Shenandoah Telecommunications Company (“Shentel”) (Nasdaq: SHEN)
announced strong first quarter results, reflecting continued
revenue growth and significantly improved profitability. Wireless
service revenue demonstrated solid growth driven by the net
addition of 5,776 postpaid wireless customers and 8,516 prepaid
wireless subscribers, including record gross activations for the
Boost brand. Postpaid gross and net activations reached an all-time
high as compared to any historical first quarter. Growth in the
Cable Segment was bolstered primarily by continued increases in
broadband subscribers.
First Quarter 2019 Highlights
- Operating revenue of $158.8 million grew 3.1%
- Operating income grew 47.9% to $24.8 million
- Net income of $13.9 million, or $0.28 per share
- Adjusted OIBDA of $73.0 million grew 6.3%
- Acquired Big Sandy Broadband, Inc. ("Big Sandy"), adding
approximately 4,800 revenue generating units
Please refer to
our First Quarter 2019 Earnings Presentation
Supplement available at https://investor.shentel.com/ for
additional information, including matters that will be referenced
during the Company’s conference call. Included in this release are
certain non-GAAP financial measures that are not determined in
accordance with U.S. generally accepted accounting principles.
Please refer to page 7 for additional information for non-GAAP
measures.
Results
Consolidated First Quarter 2019
Results
- Net income for the three months ended March 31, 2019 was
$13.9 million, resulting in net income per share of $0.28, compared
with $0.13 per share in the first quarter of 2018, reflecting an
increase of approximately 115%.
- Operating revenue for the first quarter of 2019 was $158.8
million, representing a year-over-year increase of 3.1%, driven by
strong subscriber growth in the Wireless and Cable segments.
- Operating expenses for the three months ended March 31,
2019 were $134.1 million, compared with $137.4 million for the
equivalent quarter in the prior year primarily due to a decline in
network costs for the Wireless segment attributable to repricing
backhaul circuits and migrating voice traffic from traditional
circuit-switched facilities to more cost effective VoIP facilities.
The decrease was offset by higher costs for the Cable segment
primarily due to our deployment of higher-speed data access
packages and infrastructure investments necessary to support its
growing cable and fiber networks.
- Operating income for the three months ended March 31, 2019
increased 47.9% to $24.8 million from $16.8 million in the prior
year quarter.
- Adjusted OIBDA increased 6.3% to $73.0 million for the three
months ended March 31, 2019, driven by subscriber growth in
the Wireless and Cable segments.
Wireless
- Shentel served 800,952 wireless postpaid customers at
March 31, 2019, an increase of 3.4% over 774,861 subscribers
as of March 31, 2018. As of March 31, 2019, tablets
and data devices were 9.8% of the postpaid base.
- Shentel served 267,220 wireless prepaid customers at
March 31, 2019, an increase of 6.8% over 250,191 subscribers
as of March 31, 2018. First quarter prepaid churn was
4.14%, representing an improvement of 28 basis points compared with
the prior year.
- Wireless operating revenue increased 2.5%, to $115.7 million
for the three months ended March 31, 2019, compared with $112.8
million in the first quarter of 2018, primarily driven by a 3.4%
increase in postpaid subscribers and a 6.8% increase in prepaid PCS
subscribers.
- Wireless operating expenses decreased 5.5% in the first quarter
of 2019 to $90.3 million, compared with $95.5 million for the three
months ended March 31, 2018. This decrease was primarily due
to a $2.9 million decrease in depreciation and amortization as a
result of the retirement of assets acquired in the nTelos
acquisition; a $1.3 million decrease in cost of goods sold as a
result of decreased equipment costs; a $0.3 million decrease in
cost of services due to the repricing of Wireless backhaul circuits
to market rates and migrating Wireless voice traffic from
traditional circuit-switched facilities to more cost effective VoIP
facilities; and a $0.8 million decrease in selling, general and
administrative due to a prior year reassessment of property taxes
in West Virginia.
