Good morning everyone, and welcome to the Shenandoah Telecommunications’ Fourth Quarter of 2011 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Adele Skolits, CFO. Please go ahead, ma’am.

Good morning and thank you for joining us. The purpose of today’s call is to review Shentel’s results for the quarter ended December 31, 2011. Our results were announced in a press release distributed last night and the presentation we’ll be reviewing is included on our website at www.shentel.com. Please note that a replay of the call will be made available later today. The details were set forth in the press release announcing this call. With us on the call today are Christopher French, our President and Chief Executive Officer; and Earle MacKenzie, our Executive Vice President and Chief Operating Officer. After our prepared remarks, we’ll conduct a question-and-answer session. I’ll begin with slide two of the presentation. While we don’t provide guidance with respect to specific future financial results, we caution that this call may contain forward-looking statements, which involve a number of known and unknown risks and uncertainties. These may cause our actual results to differ materially from these statements. Shentel provides a detailed discussion of various risk factors in our SEC filings, which you’re strongly encouraged to review. You are cautioned not to place undue reliance on these forward-looking statements, except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement. Also, in an effort to provide useful information to investors, we note on slide three that our comments today include non-GAAP financial measures. Details on these measures, including why we use them and reconciliations to the most comparable GAAP measures are included in our SEC filings. I’ll turn the call over to Chris now.

Thank you, Adele. We appreciate everyone joining us this morning. In recent years, we’ve been focused on two strategic initiatives, enhancing and expanding our wireless services and diversifying our business by significantly expanding the size of our cable segment. Our diversification efforts do not provide immediate financial returns, but we are reaching significant milestones denoting our progress on these strategic objectives. On slide five, we list some of the highlights in these areas. As of the end of the year, we had nearly 356,000 wireless customers and over a 137,000 cable revenue generating units. In our wireless segment, we have more than a 107,000 Boost and Virgin Mobile customers as of December 31, 2011. We again had positive net additions in postpaid subscribers, something we’ve accomplished in every quarter since first becoming a Sprint Nextel affiliate in 1999. Cable RGUs are at 7% higher than year-end 2010, an increase of almost 9,000. We have now upgraded 51% of the JetBroadband cable markets acquired in July 2010. Revenue for 2011 reached a quarter of a billion dollars. In the fourth quarter of 2011, revenues were 15% higher than they were in the fourth quarter of 2010 and 6% higher than third quarter 2011. In December, the Board of Directors declared a cash dividend of $0.33 per share. This is the same amount as previous year but a much higher payout as a percent of earnings. This dividend represents the 52nd consecutive year of annual dividends which began when Shenandoah Telephone Company paid its first dividend in 1960. Wireless segment highlights are shown on slide six. Prepaid customers grew by 40,144 in 2011 to just over 107,000. Postpaid customers are up by 13,811 or nearly 6% from a year ago. Continued postpaid growth was helped by churn of just 1.8% for 2011…

Thank you, Chris. I’ll begin on slide 10. Adjusted operating income before depreciation and amortization or OIBDA for Q4 ‘11 was $21.6 million or up $200,000 from Q4 ‘10. In order to better understand the forces driving this change, I have provided the OIBDA results by segment on slide 11. Here you get a picture of how the segment’s results are contributing to the consolidated financial results. In a moment, I’ll go into greater depth on the OIBDA changes for each segment. What you see from this table is that adjusted wireless OIBDA has grown by $700,000 despite the significant incremental costs associated with acquiring prepaid customers. Also, the cost of acquiring cable customers has reduced cable OIBDA by $700,000. Wireline OIBDA was unchanged in Q4 ‘11 over Q4 ‘10. On slide 12, I’ve analyzed the changes in the wireless OIBDA results between Q4 ‘10 and Q4 ‘11. As Earle will discuss postpaid revenues grew by $3.5 million as a result of the growth in its customer base and continued growth in the average billing rate per customer. The $10 smartphone charge instituted by Sprint in January 2011 made a substantial impact on this growth. As a result of the substantial growth in the prepaid customer base, revenues from this product have grown by $3.3 million while the related acquisition costs have grown by $2.1 million and the ongoing support of this customer base by $600,000. Postpaid customer acquisition costs grew by $2.2 million. $1.1 million of this cost increase related to the increased subsidies associated with the iPhone relative to other smartphones. Enhancements to our wireless networks primarily to accommodate the incremental data traffic, increased network costs by $1 million. On slide 13, I’ve shown the components of the changes to adjusted cable OIBDA which declined by $700,000 in Q4 ‘11 from Q4 ‘10. As you can see all revenue lines grew in the fourth quarter. This growth was driven by the 7% growth in RGUs. As with wireless, the growth in customers comes with an immediate cost related to acquiring customers. This incremental cost was $1.4 million in Q4 ‘11 over Q4 ‘10. The increase in video customers resulted in an increase of $600,000 in programming costs in Q4 ‘11 over Q4 ‘10. In addition, the improvements in the network and an increase in broadband customers drove network and backhaul expenses up by $700,000. On slide 14, I have shown the components of the change in wireline revenues. Facility revenues have grown by $1.1 million as a result of the substantial growth in sales of fiber and Ethernet facilities to businesses. The sale of the directory business in 2010 resulted in a loss of $500,000 in directory advertising revenues in 2011.Revenues and expenses from all other sources dropped by $600,000 net. At this time, I’ll turn the call over to Earle to go into greater depth on some of the operating factors driving our results.

