UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2023

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to __________

Commission File No.: 000-09881

SHENANDOAH TELECOMMUNICATIONS COMPANY

(Exact name of registrant as specified in its charter)


Virginia						54-1162807
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

500 Shentel Way, Edinburg, Virginia 22824

(Address of principal executive offices) (Zip Code)

(540) 984-4141

(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:


Common Stock (No Par Value)	SHEN	NASDAQ Global Select Market	~~50,263,953~~50,264,466
(Title of Class)	(Trading Symbol)	(Name of Exchange on which Registered)	(The number of shares of the registrant's common stock outstanding on ~~July~~October 26, 2023)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

SHENANDOAH TELECOMMUNICATIONS COMPANY

INDEX

Page
Numbers

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

Unaudited Condensed Consolidated Balance Sheets

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

Unaudited Condensed Consolidated Statements of Cash Flows

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Other Information

Item 6.

Exhibits

Signatures

Table of Contents

SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	26,304	$	44,061	Cash and cash equivalents	$	35,966	$	44,061
Accounts receivable, net of allowance for doubtful accounts of $726 and $776, respectively		15,344		20,615
Accounts receivable, net of allowance for doubtful accounts of $767 and $776, respectively						Accounts receivable, net of allowance for doubtful accounts of $767 and $776, respectively	18,851		20,615
Income taxes receivable	Income taxes receivable	4,647		29,755		Income taxes receivable	4,647		29,755
Prepaid expenses and other	Prepaid expenses and other	12,874		11,509		Prepaid expenses and other	14,394		11,509
Current assets held for sale	Current assets held for sale	19,742		22,622		Current assets held for sale	596		22,622
Total current assets	Total current assets	78,911		128,562		Total current assets	74,454		128,562
Investments	Investments	13,016		12,971		Investments	12,918		12,971
Property, plant and equipment, net	Property, plant and equipment, net	786,446		687,553		Property, plant and equipment, net	822,494		687,553
Goodwill and intangible assets, net	Goodwill and intangible assets, net	81,270		81,515		Goodwill and intangible assets, net	81,187		81,515
Operating lease right-of-use assets	Operating lease right-of-use assets	52,258		53,859		Operating lease right-of-use assets	51,832		53,859
Deferred charges and other assets	Deferred charges and other assets	15,557		13,259		Deferred charges and other assets	15,825		13,259
Total assets	Total assets	$	1,027,458	$	977,719	Total assets	$	1,058,710	$	977,719
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current maturities of long-term debt, net of unamortized loan fees	Current maturities of long-term debt, net of unamortized loan fees	$	1,056	$	648	Current maturities of long-term debt, net of unamortized loan fees	$	2,412	$	648
Accounts payable	Accounts payable	41,238		49,173		Accounts payable	43,360		49,173
Advanced billings and customer deposits	Advanced billings and customer deposits	12,359		12,425		Advanced billings and customer deposits	13,120		12,425
Accrued compensation	Accrued compensation	7,532		9,616		Accrued compensation	10,640		9,616
Current operating lease liabilities	Current operating lease liabilities	3,076		2,829		Current operating lease liabilities	3,126		2,829
Accrued liabilities and other	Accrued liabilities and other	12,766		17,906		Accrued liabilities and other	11,763		17,906
Current liabilities held for sale	Current liabilities held for sale	3,804		3,824		Current liabilities held for sale	—		3,824
Total current liabilities	Total current liabilities	81,831		96,421		Total current liabilities	84,421		96,421
Long-term debt, less current maturities, net of unamortized loan fees	Long-term debt, less current maturities, net of unamortized loan fees	123,795		74,306		Long-term debt, less current maturities, net of unamortized loan fees	147,494		74,306
Other long-term liabilities:	Other long-term liabilities:					Other long-term liabilities:
Deferred income taxes	Deferred income taxes	87,830		84,600		Deferred income taxes	88,938		84,600
Asset retirement obligations	Asset retirement obligations	10,187		9,932		Asset retirement obligations	9,942		9,932
Benefit plan obligations	Benefit plan obligations	4,035		3,758		Benefit plan obligations	3,972		3,758
Non-current operating lease liabilities	Non-current operating lease liabilities	49,872		50,477		Non-current operating lease liabilities	49,502		50,477
Other liabilities	Other liabilities	20,483		20,218		Other liabilities	20,078		20,218
Total other long-term liabilities	Total other long-term liabilities	172,407		168,985		Total other long-term liabilities	172,432		168,985
Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)					Commitments and contingencies (Note 13)
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Common stock, no par value, authorized 96,000; 50,264 and 50,110 issued and outstanding at June 30, 2023 and December 31, 2022, respectively		—		—
Common stock, no par value, authorized 96,000; 50,264 and 50,110 issued and outstanding at September 30, 2023 and December 31, 2022, respectively						Common stock, no par value, authorized 96,000; 50,264 and 50,110 issued and outstanding at September 30, 2023 and December 31, 2022, respectively	—		—
Additional paid in capital	Additional paid in capital	62,888		57,453		Additional paid in capital	65,118		57,453
Retained earnings	Retained earnings	584,410		580,554		Retained earnings	586,003		580,554
Accumulated other comprehensive income, net of taxes	Accumulated other comprehensive income, net of taxes	2,127		—		Accumulated other comprehensive income, net of taxes	3,242		—
Total shareholders’ equity	Total shareholders’ equity	649,425		638,007		Total shareholders’ equity	654,363		638,007
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	1,027,458	$	977,719	Total liabilities and shareholders’ equity	$	1,058,710	$	977,719

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES	SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES									SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)									UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share amounts)	(in thousands, except per share amounts)	Three Months Ended June 30,				Six Months Ended June 30,				(in thousands, except per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Service revenue and other	Service revenue and other	$	71,341	$	66,021	$	143,027	$	130,435	Service revenue and other	$	71,842	$	66,924	$	214,869	$	197,359
Operating expenses:	Operating expenses:									Operating expenses:
Cost of services exclusive of depreciation and amortization	Cost of services exclusive of depreciation and amortization	26,076		26,756		52,643		53,095		Cost of services exclusive of depreciation and amortization	27,751		27,477		80,394		80,572
Selling, general and administrative	Selling, general and administrative	25,691		23,090		52,300		46,925		Selling, general and administrative	24,402		22,227		76,702		69,152
Restructuring expense	Restructuring expense	—		454		—		390		Restructuring expense	—		641		—		1,031
Impairment expense	Impairment expense	836		4,068		1,020		4,407		Impairment expense	1,532		477		2,552		4,884
Depreciation and amortization	Depreciation and amortization	16,369		14,790		31,967		29,135		Depreciation and amortization	16,670		17,873		48,637		47,008
Total operating expenses	Total operating expenses	68,972		69,158		137,930		133,952		Total operating expenses	70,355		68,695		208,285		202,647
Operating income (loss)	Operating income (loss)	2,369		(3,137)		5,097		(3,517)		Operating income (loss)	1,487		(1,771)		6,584		(5,288)
Other income (expense):	Other income (expense):									Other income (expense):
Other income (expense), net	Other income (expense), net	177		(589)		1,294		(759)		Other income (expense), net	826		(1,208)		2,120		(1,967)
Income (loss) before income taxes	Income (loss) before income taxes	2,546		(3,726)		6,391		(4,276)		Income (loss) before income taxes	2,313		(2,979)		8,704		(7,255)
Income tax expense (benefit)	Income tax expense (benefit)	756		(501)		2,535		(448)		Income tax expense (benefit)	720		(251)		3,255		(699)
Net income (loss)	Net income (loss)	$	1,790	$	(3,225)	$	3,856	$	(3,828)	Net income (loss)	$	1,593	$	(2,728)	$	5,449	$	(6,556)

Other comprehensive income:	Other comprehensive income:									Other comprehensive income:
Unrealized income on interest rate hedge, net of tax	Unrealized income on interest rate hedge, net of tax	2,127		—		2,127		—		Unrealized income on interest rate hedge, net of tax	1,115		—		3,242		—
Comprehensive income (loss)	Comprehensive income (loss)	$	3,917	$	(3,225)	$	5,983	$	(3,828)	Comprehensive income (loss)	$	2,708	$	(2,728)	$	8,691	$	(6,556)

Net income (loss) per share, basic and diluted:	Net income (loss) per share, basic and diluted:									Net income (loss) per share, basic and diluted:
Basic net income (loss) per share	Basic net income (loss) per share	$	0.04	$	(0.06)	$	0.08	$	(0.08)	Basic net income (loss) per share	$	0.03	$	(0.05)	$	0.11	$	(0.13)

Diluted net income (loss) per share	Diluted net income (loss) per share	$	0.04	$	(0.06)	$	0.08	$	(0.08)	Diluted net income (loss) per share	$	0.03	$	(0.05)	$	0.11	$	(0.13)

Weighted average shares outstanding, basic	Weighted average shares outstanding, basic	50,366		50,157		50,330		50,133		Weighted average shares outstanding, basic	50,379		50,183		50,346		50,153
Weighted average shares outstanding, diluted	Weighted average shares outstanding, diluted	50,693		50,157		50,569		50,133		Weighted average shares outstanding, diluted	50,836		50,183		50,623		50,153

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES	SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES										SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY										UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)	(in thousands)										(in thousands)

		Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total			Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance, March 31, 2023		50,247	$	60,160	$	582,620	$	—	$	642,780
Balance, June 30, 2023											Balance, June 30, 2023	50,264	$	62,888	$	584,410	$	2,127	$	649,425
Net income	Net income	—	—		1,790		—		1,790		Net income	—	—		1,593		—		1,593
Stock-based compensation	Stock-based compensation	24	2,878		—		—		2,878		Stock-based compensation	—	2,220		—		—		2,220
Common stock issued	Common stock issued	—	11		—		—		11		Common stock issued	—	10		—		—		10
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards		(7)	(161)		—		—		(161)
Other comprehensive income, net of tax		—	—		—		2,127		2,127
Balance, June 30, 2023		50,264	$	62,888	$	584,410	$	2,127	$	649,425
Unrealized income on interest rate hedge, net of tax											Unrealized income on interest rate hedge, net of tax	—	—		—		1,115		1,115
Balance, September 30, 2023											Balance, September 30, 2023	50,264	$	65,118	$	586,003	$	3,242	$	654,363

		Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total			Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance, December 31, 2022	Balance, December 31, 2022	50,110	$	57,453	$	580,554	$	—	$	638,007	Balance, December 31, 2022	50,110	$	57,453	$	580,554	$	—	$	638,007
Net income	Net income	—	—		3,856		—		3,856		Net income	—	—		5,449		—		5,449
Stock-based compensation	Stock-based compensation	220	6,730		—		—		6,730		Stock-based compensation	220	8,950		—		—		8,950
Common stock issued	Common stock issued	1	22		—		—		22		Common stock issued	1	32		—		—		32
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	(67)	(1,317)		—		—		(1,317)		Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	(67)	(1,317)		—		—		(1,317)
Other comprehensive income, net of tax		—	—		—		2,127		2,127
Balance, June 30, 2023		50,264	$	62,888	$	584,410	$	2,127	$	649,425
Unrealized income on interest rate hedge, net of tax											Unrealized income on interest rate hedge, net of tax	—	—		—		3,242		3,242
Balance, September 30, 2023											Balance, September 30, 2023	50,264	$	65,118	$	586,003	$	3,242	$	654,363

		Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total			Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance, March 31, 2022		50,049	$	52,008	$	592,321	$	—	$	644,329
Balance, June 30, 2022											Balance, June 30, 2022	50,077	$	54,274	$	589,096	$	—	$	643,370
Net loss	Net loss	—	—		(3,225)		—		(3,225)		Net loss	—	—		(2,728)		—		(2,728)
Stock-based compensation	Stock-based compensation	41	2,557		—		—		2,557		Stock-based compensation	25	1,942		—		—		1,942
Common stock issued	Common stock issued	—	8		—		—		8		Common stock issued	—	11		—		—		11
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	(13)	(299)		—		—		(299)		Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	(4)	(84)		—		—		(84)
Balance, June 30, 2022		50,077	$	54,274	$	589,096	$	—	$	643,370
Balance, September 30, 2022											Balance, September 30, 2022	50,098	$	56,143	$	586,368	$	—	$	642,511

		Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total			Shares of Common Stock (no par value)	Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance, December 31, 2021	Balance, December 31, 2021	49,965	$	49,351	$	592,924	$	—	$	642,275	Balance, December 31, 2021	49,965	$	49,351	$	592,924	$	—	$	642,275
Net loss	Net loss	—	—		(3,828)		—		(3,828)		Net loss	—	—		(6,556)		—		(6,556)
Stock-based compensation	Stock-based compensation	151	5,809		—		—		5,809		Stock-based compensation	176	7,751		—		—		7,751
Common stock issued	Common stock issued	1	16		—		—		16		Common stock issued	1	27		—		—		27
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	(40)	(902)		—		—		(902)		Shares surrendered for settlement of employee taxes upon issuance of vested equity awards	(44)	(986)		—		—		(986)
Balance, June 30, 2022		50,077	$	54,274	$	589,096	$	—	$	643,370
Balance, September 30, 2022											Balance, September 30, 2022	50,098	$	56,143	$	586,368	$	—	$	642,511