- Wireless Adjusted OIBDA for the three months ended
March 31, 2019 increased 7.4% to $61.8 million, compared with
$57.6 million for the three months ended March 31, 2018.
Wireless Continuing OIBDA for the three months ended March 31,
2019 was $52.2 million, compared with $48.5 million for the three
months ended March 31, 2018.
Cable
- Total Revenue Generating Units increased 4.5% in the first
quarter of 2019 to 139,504 which includes the addition of
approximately 4,800 Big Sandy subscribers, compared with 133,439
for the three months ended March 31, 2018.
- Cable operating revenue for the first quarter of 2019 was $33.7
million, representing a quarter over quarter increase of 6.3%
compared with $31.7 million for the prior year first quarter. The
increase was primarily attributable to increases in broadband and
voice subscribers, higher video rates implemented to pass through
programming cost increases, and customers selecting or upgrading to
higher-speed data access packages.
- Cable operating expenses for the first quarter of 2019 were
$28.0 million, a quarter over quarter increase of 7.0% compared
with $26.2 million for the three months ended March 31, 2018.
The increase was primarily due to our deployment of higher-speed
data access packages and investments in infrastructure necessary to
support the growth of the cable and fiber network.
- Cable Adjusted OIBDA for the three months ended
March 31, 2019 was $12.1 million, compared with $11.7 million
for the three months ended March 31, 2018.
Wireline
- Wireline operating revenue for the three months ended
March 31, 2019 was $18.9 million, compared with $19.7 million
for the prior year first quarter. The decrease in operating revenue
was primarily attributable to repricing Wireless backhaul circuits
to market rates and migrating Wireless voice traffic from
traditional circuit-switched facilities to more cost effective VoIP
facilities.
- Wireline operating expenses for the three months ended
March 31, 2019 were $14.6 million, a quarter-over-quarter
decrease of 2.5% compared with $14.9 million for the three months
ended March 31, 2018. The decline in operating expenses was
primarily attributable to a reduction in network costs.
- Wireline Adjusted OIBDA for the three months ended
March 31, 2019 was $7.8 million, compared with $8.1 million
for the prior year equivalent quarter.
“Shentel delivered solid first quarter results,
building on the success we achieved in 2018. We achieved
consolidated revenue growth, dramatically increased operating
income, significantly improved profitability, and continued OIBDA
growth in the first quarter,” said President and CEO Chris E.
French, “We saw customer growth in all of our operating segments,
highlighted by record customer additions in both our Wireless and
Cable businesses.
“The investments we’ve made to improve the reliability and
coverage of our network and to expand our base of stores have
elevated brand recognition in the markets we serve, enabling us to
attract new customers and drive growth in both our postpaid and
prepaid customer base. Our Cable segment continued to see
increased RGUs and revenue as customers upgraded their service
plans to accommodate a growing need for higher bandwidth. We were
pleased to add the assets of Big Sandy Broadband, which expands our
service area in Kentucky. Shentel is well-positioned to
continue to provide our customers with the best service in our
expanding footprint and we look forward to driving continued growth
as we move through 2019.”
Other Information
- Capital expenditures budgeted for 2019 have been updated to
reflect the acquisition of Big Sandy and are expected to be
approximately $149.5 million, including $64.1 million in the
Wireless segment primarily for wireless network capacity
improvements. In addition, $55.0 million is budgeted primarily to
support growth in our Cable segment including new fiber routes and
continuing investments in DOCSIS 3.1 upgrades, $20.5 million in
Wireline projects including expansion of the fiber network, and
$9.9 million primarily for IT and other miscellaneous
projects.
- Capital expenditures were $44.4 million for the three months
ended March 31, 2019 compared with $24.4 million in the
comparable 2018 period.
- The Company expanded its Cable segment into the adjacent market
of eastern Kentucky through the acquisition of Big Sandy on
February 28, 2019.
- Outstanding debt at March 31, 2019 totaled $751.3 million,
net of unamortized loan costs, compared to $770.2 million as of
December 31, 2018. During the quarter, the Company
reduced debt $19.9 million, including a voluntary $15.0 million
prepayment in addition to the scheduled quarterly payment. As
of March 31, 2019, no amounts were outstanding under the
revolving line of credit. The total leverage ratio as of
March 31, 2019 was 2.42.
