and issuance of RTSRs based on actual performance, which totaled approximately 13,000 RTSRs, resulting in lower shares issued upon vesting of the RTSRs than originally granted.

Stock-based compensation expense was as follows:

 Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2023202220232022
Stock compensation expense2,220 1,942 8,950 7,751 
Capitalized stock compensation(176)(171)(586)(452)
Stock compensation expense, net$2,044 $1,771 $8,364 $7,299 

As of September 30, 2023, there was $10.9 million of total unrecognized compensation cost related to non-vested incentive awards which is expected to be recognized over weighted average period of 2.3 years.

14

Table of Contents
We utilize the treasury stock method to calculate the impact on diluted earnings (loss) per share that potentially dilutive stock-based compensation awards have. The following table indicates the computation of basic and diluted earnings (loss) per share:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands, except per share amounts)2023202220232022
Calculation of net income (loss) per share:
Net income (loss)$1,593 $(2,728)$5,449 $(6,556)
Basic weighted average shares outstanding50,379 50,183 50,346 50,153 
Basic net income (loss) per share$0.03 $(0.05)$0.11 $(0.13)
Effect of stock-based compensation awards outstanding:
Basic weighted average shares outstanding50,379 50,183 50,346 50,153 
Effect from dilutive shares and options outstanding457  277  
Diluted weighted average shares outstanding50,836 50,183 50,623 50,153 
Diluted net income (loss) per share$0.03 $(0.05)$0.11 $(0.13)
There were approximately 330 and 172,000 anti-dilutive equity awards outstanding during the three and nine months ended September 30, 2023, respectively. There were approximately 252,000 and 165,000 potentially dilutive equity awards for the three and nine months ended September 30, 2022, respectively; however, these securities were excluded from the calculation of diluted weighted average shares outstanding due to the fact that they were anti-dilutive as a result of the Company’s net loss for the periods.

Note 12. Government Grants

During the nine months ended September 30, 2023, Shentel was awarded an additional $18.3 million in new grants to strategically expand the Company’s broadband network in order to provide broadband services to unserved residences. The additional grants consisted of $9.4 million awarded under the Connect Maryland Network Infrastructure Grant Program in Maryland, $6.3 million awarded under the Virginia Telecommunications Initiative in Virginia, and $2.2 million and $0.4 million under the Major Broadband Project Strategies and Line Extension Advancement and Development programs, respectively, in West Virginia. The Company recognizes grant receivables at the time it becomes probable that the Company will be eligible to receive the grant, which is estimated to correspond with the date when specified build-out milestones are achieved. As a result of these programs, the Company received $0.4 million in cash reimbursements during the nine months ended September 30, 2023 and has recorded approximately $1.4 million in accounts receivable as of September 30, 2023. The Company did not recognize any material amounts under these programs during the nine months ended September 30, 2022 or as of December 31, 2022.

Note 13. Commitments and Contingencies

We are committed to make payments to satisfy our lease liabilities. The scheduled payments under those obligations are summarized in Note 7, Leases. We also have outstanding unconditional purchase commitments to procure marketing services and IT software licenses through 2026.

From time to time the Company is involved in various litigation matters arising out of the normal course of business. The Company consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to such matters. Estimating the probable losses or a range of probable losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve discretionary amounts, present novel legal theories, are in the early stages of the proceedings, or are subject to appeal. Whether any losses, damages or remedies ultimately resulting from such matters could reasonably have a material effect on the Company’s business, financial condition, results of operations, or cash flows will depend on a number of variables, including, for example, the timing and amount of such losses or damages (if any) and the structure and type of any such remedies. The Company’s management does not presently expect any litigation matters to have a material adverse impact on the Company’s financial position, results of operations and cash flows.

Note 14. Segment Reporting

15

Table of Contents
Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for the three and nine months ended September 30, 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for the three and nine months ended September 30, 2022 for comparability.



