• Broadband operating expenses decreased approximately $0.2 million, or 0.1%, to $228.1 million in 2023, compared with 2022. The primarily drivers were lower impairment charges and depreciation charges resulting from the discontinuation of Beam fixed wireless in 2022 as well as lower payroll costs due to higher capitalized labor. These lower expenses were partially offset by higher line costs due to the expansion of the network into new markets, and higher advertising costs associated with the Company’s expansion of Glo Fiber.

• Broadband operating income in 2023 was $41.1 million, an increase of 98.6% compared with $20.7 million in 2022.

• Broadband Adjusted EBITDA² in 2023 was $105.8 million, an increase of 17.6% compared with $90.0 million in 2022.

Tower

• Total macro towers and tenants were 219 and 453, respectively, as of December 31, 2023 compared with 222 and 446, respectively, as of December 31, 2022.

• Revenue decreased approximately $0.3 million, or 1.5%, in 2023 to $18.6 million compared with 2022. This decrease was primarily driven by lower intercompany lease revenue from ceasing Beam service in 2022.

• Operating expenses decreased approximately $0.3 million, or 2.8%, in 2023 compared with 2022, primarily driven by lower depreciation as a result of fewer depreciable tower assets in 2023 compared to 2022.

• Tower operating income in 2023 was $9.5 million, approximately flat compared with $9.5 million in 2022.

• Tower Adjusted EBITDA³ in 2023 was $11.6 million, a decrease of 2.8%compared with $11.9 million in 2022.

_{¹ Non-GAAP measure. See the disclosure captioned “Non-GAAP Financial Measures” below in this press release for more details and a reconciliation to the most comparable GAAP measure.
² Non-GAAP measure. See the disclosure captioned “Non-GAAP Financial Measures” below in this press release for more details and a reconciliation to the most comparable GAAP measure.
³ Non-GAAP measure. See the disclosure captioned “Non-GAAP Financial Measures” below in this press release for more details and a reconciliation to the most comparable GAAP measure.}

Consolidated Fourth Quarter 2023 Results

• Consolidated revenue in the fourth quarter of 2023 grew 3.6% to $72.5 million compared with the fourth quarter of 2022 primarily due to growth of 3.7% in the Broadband segment.

• Consolidated net income in the fourth quarter of 2023 was $2.6 million, compared with net loss of $1.8 million in the fourth quarter of 2022.

• Consolidated Adjusted EBITDA in the fourth quarter of 2023 was $22.9 million, an increase of $1.9 million, or 8.8%, compared with the fourth quarter of 2022 due to growth of 8.9% in the Broadband segment and 9.3% growth in the Tower segment, partially offset by a 9.2% increase in corporate expenses.

Broadband

• Broadband revenue in the fourth quarter of 2023 grew $2.4 million, or 3.7%, to $67.9 million compared with $65.5 million in the fourth quarter of 2022. Residential & SMB revenue in Glo Fiber Markets increased approximately $4.7 million, or 79.2%, during 2023, primarily driven 71.7% year-over-year growth in data RGUs and 7.1% increase in data ARPU. Residential & SMB revenue in Cable Markets decreased approximately $0.4 million, or 0.8%, during 2023, primarily driven by a 11.2% decrease in video subscribers due to accelerated cord cutting. Commercial Fiber revenue decreased approximately $1.1 million, or 10.4%, primarily driven by timing of T-Mobile early termination fees. T-Mobile disconnected 338 backhaul circuits during 2023 as part of their previously announced rationalization of the former Sprint network. RLEC & Other revenue decreased approximately $0.6 million, or 15.3%, compared with 2022, primarily driven by a decline in residential DSL subscribers.

• Broadband operating expenses in the fourth quarter of 2023 were $57.1 million compared with $61.9 million in the fourth quarter of 2022. The decrease was primarily due to $4.8 million in lower depreciation due to 2022 accelerated depreciation of Beam network assets associated with the Company’s decision to permanently cease Beam operations, for which no equivalent accelerated depreciation was present in 2023.

• Broadband operating income in the fourth quarter of 2023 was $10.8 million, an increase of 200% compared with $3.6 million in the fourth quarter of 2022.

• Broadband Adjusted EBITDA in the fourth quarter of 2023 was $26.8 million, an increase of 8.9% compared with $24.6 million for the fourth quarter of 2022.

Tower

• Tower revenue for the fourth quarter of 2023 was consistent with revenue for fourth quarter of 2022.

• Tower operating income in the fourth quarter of 2023 was $2.5 million, an increase of 32.2% compared with $1.9 million for the fourth quarter of 2022, primarily due to lower depreciation and rent expense.

• Tower Adjusted EBITDA in the fourth quarter of 2023 was $3.0 million, an increase of 9.3% compared with $2.7 million for the fourth quarter of 2022.