Conference Call and Webcast
Teleconference Information:
Date: May 9, 2019 Time: 10:00 A.M. (ET)Dial in
number: 1-888-695-7639
Password: 4992749 Audio
webcast: http://investor.shentel.com/
An audio replay of the call will be available
approximately two hours after the call is complete, through
June 2, 2019 by calling (855) 859-2056.
About Shenandoah
TelecommunicationsShenandoah Telecommunications Company
(Shentel) provides a broad range of diversified communications
services through its high speed, state-of-the-art network to
customers in the Mid-Atlantic United States. The Company’s
services include: wireless voice and data; cable video, internet
and digital voice; fiber network and services; and regulated local
and long distance telephone. Shentel is the exclusive personal
communications service (“PCS”) Affiliate of Sprint in a multi-state
area covering large portions of central and western Virginia,
south-central Pennsylvania, West Virginia, and portions of
Maryland, North Carolina, Kentucky, and Ohio. For more
information, please visit www.shentel.com.
This release contains forward-looking statements
that are subject to various risks and uncertainties. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of unforeseen factors.
A discussion of factors that may cause actual results to differ
from management's projections, forecasts, estimates and
expectations is available in the Company’s filings with the SEC.
Those factors may include changes in general economic conditions,
increases in costs, changes in regulation and other competitive
factors.
CONTACTS:Shenandoah Telecommunications CompanyJames F.
WoodwardSenior Vice President, Finance and Chief Financial
Officer540-984-5990Jim.Woodward@emp.shentel.com
Or
John Nesbett/Jennifer BelodeauIMS Investor
Relations203-972-9200jnesbett@institutionalms.com
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(in thousands, except per share
amounts)
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
Operating revenue: |
|
|
|
Service revenue and other |
$ |
143,231 |
|
|
$ |
136,559 |
|
Equipment revenue |
15,612 |
|
|
17,579 |
|
Total operating revenue |
158,843 |
|
|
154,138 |
|
Operating expenses: |
|
|
|
Cost of services |
49,518 |
|
|
49,342 |
|
Cost of goods sold |
14,637 |
|
|
15,805 |
|
Selling, general and administrative |
28,722 |
|
|
28,750 |
|
Depreciation and amortization |
41,179 |
|
|
43,487 |
|
Total operating expenses |
134,056 |
|
|
137,384 |
|
Operating income (loss) |
24,787 |
|
|
16,754 |
|
Other income (expense): |
|
|
|
Interest expense |
(7,954 |
) |
|
(9,332 |
) |
Gain (loss) on investments, net |
250 |
|
|
(32 |
) |
Non-operating income (loss), net |
1,037 |
|
|
1,021 |
|
Income (loss) before income taxes |
18,120 |
|
|
8,411 |
|
Income tax expense
(benefit) |
4,210 |
|
|
1,828 |
|
Net income (loss) |
$ |
13,910 |
|
|
$ |
6,583 |
|
|
|
|
|
Net income (loss) per share,
basic and diluted: |
|
|
|
Basic net income (loss) per share |
$ |
0.28 |
|
|
$ |
0.13 |
|
Diluted net income (loss) per share |
$ |
0.28 |
|
|
$ |
0.13 |
|
Weighted average shares outstanding, basic |
49,775 |
|
|
49,474 |
|
Weighted average shares outstanding, diluted |
50,115 |
|
|
50,024 |
|
|
|
|
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS(in thousands)
|
March 31, 2019 |
|
December 31, 2018 |
|
|
|
|
Cash and cash equivalents |
$ |
69,859 |
|
|
$ |
85,086 |
|
Other current assets |
117,926 |
|
|
125,116 |
|
Total current assets |
187,785 |
|
|
210,202 |
|
|
|
|
|
Investments |
11,274 |
|
|
10,788 |
|
Property, plant and equipment,
net |
701,980 |
|
|
701,359 |
|
Intangible assets, net |