Three Months Ended September 30, 2023:
(in thousands)BroadbandTowerCorporate & EliminationsConsolidated
External revenue
Residential & SMB - Cable Markets$43,679 $ $— $43,679 
Residential & SMB - Glo Fiber Markets9,325  — 9,325 
Commercial Fiber10,415  — 10,415 
Tower lease 4,608 — 4,608 
RLEC & Other3,815  — 3,815 
Service revenue and other67,234 4,608 — 71,842 
Intercompany revenue and other215 36 (251) 
Total revenue67,449 4,644 (251)71,842 
Operating expenses
Cost of services26,266 1,694 (209)27,751 
Selling, general and administrative14,615 304 9,483 24,402 
Impairment expense1,532   1,532 
Depreciation and amortization15,729 549 392 16,670 
Total operating expenses58,142 2,547 9,666 70,355 
Operating income (loss)$9,307 $2,097 $(9,917)$1,487 

Three Months Ended September 30, 2022:
(in thousands)BroadbandTowerCorporate & EliminationsConsolidated
External revenue
Residential & SMB - Cable Markets$43,805 $ $— $43,805 
Residential & SMB - Glo Fiber Markets4,895  — 4,895 
Commercial Fiber9,522  — 9,522 
Tower lease 4,610 — 4,610 
RLEC & Other4,139  — 4,139 
Service revenue and other62,361 4,610 — 66,971 
Intercompany revenue and other25 67 (139)(47)
Total revenue62,386 4,677 (139)66,924 
Operating expenses
Cost of services26,193 1,384 (100)27,477 
Selling, general and administrative13,946 258 8,023 22,227 
Restructuring expense169  472 641 
Impairment expense477   477 
Depreciation and amortization16,791 445 637 17,873 
Total operating expenses57,576 2,087 9,032 68,695 
Operating income (loss)$4,810 $2,590 $(9,171)$(1,771)

16

Table of Contents
Nine Months Ended September 30, 2023:
(in thousands)BroadbandTowerCorporate & EliminationsConsolidated
External revenue
Residential & SMB - Cable Markets$132,838 $ $— $132,838 
Residential & SMB - Glo Fiber Markets24,492  — 24,492 
Commercial Fiber32,366  — 32,366 
Tower lease 13,861 — 13,861 
RLEC & Other11,312  — 11,312 
Service revenue and other201,008 13,861 — 214,869 
Intercompany revenue and other321 112 (433) 
Total revenue201,329 13,973 (433)214,869 
Operating expenses
Cost of services76,447 4,265 (318)80,394 
Selling, general and administrative46,110 1,103 29,489 76,702 
Impairment expense2,552   2,552 
Depreciation and amortization45,902 1,600 1,135 48,637 
Total operating expenses171,011 6,968 30,306 208,285 
Operating income (loss)$30,318 $7,005 $(30,739)$6,584 

Nine Months Ended September 30, 2022:
(in thousands)BroadbandTowerCorporate & EliminationsConsolidated
External revenue
Residential & SMB - Cable Markets$131,141 $ $— $131,141 
Residential & SMB - Glo Fiber Markets12,371  — 12,371 
Commercial Fiber27,924  — 27,924 
Tower lease 13,971 — 13,971 
RLEC & Other11,952  — 11,952 
Service revenue and other183,388 13,971 — 197,359 
Intercompany revenue and other124 255 (379) 
Total revenue183,512 14,226 (379)197,359 
Operating expenses
Cost of services76,801 4,054 (283)80,572 
Selling, general and administrative41,376 982 26,794 69,152 
Restructuring expense629  402 1,031 
Impairment expense4,884   4,884 
Depreciation and amortization42,724 1,562 2,722 47,008 
Total operating expenses166,414 6,598 29,635 202,647 
Operating income (loss)$17,098 $7,628 $(30,014)$(5,288)

17

Table of Contents
A reconciliation of the total of the reportable segments’ operating income (loss) to unaudited condensed consolidated income (loss) before income taxes is as follows:
 Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2023202220232022
Total consolidated operating income (loss) $1,487 $(1,771)$6,584 $(5,288)
Other income (expense), net826 (1,208)2,120 (1,967)
Income (loss) before income taxes$2,313 $(2,979)$8,704 $(7,255)

The Company’s chief operating decision maker (CODM) does not currently review total assets by segment since the assets are centrally managed and some of the assets are shared by the segments. Accordingly, total assets by segment are not provided.