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES	SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES					SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS					UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)	(in thousands)	Six Months Ended June 30,				(in thousands)	Nine Months Ended September 30,
		2023		2022			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	3,856	$	(3,828)	Net income (loss)	$	5,449	$	(6,556)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	Adjustments to reconcile net income (loss) to net cash provided by operating activities:					Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	31,967		29,135		Depreciation and amortization	48,637		47,008
Stock-based compensation expense, net of amount capitalized	Stock-based compensation expense, net of amount capitalized	6,320		5,528		Stock-based compensation expense, net of amount capitalized	8,364		7,299
Impairment expense	Impairment expense	1,020		4,407		Impairment expense	2,552		4,884
Deferred income taxes	Deferred income taxes	2,491		(392)		Deferred income taxes	3,211		(1,374)
Bad debt expense						Bad debt expense	1,837		1,252
Gain on sale of FCC spectrum licenses						Gain on sale of FCC spectrum licenses	(1,328)		—
Other, net	Other, net	1,118		1,985		Other, net	439		1,638
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Accounts receivable	Accounts receivable	4,499		4,430		Accounts receivable	1,407		1,157
Current income taxes	Current income taxes	25,108		—		Current income taxes	25,108		731
Operating lease assets and liabilities, net	Operating lease assets and liabilities, net	408		414		Operating lease assets and liabilities, net	512		618
Other assets	Other assets	1,937		(1,902)		Other assets	2,515		(1,056)
Accounts payable	Accounts payable	(3,012)		127		Accounts payable	(3,431)		(608)
Other deferrals and accruals	Other deferrals and accruals	(5,912)		(1,180)		Other deferrals and accruals	(3,583)		1,212
Net cash provided by operating activities	Net cash provided by operating activities	69,800		38,724		Net cash provided by operating activities	91,689		56,205

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(136,158)		(88,706)		Capital expenditures	(190,354)		(132,357)
Proceeds from the sale of FCC spectrum licenses						Proceeds from the sale of FCC spectrum licenses	17,300		—
Proceeds from sale of investments						Proceeds from sale of investments	—		793
Proceeds from sale of assets and other	Proceeds from sale of assets and other	508		279		Proceeds from sale of assets and other	566		922
Net cash used in investing activities	Net cash used in investing activities	(135,650)		(88,427)		Net cash used in investing activities	(172,488)		(130,642)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from credit facility borrowings	Proceeds from credit facility borrowings	50,000		—		Proceeds from credit facility borrowings	75,000		25,000
Payments for debt issuance costs	Payments for debt issuance costs	(300)		—		Payments for debt issuance costs	(300)		—
Taxes paid for equity award issuances	Taxes paid for equity award issuances	(1,317)		(835)		Taxes paid for equity award issuances	(1,317)		(986)
Payments for financing arrangements and other	Payments for financing arrangements and other	(290)		(471)		Payments for financing arrangements and other	(679)		(888)
Net cash provided by (used in) financing activities		48,093		(1,306)
Net cash provided by financing activities						Net cash provided by financing activities	72,704		23,126
Net decrease in cash and cash equivalents	Net decrease in cash and cash equivalents	(17,757)		(51,009)		Net decrease in cash and cash equivalents	(8,095)		(51,311)
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	44,061		84,344		Cash and cash equivalents, beginning of period	44,061		84,344
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	26,304	$	33,335	Cash and cash equivalents, end of period	$	35,966	$	33,033

Supplemental Disclosures of Cash Flow Information	Supplemental Disclosures of Cash Flow Information					Supplemental Disclosures of Cash Flow Information
Interest paid	Interest paid	$	3,111	$	—	Interest paid	$	5,424	$	243
Income tax refunds received, net	Income tax refunds received, net	$	25,481	$	—	Income tax refunds received, net	$	25,481	$	—

See accompanying notes to unaudited condensed consolidated financial statements.

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SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation and Other Information

Shenandoah Telecommunications Company and its subsidiaries (“Shentel”, “we”, “our”, “us”, or the “Company”) provide broadband data, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania and Kentucky, via fiber optic and hybrid fiber coaxial cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. The Company also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as a Rural Local Exchange Carrier (“RLEC”). These integrated networks are connected by a fiber network. All of these operations are contained within our Broadband reporting segment.

Our Tower segment owns ~~222~~220 cell towers and leases colocation space on those towers to wireless communications providers.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. All normal recurring adjustments considered necessary for a fair presentation have been included. Certain disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an on-going basis we evaluate significant estimates and assumptions, including, but not limited to, revenue recognition, stock-based compensation, estimated useful lives of assets, impairment of goodwill and indefinite-lived intangible assets, intangible assets subject to amortization, the computation of income taxes and the fair value of interest rate swaps. Future events and their effects cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. Management evaluates and updates assumptions and estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Adoption of New Accounting Standards

There have been no material developments related to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s unaudited condensed consolidated financial statements and note disclosures from those disclosed in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2022, that would be expected to impact the Company.

Note 2. Revenue from Contracts with Customers

Contract Assets

The Company’s contract assets primarily include commissions incurred to acquire contracts with customers. The Company incurs commission expenses related to in-house and third-party vendors which are capitalized and amortized over the expected customer benefit period which is approximately six years. The Company’s current contract assets are included in prepaid expenses and other and the Company’s non-current contract assets are included in deferred charges and other assets in its unaudited condensed consolidated balance sheets. Amortization of capitalized commission expenses is recorded in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of comprehensive income (loss).

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The following tables present the activity of current and non-current contract assets:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		2023		2022		(in thousands)	2023		2022		2023		2022
Beginning Balance	Beginning Balance	$	8,756	$	8,303	$	8,646	$	8,147	Beginning Balance	$	8,742	$	8,427	$	8,646	$	8,147
Commission payments	Commission payments	793		1,309		1,684		1,647		Commission payments	755		983		2,439		2,630
Contract asset amortization	Contract asset amortization	(807)		(1,185)		(1,588)		(1,367)		Contract asset amortization	(822)		(729)		(2,410)		(2,096)
Ending Balance	Ending Balance	$	8,742	$	8,427	$	8,742	$	8,427	Ending Balance	$	8,675	$	8,681	$	8,675	$	8,681

Contract Liabilities

The Company’s contract liabilities include services that are billed in advance and recorded as deferred revenue, as well as installation fees that are charged upfront without transfer of commensurate goods or services to the customer. The Company’s current contract liabilities are included in advanced billings and customer deposits and the Company’s non-current contract liabilities are included in other liabilities in its unaudited condensed consolidated balance sheets. Shentel’s current contract liability balances were ~~$9.4~~$10.1 million and $9.5 million as of ~~June~~September 30, 2023 and December 31, 2022, respectively, and Shentel’s non-current contract liability balances were ~~$1.3~~$1.0 million and $1.9 million as of ~~June~~September 30, 2023 and December 31, 2022, respectively. Shentel expects its current contract liability balances to be recognized within revenues during the twelve-month periods following the respective balance sheet dates and its non-current contract liability balances to be recognized within revenues after the twelve-month periods following the respective balance sheet dates.

Refer to Note 14, Segment Reporting, for a summary of the Company’s revenue streams.

Note 3. Investments

Investments consist of the following:


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
SERP investments at fair value	SERP investments at fair value	$	2,116	$	1,889	SERP investments at fair value	$	2,027	$	1,889
Cost method investments	Cost method investments	10,645		10,749		Cost method investments	10,657		10,749
Equity method investments	Equity method investments	255		333		Equity method investments	234		333
Total investments	Total investments	$	13,016	$	12,971	Total investments	$	12,918	$	12,971

SERP Investments at Fair Value: The fair value of the SERP investments are based on unadjusted quoted prices in active markets and are classified as Level 1 of the fair value hierarchy. Changes to the ~~investments'~~investments’ fair value are presented in Other income (expense), while the reciprocal changes in the liability are presented in selling, general and administrative expense.

Cost Method Investments: Shentel’s investment in CoBank’s Class A common stock, derived from the CoBank patronage program, represented substantially all of the Company’s cost method investments with a balance of $10.0 million at both ~~June~~September 30, 2023 and December 31, 2022, respectively. We recognized approximately ~~$0.2~~$0.1 million and ~~$0.1 million~~$13.7 thousand of patronage income in other income (expense) for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and approximately ~~$0.3~~$0.4 million and ~~$0.2 million~~$40.5 thousand during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The Company expects that approximately 88% of the patronage distributions will be collected in cash and 12% in equity in 2023.

Equity Method Investments: At December 31, 2022, the Company had a 20.0% ownership interest in Valley Network Partnership (“ValleyNet”). During 2023, ValleyNet ~~has~~ ceased operations and ~~is in the process of being~~was dissolved. In April 2023, Shentel received a payment of $0.1 million, representing Shentel’s remaining capital in the partnership, and the investment balance was derecognized from Shentel’s unaudited condensed consolidated balance sheets. Prior to the commencement of dissolution proceedings, the Company and ValleyNet purchased capacity on one another’s fiber network, through related party transactions.

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Note 4. Property, Plant and Equipment

Property, plant and equipment consist of the following:


($ in thousands)	($ in thousands)	Estimated Useful Lives	June 30, 2023		December 31, 2022		($ in thousands)	Estimated Useful Lives	September 30, 2023		December 31, 2022
Land	Land		$	3,722	$	3,722	Land		$	3,521	$	3,722
Land improvements	Land improvements	10 years	3,483		3,483		Land improvements	10 years	3,610		3,483
Buildings and structures	Buildings and structures	10 - 45 years	96,175		93,461		Buildings and structures	10 - 45 years	95,170		93,461
Cable and fiber	Cable and fiber	15 - 30 years	682,218		593,771		Cable and fiber	15 - 30 years	721,441		593,771
Equipment and software	Equipment and software	4 - 8 years	333,821		317,347		Equipment and software	4 - 8 years	323,422		317,347
Plant in service	Plant in service		1,119,419		1,011,784		Plant in service		1,147,164		1,011,784
Plant under construction	Plant under construction		163,610		144,534		Plant under construction		167,389		144,534
Total property, plant and equipment	Total property, plant and equipment		1,283,029		1,156,318		Total property, plant and equipment		1,314,553		1,156,318
Less: accumulated depreciation and amortization	Less: accumulated depreciation and amortization		(496,583)		(468,765)		Less: accumulated depreciation and amortization		(492,059)		(468,765)
Property, plant and equipment, net	Property, plant and equipment, net		$	786,446	$	687,553	Property, plant and equipment, net		$	822,494	$	687,553

Property, plant and equipment, net increases were primarily attributable to capital expenditures in the Broadband segment due to expansion of Glo Fiber assets and market expansion. The Company’s accounts payable as of ~~June~~September 30, 2023 and December 31, 2022 included amounts associated with capital expenditures of approximately ~~$38.9~~$41.4 million and $43.8 million, respectively. Depreciation and amortization expense was ~~$16.2~~$16.5 million and ~~$14.6~~$17.7 million during the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$31.7~~$48.3 million and ~~$28.7~~$46.4 million during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively.

On August 23, 2022, the Company entered into a definitive asset purchase agreement (the “Spectrum Purchase Agreement”) with a wireless carrier pursuant to which the Company agreed to sell certain Federal Communications Commission (“FCC”) spectrum licenses and leases previously utilized in the Company’s Beam branded fixed wireless service for total consideration of approximately $21.1 million, composed of $17.3 million cash and approximately $3.8 million of liabilities to be assumed by the wireless carrier (the “Spectrum Transaction”). The Spectrum Transaction closed on July 6, 2023.

Note 5. Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following:


		June 30, 2023						December 31, 2022							September 30, 2023						December 31, 2022
(in thousands)	(in thousands)	Gross Carrying Amount		Accumulated Amortization and Other		Net		Gross Carrying Amount		Accumulated Amortization and Other		Net		(in thousands)	Gross Carrying Amount		Accumulated Amortization and Other		Net		Gross Carrying Amount		Accumulated Amortization and Other		Net
Goodwill - Broadband	Goodwill - Broadband	$	3,244	$	—	$	3,244	$	3,244	$	—	$	3,244	Goodwill - Broadband	$	3,244	$	—	$	3,244	$	3,244	$	—	$	3,244
Indefinite-lived intangibles:	Indefinite-lived intangibles:													Indefinite-lived intangibles:
Cable franchise rights	Cable franchise rights	64,334		—		64,334		64,334		—		64,334		Cable franchise rights	64,334		—		64,334		64,334		—		64,334
FCC Spectrum licenses	FCC Spectrum licenses	12,122		—		12,122		12,122		—		12,122		FCC Spectrum licenses	12,122		—		12,122		12,122		—		12,122
Railroad crossing rights	Railroad crossing rights	141		—		141		141		—		141		Railroad crossing rights	180		—		180		141		—		141
Total indefinite-lived intangibles	Total indefinite-lived intangibles	76,597		—		76,597		76,597		—		76,597		Total indefinite-lived intangibles	76,636		—		76,636		76,597		—		76,597

Finite-lived intangibles:	Finite-lived intangibles:													Finite-lived intangibles:
Subscriber relationships	Subscriber relationships	28,425		(27,140)		1,285		28,425		(26,910)		1,515		Subscriber relationships	28,425		(27,255)		1,170		28,425		(26,910)		1,515
Other intangibles	Other intangibles	488		(344)		144		488		(329)		159		Other intangibles	488		(351)		137		488		(329)		159
Total finite-lived intangibles	Total finite-lived intangibles	28,913		(27,484)		1,429		28,913		(27,239)		1,674		Total finite-lived intangibles	28,913		(27,606)		1,307		28,913		(27,239)		1,674
Total goodwill and intangible assets	Total goodwill and intangible assets	$	108,754	$	(27,484)	$	81,270	$	108,754	$	(27,239)	$	81,515	Total goodwill and intangible assets	$	108,793	$	(27,606)	$	81,187	$	108,754	$	(27,239)	$	81,515

Amortization expense was $0.2 million during the three months ended September 30, 2023 and 2022, and $0.4 million and $0.6 million during the nine months ended September 30, 2023 and 2022, respectively.

