EXHIBIT 99.1
March 1, 2013
4Q 2012
Earnings Conference Call
Earnings Conference Call
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:
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:
q Increasing competition in the communications industry; and
q A complex and uncertain regulatory environment.
A further list and description of these risks, uncertainties and other factors can be found in the
Company’s SEC filings which are available online at www.sec.gov, www.shentel.com or on
request from the Company. The Company does not undertake to update any forward-looking
statements as a result of new information or future events or developments.
Company’s SEC filings which are available online at www.sec.gov, www.shentel.com or on
request from the Company. The Company does not undertake to update any forward-looking
statements as a result of new information or future events or developments.
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.
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
President and CEO
5
4Q’12 Highlights
n 4G LTE Progress at 12/31/12
§ 224 Sites upgraded to NV equipment
§ 200 with 4G LTE in service
n Improved Returns from Prepaid
§ Q4 Update of Prepaid settlement rates with Sprint
§ $11.8M received, cost reduction covering July 2010 through
September 2012
September 2012
6
2012 Financial Highlights
Revenue
($ millions)
Adjusted OIBDA
($ millions)
7
Wireless Highlights
PCS Customers (000s)
q Steady Postpaid growth
Postpaid customers up 5.7%
in the last year
Postpaid customers up 5.7%
in the last year
q Rapid Prepaid Growth
Q4’12 net additions of 5,723;
128k prepaid subs at 12/31
Q4’12 net additions of 5,723;
128k prepaid subs at 12/31
q Churn improves
§ Postpaid churn 1.87% for
4Q’12, down from 1.89%
for 4Q’11.
4Q’12, down from 1.89%
for 4Q’11.
§ Prepaid Q4’12 churn of
3.71% compared to 3.90%
for Q4’11.
3.71% compared to 3.90%
for Q4’11.
8
Cable Highlights
n RGU Growth
n Total RGU growth of 2.7% during 2012
n 114,891 RGUs at 12/31/2012
n Cable Upgrades
n Started the final planned upgrade to markets acquired in
mid-2010.
mid-2010.
n Non-cash Impairment Charge
n Result of annual testing; wrote off $11.0 million of goodwill
9
VP of Finance and CFO
10
Profitability
Adjusted OIBDA ($ thousands)
11
Growth in Adjusted OIBDA ($ thousands)
Adjusted OIBDA
Adjusted OIBDA
12
Adjusted EPS
Adjusted EPS
13
Adjusted OIBDA by Segment ($ millions)
14
Wireless Segment - Change in Adjusted OIBDA
Q4’12 vs. Q4’11 ($ millions)
Q4’12 vs. Q4’11 ($ millions)
15
Key Operational Results - Mobile Company
Mobile Company Revenue ($ millions)
Towers and Leases
16
Cable Segment - Change in Adjusted OIBDA
Q4’12 vs. Q4’11 ($ millions)
Q4’12 vs. Q4’11 ($ millions)
17
EVP and COO
18
Network Vision Scorecard - as of 2/25/13
To Date:
Leasing & Zoning Complete 413 out of 520 year-end sites
Sites on air 267 out of 520 year-end sites
Sites with 4G LTE launched 222 out of 520 year-end sites
n Sites on air have more than tripled since end of Q3 2012
n 4G LTE currently available to 67% of covered POPs
n 4G LTE service launched in 9 out of 13 local markets
19
Key Operational Results - Wireless
PCS Postpaid Customers (000s)
20
Key Operational Results - Wireless
Annual Gross Additions - Postpaid
Annual Net Additions - Postpaid
n Net adds of 4,025 in Q4 2012
versus 5,072 in Q4 2011
versus 5,072 in Q4 2011
n Q4 2012 churn of 1.87% down
from 1.89% in Q4 2011
from 1.89% in Q4 2011
n Shentel-controlled channels
produced 49% of gross adds in
Q4 2012 and 55% in Q4 2011
produced 49% of gross adds in
Q4 2012 and 55% in Q4 2011
n 2012 annual churn of 1.79% up
from 1.78% in 2011
from 1.78% in 2011
n Shentel-controlled channels
produced 48% of gross adds in
2012 and 53% in 2011
produced 48% of gross adds in
2012 and 53% in 2011
21
Key Operational Results - PCS
Gross Billed Revenue per Postpaid User - Data & Voice 1
1 - Before Service credits, bad debt, Sprint Nextel fees.