Note 15. Subsequent Events

On October 24, 2023, Shentel entered into a definitive agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC (“Horizon” or “Horizon Telcom”) for $385 million (the “Horizon Transaction”). Consideration will consist of $305 million in cash and $80 million of Shentel common stock.

Horizon is a leading commercial fiber provider in Ohio and adjacent states serving national wireless providers, carriers, enterprises, and government, education and healthcare customers. Based in Chillicothe, Ohio, Horizon was founded in 1895 as the incumbent local exchange carrier (“ILEC”) in Ross County, Ohio and rapidly expanded its fiber network over the past 14 years. Most recently, Horizon has pursued a strategy of investing in Fiber-to-the-Home (“FTTH”) in tier 3 & 4 markets in Ohio.

Financing

Shentel intends to fund the Horizon Transaction with a combination of existing cash resources, revolving credit facility capacity and an amended and upsized credit facility. The Company has received $275 million in financing commitments from CoBank, Bank of America, Citizens Bank, N.A., and Fifth Third Bank, N.A..
GCM Grosvenor (“GCM”), a selling unit holder of Horizon, will exchange its equity interest in Horizon for 4.08 million shares of Shentel common stock with an aggregate value of $80 million based on a reference price of $19.60 resulting in GCM owning approximately 7% of Shentel’s fully diluted common shares after the transaction is closed.
Shentel has entered into a 7% Participating Exchangeable Perpetual Preferred Stock (“Preferred Stock”) investment agreement with Energy Capital Partners (“ECP”), an existing Shentel shareholder and long-time infrastructure investor, to provide $81 million of growth capital to fund the FTTH network expansion, the government grant projects and general corporate purposes. The dividend can be paid in cash or in-kind at the option of the Company. The Preferred Stock can be exchanged for Shentel common stock at an exchange price of $24.50, a 25% premium to the reference price of $19.60, under certain conditions as outlined in the investment agreement. This financing is expected to close in conjunction with the Horizon Transaction.
The Company plans to raise additional growth capital for the FTTH network expansion, government grant projects and general corporate purposes, which may include exploring strategic alternatives for its tower portfolio.

The Horizon Transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close in the first half of 2024.

Shentel is in the process of evaluating the impact of the Horizon Transaction on its consolidated financial statements and related disclosures.
18

Table of Contents
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will,” “should,” “could” or “plan” and similar expressions as they relate to Shenandoah Telecommunications Company or its management are intended to identify these forward-looking statements. All statements regarding Shenandoah Telecommunications Company’s expected future financial position, operating results and cash flows, business strategy, financing plans, forecasted trends relating to the markets in which Shenandoah Telecommunications Company operates and similar matters are forward-looking statements. We cannot assure you that the Company’s expectations expressed or implied in these forward-looking statements will turn out to be correct. The Company’s actual results could be materially different from its expectations because of various factors, including, but not limited to, those discussed under the caption Risk Factors in the Companys Annual Report on Form 10-K for its fiscal year ended December 31, 2022 (“2022 Form 10-K”). The forward-looking statements included in this Form 10-Q are made only as of the date of the statement. We undertake 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, except as required by law.
The following management’s discussion and analysis should be read in conjunction with the Company’s 2022 Form 10-K, including the consolidated financial statements and related notes included therein.

Overview

Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”) is a provider of a comprehensive range of broadband communication services and cell tower colocation space in the Mid-Atlantic portion of the United States.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) is organized around our reportable segments. Refer to Note 14, Segment Reporting, in our unaudited condensed consolidated financial statements for additional information.

Recent Developments

The Spectrum Transaction
On August 23, 2022, the Company entered into a definitive asset purchase agreement (the “Spectrum Purchase Agreement”) with a wireless carrier pursuant to which the Company agreed to sell certain Federal Communications Commission (“FCC”) spectrum licenses and leases previously utilized in the Company’s Beam branded fixed wireless service for total consideration of approximately $21.1 million, composed of $17.3 million cash and approximately $3.8 million of liabilities to be assumed by the wireless carrier (the “Spectrum Transaction”). The Spectrum Transaction closed on July 6, 2023.

The Horizon Transaction
On October 24, 2023, Shentel entered into a definitive agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC (“Horizon” or “Horizon Telcom”) for $385 million (the “Horizon Transaction”). Consideration will consist of $305 million in cash and $80 million of Shentel common stock.