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Amortization expense was $0.1 million and $0.2 million during the three months ended June 30, 2023 and 2022, respectively, and $0.2 million and $0.4 million during the six months ended June 30, 2023 and 2022, respectively.

~~As described in Note 4,~~ ~~Property, Plant and Equipment, the Company entered into the Spectrum Purchase Agreement to sell FCC spectrum licenses associated with Beam.~~ As a result of the expected sale, the Company concluded that the FCC spectrum licenses met the held for sale ~~criteria; accordingly,~~criteria. Accordingly, $13.8 million of indefinite-lived licenses and $5.9 million of finite-lived licenses are presented as held for sale, along with the corresponding $3.8 million of operating lease liabilities related to the finite-lived licenses, as of ~~June 30, 2023 and~~ December 31, 2022. Upon the closing of the Spectrum Transaction, the respective balances were derecognized, resulting in a gain of $1.3 million recorded in other income (expense). The Company evaluated ~~the~~these events ~~described here and in Note 4,~~ ~~Property, Plant and Equipment~~ and determined that ~~these events do~~the Spectrum Transaction does not represent a strategic shift in the Company’s business.

Note 6. Other Assets and Accrued Liabilities

Prepaid expenses and other, classified as current assets, included the following:


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
Prepaid maintenance expenses	Prepaid maintenance expenses	$	6,830	$	7,444	Prepaid maintenance expenses	$	7,024	$	7,444
Broadband contract acquisition costs	Broadband contract acquisition costs	3,026		2,809		Broadband contract acquisition costs	3,037		2,809
Interest rate swaps						Interest rate swaps	1,321		—
Other	Other	3,018		1,256		Other	3,012		1,256
Prepaid expenses and other	Prepaid expenses and other	$	12,874	$	11,509	Prepaid expenses and other	$	14,394	$	11,509

Deferred charges and other assets, classified as long-term assets, included the following:


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
Broadband contract acquisition costs	Broadband contract acquisition costs	$	5,716	$	5,837	Broadband contract acquisition costs	$	5,638	$	5,837
Interest rate swaps	Interest rate swaps	2,438		—		Interest rate swaps	3,048		—
Prepaid expenses and other	Prepaid expenses and other	7,403		7,422		Prepaid expenses and other	7,139		7,422
Deferred charges and other assets	Deferred charges and other assets	$	15,557	$	13,259	Deferred charges and other assets	$	15,825	$	13,259

Accrued liabilities and other, classified as current liabilities, included the following:


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
Accrued programming costs	Accrued programming costs	$	3,142	$	3,306	Accrued programming costs	$	2,967	$	3,306
Pension plan	Pension plan	—		3,341		Pension plan	—		3,341
Other current liabilities	Other current liabilities	9,624		11,259		Other current liabilities	8,796		11,259
Accrued liabilities and other	Accrued liabilities and other	$	12,766	$	17,906	Accrued liabilities and other	$	11,763	$	17,906

Other liabilities, classified as long-term liabilities, included the following:


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
Noncurrent portion of deferred lease revenue	Noncurrent portion of deferred lease revenue	$	18,788	$	18,679	Noncurrent portion of deferred lease revenue	$	18,387	$	18,679
Noncurrent portion of financing leases	Noncurrent portion of financing leases	1,414		1,500		Noncurrent portion of financing leases	1,397		1,500
Other	Other	281		39		Other	294		39
Other liabilities	Other liabilities	$	20,483	$	20,218	Other liabilities	$	20,078	$	20,218

In 2021, Shentel’s Board of Directors adopted a resolution to terminate its pension plan. The Company terminated the pension plan and all benefits were distributed in June 2023 through the combination of lump sum payments and the purchase of non-participating annuity contracts at the option of the pension plan participants. The Company made an additional $2.9 million contribution from its cash balance as a result of the settlement and recognized a settlement gain of $0.7 million in other income (expense). for the nine months ended September 30, 2023.

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Note 7. Leases

The Company leases various broadband network and telecommunications sites, fiber optic cable routes, warehouses, retail stores, and office facilities for use in our business.

The components of lease costs were as follows:


		Classification	Three Months Ended June 30,				Six Months Ended June 30,					Classification	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)		2023		2022		2023		2022		(in thousands)		2023		2022		2023		2022
Finance lease cost	Finance lease cost										Finance lease cost
Amortization of leased assets	Amortization of leased assets	Depreciation	$	119	$	119	$	238	$	238	Amortization of leased assets	Depreciation	$	120	$	119	$	358	$	357
Interest on lease liabilities	Interest on lease liabilities	Interest expense	19		21		39		42		Interest on lease liabilities	Interest expense	20		21		59		63
Operating lease cost	Operating lease cost	Operating expense1	1,762		2,999		3,605		5,662		Operating lease cost	Operating expense1	1,693		2,680		5,298		8,342
Lease cost	Lease cost		$	1,901	$	3,139	$	3,883	$	5,942	Lease cost		$	1,833	$	2,820	$	5,715	$	8,762

(1)Operating lease expense is presented in cost of service or selling, general and administrative expense based on the use of the relevant facility.

The following table summarizes the expected maturity of lease liabilities as of ~~June~~September 30, 2023:


(in thousands)	(in thousands)	Operating Leases		Finance Leases		Total		(in thousands)	Operating Leases		Finance Leases		Total
2023	2023	$	2,534	$	55	$	2,589	2023	$	1,265	$	20	$	1,285
2024	2024	5,750		178		5,928		2024	5,862		178		6,040
2025	2025	5,421		180		5,601		2025	5,529		180		5,709
2026	2026	4,601		153		4,754		2026	4,682		153		4,835
2027	2027	3,750		155		3,905		2027	3,854		155		4,009
2028 and thereafter	2028 and thereafter	64,996		1,359		66,355		2028 and thereafter	66,096		1,359		67,455
Total lease payments	Total lease payments	87,052		2,080		89,132		Total lease payments	87,288		2,045		89,333
Less: Interest	Less: Interest	(34,104)		(565)		(34,669)		Less: Interest	(34,660)		(545)		(35,205)
Present value of lease liabilities	Present value of lease liabilities	$	52,948	$	1,515	$	54,463	Present value of lease liabilities	$	52,628	$	1,500	$	54,128

Other information related to operating and finance leases was as follows:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Operating leases	Operating leases					Operating leases
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)	19.4		20.0		Weighted average remaining lease term (years)	19.3		19.8
Weighted average discount rate	Weighted average discount rate	4.8	%	4.5	%	Weighted average discount rate	4.9	%	4.5	%
Finance leases	Finance leases					Finance leases
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)	12.8		13.9		Weighted average remaining lease term (years)	12.6		13.1
Weighted average discount rate	Weighted average discount rate	5.2	%	5.2	%	Weighted average discount rate	5.2	%	5.2	%


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		2023		2022		(in thousands)	2023		2022		2023		2022
Cash paid for operating lease liabilities	Cash paid for operating lease liabilities	$	1,497	$	1,511	$	3,181	$	3,103	Cash paid for operating lease liabilities	$	1,662	$	1,513	$	4,843	$	4,616
Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases)	Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases)	456		430		1,721		2,070		Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases)	508		1,213		2,229		3,283

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The Company recognized $4.7 million and ~~$4.4~~$4.0 million of operating lease revenue for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$9.2~~$13.9 million and ~~$9.8~~$13.8 million of operating lease revenue for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in Service revenue and other in the unaudited condensed consolidated statements of comprehensive income (loss). Substantially all of our lease revenue relates to fixed lease payments.

Below is a summary of our minimum rental receipts under the lease agreements in place as of ~~June~~September 30, 2023:


(in thousands)	(in thousands)	Operating Leases		(in thousands)	Operating Leases
2023	2023	$	8,093	2023	$	4,311
2024	2024	15,110		2024	16,206
2025	2025	14,006		2025	15,126
2026	2026	10,941		2026	12,086
2027	2027	9,425		2027	10,596
2028 and thereafter	2028 and thereafter	22,794		2028 and thereafter	25,199
Total	Total	$	80,369	Total	$	83,524

Note 8. Debt

Our Credit Agreement, dated July 1, 2021 (the “Credit Agreement”) contains (i) a $100 million, five-year undrawn revolving credit facility (the “Revolver”), (ii) a $150 million five-year delayed draw amortizing term loan (“Term Loan A-1”) and (iii) a $150 million seven-year delayed draw amortizing term loan (“Term Loan A-2” and collectively with Term Loan A-1, the “Term Loans”). The following loans were outstanding under the Credit Agreement:


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	September 30, 2023		December 31, 2022
Term loan A-1	Term loan A-1	$	62,500	$	37,500	Term loan A-1	$	75,000	$	37,500
Term loan A-2	Term loan A-2	62,500		37,500		Term loan A-2	75,000		37,500
Total debt	Total debt	125,000		75,000		Total debt	150,000		75,000
Less: unamortized loan fees	Less: unamortized loan fees	(149)		(46)		Less: unamortized loan fees	(94)		(46)
Total debt, net of unamortized loan fees	Total debt, net of unamortized loan fees	$	124,851	$	74,954	Total debt, net of unamortized loan fees	$	149,906	$	74,954

In May 2023, Shentel amended the Credit Agreement resulting in (a) a change of the floating index rate from the one-month term London Inter-Bank Offered Rate (“LIBOR”) to the one-month term Secured Overnight Financing Rate (“SOFR”), (b) an extension of the borrowing deadline under the Term Loans from June 30, 2023 to December 31, 2023, and (c) an extension of the first principal repayment date for the Term Loans from September 30, 2023 to March 31, 2024. Management evaluated the amendment and concluded that the amendment event represents a modification of the existing Credit Agreement; therefore, modification accounting was applied.

Both Term Loan A-1 and Term Loan A-2 bore interest at one-month LIBOR plus a margin of 1.50% until May 2023 and now bear interest at one-month term SOFR plus a margin of 1.50%. The margin of 1.50% is variable and determined by the Company’s net leverage ratio. The interest rate was ~~6.64%~~6.92% and 5.89% at ~~June~~September 30, 2023 and December 31, 2022, respectively. The ~~Company’s cash payments for~~Company incurred interest ~~were $1.8~~expense of $2.3 million and $0.5 million during the three months ended ~~June~~September 30, 2023 and ~~$3.1~~2022, respectively, and $5.4 million and $1.2 million during the ~~six~~nine months ended ~~June~~September 30, ~~2023. Shentel had no debt outstanding during the three~~2023 and ~~six months ended June 30, 2022; therefore, the Company made no interest payments during the three and six months ended June 30, 2022.~~2022, respectively. Shentel is charged commitment fees on unutilized portions of its Revolver and Term Loans. The Company recorded $0.1 million and $0.2 million related to these fees ~~for~~during the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$0.3~~$0.4 million and ~~$0.4~~$0.6 million related to these fees for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, ~~respectively, which is~~respectively. Both interest expense and commitment fees are included in other income (expense), net in the unaudited condensed consolidated statements of comprehensive income (loss).

The Credit Agreement contains a borrowing deadline of December 31, 2023, after which the Company will not be able to borrow against the undrawn portion of the Term Loans.

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The Credit Agreement includes various covenants, including total net leverage ratio and debt service coverage ratio financial covenants.

Shentel’s Term Loans require quarterly payments based on a percentage of the outstanding balance. Based on the outstanding balance as of ~~June~~September 30, 2023, Term Loan A-1 requires quarterly principal repayments of ~~$0.4~~$0.5 million from March 31, 2024 through June 30, 2024; then increasing to ~~$0.8~~$0.9 million quarterly from September 30, 2024 through March 31, 2026, with the remaining balance due June 30, 2026. Based on the outstanding balance as of ~~June~~September 30, 2023, Term Loan A-2 requires quarterly principal repayments of $0.2 million from March 31, 2024 through March 31, 2028, with the remaining balance due June 30, 2028.

The following table summarizes the expected payments of Shentel’s outstanding borrowings as of ~~June~~September 30, 2023:


(in thousands)	(in thousands)	Amount		(in thousands)	Amount
2023	2023	$	—	2023	$	—
2024	2024	2,969		2024	3,563
2025	2025	3,750		2025	4,500
2026	2026	57,656		2026	69,187
2027	2027	625		2027	750
2028	2028	60,000		2028	72,000
Total	Total	$	125,000	Total	$	150,000

The Credit Agreement is fully secured by a pledge and unconditional guarantee from the Company and all of its subsidiaries, except Shenandoah Telephone Company. This provides the lenders a security interest in substantially all of the assets of the Company.

