Attached files
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| 8-K - SHENANDOAH TELECOMM 8-K 3-7-2011 - SHENANDOAH TELECOMMUNICATIONS CO/VA/ | form8k.htm |
EXHIBIT 99.1
4Q 2010 Earnings Conference Call
March 7, 2011
Exhibit 99.1
2
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.
4
Chris French
CEO and President
5
4Q’10 Highlights
q Customer Growth
u Total wireless customers 302,653 at end of year
u Total Cable RGUs 104,440 at end of year
q Cable Expansion
u November 30th closed on the purchase of Suddenlink
properties; 7,000 homes passed, 3,900 RGUs
properties; 7,000 homes passed, 3,900 RGUs
q Wireless
u Significant growth in prepaid business which began with
the purchase of approximately 50,000 current Virgin
Mobile customers in July 2010
the purchase of approximately 50,000 current Virgin
Mobile customers in July 2010
6
Cable Highlights
q Cable Upgrades
u Former Rapid Communication systems complete
u Former Jet Broadband markets work underway
q Triple Play
u High Speed data available to 89% and voice to 73%
of acquired video homes passed at 12/31/10
of acquired video homes passed at 12/31/10
q Sales Momentum
u 2010 net RGU additions of 9,972
7
Wireless Highlights
PCS Postpaid Customers (000s)
q Prepaid - 2010 net
additions of 17,071 and
66,956 prepaid subs at
12/31
additions of 17,071 and
66,956 prepaid subs at
12/31
q Steady Wireless growth
- Postpaid customers up
6% in the last year
- Postpaid customers up
6% in the last year
q Postpaid Churn
improves - Annual churn
of 1.9% compared to 2.1%
for 2009
improves - Annual churn
of 1.9% compared to 2.1%
for 2009
8
2010 Financial Highlights
q JetBroadBand acquisition-
related transaction costs -
$3.1 million before tax and $1.8
million after tax
related transaction costs -
$3.1 million before tax and $1.8
million after tax
q Prepaid - Net loss $.6 million
pre-tax, $.4 million after-tax
pre-tax, $.4 million after-tax
q Closed DB Pension Plan -
Incurred cost of $3.8 million,
pre-tax, $2.3 million after tax
Incurred cost of $3.8 million,
pre-tax, $2.3 million after tax
q Directory sale - sold
publishing rights for $4 million
gain pre-tax, $2.4 million after
tax
publishing rights for $4 million
gain pre-tax, $2.4 million after
tax
Net Income
(in millions)
Net Income from Continuing Operations
(in millions)
(in millions)
9
Adele Skolits
CFO and VP of Finance
10
Profitability
Adjusted OIBDA ($ millions)
11
Adjusted OIBDA by Segment
12
Wireless Segment - Change in Adjusted
OIBDA 2010 vs. 2009
OIBDA 2010 vs. 2009
13
Cable Segment - Change in Adjusted
OIBDA 2010 vs. 2009
OIBDA 2010 vs. 2009
14
Earle MacKenzie
EVP and COO
15
Key Operational Results - Wireless
PCS Postpaid Customers (000s)
16
Key Operational Results - Wireless
Gross Additions - Postpaid
Net Additions - Postpaid
n Continued postpaid net
growth
growth
n Q4 2010 net adds of
5,112, a 68% increase
over Q4 2009
5,112, a 68% increase
over Q4 2009
n Q4 2010 churn of 1.8%
down from 2.0% in Q4
2010
down from 2.0% in Q4
2010
n Decrease in churn from
2.1% for 2009 to 1.9% for
2010
2.1% for 2009 to 1.9% for
2010
17
Key Operational Results - PCS
Gross Billed Revenue per Postpaid User - Data & Voice 1
1 - Before Service credits, bad debt, Sprint Nextel fees.
18
PCS Revenues
Gross Billed Revenues - Postpaid ($ millions)
$144.8
$151.2
*-The Net Service Fee percentage increased from 8.8% to 12% effective 6/1/10
19
Postpaid PCS Customers Top Picks Q4 2010
n Top Service Plans - 63% of
Gross Adds
Gross Adds
u Everything Data Family
1500 - 47%
1500 - 47%
u Everything Messaging
Family 1500 - 8%
Family 1500 - 8%
u Everything 450 - 8%
n Top Devices - New Activations
- All Channels
- All Channels
u LG Rumor Touch 17%
u HTC EVO 4G 14%
u Samsung Seek 7%
u LG Optimus S 6%
u Samsung Epic 4G 5%
u Mobile Data Cards 6%
u Mobile Computing 1%
20
PCS Prepaid Statistics
ØAcquired 49,885 prepaid subscribers effective 7/1/10
§Paid $138 per sub
ØGross adds of 19,199 in Q4 2010 and 33,488 since
7/1/10
7/1/10
ØNet adds of 10,775 in Q4 2010 and 17,071 since 7/1/10
ØEnding subscribers of 66,956
ØChurn rate of 4.6% for Q4 2010 and 4.9% since 7/1/10
ØAverage Billed Revenue of $18.42 in Q4 2010 and $17.61
since 7/1/10
since 7/1/10
21
Key Operational Results - Wireline
n Modest access line loss
n Improved broadband
penetration to over 50%
penetration to over 50%
n 8% growth in DSL
customers since
12/31/09
customers since
12/31/09
Access lines (000s)
Internet Customers (000s)
22
RGU Growth by Quarter - Cable
Net RGU growth excludes 1,754 RGU’s sold Q4’09 and 65,338 acquired Q3’10 and 4,245
acquired in Q4’10
acquired in Q4’10
23
Key Operational Results - Cable
Note: Video homes passed includes 16K homes located in Shenandoah County, VA, where internet and
voice services are not available from the cable company.
voice services are not available from the cable company.
24
Investing in the Future
n Completed upgrade of 2008
Rapid acquisition in Q4 2010
Rapid acquisition in Q4 2010
n Completed hardening of Jet
Network in Q4 2010
Network in Q4 2010
n Began upgrade of Farmville
system to be completed in Q2
2011
system to be completed in Q2
2011
n All Virginia systems upgrades
projected to be completed in
2011
projected to be completed in
2011
n West Virginia systems
upgrades to be completed in
2012
upgrades to be completed in
2012
Capex Spending
25
Q&A
26
Appendix
27
Non-GAAP Financial Measure - Billed Revenue per Postpaid Subscriber