Horizon is a leading commercial fiber provider in Ohio and adjacent states serving national wireless providers, carriers, enterprises, and government, education and healthcare customers. Based in Chillicothe, Ohio, Horizon was founded in 1895 as the incumbent local exchange carrier (“ILEC”) in Ross County, Ohio and rapidly expanded its fiber network over the past 14 years. Most recently, Horizon has pursued a strategy of investing in Fiber-to-the-Home (“FTTH”) in tier 3 & 4 markets in Ohio.

Financing

Shentel intends to fund the Horizon Transaction with a combination of existing cash resources, revolving credit facility capacity and an amended and upsized credit facility. The Company has received $275 million in financing commitments from CoBank, Bank of America, Citizens Bank, N.A., and Fifth Third Bank, N.A..
GCM Grosvenor (“GCM”), a selling unit holder of Horizon, will exchange its equity interest in Horizon for 4.08 million shares of Shentel common stock with an aggregate value of $80 million based on a reference price of $19.60 resulting in GCM owning approximately 7% of Shentel’s fully diluted common shares after the transaction is closed.
Shentel has entered into a 7% Participating Exchangeable Perpetual Preferred Stock (“Preferred Stock”) investment agreement with Energy Capital Partners (“ECP”), an existing Shentel shareholder and long-time infrastructure
19

Table of Contents
investor, to provide $81 million of growth capital to fund the FTTH network expansion, the government grant projects and general corporate purposes. The dividend can be paid in cash or in-kind at the option of the Company. The Preferred Stock can be exchanged for Shentel common stock at an exchange price of $24.50, a 25% premium to the reference price of $19.60, under certain conditions as outlined in the investment agreement. This financing is expected to close in conjunction with the Horizon Transaction.
The Company plans to raise additional growth capital for the FTTH network expansion, government grant projects and general corporate purposes, which may include exploring strategic alternatives for its tower portfolio.

The Horizon Transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close in the first half of 2024.

Results of Operations

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

The Company’s consolidated results from operations are summarized as follows:
Three Months Ended September 30,Change
($ in thousands)2023% of Revenue2022% of Revenue$%
Revenue$71,842 100.0 $66,924 100.0 4,918 7.3 
Operating expenses70,355 97.9 68,695 102.6 1,660 2.4 
Operating income (loss)1,487 2.1 (1,771)(2.6)3,258 184.0 
Other income (expense), net826 1.1 (1,208)(1.8)2,034 (168.4)
Income (loss) before income taxes2,313 3.2 (2,979)(4.5)5,292 177.6 
Income tax expense720 1.0 (251)(0.4)971 386.9 
Net income (loss)$1,593 2.2 $(2,728)(4.1)4,321 (158.4)

Revenue
Revenue increased approximately $4.9 million, or 7.3%, during the three months ended September 30, 2023 compared with the three months ended September 30, 2022, primarily driven by growth of $5.1 million, or 8.1%, in the Broadband segment. Refer to the discussion of the results of operations for the Broadband and Tower segments, included within this MD&A, for additional information.

Operating expenses
Operating expenses increased approximately $1.7 million, or 2.4%, for the three months ended September 30, 2023 compared with the three months ended September 30, 2022, primarily driven by $0.6 million, $0.5 million and $0.6 million of incremental operating expenses for the Broadband, Tower and Corporate segments, respectively.

Other income (expense), net
Other income (expense), net increased $2.0 million, or 168.4%, for the three months ended September 30, 2023 compared with the three months ended September 30, 2022, primarily driven by a gain recorded in connection with the sale of the Company’s FCC spectrum licenses upon the closing of the Spectrum Transaction in July 2023, partially offset by an increase in interest expense.