Note 9. Derivatives and Hedging

During the second quarter of 2023, Shentel entered into pay fixed (2.90%), receive variable (one-month term SOFR) interest rate swaps totaling $150.0 million of notional principal (the “Swaps”). The Swaps contain monthly payment terms beginning in May 2024, which extend through their maturity dates in June 2026. The Swaps are designated as a cash flow ~~hedge,~~hedges, representing 50% of the Company’s expected outstanding debt (including expected future borrowings under the Term Loans). The Company uses the Swaps to manage its exposure to interest rate risk for its long-term variable-rate Term Loans.

The table below presents the fair value of the Swaps as well as their classification in the unaudited condensed consolidated balance sheets. The fair value of these instruments was estimated using an income approach and observable market inputs (Level 2):


(in thousands)	~~June~~September 30, 2023
Balance sheet line item of derivative financial instruments:
Prepaid expenses and other	$	~~428~~1,321
Deferred charges and other assets	~~2,438~~3,048
Total derivatives designated as hedging instruments	$	~~2,866~~4,369

The hedge was determined to be highly effective and therefore all change in the fair value of the swaps was recognized through other comprehensive income. The Company recognized ~~$2.1~~$1.1 million and $3.2 million of unrealized gains, net of deferred taxes totaling ~~$0.7~~$0.4 million and $1.1 million, for the three and ~~six~~nine months ended ~~June~~September 30, ~~2023.~~2023, respectively. Since the Company did not have outstanding interest rate swaps in the prior year period, there were no gains or losses recorded for the three or ~~six~~nine months ended ~~June~~September 30, 2022. Shentel expects to begin reclassifying amounts related to the Swaps from accumulated other comprehensive income to interest expense in May 2024 when the payment ~~period~~periods of the Swaps ~~and thus the period containing the hedged transactions, begins.~~begin.

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Note 10. Income Taxes

The Company files U.S. federal income tax returns and various state income tax returns. The Company is not subject to any state or federal income tax audits as of ~~June~~September 30, 2023. The Company’s income tax returns are generally open to examination from 2019 forward and the net operating losses acquired in the acquisition of nTelos are open to examination from 2002 forward.

The effective tax rates for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, differ from the statutory U.S. federal income tax rate of 21% primarily due to the state income taxes, excess tax benefits and other discrete items.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		2023		2022		(in thousands)	2023		2022		2023		2022
Expected tax expense (benefit) at federal statutory	Expected tax expense (benefit) at federal statutory	$	535	$	(783)	$	1,342	$	(898)	Expected tax expense (benefit) at federal statutory	$	486	$	(626)	$	1,828	$	(1,524)
State income tax expense (benefit), net of federal tax effect	State income tax expense (benefit), net of federal tax effect	134		(181)		344		(213)		State income tax expense (benefit), net of federal tax effect	124		(148)		468		(361)
Revaluation of deferred tax liabilities										Revaluation of deferred tax liabilities	—		(108)		—		(108)
Excess tax deficiency from share-based compensation and other expense, net	Excess tax deficiency from share-based compensation and other expense, net	87		463		849		663		Excess tax deficiency from share-based compensation and other expense, net	110		631		959		1,294
Income tax expense (benefit)	Income tax expense (benefit)	$	756	$	(501)	$	2,535	$	(448)	Income tax expense (benefit)	$	720	$	(251)	$	3,255	$	(699)

The Company received $25.6 million in cash refunds for income taxes for the ~~six~~nine months ended ~~June~~September 30, 2023. The Company made ~~$0.1 million in~~no cash payments and received no cash refunds for income taxes for the ~~six~~nine months ended ~~June~~September 30, 2022.

Note 11. Stock Compensation and Earnings (Loss) per Share

The Company granted approximately 385,000 restricted stock units (“RSUs”) at a weighted average grant price of $19.05 to employees and directors during the ~~six~~nine months ended ~~June~~September 30, 2023. Approximately 190,000 RSUs with a weighted average grant price of $25.01 vested and ~~8,000~~9,000 RSUs with a weighted average grant price of ~~$21.64~~$21.65 were forfeited during the ~~six~~nine months ended ~~June~~September 30, 2023. The total fair value of RSUs vested was $4.8 million during the ~~six~~nine months ended ~~June~~September 30, 2023. Approximately ~~837,000~~836,000 RSUs with a weighted average grant price of ~~$21.64~~$21.21 remained outstanding as of ~~June~~September 30, 2023.

The Company granted approximately 134,000 Relative Total Shareholder Return RSUs (“RTSRs”) awards at a weighted average grant price of $23.64 to employees during the ~~six~~nine months ended ~~June~~September 30, 2023. Approximately 30,000 RTSRs with a weighted average grant price of $56.32 vested and no RTSRs were forfeited during the ~~six~~nine months ended ~~June~~September 30, 2023. The total fair value of RTSRs vested was $1.1 million during the ~~six~~nine months ended ~~June~~September 30, 2023. Approximately 293,000 RTSRs with a weighted average grant price of $25.80 remained outstanding as of ~~June~~September 30, 2023. The amount of RTSRs issued are determined on the vesting date based upon the Company’s stock performance compared to a group of peer companies. The vested amounts above exclude the vesting date adjustment and issuance of RTSRs based on actual performance, which totaled approximately 13,000 RTSRs, resulting in lower shares issued upon vesting of the RTSRs than originally granted.

Stock-based compensation expense was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		2023		2022		(in thousands)	2023		2022		2023		2022
Stock compensation expense	Stock compensation expense	2,878		2,557		6,730		5,809		Stock compensation expense	2,220		1,942		8,950		7,751
Capitalized stock compensation	Capitalized stock compensation	(275)		(172)		(410)		(281)		Capitalized stock compensation	(176)		(171)		(586)		(452)
Stock compensation expense, net	Stock compensation expense, net	$	2,603	$	2,385	$	6,320	$	5,528	Stock compensation expense, net	$	2,044	$	1,771	$	8,364	$	7,299

As of ~~June~~September 30, 2023, there was ~~$13.2~~$10.9 million of total unrecognized compensation cost related to non-vested incentive awards which is expected to be recognized over weighted average period of ~~2.5~~2.3 years.

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We utilize the treasury stock method to calculate the impact on diluted earnings (loss) per share that potentially dilutive stock-based compensation awards have. The following table indicates the computation of basic and diluted earnings (loss) per share:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2023		2022		2023		2022		(in thousands, except per share amounts)	2023		2022		2023		2022
Calculation of net income (loss) per share:	Calculation of net income (loss) per share:									Calculation of net income (loss) per share:
Net income (loss)	Net income (loss)	$	1,790	$	(3,225)	$	3,856	$	(3,828)	Net income (loss)	$	1,593	$	(2,728)	$	5,449	$	(6,556)
Basic weighted average shares outstanding	Basic weighted average shares outstanding	50,366		50,157		50,330		50,133		Basic weighted average shares outstanding	50,379		50,183		50,346		50,153
Basic net income (loss) per share	Basic net income (loss) per share	$	0.04	$	(0.06)	$	0.08	$	(0.08)	Basic net income (loss) per share	$	0.03	$	(0.05)	$	0.11	$	(0.13)

Effect of stock-based compensation awards outstanding:	Effect of stock-based compensation awards outstanding:									Effect of stock-based compensation awards outstanding:
Basic weighted average shares outstanding	Basic weighted average shares outstanding	50,366		50,157		50,330		50,133		Basic weighted average shares outstanding	50,379		50,183		50,346		50,153
Effect from dilutive shares and options outstanding	Effect from dilutive shares and options outstanding	327		—		239		—		Effect from dilutive shares and options outstanding	457		—		277		—
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	50,693		50,157		50,569		50,133		Diluted weighted average shares outstanding	50,836		50,183		50,623		50,153
Diluted net income (loss) per share	Diluted net income (loss) per share	$	0.04	$	(0.06)	$	0.08	$	(0.08)	Diluted net income (loss) per share	$	0.03	$	(0.05)	$	0.11	$	(0.13)

There were approximately ~~119,000~~330 and ~~411,000~~172,000 anti-dilutive equity awards outstanding during the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively. There were approximately ~~212,000~~252,000 and ~~155,000~~165,000 potentially dilutive equity awards for the three and ~~six~~nine months ended ~~June~~September 30, ~~2022;~~2022, respectively; however, these securities were excluded from the calculation of diluted weighted average shares outstanding due to the fact that they were anti-dilutive as a result of the Company’s net loss for the periods.

Note 12. Government Grants

During the ~~six~~nine months ended ~~June~~September 30, 2023, Shentel was awarded an additional ~~$16.1~~$18.3 million in new grants to strategically expand the Company’s broadband network in order to provide broadband services to unserved residences. The additional grants consisted of $9.4 million awarded under the Connect Maryland Network Infrastructure Grant Program in Maryland, $6.3 million awarded under the Virginia Telecommunications Initiative in Virginia, and $2.2 million and $0.4 million under the Major Broadband Project Strategies and Line Extension Advancement and Development ~~program~~programs, respectively, in West Virginia. The Company recognizes grant receivables at the time it becomes probable that the Company will be eligible to receive the grant, which is estimated to correspond with the date when specified build-out milestones are achieved. As a result of these programs, the Company received $0.4 million in cash reimbursements during the nine months ended September 30, 2023 and has recorded approximately $1.4 million in accounts receivable as of September 30, 2023. The Company ~~has~~did not ~~recognized~~recognize any material amounts under these programs during the nine months ended September 30, 2022 or as of ~~June 30, 2023 and~~ December 31, 2022.

Note 13. Commitments and Contingencies

We are committed to make payments to satisfy our lease liabilities. The scheduled payments under those obligations are summarized in Note 7, Leases. We also have outstanding unconditional purchase commitments to procure marketing services and IT software licenses through 2026.

From time to time the Company is involved in various litigation matters arising out of the normal course of business. The Company consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to such matters. Estimating the probable losses or a range of probable losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve discretionary amounts, present novel legal theories, are in the early stages of the proceedings, or are subject to appeal. Whether any losses, damages or remedies ultimately resulting from such matters could reasonably have a material effect on the Company’s business, financial condition, results of operations, or cash flows will depend on a number of variables, including, for example, the timing and amount of such losses or damages (if any) and the structure and type of any such remedies. The Company’s management does not presently expect any litigation matters to have a material adverse impact on the Company’s financial position, results of operations and cash flows.

Note 14. Segment Reporting

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Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for the three and ~~six~~nine months ended ~~June~~September 30, 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for the three and ~~six~~nine months ended ~~June~~September 30, 2022 for comparability.

~~Table of Contents~~

Three Months Ended ~~June~~September 30, 2023:


(in thousands)	(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated		(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated
External revenue	External revenue									External revenue
Residential & SMB - Cable Markets	Residential & SMB - Cable Markets	$	44,403	$	—	$	—	$	44,403	Residential & SMB - Cable Markets	$	43,679	$	—	$	—	$	43,679
Residential & SMB - Glo Fiber Markets	Residential & SMB - Glo Fiber Markets	8,164		—		—		8,164		Residential & SMB - Glo Fiber Markets	9,325		—		—		9,325
Commercial Fiber	Commercial Fiber	10,253		—		—		10,253		Commercial Fiber	10,415		—		—		10,415
Tower lease	Tower lease	—		4,715		—		4,715		Tower lease	—		4,608		—		4,608
RLEC & Other	RLEC & Other	3,806		—		—		3,806		RLEC & Other	3,815		—		—		3,815
Service revenue and other	Service revenue and other	66,626		4,715		—		71,341		Service revenue and other	67,234		4,608		—		71,842
Intercompany revenue and other	Intercompany revenue and other	51		38		(89)		—		Intercompany revenue and other	215		36		(251)		—
Total revenue	Total revenue	66,677		4,753		(89)		71,341		Total revenue	67,449		4,644		(251)		71,842
Operating expenses	Operating expenses									Operating expenses
Cost of services	Cost of services	24,752		1,379		(55)		26,076		Cost of services	26,266		1,694		(209)		27,751
Selling, general and administrative	Selling, general and administrative	15,924		349		9,418		25,691		Selling, general and administrative	14,615		304		9,483		24,402
Impairment expense	Impairment expense	836		—		—		836		Impairment expense	1,532		—		—		1,532
Depreciation and amortization	Depreciation and amortization	15,490		538		341		16,369		Depreciation and amortization	15,729		549		392		16,670
Total operating expenses	Total operating expenses	57,002		2,266		9,704		68,972		Total operating expenses	58,142		2,547		9,666		70,355
Operating income (loss)	Operating income (loss)	$	9,675	$	2,487	$	(9,793)	$	2,369	Operating income (loss)	$	9,307	$	2,097	$	(9,917)	$	1,487

Three Months Ended ~~June~~September 30, 2022:


(in thousands)	(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated		(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated
External revenue	External revenue									External revenue
Residential & SMB - Cable Markets	Residential & SMB - Cable Markets	$	43,843	$	—	$	—	$	43,843	Residential & SMB - Cable Markets	$	43,805	$	—	$	—	$	43,805
Residential & SMB - Glo Fiber Markets	Residential & SMB - Glo Fiber Markets	4,056		—		—		4,056		Residential & SMB - Glo Fiber Markets	4,895		—		—		4,895
Commercial Fiber	Commercial Fiber	9,340		—		—		9,340		Commercial Fiber	9,522		—		—		9,522
Tower lease	Tower lease	—		4,615		—		4,615		Tower lease	—		4,610		—		4,610
RLEC & Other	RLEC & Other	4,124		—		—		4,124		RLEC & Other	4,139		—		—		4,139
Service revenue and other	Service revenue and other	61,363		4,615		—		65,978		Service revenue and other	62,361		4,610		—		66,971
Intercompany revenue and other	Intercompany revenue and other	49		87		(93)		43		Intercompany revenue and other	25		67		(139)		(47)
Total revenue	Total revenue	61,412		4,702		(93)		66,021		Total revenue	62,386		4,677		(139)		66,924
Operating expenses	Operating expenses									Operating expenses
Cost of services	Cost of services	25,440		1,378		(62)		26,756		Cost of services	26,193		1,384		(100)		27,477
Selling, general and administrative	Selling, general and administrative	13,958		406		8,726		23,090		Selling, general and administrative	13,946		258		8,023		22,227
Restructuring expense	Restructuring expense	443		—		11		454		Restructuring expense	169		—		472		641
Impairment expense	Impairment expense	4,068		—		—		4,068		Impairment expense	477		—		—		477
Depreciation and amortization	Depreciation and amortization	13,396		633		761		14,790		Depreciation and amortization	16,791		445		637		17,873
Total operating expenses	Total operating expenses	57,305		2,417		9,436		69,158		Total operating expenses	57,576		2,087		9,032		68,695
Operating income (loss)	Operating income (loss)	$	4,107	$	2,285	$	(9,529)	$	(3,137)	Operating income (loss)	$	4,810	$	2,590	$	(9,171)	$	(1,771)

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~~Six~~Nine Months Ended ~~June~~September 30, 2023:


(in thousands)	(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated		(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated
External revenue	External revenue									External revenue
Residential & SMB - Cable Markets	Residential & SMB - Cable Markets	$	89,159	$	—	$	—	$	89,159	Residential & SMB - Cable Markets	$	132,838	$	—	$	—	$	132,838
Residential & SMB - Glo Fiber Markets	Residential & SMB - Glo Fiber Markets	15,167		—		—		15,167		Residential & SMB - Glo Fiber Markets	24,492		—		—		24,492
Commercial Fiber	Commercial Fiber	21,951		—		—		21,951		Commercial Fiber	32,366		—		—		32,366
Tower lease	Tower lease	—		9,253		—		9,253		Tower lease	—		13,861		—		13,861
RLEC & Other	RLEC & Other	7,497		—		—		7,497		RLEC & Other	11,312		—		—		11,312
Service revenue and other	Service revenue and other	133,774		9,253		—		143,027		Service revenue and other	201,008		13,861		—		214,869
Intercompany revenue and other	Intercompany revenue and other	106		76		(182)		—		Intercompany revenue and other	321		112		(433)		—
Total revenue	Total revenue	133,880		9,329		(182)		143,027		Total revenue	201,329		13,973		(433)		214,869
Operating expenses	Operating expenses									Operating expenses
Cost of services	Cost of services	50,181		2,571		(109)		52,643		Cost of services	76,447		4,265		(318)		80,394
Selling, general and administrative	Selling, general and administrative	31,495		799		20,006		52,300		Selling, general and administrative	46,110		1,103		29,489		76,702
Impairment expense	Impairment expense	1,020		—		—		1,020		Impairment expense	2,552		—		—		2,552
Depreciation and amortization	Depreciation and amortization	30,173		1,051		743		31,967		Depreciation and amortization	45,902		1,600		1,135		48,637
Total operating expenses	Total operating expenses	112,869		4,421		20,640		137,930		Total operating expenses	171,011		6,968		30,306		208,285
Operating income (loss)	Operating income (loss)	$	21,011	$	4,908	$	(20,822)	$	5,097	Operating income (loss)	$	30,318	$	7,005	$	(30,739)	$	6,584

~~Six~~Nine Months Ended ~~June~~September 30, 2022:


(in thousands)	(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated		(in thousands)	Broadband		Tower		Corporate & Eliminations		Consolidated
External revenue	External revenue									External revenue
Residential & SMB - Cable Markets	Residential & SMB - Cable Markets	$	87,336	$	—	$	—	$	87,336	Residential & SMB - Cable Markets	$	131,141	$	—	$	—	$	131,141
Residential & SMB - Glo Fiber Markets	Residential & SMB - Glo Fiber Markets	7,476		—		—		7,476		Residential & SMB - Glo Fiber Markets	12,371		—		—		12,371
Commercial Fiber	Commercial Fiber	18,402		—		—		18,402		Commercial Fiber	27,924		—		—		27,924
Tower lease	Tower lease	—		9,361		—		9,361		Tower lease	—		13,971		—		13,971
RLEC & Other	RLEC & Other	7,813		—		—		7,813		RLEC & Other	11,952		—		—		11,952
Service revenue and other	Service revenue and other	121,027		9,361		—		130,388		Service revenue and other	183,388		13,971		—		197,359
Intercompany revenue and other	Intercompany revenue and other	99		188		(240)		47		Intercompany revenue and other	124		255		(379)		—
Total revenue	Total revenue	121,126		9,549		(240)		130,435		Total revenue	183,512		14,226		(379)		197,359
Operating expenses	Operating expenses									Operating expenses
Cost of services	Cost of services	50,608		2,670		(183)		53,095		Cost of services	76,801		4,054		(283)		80,572
Selling, general and administrative	Selling, general and administrative	27,430		724		18,771		46,925		Selling, general and administrative	41,376		982		26,794		69,152
Restructuring expense	Restructuring expense	460		—		(70)		390		Restructuring expense	629		—		402		1,031
Impairment expense	Impairment expense	4,407		—		—		4,407		Impairment expense	4,884		—		—		4,884
Depreciation and amortization	Depreciation and amortization	25,933		1,117		2,085		29,135		Depreciation and amortization	42,724		1,562		2,722		47,008
Total operating expenses	Total operating expenses	108,838		4,511		20,603		133,952		Total operating expenses	166,414		6,598		29,635		202,647
Operating income (loss)	Operating income (loss)	$	12,288	$	5,038	$	(20,843)	$	(3,517)	Operating income (loss)	$	17,098	$	7,628	$	(30,014)	$	(5,288)

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A reconciliation of the total of the reportable segments’ operating income (loss) to unaudited condensed consolidated income (loss) before income taxes is as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		2023		2022		(in thousands)	2023		2022		2023		2022
Total consolidated operating income (loss)	Total consolidated operating income (loss)	$	2,369	$	(3,137)	$	5,097	$	(3,517)	Total consolidated operating income (loss)	$	1,487	$	(1,771)	$	6,584	$	(5,288)
Other income (expense), net	Other income (expense), net	177		(589)		1,294		(759)		Other income (expense), net	826		(1,208)		2,120		(1,967)
Income (loss) before income taxes	Income (loss) before income taxes	$	2,546	$	(3,726)	$	6,391	$	(4,276)	Income (loss) before income taxes	$	2,313	$	(2,979)	$	8,704	$	(7,255)

The Company’s chief operating decision maker (CODM) does not currently review total assets by segment since the assets are centrally managed and some of the assets are shared by the segments. Accordingly, total assets by segment are not provided.

Note 15. Subsequent Events

On October 24, 2023, Shentel entered into a definitive agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC (“Horizon” or “Horizon Telcom”) for $385 million (the “Horizon Transaction”). Consideration will consist of $305 million in cash and $80 million of Shentel common stock.

Horizon is a leading commercial fiber provider in Ohio and adjacent states serving national wireless providers, carriers, enterprises, and government, education and healthcare customers. Based in Chillicothe, Ohio, Horizon was founded in 1895 as the incumbent local exchange carrier (“ILEC”) in Ross County, Ohio and rapidly expanded its fiber network over the past 14 years. Most recently, Horizon has pursued a strategy of investing in Fiber-to-the-Home (“FTTH”) in tier 3 & 4 markets in Ohio.

Financing

•Shentel intends to fund the Horizon Transaction with a combination of existing cash resources, revolving credit facility capacity and an amended and upsized credit facility. The Company has received $275 million in financing commitments from CoBank, Bank of America, Citizens Bank, N.A., and Fifth Third Bank, N.A..

•GCM Grosvenor (“GCM”), a selling unit holder of Horizon, will exchange its equity interest in Horizon for 4.08 million shares of Shentel common stock with an aggregate value of $80 million based on a reference price of $19.60 resulting in GCM owning approximately 7% of Shentel’s fully diluted common shares after the transaction is closed.

•Shentel has entered into a 7% Participating Exchangeable Perpetual Preferred Stock (“Preferred Stock”) investment agreement with Energy Capital Partners (“ECP”), an existing Shentel shareholder and long-time infrastructure investor, to provide $81 million of growth capital to fund the FTTH network expansion, the government grant projects and general corporate purposes. The dividend can be paid in cash or in-kind at the option of the Company. The Preferred Stock can be exchanged for Shentel common stock at an exchange price of $24.50, a 25% premium to the reference price of $19.60, under certain conditions as outlined in the investment agreement. This financing is expected to close in conjunction with the Horizon Transaction.

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

The Horizon Transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close in the first half of 2024.

Shentel is in the process of evaluating the impact of the Horizon Transaction on its consolidated financial statements and related disclosures.

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ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will,” “should,” “could” or “plan” and similar expressions as they relate to Shenandoah Telecommunications Company or its management are intended to identify these forward-looking statements. All statements regarding Shenandoah Telecommunications Company’s expected future financial position, operating results and cash flows, business strategy, financing plans, forecasted trends relating to the markets in which Shenandoah Telecommunications Company operates and similar matters are forward-looking statements. We cannot assure you that the Company’s expectations expressed or implied in these forward-looking statements will turn out to be correct. The Company’s actual results could be materially different from its expectations because of various factors, including, but not limited to, those discussed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2022 (“2022 Form 10-K”). The forward-looking statements included in this Form 10-Q are made only as of the date of the statement. We undertake 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.

The following management’s discussion and analysis should be read in conjunction with the Company’s 2022 Form 10-K, including the consolidated financial statements and related notes included therein.

Overview

Shenandoah Telecommunications Company (“Shentel”, “we”, “our”, “us”, or the “Company”) is a provider of a comprehensive range of broadband communication services and cell tower colocation space in the Mid-Atlantic portion of the United States.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) is organized around our reportable segments. Refer to Note 14, Segment Reporting, in our unaudited condensed consolidated financial statements for additional information.

~~Second Quarter of 2023~~Recent Developments

~~Debt amendment:~~The Spectrum Transaction

~~In May 2023, Shentel amended~~On August 23, 2022, the ~~Credit Agreement resulting~~Company entered into a definitive asset purchase agreement (the “Spectrum Purchase Agreement”) with a wireless carrier pursuant to which the Company agreed to sell certain Federal Communications Commission (“FCC”) spectrum licenses and leases previously utilized in ~~(a) a change~~the Company’s Beam branded fixed wireless service for total consideration of approximately $21.1 million, composed of $17.3 million cash and approximately $3.8 million of liabilities to be assumed by the floating index rate from the one-month term London Inter-Bank Offered Rate to the one-month term Secured Overnight Financing Rate, (b) an extension of the borrowing deadline under the Term Loans from June 30, 2023 to December 31, 2023, and (c) an extension of the first principal repayment date for the Term Loans from September 30, 2023 to March 31, 2024.wireless carrier (the “Spectrum Transaction”). The Spectrum Transaction closed on July 6, 2023.

~~Hedging arrangements:~~The Horizon Transaction

~~In May~~On October 24, 2023, Shentel entered into ~~pay fixed, receive variable interest rate swaps totaling $150.0~~a definitive agreement to acquire 100% of the equity interests in Horizon Acquisition Parent LLC (“Horizon” or “Horizon Telcom”) for $385 million (the “Horizon Transaction”). Consideration will consist of $305 million in cash and $80 million of notional principal (the “Swaps”). The Swaps contain monthly payment terms beginning in May 2024, which extend through their maturity dates in June 2026. The Swaps are designated as a cash flow hedge, representing 50% of the Company’s expected outstanding debt (including expected future borrowings under the Term Loans). The Company uses the Swaps to manage its exposure to interest rate risk for its long-term variable-rate Term Loans.Shentel common stock.

~~Pension plan termination:~~Horizon is a leading commercial fiber provider in Ohio and adjacent states serving national wireless providers, carriers, enterprises, and government, education and healthcare customers. Based in Chillicothe, Ohio, Horizon was founded in 1895 as the incumbent local exchange carrier (“ILEC”) in Ross County, Ohio and rapidly expanded its fiber network over the past 14 years. Most recently, Horizon has pursued a strategy of investing in Fiber-to-the-Home (“FTTH”) in tier 3 & 4 markets in Ohio.

~~In 2021, Shentel’s Board~~

Financing

•Shentel intends to fund the Horizon Transaction with a combination of ~~Directors adopted a resolution to terminate its pension plan.~~existing cash resources, revolving credit facility capacity and an amended and upsized credit facility. The Company terminated the pension plan and all benefits were distributed in June 2023 through the combination of lump sum payments and the purchase of non-participating annuity contracts at the option of the pension plan participants. The Company made an additional $2.9 million contribution from its cash balance as a result of the settlement and recognized a settlement gain of $0.7has received $275 million in ~~other income (expense).~~financing commitments from CoBank, Bank of America, Citizens Bank, N.A., and Fifth Third Bank, N.A..