339,714 |
|
|
366,029 |
|
Goodwill |
149,070 |
|
|
146,497 |
|
Operating lease assets |
361,564 |
|
|
— |
|
Deferred charges and other
assets |
48,325 |
|
|
49,891 |
|
Total assets |
$ |
1,799,712 |
|
|
$ |
1,484,766 |
|
|
|
|
|
Total current liabilities |
119,121 |
|
|
88,539 |
|
Long-term debt, less current
maturities |
726,970 |
|
|
749,624 |
|
Other liabilities |
501,007 |
|
|
204,356 |
|
Total shareholders’
equity |
452,614 |
|
|
442,247 |
|
Total liabilities and shareholders’ equity |
$ |
1,799,712 |
|
|
$ |
1,484,766 |
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND
SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(in thousands)
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
Cash flows from operating
activities: |
|
|
|
Net income (loss) |
$ |
13,910 |
|
|
$ |
6,583 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
Depreciation |
35,520 |
|
|
36,634 |
|
Amortization |
5,659 |
|
|
6,853 |
|
Bad debt expense |
367 |
|
|
369 |
|
Stock based compensation expense, net of amount capitalized |
1,714 |
|
|
2,037 |
|
Waived management fee |
9,628 |
|
|
9,048 |
|
Deferred income taxes |
(3,378 |
) |
|
(3,684 |
) |
Other adjustments |
(23 |
) |
|
705 |
|
Changes in assets and liabilities |
(1,734 |
) |
|
2,315 |
|
Net cash provided by (used in) operating activities |
$ |
61,663 |
|
|
$ |
60,860 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Acquisition of property, plant and equipment |
$ |
(44,420 |
) |
|
$ |
(24,382 |
) |
Cash disbursed for acquisition, net of cash acquired |
(10,000 |
) |
|
(52,000 |
) |
Proceeds from sale of assets |
53 |
|
|
263 |
|
Cash distributions (contributions) from investments and other |
(8 |
) |
|
1 |
|
Net cash provided by (used in) investing activities |
$ |
(54,375 |
) |
|
$ |
(76,118 |
) |
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Principal payments on long-term debt |
$ |
(19,889 |
) |
|
$ |
(12,125 |
) |
Proceeds from revolving credit facility borrowings |
— |
|
|
15,000 |
|
Principal payments on revolving credit facility |
— |
|
|
(15,000 |
) |
Proceeds from exercises of stock option |
72 |
|
|
— |
|
Taxes paid for equity award issuances |
(2,698 |
) |
|
(1,754 |
) |
Net cash provided by (used in) financing activities |
$ |
(22,515 |
) |
|
$ |
(13,879 |
) |
Net increase (decrease) in cash and cash equivalents |
$ |
(15,227 |
) |
|
$ |
(29,137 |
) |
Cash and cash equivalents, beginning of period |
85,086 |
|
|
78,585 |
|
Cash and cash equivalents, end of period |
$ |
69,859 |
|
|
$ |
49,448 |
|
|
|
|
|
Non-GAAP Financial MeasuresIn
managing our business and assessing our financial performance,
management supplements the information provided by the financial
statement measures prepared in accordance with GAAP with Adjusted
OIBDA and Continuing OIBDA, which are considered “non-GAAP
financial measures” under SEC rules.
Adjusted OIBDA is defined as operating income
(loss) before depreciation and amortization, adjusted to exclude
the effects of: certain non-recurring transactions; impairment of
assets; gains and losses on asset sales; actuarial gains and losses
on pension and other post-retirement benefit plans; and share-based
compensation expense, amortization of deferred contract costs, and
adjusted to include the benefit received from the waived management
fee by Sprint. Continuing OIBDA is defined as Adjusted OIBDA, less
the benefit received from the waived management fee by Sprint.
Adjusted OIBDA and Continuing OIBDA should not be construed as an
alternative to operating income as determined in accordance with
GAAP as a measure of operating performance.