Income tax (benefit) expense
The Company recognized $0.7 million of income tax expense for the three months ended September 30, 2023, compared with $0.3 million of income tax benefit for the three months ended September 30, 2022. The $1.0 million increase in income tax expense was driven by higher pre-tax income during the three months ended September 30, 2023.
20

Table of Contents

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

The Company’s consolidated results from operations are summarized as follows:
Nine Months Ended September 30,Change
($ in thousands)2023% of Revenue2022% of Revenue$%
Revenue$214,869 100.0 $197,359 100.0 17,510 8.9 
Operating expenses208,285 96.9 202,647 102.7 5,638 2.8 
Operating income (loss)6,584 3.1 (5,288)(2.7)11,872 (224.5)
Other income (expense), net2,120 1.0 (1,967)(1.0)4,087 (207.8)
Income (loss) before income taxes8,704 4.1 (7,255)(3.7)15,959 (220.0)
Income tax expense3,255 1.5 (699)(0.4)3,954 565.7 
Net income (loss)$5,449 2.5 $(6,556)(3.3)12,005 (183.1)

Revenue
Revenue increased approximately $17.5 million, or 8.9%, during the nine months ended September 30, 2023 compared with the nine months ended September 30, 2022, primarily driven by growth of $17.8 million, or 9.7%, in the Broadband segment, partially offset by a decline of $0.3 million, or 1.8%, in the Tower segment. Refer to the discussion of the results of operations for the Broadband and Tower segments, included within this MD&A, for additional information.

Operating expenses
Operating expenses increased approximately $5.6 million, or 2.8%, for the nine months ended September 30, 2023 compared with the nine months ended September 30, 2022, primarily driven by $4.6 million, $0.4 million and $0.7 million of incremental operating expenses for the Broadband, Tower and Corporate segments, respectively.

Other income (expense), net
Other income (expense), net increased $4.1 million, or 207.8%, for the nine months ended September 30, 2023 compared with the nine months ended September 30, 2022, primarily driven by a gain recorded in connection with the sale of the Company’s FCC spectrum licenses upon the closing of the Spectrum Transaction in July 2023, sales taxes refunds received, interest income related to tax refunds and a pension settlement gain resulting from the termination of Shentel’s pension plan in June 2023, partially offset by an increase in interest expense.

Income tax (benefit) expense
The Company recognized $3.3 million of income tax expense for the nine months ended September 30, 2023, compared with $0.7 million of income tax benefit for the nine months ended September 30, 2022. The $4.0 million increase in income tax expense was driven by higher pre-tax income during the nine months ended September 30, 2023.

Broadband

Our Broadband segment provides broadband internet, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania and Kentucky, via hybrid fiber coaxial cable under the brand name of Shentel, and fiber optics under the brand name of Glo Fiber. The Broadband segment also leases dark fiber and provides Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. The Broadband segment also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as a Rural Local Exchange Carrier (“RLEC”). These integrated networks are connected by over 9,300 route miles of fiber.

21

Table of Contents
The following table indicates selected operating statistics of our Broadband segment:
 September 30,
2023
September 30,
2022
Broadband homes and businesses passed (1)415,971 342,741 
Cable Markets213,317 211,829 
Glo Fiber Markets202,654 130,912 
Residential & Small and Medium Business ("SMB") Revenue Generating Units ("RGUs"):
Broadband Data146,797 130,238 
Cable Markets109,404 109,132 
Glo Fiber Markets37,393 21,106 
Video44,050 48,092 
Voice40,699 39,801 
Total Residential & SMB RGUs (excludes RLEC)
231,546 218,131 
Residential & SMB Penetration (2)
Broadband Data35.3 %38.0 %
Cable Markets51.3 %51.5 %
Glo Fiber Markets18.5 %16.1 %
Video10.6 %14.0 %
Voice10.2 %12.2 %
Residential & SMB Average Revenue per User ("ARPU") (3)
Broadband Data$80.95 $80.05 
Cable Markets$82.22 $81.43 
Glo Fiber Markets$77.00 $72.75 
Video$105.72 $102.59 
Voice$25.14 $25.56 
Fiber route miles9,387 8,072 
Total fiber miles (4)813,273 622,095 
_______________________________________________________
(1)Homes and businesses are considered passed (“passings”) if we can connect them to our network without further extending the distribution system. Passings is an estimate based upon the best available information. Passings will vary among video, broadband data and voice services.
(2)Penetration is calculated by dividing the number of users by the number of passings or available homes, as appropriate.
(3)Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.
(4)Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.
22

Table of Contents

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022

Broadband results from operations are summarized as follows:
Three Months Ended September 30,Change
($ in thousands)2023% of Revenue2022% of Revenue