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investor, to provide $81 million of growth capital to fund the FTTH network expansion, the government grant projects and general corporate purposes. The dividend can be paid in cash or in-kind at the option of the Company. The Preferred Stock can be exchanged for Shentel common stock at an exchange price of $24.50, a 25% premium to the reference price of $19.60, under certain conditions as outlined in the investment agreement. This financing is expected to close in conjunction with the Horizon Transaction.

The Horizon Transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close in the first half of 2024.

Results of Operations

Three Months Ended ~~June~~September 30, 2023 Compared with the Three Months Ended ~~June~~September 30, 2022

The Company’s consolidated results from operations are summarized as follows:


		Three Months Ended June 30,						Change			Three Months Ended September 30,						Change
($ in thousands)	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%
Revenue	Revenue	$	71,341	100.0	$	66,021	100.0	5,320	8.1	Revenue	$	71,842	100.0	$	66,924	100.0	4,918	7.3
Operating expenses	Operating expenses	68,972		96.7	69,158		104.8	(186)	(0.3)	Operating expenses	70,355		97.9	68,695		102.6	1,660	2.4
Operating income (loss)	Operating income (loss)	2,369		3.3	(3,137)		(4.8)	5,506	175.5	Operating income (loss)	1,487		2.1	(1,771)		(2.6)	3,258	184.0

Other income (expense), net	Other income (expense), net	177		0.2	(589)		(0.9)	766	(130.1)	Other income (expense), net	826		1.1	(1,208)		(1.8)	2,034	(168.4)
Income (loss) before taxes		2,546		3.6	(3,726)		(5.6)	6,272	168.3
Income (loss) before income taxes										Income (loss) before income taxes	2,313		3.2	(2,979)		(4.5)	5,292	177.6
Income tax expense	Income tax expense	756		1.1	(501)		(0.8)	1,257	250.9	Income tax expense	720		1.0	(251)		(0.4)	971	386.9
Net income (loss)	Net income (loss)	$	1,790	2.5	$	(3,225)	(4.9)	5,015	(155.5)	Net income (loss)	$	1,593	2.2	$	(2,728)	(4.1)	4,321	(158.4)

Revenue

Revenue increased approximately ~~$5.3~~$4.9 million, or ~~8.1%~~7.3%, during the three months ended ~~June~~September 30, 2023 compared with the three months ended ~~June~~September 30, 2022, primarily driven by growth of ~~$5.3~~$5.1 million, or ~~8.6%~~8.1%, in the Broadband segment. Refer to the discussion of the results of operations for the Broadband and Tower segments, included within this MD&A, for additional information.

Operating expenses

Operating expenses ~~decreased~~increased approximately ~~$0.2~~$1.7 million, or ~~0.3%~~2.4%, for the three months ended ~~June~~September 30, 2023 compared with the three months ended ~~June~~September 30, 2022, primarily driven by ~~$0.3~~$0.6 million, $0.5 million and ~~$0.2 million of lower Broadband and Tower operating expenses, respectively, partially offset by $0.3~~$0.6 million of incremental operating expenses for the Broadband, Tower and Corporate ~~operating expenses.~~segments, respectively.

Other income (expense), net

Other income (expense), net increased ~~$0.8~~$2.0 million, or ~~130.1%~~168.4%, for the three months ended ~~June~~September 30, 2023 compared with the three months ended ~~June~~September 30, 2022, primarily driven by a ~~pension settlement~~ gain ~~resulting from~~recorded in connection with the ~~termination~~sale of ~~Shentel’s pension plan~~the Company’s FCC spectrum licenses upon the closing of the Spectrum Transaction in ~~June 2023.~~July 2023, partially offset by an increase in interest expense.

Income tax (benefit) expense

The Company recognized ~~$0.8~~$0.7 million of income tax expense for the three months ended ~~June~~September 30, 2023, compared with ~~$0.5~~$0.3 million of income tax benefit for the three months ended ~~June~~September 30, 2022. The ~~$1.3~~$1.0 million increase in income tax expense was driven by higher pre-tax income during the three months ended ~~June~~September 30, 2023.

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~~Six~~Nine Months Ended ~~June~~September 30, 2023 Compared with the ~~Six~~Nine Months Ended ~~June~~September 30, 2022

The Company’s consolidated results from operations are summarized as follows:


		Six Months Ended June 30,						Change			Nine Months Ended September 30,						Change
($ in thousands)	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%
Revenue	Revenue	$	143,027	100.0	$	130,435	100.0	12,592	9.7	Revenue	$	214,869	100.0	$	197,359	100.0	17,510	8.9
Operating expenses	Operating expenses	137,930		96.4	133,952		102.7	3,978	3.0	Operating expenses	208,285		96.9	202,647		102.7	5,638	2.8
Operating income (loss)	Operating income (loss)	5,097		3.6	(3,517)		(2.7)	8,614	(244.9)	Operating income (loss)	6,584		3.1	(5,288)		(2.7)	11,872	(224.5)

Other income (expense), net	Other income (expense), net	1,294		0.9	(759)		(0.6)	2,053	(270.5)	Other income (expense), net	2,120		1.0	(1,967)		(1.0)	4,087	(207.8)
Income (loss) before taxes		6,391		4.5	(4,276)		(3.3)	10,667	(249.5)
Income (loss) before income taxes										Income (loss) before income taxes	8,704		4.1	(7,255)		(3.7)	15,959	(220.0)
Income tax expense	Income tax expense	2,535		1.8	(448)		(0.3)	2,983	665.8	Income tax expense	3,255		1.5	(699)		(0.4)	3,954	565.7
Net income (loss)	Net income (loss)	$	3,856	2.7	$	(3,828)	(2.9)	7,684	(200.7)	Net income (loss)	$	5,449	2.5	$	(6,556)	(3.3)	12,005	(183.1)

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Revenue

Revenue increased approximately ~~$12.6~~$17.5 million, or ~~9.7%~~8.9%, during the ~~six~~nine months ended ~~June~~September 30, 2023 compared with the ~~six~~nine months ended ~~June~~September 30, 2022, primarily driven by growth of ~~$12.8~~$17.8 million, or ~~10.5%~~9.7%, in the Broadband segment, partially offset by a decline of ~~$0.2~~$0.3 million, or ~~2.3%~~1.8%, in the Tower segment. Refer to the discussion of the results of operations for the Broadband and Tower segments, included within this MD&A, for additional information.

Operating expenses

Operating expenses increased approximately ~~$4.0~~$5.6 million, or ~~3.0%~~2.8%, for the ~~six~~nine months ended ~~June~~September 30, 2023 compared with the ~~six~~nine months ended ~~June~~September 30, 2022, primarily driven by ~~$4.0~~$4.6 million, $0.4 million and $0.7 million of incremental operating expenses for the Broadband, ~~operating expenses.~~Tower and Corporate segments, respectively.

Other income (expense), net

Other income (expense), net increased ~~$2.1~~$4.1 million, or ~~270.5%~~207.8%, for the ~~six~~nine months ended ~~June~~September 30, 2023 compared with the ~~six~~nine months ended ~~June~~September 30, 2022, primarily driven by a gain recorded in connection with the sale of the Company’s FCC spectrum licenses upon the closing of the Spectrum Transaction in July 2023, sales taxes refunds received, ~~and~~ interest income related to tax refunds ~~during the six months ended June 30, 2023, as well as~~and a pension settlement gain resulting from the termination of Shentel’s pension plan in June ~~2023.~~2023, partially offset by an increase in interest expense.

Income tax (benefit) expense

The Company recognized ~~$2.5~~$3.3 million of income tax expense for the ~~six~~nine months ended ~~June~~September 30, 2023, compared with ~~$0.4~~$0.7 million of income tax benefit for the ~~six~~nine months ended ~~June~~September 30, 2022. The ~~$3.0~~$4.0 million increase in income tax expense was driven by higher pre-tax income during the ~~six~~nine months ended ~~June~~September 30, 2023.

Broadband

Our Broadband segment provides broadband internet, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania and Kentucky, via hybrid fiber coaxial cable under the brand name of Shentel, and fiber optics under the brand name of Glo Fiber. The Broadband segment also leases dark fiber and provides Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. The Broadband segment also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as a Rural Local Exchange Carrier (“RLEC”). These integrated networks are connected by over ~~9,000~~9,300 route miles of fiber.

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The following table indicates selected operating statistics of our Broadband segment:


		June 30, 2023			June 30, 2022				September 30, 2023			September 30, 2022
Broadband homes and businesses passed (1)	Broadband homes and businesses passed (1)	396,035			324,186			Broadband homes and businesses passed (1)	415,971			342,741
Cable Markets	Cable Markets	213,188			211,681			Cable Markets	213,317			211,829
Glo Fiber Markets	Glo Fiber Markets	182,847			112,505			Glo Fiber Markets	202,654			130,912

Residential & Small and Medium Business ("SMB") RGUs:
Residential & Small and Medium Business ("SMB") Revenue Generating Units ("RGUs"):								Residential & Small and Medium Business ("SMB") Revenue Generating Units ("RGUs"):
Broadband Data	Broadband Data	142,247			125,003			Broadband Data	146,797			130,238
Cable Markets	Cable Markets	109,404			107,878			Cable Markets	109,404			109,132
Glo Fiber Markets	Glo Fiber Markets	32,843			17,125			Glo Fiber Markets	37,393			21,106
Video	Video	44,800			49,027			Video	44,050			48,092
Voice	Voice	40,313			39,535			Voice	40,699			39,801
Total Residential & SMB RGUs (excludes RLEC)	Total Residential & SMB RGUs (excludes RLEC)	227,360			213,565			Total Residential & SMB RGUs (excludes RLEC)	231,546			218,131

Residential & SMB Penetration (2)	Residential & SMB Penetration (2)							Residential & SMB Penetration (2)
Broadband Data	Broadband Data	35.9		%	38.6		%	Broadband Data	35.3		%	38.0		%
Cable Markets	Cable Markets	51.3		%	51.0		%	Cable Markets	51.3		%	51.5		%
Glo Fiber Markets	Glo Fiber Markets	18.0		%	15.2		%	Glo Fiber Markets	18.5		%	16.1		%
Video	Video	11.3		%	15.1		%	Video	10.6		%	14.0		%
Voice	Voice	10.7		%	12.9		%	Voice	10.2		%	12.2		%

Residential & SMB ARPU (3)
Residential & SMB Average Revenue per User ("ARPU") (3)								Residential & SMB Average Revenue per User ("ARPU") (3)
Broadband Data	Broadband Data	$	81.03		$	79.94		Broadband Data	$	80.95		$	80.05
Cable Markets	Cable Markets	$	82.55		$	80.82		Cable Markets	$	82.22		$	81.43
Glo Fiber Markets	Glo Fiber Markets	$	75.63		$	74.49		Glo Fiber Markets	$	77.00		$	72.75
Video	Video	$	106.21		$	103.16		Video	$	105.72		$	102.59
Voice	Voice	$	25.35		$	25.95		Voice	$	25.14		$	25.56

Fiber route miles	Fiber route miles	9,082			7,906			Fiber route miles	9,387			8,072
Total fiber miles (4)	Total fiber miles (4)	767,173			589,923			Total fiber miles (4)	813,273			622,095

(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 users by the number of passings or available homes, as appropriate.

(3)Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.

(4)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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Three Months Ended ~~June~~September 30, 2023 Compared with the Three Months Ended ~~June~~September 30, 2022

Broadband results from operations are summarized as follows:


		Three Months Ended June 30,						Change			Three Months Ended September 30,						Change
($ in thousands)	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%
Broadband operating revenue	Broadband operating revenue									Broadband operating revenue
Residential & SMB - Cable Markets (1)	Residential & SMB - Cable Markets (1)	$	44,403	66.6	$	43,843	71.4	560	1.3	Residential & SMB - Cable Markets (1)	$	43,679	64.8	$	43,805	70.2	(126)	(0.3)
Residential & SMB - Glo Fiber Markets (1)	Residential & SMB - Glo Fiber Markets (1)	8,164		12.2	4,056		6.6	4,108	101.3	Residential & SMB - Glo Fiber Markets (1)	9,325		13.8	4,895		7.8	4,430	90.5
Commercial Fiber	Commercial Fiber	10,255		15.4	9,343		15.2	912	9.8	Commercial Fiber	10,418		15.4	9,523		15.3	895	9.4
RLEC & Other	RLEC & Other	3,855		5.8	4,170		6.8	(315)	(7.6)	RLEC & Other	4,027		6.0	4,163		6.7	(136)	(3.3)
Total broadband revenue	Total broadband revenue	66,677		100.0	61,412		100.0	5,265	8.6	Total broadband revenue	67,449		100.0	62,386		100.0	5,063	8.1
Broadband operating expenses	Broadband operating expenses									Broadband operating expenses
Cost of services	Cost of services	24,752		37.1	25,440		41.4	(688)	(2.7)	Cost of services	26,266		38.9	26,193		42.0	73	0.3
Selling, general, and administrative	Selling, general, and administrative	15,924		23.9	13,958		22.7	1,966	14.1	Selling, general, and administrative	14,615		21.7	13,946		22.4	669	4.8
Restructuring expense	Restructuring expense	—		—	443		0.7	(443)	(100.0)	Restructuring expense	—		—	169		0.3	(169)	(100.0)
Impairment expense	Impairment expense	836		1.3	4,068		6.6	(3,232)	(79.4)	Impairment expense	1,532		2.3	477		0.8	1,055	221.2
Depreciation and amortization	Depreciation and amortization	15,490		23.2	13,396		21.8	2,094	15.6	Depreciation and amortization	15,729		23.3	16,791		26.9	(1,062)	(6.3)
Total broadband operating expenses	Total broadband operating expenses	57,002		85.5	57,305		93.3	(303)	(0.5)	Total broadband operating expenses	58,142		86.2	57,576		92.3	566	1.0
Broadband operating income	Broadband operating income	$	9,675	14.5	$	4,107	6.7	5,568	135.6	Broadband operating income	$	9,307	13.8	$	4,810	7.7	4,497	93.5

(1)Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for the three months ended ~~June~~September 30, 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for the three months ended ~~June~~September 30, 2022 for comparability.