In a capital-intensive industry such as
telecommunications, management believes that Adjusted OIBDA and
Continuing OIBDA and the associated percentage margin calculations
are meaningful measures of our operating performance. We use
Adjusted OIBDA and Continuing OIBDA as supplemental performance
measures because management believes these measures facilitate
comparisons of our operating performance from period to period and
comparisons of our operating performance to that of our peers and
other companies by excluding potential differences caused by the
age and book depreciation of fixed assets (affecting relative
depreciation expenses) as well as the other items described above
for which additional adjustments were made. In the future,
management expects that the Company may again report Adjusted OIBDA
and Continuing OIBDA excluding these items and may incur expenses
similar to these excluded items. Accordingly, the exclusion of
these and other similar items from our non-GAAP presentation should
not be interpreted as implying these items are non-recurring,
infrequent or unusual.
While depreciation and amortization are
considered operating costs under generally accepted accounting
principles, these expenses primarily represent the current period
allocation of costs associated with long-lived assets acquired or
constructed in prior periods, and accordingly may obscure
underlying operating trends for some purposes. By isolating
the effects of these expenses and other items that vary from period
to period without any correlation to our underlying performance, or
that vary widely among similar companies, management believes
Adjusted OIBDA and Continuing OIBDA facilitates internal
comparisons of our historical operating performance, which are used
by management for business planning purposes, and also facilitates
comparisons of our performance relative to that of our
competitors. In addition, we believe that Adjusted OIBDA and
Continuing OIBDA and similar measures are widely used by investors
and financial analysts as measures of our financial performance
over time, and to compare our financial performance with that of
other companies in our industry.
Adjusted OIBDA and Continuing OIBDA have
limitations as an analytical tool, and should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. These limitations include, but are not
limited to, the following:
- they do not reflect capital expenditures;
- they do not reflect the impacts of non-cash amortization of
deferred contract costs;
- many of the assets being depreciated and amortized will have to
be replaced in the future and Adjusted and Continuing OIBDA do not
reflect cash requirements for such replacements;
- they do not reflect costs associated with share-based awards
exchanged for employee services;
- they do not reflect interest expense necessary to service
interest or principal payments on indebtedness;
- they do not reflect gains, losses or dividends on
investments;
- they do not reflect expenses incurred for the payment of income
taxes; and
- other companies, including companies in our industry, may
calculate Adjusted and Continuing OIBDA differently than we do,
limiting its usefulness as a comparative measure.
In light of these limitations, management
considers Adjusted OIBDA and Continuing OIBDA as a financial
performance measure that supplements but does not replace the
information reflected in our GAAP results.