Other Information

• As previously announced, on October 24, 2023, Shentel entered into a definitive agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC for $385 million. Consideration will consist of $305 million in cash and $80 million of Shentel common stock. Closing is expected to occur in the first half of 2024 after regulatory approvals are received.

• The Company plans to raise additional growth capital for the FTTH network expansion, government grant projects and general corporate purposes, which may include the sale of some or all of its tower portfolio as well as exploring other strategic alternatives.

• Capital expenditures were $256.6 million for the year ended December 31, 2023 compared with $189.6 million in 2022. The $66.9 million increase in capital expenditures was primarily due to higher spending in the Broadband segment driven by the expansion of Glo Fiber Markets.

• As of December 31, 2023, our cash and cash equivalents totaled $139.3 million and the availability under our revolving line of credit was $100.0 million, for total available liquidity of $239.3 million. During 2023, we borrowed a total of $225.0 million under our term loans and had total indebtedness of $300 million as of December 31, 2023.

• On July 6, 2023, the Company closed on the sale of its 2.5 GHz spectrum for $17.3 million in cash and $3.8 million in assumed liabilities.

Conference Call and Webcast

Date: Wednesday, February 21, 2024
Time: 8:30 a.m. (ET)
Listen via Internet: https://investor.shentel.com/
For Analysts, please register to dial-in at this link.

A live webcast of the call will be available on the “Investor Relations” page of the Company’s website at http://investor.shentel.com/.

A replay of the call will be available for a limited time on the Investor Relations page of the Company’s website.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides broadband services through its high speed, state-of-the-art fiber optic and cable and networks to customers in the Mid-Atlantic United States. The Company’s services include: broadband internet, video and voice; fiber optic Ethernet, wavelength and leasing; and tower colocation leasing. The Company owns an extensive regional network with approximately 9,900 route miles of fiber and 219 macro cellular towers. For more information, please visit www.shentel.com.

This release contains forward-looking statements about Shentel regarding, among other things, its business strategy, its prospects and its financial position. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “should,” “could,” or “anticipates” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. The forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to Shentel’s beliefs and expectations as to future events and trends affecting its business that are necessarily subject to uncertainties, many of which are outside Shentel’s control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved, and actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors. A discussion of other factors that may cause actual results to differ from management’s projections, forecasts, estimates and expectations is available in Shentel’s filings with the Securities and Exchange Commission. Those factors may include, among others, the ability to obtain the required regulatory approvals and satisfy the closing conditions required for the Horizon Transaction, Shentel’s ability to obtain the financing for the Horizon Transaction, the closing of the Transaction may not occur on time or at all, the expected savings and synergies from the Horizon Transaction may not be realized or may take longer or cost more than expected to realize, changes in overall economic conditions including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19 and other conditions. The forward-looking statements included are made only as of the date of the statement. Shentel undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.

CONTACTS:
Shenandoah Telecommunications Company
Jim Volk
Senior Vice President - Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.com

SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands, except per share amounts)
(Figures for the quarters ended December 31, 2023 and 2022 are unaudited)

SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Non-GAAP Financial Measures
Adjusted EBITDA

The Company defines Adjusted EBITDA as net income (loss) from continuing operations calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, impairment, other income (expense), net, interest income, interest expense, income tax expense (benefit), stock compensation expense, transaction costs related to acquisition and disposition events (including professional advisory fees, integration costs and related compensatory matters), restructuring expense, tax on equity award vesting and exercise events and other non-comparable items. A reconciliation of net income (loss), which is the most directly comparable GAAP financial measure, to Adjusted EBITDA is provided below herein.

Adjusted EBITDA margin is the Company’s calculation of Adjusted EBITDA, divided by revenue calculated in accordance with GAAP.

The Company uses Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of performance to evaluate operating effectiveness and assess its ability to increase revenues while controlling expense growth and the scalability of the Company’s business growth strategy. Adjusted EBITDA is also a significant performance measure used by the Company in its incentive compensation programs. The Company believes that the exclusion of the expense and income items eliminated in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors a useful measure for period-to-period comparisons of the Company’s core operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operations. Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating the Company’s operating results. However, use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and investors and others should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies may calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.

Segment Results

Year ended December 31, 2023

Year ended December 31, 2022

Quarter ended December 31, 2023

Quarter ended December 31, 2022

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_{⁽¹⁾ Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for 2022 for comparability.}

Supplemental Information

Broadband Operating Statistics

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_{⁽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 RGUs by the number of passings or available homes, as appropriate.
⁽³⁾ 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.}

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_{⁽¹⁾ Average Revenue Per Data RGU calculation = (Residential & SMB Revenue * 1,000) / average data RGUs / 12 months}

Tower Operating Statistics