Residential & SMB - Cable Markets revenue

Residential & SMB - Cable Markets revenue for the three months ended ~~June~~September 30, 2023 was consistent with revenue for the three months ended September 30, 2022.

Residential & SMB - Glo Fiber Markets revenue

Residential & SMB - Glo Fiber Markets revenue for the three months ended September 30, 2023 increased approximately ~~$0.6~~$4.4 million, or 90.5%, compared with the three months ended September 30, 2022, primarily driven by 77.2% year-over-year growth in data RGUs driven by the Company’s expansion of Glo Fiber and 5.8% increase in data ARPU.

Commercial Fiber revenue

Commercial Fiber revenue for the three months ended September 30, 2023 increased approximately $0.9 million, or 9.4%, compared with the three months ended September 30, 2022, primarily driven by $0.5 million in recurring revenue driven by 16.3% increase in connections and $0.4 million in T-Mobile non-recurring early termination fees. T-Mobile disconnected 71 backhaul circuits during the three months ended September 30, 2023 as part of their previously announced rationalization of the former Sprint network. The Company expects approximately 80 additional backhaul disconnects as part of the network rationalization.

Cost of services

Cost of services for the three months ended September 30, 2023 was consistent with cost of services for the three months ended September 30, 2022.

Selling, general and administrative

Selling, general and administrative expense for the three months ended September 30, 2023, increased $0.7 million, or 4.8%, compared with the three months ended September 30, 2022, primarily driven by higher advertising costs associated with the Company’s expansion of Glo Fiber and a change in strategy to drive more gross subscriber additions to low cost sales channels.

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Impairment expense

The Company recorded impairment charges of $1.5 million during the three months ended September 30, 2023, compared with $0.5 million of impairment charges for the three months ended September 30, 2022. Impairment charges for the three months ended September 30, 2023 and 2022 were both primarily a result of Beam fixed wireless assets that are no longer expected to be used and have no alternative use.

Depreciation and amortization

Depreciation and amortization for the three months ended September 30, 2023 decreased $1.1 million, or 6.3%, compared with the three months ended September 30, 2022, primarily driven by the acceleration of depreciation associated with assets at Beam sites for the three months ended September 30, 2022, with no corresponding accelerated depreciation during the current period.

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Broadband results from operations are summarized as follows:


	Nine Months Ended September 30,						Change
($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%
Broadband operating revenue
Residential & SMB - Cable Markets (1)	$	132,838	66.0	$	131,141	71.5	1,697	1.3
Residential & SMB - Glo Fiber Markets (1)	24,492		12.2	12,371		6.7	12,121	98.0
Commercial Fiber	32,373		16.1	27,930		15.2	4,443	15.9
RLEC & Other	11,626		5.8	12,070		6.6	(444)	(3.7)
Total broadband revenue	201,329		100.0	183,512		100.0	17,817	9.7
Broadband operating expenses
Cost of services	76,447		38.0	76,801		41.9	(354)	(0.5)
Selling, general, and administrative	46,110		22.9	41,376		22.5	4,734	11.4
Restructuring expense	—		—	629		0.3	(629)	(100.0)
Impairment expense	2,552		1.3	4,884		2.7	(2,332)	(47.7)
Depreciation and amortization	45,902		22.8	42,724		23.3	3,178	7.4
Total broadband operating expenses	171,011		84.9	166,414		90.7	4,597	2.8
Broadband operating income	$	30,318	15.1	$	17,098	9.3	13,220	77.3

(1)Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for the nine months ended September 30, 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for the nine months ended September 30, 2022 for comparability.

Residential & SMB - Cable Markets revenue

Residential & SMB - Cable Markets revenue for the nine months ended September 30, 2023 increased approximately $1.7 million, or 1.3%, compared with the ~~three~~nine months ended ~~June~~September 30, 2022, primarily driven by ~~1.4%~~0.2% year-over-year growth in data ~~Revenue Generating Units (“RGUs”)~~RGUs and ~~2.1%~~1.0% increase in data ARPU driven by increased customer demand for higher speed data service.

Residential & SMB - Glo Fiber Markets revenue

Residential & SMB - Glo Fiber Markets revenue for the ~~three~~nine months ended ~~June~~September 30, 2023 increased approximately ~~$4.1~~$12.1 million, or ~~101.3%~~98.0%, compared with the ~~three~~nine months ended ~~June~~September 30, 2022, primarily driven by ~~91.8%~~77.2% year-over-year growth in data RGUs driven by the Company’s expansion of Glo ~~Fiber.~~Fiber and 2.7% increase in data ARPU.

Commercial Fiber revenue

Commercial Fiber revenue for the ~~three~~nine months ended ~~June~~September 30, 2023 increased approximately ~~$0.9~~$4.4 million, or ~~9.8%~~15.9%, compared with the ~~three~~nine months ended ~~June~~September 30, 2022, primarily driven by ~~$0.5~~$2.9 million in T-Mobile non-recurring early termination fees and $1.7 million in recurring revenue driven by ~~19.6%~~17.6% increase in ~~connections and $0.4 million in T-Mobile non-recurring early termination fees.~~connections. T-Mobile disconnected 22281 backhaul circuits during the ~~three~~nine months ended ~~June~~September 30, 2023 as part of their previously announced rationalization of the former Sprint network. The Company expects ~~151~~approximately 80 additional backhaul disconnects ~~in 2023~~ as part of the network rationalization.

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Cost of services

Cost of services for the ~~three~~nine months ended ~~June~~September 30, 2023, decreased approximately ~~$0.7~~$0.4 million, or ~~2.7%~~0.5%, compared with the ~~three~~nine months ended ~~June~~September 30, 2022, primarily driven by lower payroll costs due to higher capitalized labor and lower medical benefit costs, partially offset by higher line costs due to the expansion of the network into new markets and mobile switching centers of wireless carrier ~~customers.~~customers as well as higher regulatory costs.

Selling, general and administrative

Selling, general and administrative expense for the ~~three~~nine months ended ~~June~~September 30, 2023, increased ~~$2.0~~$4.7 million, or ~~14.1%~~11.4%, compared with the ~~three~~nine months ended ~~June~~September 30, 2022, primarily driven by higher advertising costs associated with the Company’s expansion of Glo Fiber and a change in strategy to drive more gross subscriber additions to low cost sales channels ~~as well as higher bad debt expense.~~

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~~Impairment expense~~

The Company recorded impairment charges of $0.8 million during the three months ended June 30, 2023, compared with $4.1 million of impairment charges for the three months ended June 30, 2022. Impairment charges for the three months ended June 30, 2023 were primarily a result of colocation lease right-of-use assets that are no longer expected to be used and have no alternative use, while impairment charges in the three months ended June 30, 2022 were primarily a result of the Company’s expected decommissioning of Beam fixed wireless sites.

~~Depreciation and amortization~~

~~Depreciation and amortization increased $2.1 million, or 15.6%, compared with the three months ended June 30, 2022, primarily driven by the Company’s expansion of its Glo Fiber network.~~

~~Six Months Ended June 30, 2023 Compared with the Six Months Ended June 30, 2022~~

~~Broadband results from operations are summarized as follows:~~

Six Months Ended June 30, Change
($ in thousands) 2023 % of Revenue 2022 % of Revenue $ %
Broadband operating revenue
Residential & SMB - Cable Markets (1) $ 89,159 66.6 $ 87,336 72.1 1,823 2.1
Residential & SMB - Glo Fiber Markets (1) 15,167 11.3 7,476 6.2 7,691 102.9
Commercial Fiber 21,955 16.4 18,407 15.2 3,548 19.3
RLEC & Other 7,599 5.7 7,907 6.5 (308) (3.9)
Total broadband revenue 133,880 100.0 121,126 100.0 12,754 10.5
Broadband operating expenses
Cost of services 50,181 37.5 50,608 41.8 (427) (0.8)
Selling, general, and administrative 31,495 23.5 27,430 22.6 4,065 14.8
Restructuring expense — — 460 0.4 (460) (100.0)
Impairment expense 1,020 0.8 4,407 3.6 (3,387) (76.9)
Depreciation and amortization 30,173 22.5 25,933 21.4 4,240 16.3
Total broadband operating expenses 112,869 84.3 108,838 89.9 4,031 3.7
Broadband operating income $ 21,011 15.7 $ 12,288 10.1 8,723 71.0

~~(1)~~Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for the six months ended June 30, 2023. These revenues were previously reported in one line under the description “Residential & SMB”. Shentel has amended the presentation for the six months ended June 30, 2022 for comparability.

~~Residential & SMB - Cable Markets revenue~~

Residential & SMB - Cable Markets revenue for the six months ended June 30, 2023 increased approximately $1.8 million, or 2.1%, compared with the six months ended June 30, 2022, primarily driven by 1.4% year-over-year growth in data RGUs and 2.1% increase in data ARPU driven by increased customer demand for higher speed data service.

~~Residential & SMB - Glo Fiber Markets revenue~~

Residential & SMB - Glo Fiber Markets revenue for the six months ended June 30, 2023 increased approximately $7.7 million, or 102.9%, compared with the six months ended June 30, 2022, primarily driven by 91.8% year-over-year growth in data RGUs driven by the Company’s expansion of Glo Fiber.

~~Commercial Fiber revenue~~

Commercial Fiber revenue for the six months ended June 30, 2023 increased approximately $3.5 million, or 19.3%, compared with the six months ended June 30, 2022, primarily driven by $2.5 million in T-Mobile non-recurring early termination fees and $0.9 million in recurring revenue driven by 18.3% increase in connections. T-Mobile disconnected 210 backhaul circuits during the six months ended June 30, 2023 as part of their previously announced rationalization of the former Sprint network. The Company expects 151 additional backhaul disconnects in 2023 as part of the network rationalization.

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~~Cost of services~~

Cost of services for the six months ended June 30, 2023, decreased approximately $0.4 million, or 0.8%, compared with the six months ended June 30, 2022, primarily driven by lower payroll costs due to higher capitalized labor and lower medical benefit costs, partially offset by higher line costs due to the expansion of the network into new markets and mobile switching centers of wireless carrier customers.

~~Selling, general and administrative~~

Selling, general and administrative expense for the six months ended June 30, 2023, increased $4.1 million, or 14.8%, compared with the six months ended June 30, 2022, primarily driven by higher advertising costs associated with the Company’s expansion of Glo Fiber and a change in strategy to drive more gross subscriber additions to low cost sales channels, higher information technology costs as a result of the Company’s investment in upgraded systems, and higher operating taxes associated with increased network assets associated with the expansion of Glo Fiber.

Impairment expense

The Company recorded impairment charges of ~~$1.0~~$2.6 million during the ~~six~~nine months ended ~~June~~September 30, 2023, compared with ~~$4.4~~$4.9 million of impairment charges recorded during the ~~six~~nine months ended ~~June~~September 30, 2022. Impairment charges for the ~~six~~nine months ended ~~June~~September 30, 2023 were primarily a result of colocation lease right-of-use and Beam fixed wireless assets that are no longer expected to be used and have no alternative use, while impairment charges in the ~~six~~nine months ended ~~June~~September 30, 2022 were primarily a result of the Company’s expected decommissioning of Beam fixed wireless sites.

Depreciation and amortization

Depreciation and amortization increased ~~$4.2~~$3.2 million, or ~~16.3%~~7.4%, compared with the ~~six~~nine months ended ~~June~~September 30, 2022, primarily driven by the Company’s expansion of its Glo Fiber ~~network.~~network, partially offset by the acceleration of depreciation associated with assets at Beam sites for the nine months ended September 30, 2022, with no corresponding accelerated depreciation during the current period.

Tower

Our Tower segment owns cell towers and leases colocation space on the towers to wireless communications providers. Substantially all of our owned towers are built on ground that we lease from the respective landlords.