The following tables reconcile Adjusted OIBDA
and Continuing OIBDA to operating income, which we consider to be
the most directly comparable GAAP financial measure, for the first
quarter 2019 and 2018:
Adjusted OIBDA and Continuing OIBDA
Three Months Ended
March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
Wireless |
|
Cable |
|
Wireline |
|
Other |
|
Consolidated |
Operating income |
$ |
25,337 |
|
$ |
5,703 |
|
$ |
4,346 |
|
$ |
(10,599 |
) |
$ |
24,787 |
Non-cash amortization of deferred contract costs |
|
(4,211 |
) |
|
(237 |
) |
|
(64 |
) |
|
(2 |
) |
|
(4,514 |
) |
Depreciation and amortization |
|
31,050 |
|
|
6,458 |
|
|
3,533 |
|
|
138 |
|
|
41,179 |
|
Share-based compensation expense |
|
— |
|
|
— |
|
|
— |
|
|
1,714 |
|
|
1,714 |
|
Benefit received from the waived management fee (1) |
|
9,628 |
|
|
— |
|
|
— |
|
|
— |
|
|
9,628 |
|
Actuarial (gains) losses on pension plans |
|
— |
|
|
— |
|
|
— |
|
|
(38 |
) |
|
(38 |
) |
Other |
|
19 |
|
|
136 |
|
|
— |
|
|
65 |
|
|
220 |
|
Adjusted OIBDA |
|
61,823 |
|
|
12,060 |
|
|
7,815 |
|
|
(8,722 |
) |
|
72,976 |
|
Waived management fee |
|
(9,628 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(9,628 |
) |
Continuing OIBDA |
$ |
|
52,195 |
|
$ |
|
12,060 |
|
$ |
|
7,815 |
|
$ |
|
(8,722 |
) |
$ |
|
63,348 |
|
Three Months Ended March 31,
2018 |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Wireless |
|
Cable |
|
Wireline |
|
Other |
|
Consolidated |
Operating income |
$ |
17,267 |
|
$ |
5,527 |
|
$ |
4,772 |
|
$ |
(10,812 |
) |
$ |
16,754 |
Non-cash amortization of deferred contract costs |
|
(2,760 |
) |
|
141 |
|
|
(35 |
) |
|
— |
|
|
(2,654 |
) |
Depreciation and amortization |
|
33,925 |
|
|
6,024 |
|
|
3,394 |
|
|
144 |
|
|
43,487 |
|
Share-based compensation expense |
|
— |
|
|
— |
|
|
— |
|
|
2,037 |
|
|
2,037 |
|
Benefit received from the waived management fee (1) |
|
9,048 |
|
|
— |
|
|
— |
|
|
— |
|
|
9,048 |
|
Actuarial (gains) losses on pension plans |
|
— |
|
|
— |
|
|
— |
|
|
(82 |
) |
|
(82 |
) |
Other |
|
81 |
|
|
— |
|
|
— |
|
|
— |
|
|
81 |
|
Adjusted OIBDA |
|
57,561 |
|
|
11,692 |
|
|
8,131 |
|
|
(8,713 |
) |
|
68,671 |
|
Waived management fee |
|
(9,048 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(9,048 |
) |
Continuing OIBDA |
$ |
|
48,513 |
|
$ |
|
11,692 |
|
$ |
|
8,131 |
|
$ |
|
(8,713 |
) |
$ |
59,623 |
|
_______________________________________________________
- Under our amended affiliate agreement, Sprint agreed to waive
the Management Fees charged on both postpaid and prepaid revenue,
up to $4.2 million per month, until the total amount waived reaches
approximately $255.6 million, which is expected to occur in
2022.
Segment Results
Three
Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
Wireless |
|
Cable |
|
Wireline |
|
Other |
|
Eliminations |
|
Consolidated |
External
revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue |
|
$ |
97,075 |
|
|
$ |
29,705 |
|
|
$ |
5,485 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
132,265 |
|
Equipment revenue |
|
15,291 |
|
|
270 |
|
|
51 |
|
|
— |
|
|
— |
|
|
15,612 |
|
Other |
|
2,018 |
|
|
2,265 |
|
|
6,683 |
|
|
— |
|
|
— |
|
|
10,966 |
|
Total external
revenue |
|
114,384 |
|
|
32,240 |
|
|
12,219 |
|
|
— |
|
|
— |
|
|
158,843 |
|
Internal revenue |
|
1,270 |
|
|
1,469 |
|
|
6,690 |
|
|
— |
|
|
(9,429 |
) |
|
— |
|
Total operating
revenue |
|
115,654 |
|
|
33,709 |
|
|
18,909 |
|
|
— |
|
|
(9,429 |
) |
|