22
PCS Revenues
Annual Gross Billed Revenues - Postpaid ($ millions)
23
Postpaid PCS Customers Top Picks Q4 2012
n Smartphones made up 65% of
the Postpaid base in Q4 2012,
up from 53% in Q4 2011 and
61% in Q3 2012
the Postpaid base in Q4 2012,
up from 53% in Q4 2011 and
61% in Q3 2012
n Top Service Plans - 72% of
Gross Adds
Gross Adds
► Everything Data 1500 - 56%
► Everything Data 450 - 16%
n Top Devices - New Activations
- All Channels
- All Channels
► iPhone 24%
► Samsung Galaxy S III 23%
► Kyocera DuraXT 6%
24
iPhone Statistics - Q4’12
n 24% of Q4 Gross Adds
n 34% of iPhones were sold or upgraded in Shentel-
controlled channels
controlled channels
n 17.9% of 12/31/2012 Postpaid customers had the
iPhone, up from 13.2% at 9/30/12
iPhone, up from 13.2% at 9/30/12
n 54% iPhone 4S
n 33% iPhone 4
n 13% iPhone 5
25
PCS Prepaid Statistics
Gross Additions (000s)
Cumulative Customers (000s)
26
PCS Prepaid Statistics
Churn %
Average Gross Billed Revenue
27
Cable - RGU Growth by Quarter
|
Customers
|
75,131
|
75,348
|
76,130
|
74,726
|
74,798
|
|
RGU's/Customer
|
1.49
|
1.51
|
1.48
|
1.54
|
1.54
|
28
Cable Statistics
Average Monthly Revenue per RGU
Average Monthly Revenue per Customer*
*Average monthly revenue per video subscriber was $84.46 and $99.30 for Q4 2011 and Q4 2012, respectively.
29
Key Operational Results - Cable
30
Key Operational Results - Wireline
n Access line loss of 3.4% in
past 12 months
past 12 months
n Broadband penetration in
LEC area at 56%
LEC area at 56%
n 1.7% growth in DSL
customers since
12/31/2011.
customers since
12/31/2011.
n Total connections at
12/31/12 of 34.9 thousand
12/31/12 of 34.9 thousand
Access lines (000s)
DSL Customers (000s)
31
Wireline Statistics - Fiber Sales ($ millions)
Fiber Lease Revenue
New External Fiber Lease Contracts*
* Amounts shown represent the total contract value.
Contract Terms range from 36 to 120 months.
Contract Terms range from 36 to 120 months.
32
Investing in the Future
n Last Cable upgrade of 10,000
homes passed is underway
and expected to be complete
in 2013.
homes passed is underway
and expected to be complete
in 2013.
n Network Vision spend of
$55M in 2012. Budget of
$60M in 2013.
$55M in 2012. Budget of
$60M in 2013.
n Success-based spending is
23% of total 2013 budget.
23% of total 2013 budget.
Capex Spending ($ millions)
* Capex spending for 2012 includes $24.7 million of contracted
commitments that was included in accounts payable at 12/31/12.
commitments that was included in accounts payable at 12/31/12.
33
Q&A
34
Appendix
35
Non-GAAP Financial Measure -
Billed Revenue per Postpaid Subscriber
Billed Revenue per Postpaid Subscriber
36
Non-GAAP Financial Measure -
Adjusted Earnings Per Share
Adjusted Earnings Per Share