The following table indicates selected operating statistics of the Tower segment:


		June 30, 2023	June 30, 2022		September 30, 2023	September 30, 2022
Macro tower sites	Macro tower sites	222	223	Macro tower sites	220	222
Tenants	Tenants	448	465	Tenants	446	457
Average tenants per tower	Average tenants per tower	1.9	2.0	Average tenants per tower	2.0	2.0

Three Months Ended ~~June~~September 30, 2023 Compared with the Three Months Ended ~~June~~September 30, 2022

Tower results from operations are summarized as follows:


		Three Months Ended June 30,						Change			Three Months Ended September 30,						Change
($ in thousands)	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%
Tower revenue	Tower revenue	$	4,753	100.0	$	4,702	100.0	51	1.1	Tower revenue	$	4,644	100.0	$	4,677	100.0	(33)	(0.7)
Tower operating expenses	Tower operating expenses	2,266		47.7	2,417		51.4	(151)	(6.2)	Tower operating expenses	2,547		54.8	2,087		44.6	460	22.0
Tower operating income	Tower operating income	$	2,487	52.3	$	2,285	48.6	202	8.8	Tower operating income	$	2,097	45.2	$	2,590	55.4	(493)	(19.0)

Revenue

Revenue for the three months ended ~~June~~September 30, 2023 was consistent with revenue for the three months ended ~~June~~September 30, 2022.

Operating expenses

Operating expenses ~~decreased~~increased approximately ~~$0.2~~$0.5 million, or ~~6.2%~~22.0%, for the three months ended ~~June~~September 30, 2023 compared with the three months ended ~~June~~September 30, 2022, primarily driven by ~~lower~~higher maintenance and depreciation ~~and professional service~~ costs.

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~~Six~~Nine Months Ended ~~June~~September 30, 2023 Compared with the ~~Six~~Nine Months Ended ~~June~~September 30, 2022

Tower results from operations are summarized as follows:


		Six Months Ended June 30,						Change			Nine Months Ended September 30,						Change
($ in thousands)	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%	($ in thousands)	2023		% of Revenue	2022		% of Revenue	$	%
Tower revenue	Tower revenue	$	9,329	100.0	$	9,549	100.0	(220)	(2.3)	Tower revenue	$	13,973	100.0	$	14,226	100.0	(253)	(1.8)
Tower operating expenses	Tower operating expenses	4,421		47.4	4,511		47.2	(90)	(2.0)	Tower operating expenses	6,968		49.9	6,598		46.4	370	5.6
Tower operating income	Tower operating income	$	4,908	52.6	$	5,038	52.8	(130)	(2.6)	Tower operating income	$	7,005	50.1	$	7,628	53.6	(623)	(8.2)

Revenue

Revenue decreased approximately ~~$0.2~~$0.3 million, or ~~2.3%~~1.8%, for the ~~six~~nine months ended ~~June~~September 30, 2023 compared with the ~~six~~nine months ended ~~June~~September 30, 2022, primarily driven by lower application fee revenue.

Operating expenses

Operating expenses increased approximately $0.4 million, or 5.6% for the ~~six~~three months ended ~~June~~September 30, 2023 ~~were consistent~~compared with ~~operating expenses for~~ the ~~six~~three months ended ~~June~~September 30, ~~2022.~~2022, primarily driven by higher maintenance costs.

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Financial Condition, Liquidity and Capital Resources

Sources and Uses of Cash: Our principal sources of liquidity are our cash and cash equivalents, cash generated from operations, and borrowings under our Credit Agreement, dated July 1, 2021 and as amended in May 2023 (the “Credit Agreement”). The Credit Agreement contains (i) a $100 million, five-year undrawn revolving credit facility (the “Revolver”), (ii) a $150 million five-year delayed draw amortizing term loan (“Term Loan A-1”) and (iii) a $150 million seven-year delayed draw amortizing term loan (“Term Loan A-2” and collectively with Term Loan A-1, the “Term Loans”).

In 2021, Congress passed the American Rescue Plan Act to subsidize the deployment of high-speed broadband internet access in unserved areas. We have been awarded approximately ~~$87.5~~$90.1 million in grants to serve approximately ~~27,600~~28,500 unserved homes in the states of Virginia, West Virginia and Maryland. The grants will be paid to the Company as certain milestones are completed. The Company expects to ~~its~~ fulfill its performance obligations during the period from 2023 to 2025.

As of ~~June~~September 30, 2023, our cash and cash equivalents totaled ~~$26.3~~$36.0 million and the availability under our delayed draw ~~term loans~~Term Loans and ~~revolving line of credit~~Revolver was ~~$275.0~~$250.0 million, for total available liquidity of ~~$301.3~~$286.0 million.

Operating activities generated approximately ~~$69.8~~$91.7 million of cash during the ~~six~~nine months ended ~~June~~September 30, 2023, representing an increase of ~~$31.1~~$35.5 million compared with the prior year period, driven primarily by tax refunds received during the ~~six~~nine months ended ~~June~~September 30, 2023 and changes in working capital, partially offset by settlement of Shentel’s pension plan.

Net cash used in investing activities increased ~~$47.2~~$41.8 million during the ~~six~~nine months ended ~~June~~September 30, 2023, compared with the ~~six~~nine months ended ~~June~~September 30, 2022, primarily driven by a ~~$47.5~~$58.0 million increase in capital expenditures as a result of higher spending in the Broadband segment to enable our Glo Fiber market ~~expansion.~~expansion, partially offset by $17.3 million in cash receipts resulting from our sale of FCC spectrum licenses upon the closing of the Spectrum Transaction in July 2023.

Net cash provided by financing activities was ~~$48.1~~$72.7 million during the ~~six~~nine months ended ~~June~~September 30, 2023, compared with net cash ~~used in~~provided by financing activities of ~~$1.3~~$23.1 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The change was primarily driven by an increase of $50.0 million ~~borrowed~~in borrowings under the ~~Company’s team loans during the six months ended June 30, 2023, partially offset by increases in cash paid for taxes associated with equity award issuances.~~Team Loans.

The Company has received approximately $29.0 million in net cash refunds for income and sales taxes during the ~~six~~nine months ended ~~June~~September 30, 2023.

Indebtedness: ~~During the six months ended June 30, 2023, we~~To date, Shentel has borrowed ~~$50.0~~$75.0 million under each of the delayed draw ~~term loan~~Term Loan facilities available under the Credit Agreement for a total of ~~$125.0~~$150.0 million. The commitments of the lenders under the Credit Agreement to make these ~~term loans~~Term Loans to us expire on December 31, 2023. After this date, we will not be able to borrow any undrawn portion of the ~~term loan~~Term Loan commitments. We expect to borrow the remaining ~~$175.0~~$150.0 million available under these ~~term loans~~Term Loans by December 31, 2023 to fund planned capital expenditures to continue our Glo Fiber network expansion. As of ~~June~~September 30, 2023, the Company’s indebtedness totaled approximately ~~$124.9~~$149.9 million, net of unamortized loan fees of $0.1 million, with an annualized overall weighted average effective interest rate of approximately ~~5.71%~~6.17%.

The Company will be required to commence making principal repayments of these ~~term loans~~Term Loans on March 31, 2024. The amount of these principal repayments is calculated as a percentage of the principal amount of the ~~term loans~~Term Loans outstanding. Based on the principal amounts outstanding as of ~~June~~September 30, 2023, (i) the first ~~term loan~~Term Loan will require quarterly principal repayments of ~~$0.4~~$0.5 million from March 31, 2024 through June 30, 2024, then increasing to ~~$0.8~~$0.9 million quarterly from September 30, 2024 through March 31, 2026, with the remaining balance due June 30, 2026, and (ii) the second ~~term loan~~Term Loan will require quarterly principal repayments of $0.2 million from March 31, 2024 through March 31, 2028, with the remaining balance due June 30, 2028. These repayment amounts, as well as our interest expense, will increase to the extent we borrow any of the remaining ~~$175.0~~$150.0 million available under the ~~term loans~~Term Loans by the borrowing deadline as we expect.

Refer to Note 8, Debt, for more information about the Credit Agreement.

As of ~~June~~September 30, 2023, the Company was in compliance with the financial covenants in our Credit Agreement.

We expect our cash on hand, cash flow from operations, and availability of funds from our Credit Agreement as well as government grants will be sufficient to meet our anticipated liquidity needs for business operations for the next twelve months. There can be no assurance that we will continue to generate cash flows at or above current levels.

During the ~~second quarter~~first nine months of 2023, our capital expenditures of ~~$136.2~~$190.4 million exceeded our net cash provided by operating activities by ~~$66.4~~$98.7 million, and we expect our capital expenditures will continue to exceed the cash flow provided from

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operations through 2025, as we expand our Glo Fiber broadband network to potentially reach over 450,000 ~~passings. During 2023, we anticipate funding $260 to $300 million~~passings, excluding the impact from the Horizon acquisition and financings noted in capital expenditures primarily related to continuing our network expansion for Glo Fiber and government subsidized unserved homes with net cash provided by operating activities, proceeds from our delayed draw term loans and government grants.

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Recent Developments.

The actual amount and timing of our future capital requirements may differ materially from our estimates depending on the demand for our products and services, new market developments and expansion opportunities.

Our cash flows from operations could be adversely affected by events outside our control, including, without limitation, 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. Our ability to attract and maintain a sufficient customer base, particularly in our Broadband markets, is critical to our ability to maintain a positive cash flow from operations. The foregoing events individually or collectively could affect our results.

Critical Accounting Policies

There have been no material changes to the critical accounting policies previously disclosed in Part II, Item 8 of our 2022 Form 10-K for the year ended December 31, 2022.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have borrowed a total of ~~$125.0~~$150.0 million pursuant to the variable rate delayed draw ~~term loans~~Term Loans available under the Credit Agreement, and we expect to continue to borrow under our Credit Agreement as needed to fund the Company’s future capital expenditures. We expect to draw an additional ~~$175.0~~$150.0 million against the Credit Agreement by December 31, 2023. Fluctuations in interest rates on future borrowings could result in increased market risk.

As of ~~June~~September 30, 2023, the Company had ~~$125.0~~$150.0 million of gross variable rate debt outstanding, bearing interest at an annualized weighted average effective rate of ~~5.71%~~6.17%. An increase in market interest rates of 1.00% would add approximately ~~$1.2~~$1.5 million to annual interest expense.

In May 2023, Shentel entered into pay fixed, receive variable interest rate swaps totaling $150.0 million of notional principal (the “Swaps”). The Swaps contain monthly payment terms beginning in May 2024 which extend through their maturity dates in June 2026. The Swaps are designated as a cash flow ~~hedge,~~hedges, representing 50% of the Company’s expected outstanding debt (including expected future borrowings under the Term Loans). The Company uses the Swaps to manage its exposure to interest rate risk for its long-term variable-rate Term Loans through interest rate swaps. When the ~~Swaps'~~Swaps’ payments term begins, Shentel will effectively pay a fixed weighted-average interest rate of 2.90%, prior to margin added associated with our credit facility.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer (the certifying officers) have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ~~Exchange Act)~~“Exchange Act”)) as of ~~June~~September 30, 2023. Our certifying officers concluded that our disclosure controls and procedures were effective as of ~~June~~September 30, 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the fiscal quarter ended ~~June~~September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

We are currently involved in, and may in the future become involved in, legal proceedings, claims and investigations in the ordinary course of our business. Although the results of these legal proceedings, claims and investigations cannot be predicted with certainty, we do not believe that the final outcome of any matters that we are currently involved in are reasonably likely to have a material adverse effect on our business, financial condition or results of operations. Regardless of final outcomes, however, any such proceedings, claims, and investigations may nonetheless impose a significant burden on management and employees and be costly to defend, with unfavorable preliminary or interim rulings.

ITEM 1A. RISK FACTORS

We discuss in our Annual Report on Form 10-K various risks that may materially affect our business. We use this section to update this discussion to reflect material developments since our Form 10-K was filed. As of ~~June~~September 30, 2023, the Company has not identified any needed updates to the risk factors included in our most recent Form 10-K.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Use of Proceeds from Registered Securities

None.

Purchases of Equity Securities by the Issuer or Affiliated Purchasers

In conjunction with the vesting of stock awards or exercise of stock options, the grantees may surrender awards necessary to cover the statutory tax withholding requirements and any amounts required to cover stock option strike prices associated with the transaction. The following table provides information about shares surrendered during the quarter ended ~~June~~September 30, 2023, to settle employee tax withholding obligations related to the vesting of stock awards.

(in thousands, except per share amounts) Number of Shares
Surrendered Average Price
Paid per Share
April 1 to April 30 — $—
May 1 to May 31 — $—
June 1 to June 30 8 $20.56
Total 8


(in thousands, except per share amounts)	Number of Shares Surrendered	Average Price Paid per Share
July 1 to July 31	—	$—
August 1 to August 31	—	$—
September 1 to September 30	—	$—
Total	—

ITEM 5. OTHER INFORMATION

During the three months ended ~~June~~September 30, 2023, none of our officers or directors adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K.

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ITEM 6. Exhibits Index


Exhibit No.	Exhibit Description

~~10.1~~	Amendment No. 1 to Credit Agreement, dated May 17, 2023, among Shenandoah Telecommunications Company, certain of its subsidiaries, CoBank ACB, as administrative agent, and the other lenders party thereto.

31.1*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2*	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.3*	Certification of Principal Accounting Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32**	Certifications pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. § 1350.

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* Filed herewith

** This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			SHENANDOAH TELECOMMUNICATIONS COMPANY


			/s/ James J. Volk
			James J. Volk
			Senior Vice President and Chief Financial Officer (Principal Financial Officer)
			Date: ~~August 2,~~November 3, 2023