158,843 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
33,478 |
|
|
15,647 |
|
|
9,151 |
|
|
— |
|
|
(8,758 |
) |
|
49,518 |
|
Cost of goods sold |
|
14,427 |
|
|
175 |
|
|
36 |
|
|
— |
|
|
(1 |
) |
|
14,637 |
|
Selling, general and administrative |
|
11,362 |
|
|
5,726 |
|
|
1,843 |
|
|
10,461 |
|
|
(670 |
) |
|
28,722 |
|
Depreciation and amortization |
|
31,050 |
|
|
6,458 |
|
|
3,533 |
|
|
138 |
|
|
— |
|
|
41,179 |
|
Total operating
expenses |
|
90,317 |
|
|
28,006 |
|
|
14,563 |
|
|
10,599 |
|
|
(9,429 |
) |
|
134,056 |
|
Operating income
(loss) |
|
$ |
25,337 |
|
|
$ |
5,703 |
|
|
$ |
4,346 |
|
|
$ |
(10,599 |
) |
|
$ |
— |
|
|
$ |
24,787 |
|
Three
Months Ended March 31, 2018 |
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
Wireless |
|
Cable |
|
Wireline |
|
Other |
|
Eliminations |
|
Consolidated |
External
revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue |
|
$ |
92,165 |
|
|
$ |
28,471 |
|
|
$ |
5,308 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
125,944 |
|
Equipment revenue |
|
17,374 |
|
|
159 |
|
|
46 |
|
|
— |
|
|
— |
|
|
17,579 |
|
Other |
|
2,026 |
|
|
2,050 |
|
|
6,539 |
|
|
— |
|
|
— |
|
|
10,615 |
|
Total external
revenue |
|
111,565 |
|
|
30,680 |
|
|
11,893 |
|
|
— |
|
|
— |
|
|
154,138 |
|
Internal revenue |
|
1,239 |
|
|
1,031 |
|
|
7,814 |
|
|
— |
|
|
(10,084 |
) |
|
— |
|
Total operating
revenue |
|
112,804 |
|
|
31,711 |
|
|
19,707 |
|
|
— |
|
|
(10,084 |
) |
|
154,138 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
33,750 |
|
|
15,156 |
|
|
9,802 |
|
|
— |
|
|
(9,366 |
) |
|
49,342 |
|
Cost of goods sold |
|
15,727 |
|
|
56 |
|
|
22 |
|
|
— |
|
|
— |
|
|
15,805 |
|
Selling, general and administrative |
|
12,135 |
|
|
4,948 |
|
|
1,717 |
|
|
10,668 |
|
|
(718 |
) |
|
28,750 |
|
Depreciation and amortization |
|
33,925 |
|
|
6,024 |
|
|
3,394 |
|
|
144 |
|
|
— |
|
|
43,487 |
|
Total operating
expenses |
|
95,537 |
|
|
26,184 |
|
|
14,935 |
|
|
10,812 |
|
|
(10,084 |
) |
|
137,384 |
|
Operating income
(loss) |
|
$ |
17,267 |
|
|
$ |
5,527 |
|
|
$ |
4,772 |
|
|
$ |
(10,812 |
) |
|
$ |
— |
|
|
$ |
16,754 |
|
Supplemental Information
Subscriber Statistics
The following table indicates selected operating
statistics of Wireless, including Sprint subscribers:
|
March 31, 2019 (2) |
|
March 31, 2018 (2) |
Postpaid: |
|
|
|
Retail PCS subscribers - postpaid |
800,952 |
|
|
774,861 |
|
Gross PCS subscriber additions - postpaid |
50,847 |
|
|
43,077 |
|
Net PCS subscriber additions (losses) - postpaid (3) |
5,776 |
|
|
38,264 |
|
PCS average monthly retail churn % - postpaid |
1.89 |
% |
|
1.89 |
% |
Prepaid: |
|
|
|
Retail PCS subscribers - prepaid |
267,220 |
|
|
250,191 |
|
Gross PCS subscriber additions - prepaid |
40,979 |
|
|
40,111 |
|
Net PCS subscriber additions (losses) - prepaid (4) |
8,516 |
|
|
24,369 |
|
PCS average monthly retail churn % - prepaid |
4.14 |
% |
|
4.42 |
% |
|
|
|
|
PCS market POPS (000) (1) |
7,023 |
|
|
7,023 |
|
PCS covered POPS (000)
(1) |
6,261 |
|
|
5,889 |
|
CDMA base stations
(sites) |
1,874 |
|
|
1,742 |
|
Towers owned |
211 |
|
|
193 |
|
Non-affiliate cell site
leases |
195 |
|
|
192 |
|
_______________________________________________________
- "POPS" refers to the estimated population of a given geographic
area. Market POPS are those within a market area which we are
authorized to serve under our Sprint PCS affiliate agreement, and
Covered POPS are those covered by our network. The data source for
POPS is U.S. census data.
