Shenandoah Telecommunications Co

Good morning, everyone. Welcome to Shenandoah Telecommunications' third quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Kirk Andrews, Director of Financial Planning and Analysis at Shentel.

Good morning, and thank you for joining us. The purpose of today's call is to review Shentel's results for the third quarter of 2021. Our results were announced in a press release distributed last night and the presentation we'll be reviewing is included on the investor page at our website, www.chentel.com. Please note that an audio replay of this call will be made available later today. The details are set forth in the press release announcing this call. With us on the call today are Chris French, President and Chief Executive Officer, Ed McKay, Executive Vice President and Chief Operating Officer, and Jim Volk, Senior Vice President of Finance and CFO. After our prepared remarks, we will conduct a question and answer session. As always, let me refer you to slide two of the presentation, which contains our safe harbor disclaimer, and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. These may cause our actual results to differ materially from the statements. Therefore, we have provided a detailed discussion of various risk factors in our SEC filings, which you are encouraged to review. Your caution not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements. And with that, I will now turn the call over to Chris. Go ahead, Chris.

Thanks, Kirk. We appreciate everyone joining us this morning, and I hope everyone is staying healthy and safe. I'd like to start by providing an update on our strategy and future capital allocation plans. We continue to target 730,000 broadband passings by 2026. With strong momentum on business development, construction, and sales, we are upgrading our target for Glow Fiber from 300,000 to 450,000 serviceable addresses by 2026. Our government relations team continues to get a warm embrace by municipalities looking to offer a choice of broadband providers for their local residences and businesses. We have executed 17 new franchise agreements in 2021, adding approximately 160,000 future passings for a total of 304,000 passings with franchise approvals. Further, we have an attractive funnel of additional markets that have met our investment criteria, which we expect will lead to franchise agreements in the coming quarters. We're very bullish about our Glowfiber results and prospects, and over the next five years plan to invest more than $500 million building fiber to the home and connecting customers. In addition to investing in Glow, our team has been analyzing new opportunities to build broadband to unserved homes. Shintel has a long history investing in the latest technologies so rural communities can enjoy the same state-of-the-art telecommunications services that are provided in rural markets, excuse me, in urban markets. Our proven track record positions us well to partner with county and state governments to develop cost-effective and timely broadband solutions to reach these unserved locations. An unserved home is currently defined by most government agencies as a home without access to speeds of 25 megabits per second down and 3 megabits per second up. In the five states that we operate in, there are over $1.3 billion in government grant funds available to subsidize building broadband to these unserved locations. Most of the state grants are being funded by the American Rescue Plan that was passed by Congress in the first quarter. While the unserved opportunity for us is less than 10% of the GLOW target market, we have identified several attractive opportunities that we are pursuing in the region. We expect these will be accretive to our broadband business if we're successful in being awarded government grants. Ed will provide more details on the opportunities by each state. As we stated in the past, one of our governing investment principles is to offer the best Internet service in the markets we serve. With the large amount of government grant funds now available and possibly growing if the infrastructure bill in Congress is passed, we are pausing our BEAM expansion plans. These plans have focused on providing a fixed wireless service to the same low-density rural unserved homes that may be eligible for government grants to build fiber. Going forward, we are adopting a success-based investment model for BEAM where we've been awarded government grants to build fiber networks with wireless last-mile connections for certain difficult-to-reach locations. The hybrid fiber fixed wireless network design is unique to Shentel given our product offerings and license spectrum position and allows us to lower the subsidies required by the local partner counties and shortens the time to deliver broadband service to unserved homes. We plan to share more details in the coming quarters on this segment of the market. In summary, our target remains at 730,000 serviceable addresses with a shift to a fiber-first, future-proof network. Shifting now to our broadband network expansion on slide 5, we continued our strong construction momentum in the third quarter with 17,000 new passings being added, with total passings now approximately 296,000. Glow fiber had another record quarter of construction, adding over 14,000 new passings. We expect similar construction results in the fourth quarter with approximately 75,000 glow fiber passings by the end of the year. Beam passings grew to 24,000 during the quarter. With a more targeted approach to beam expansion, we now expect our beam network to reach 28,000 passings and our integrated broadband network to reach approximately 314,000 passings by the end of 2021. Turning to slide six, broadband data net additions were over 4,100 during the third quarter. Glow fiber contributed 2,100, or over half of our net additions, reflecting a 43% growth rate over the same period a year ago. We have added over 16,000 net data additions over the past four quarters, despite the COVID tailwinds on our incumbent cable business now being well behind us. We have great momentum to continue this pace and increase it as we launch new GLOW markets. On slide 7, we turn to the annual dividend. On Tuesday, our Board of Directors declared a $0.07 per share dividend payable on December 1 to shareholders of record on November 8. This is the 62nd consecutive year that Shentel has paid an annual dividend. the dividend realigns with our now smaller company as a result of the sale of our wireless operations. The annual dividend is in addition to the $18.75 special dividend that was paid to shareholders in August following the sale of our wireless assets and operations. The special dividend was equal to 95% of earnings per share from discontinued operations. With that, I'll now turn the call over to Jim to review the details of our financial results.