- Beginning February 1, 2018 includes Richmond Expansion Area
except for gross PCS subscriber additions.
- March 31, 2018 Net PCS subscriber additions - postpaid were a
loss of 79, excluding the acquisition of the expansion area on
February 1, 2018.
- March 31, 2018 Net PCS subscriber additions - prepaid were
8,678, excluding the acquisition of the expansion area on February
1, 2018.
The subscriber stats above, excluding gross additions, include
the Richmond Expansion Area as follows:
|
February 1, 2018 |
|
Expansion Area |
PCS subscribers -
postpaid |
38,343 |
|
PCS subscribers - prepaid |
15,691 |
|
Acquired PCS market POPS
(000) |
1,082 |
|
Acquired PCS covered POPS
(000) |
602 |
|
Acquired CDMA base stations
(sites) |
105 |
|
The following table indicates selected operating
statistics of Cable:
|
March 31, 2019 (8) |
|
March 31, 2018 |
Homes passed (1) |
189,613 |
|
|
184,975 |
|
Customer relationships
(2) |
|
|
|
Video users |
42,752 |
|
|
43,264 |
|
Non-video customers |
41,107 |
|
|
35,133 |
|
Total customer relationships |
83,859 |
|
|
78,397 |
|
Video |
|
|
|
Customers (3) |
44,119 |
|
|
45,555 |
|
Penetration (4) |
23.3 |
% |
|
24.6 |
% |
Digital video penetration (5) |
85.7 |
% |
|
75.8 |
% |
Broadband |
|
|
|
Users (3) |
71,549 |
|
|
65,141 |
|
Penetration (4) |
37.7 |
% |
|
35.2 |
% |
Voice |
|
|
|
Users (3) |
23,836 |
|
|
22,743 |
|
Penetration (4) |
12.6 |
% |
|
12.3 |
% |
Total revenue generating units
(6) |
139,504 |
|
|
133,439 |
|
Fiber route miles |
3,629 |
|
|
3,371 |
|
Total fiber miles (7) |
141,230 |
|
|
124,701 |
|
Average revenue generating
units |
136,911 |
|
|
132,865 |
|
_______________________________________________________
- Homes and businesses are considered passed (“homes passed”) if
we can connect them to our distribution system without further
extending the transmission lines. Homes passed is an estimate
based upon the best available information. Homes passed have access
to video, broadband and voice services.
- Customer relationships represent the number of billed customers
who receive at least one of our services.
- Generally, a dwelling or commercial unit with one or more
television sets connected to our distribution system counts as one
video customer. Where services are provided on a bulk basis,
such as to hotels and some multi-dwelling units, the revenue
charged to the customer is divided by the rate for comparable
service in the local market to determine the number of customer
equivalents included in the customer counts shown above.
- Penetration is calculated by dividing the number of users by
the number of homes passed or available homes, as appropriate.
- Digital video penetration is calculated by dividing the number
of digital video users by total video users. Digital video
users are video customers who receive any level of video service
via digital transmission. A dwelling with one or more digital
set-top boxes or digital adapters counts as one digital video
user.
- Revenue generating units are the sum of video, voice and
broadband users.
- 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.
- Beginning February 28, 2019, includes approximately 4,800
subscribers from the Big Sandy acquisition.
The following table includes selected operating
statistics of the Wireline operations:
|
|
March 31, 2019 |
|
March 31, 2018 |
Long distance subscribers |
|
9,623 |
|
|
8,980 |
|
Video customers (1) |
|
4,656 |
|
|
4,912 |
|
Broadband customers |
|
14,588 |
|
|
14,695 |
|
Fiber route miles |
|
2,170 |
|
|
2,078 |
|
Total fiber miles (2) |
|
162,281 |
|
|
155,188 |
|
_______________________________________________________
- Wireline’s video service passes approximately 16,500
homes.
- 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.
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