Thank you, Adele. Good morning, everyone. I’ll be starting on slide 16. We continued our positive trend on postpaid net adds with a strong fourth quarter and an increase of approximately 6% for the year bringing us to 248,620 postpaid customers at December 31. Slide 17 provides a details of those postpaid gross and net adds for the year. We had 65,240 gross adds, an increase of 1,725 from 2010. We had net adds of 13,811, an increase of approximately 10% from 2010. The fourth quarter was very strong with 5,072 net adds, an increase of 21% over the fourth quarter of 2010. Churn for the fourth quarter was at 1.89% up slightly from 2010, but for the year, we improved to 1.78% from 1.89% which contributed to our improved net adds. As shown on the slide 18, we continue to have a significant increase in postpaid gross billed revenue per user to $59.44 per month, an increase of a $1.98 from the third quarter of 2011 and $3.90 from the fourth quarter of 2010. The $4.84 increase in the data components for 2011 is the result of continuing to focus on selling high-end price plans and the $10 per month charge that Sprint initiated at the end of January on all new smartphone users. The 6% increase in customers and higher average billed revenue resulted in an 10% increase in total postpaid gross billed revenues to a $166 million shown on slide 19. Bad debt decreased by 300,000 and credits remained at 10% of gross revenues. And over 9% increase in net revenue is due to the increase in the Net Service Fee percentage paid to Sprint from 8.8% to 12% on June 1, 2010. The same three price plans that were most popular in the third quarter were…

This concludes our prepared remarks. John, would you please review the instructions for posting a question.

Absolutely. (Operator Instructions) We will go first to Ric Prentiss of Raymond James. Ric Prentiss – Raymond James: Couple of questions for you if I could. First, as you think about the iPhone details that you provided us Earle, 16% of the adds processed in the quarter, seemed a little bit light, I know early on you had mentioned there were some supply issues. Can you talk a little bit about what the trends you’re seeing in 1Q so far, has that become a larger percent of sales?

The answer is no. We haven’t seen it that much larger, not a significant change in the first quarter. I can’t really contribute why that’s happening but we carry a pretty robust group of phones. You can see that 36% of them were sold on our control market, distribution areas. What we do is we actually have sales people in each office that are experts on particular phones. And I think part of it is people tend to sell the phone that they are the most comfortable with. So if a customer comes in without a strong feeling to buy an iPhone, we may be moving him to a different phone just because of the sales person is enthusiastic about the phone that they are selling. Ric Prentiss – Raymond James: Okay. And do you know the stat about how many of your iPhone sales or people that are new to Shenandoah versus just the retention. So is that 16% of gross adds that kind of indicating that that’s the percent that’s new as probably 16% of total gross. And I am just trying to think how many iPhones were to new to you customers?

About 3,000 new to us customers in the fourth quarter. Ric Prentiss – Raymond James: Okay. And then you mentioned the smartphone penetration 53% of your base, the $10 built-on, would you think that ARPU growth can continue in ‘12 from the increased sale of smartphones?

The answer is yes because of two things, number one I think the penetration is going to continue to grow but you have to remember that any smartphone that was not a 4G smartphone prior to January is not receiving that $10 surcharge. Ric Prentiss – Raymond James: Right.

So as we start to see some smartphones that are reaching that two year age, they will be upgrading. And once they upgrade we’ll be able to collect the additional $10. Ric Prentiss – Raymond James: Fine. And then final question I’ll circle back if there is time. There has been a lot of movements in the DC on the Access Reform, USF Reform. Can you talk to us a little bit about across all your businesses what kind of exposure you have, first the USF and then to Access?

I’ll take that. In 2011, about $13.7 million in access fees were reported by our wireline segment. However over $3 million of that was affiliate billings, so our access fees net – if you eliminated the inter-company billing are about $10 million. We spent some time analyzing this. We don’t have the final analysis done yet Ric, but we believe that at this point, the impact on us can be compensated for by charges to our end-users, but we are still testing the waters on that and still analyzing the full impact on us. But its wireless for us than it is for many other RLECs at this point. Earle, do you want to talk about the end-user rates that we have now.

Yes. Basically our R1 [ph] rate right now is in the $12.50 range. We did not have any price increases up until a couple of years ago for almost 30 years. So we believe that we’ve got some headroom in order to increase rates without significantly impacting the total number of customers. We recently just in the first quarter – I didn’t quoted, talk about it in this call but we will in the first quarter call, we increased our rates at the beginning of the year and we virtually had no pushback from the customers at all on about a $1.75 increase in our monthly rates. So we believe that as Adele said that we can cover those increases. We can increase our local rates at least in the short run, next couple of years to compensate to keep our total revenue at about the same level. Ric Prentiss – Raymond James: Okay. Great, thanks Earle, and Adele.

You’re quite welcome.

Our next question comes from Barry Sine with Drexel Hamilton. Barry Sine – Drexel Hamilton: Good morning folks.

Good morning. Barry Sine – Drexel Hamilton: I want to start off following up on questions about again on the iPhone. If I recall correctly in 4Q, you didn’t have the iPhone because it wasn’t introduced until a part way into the quarter and then it was a later date when you actually got inventory in the stores. I think in response to the prior question you said that you’re sell rates on the iPhones are about the same in 1Q so far as 4Q. I would think it’d be higher because now you’ve got the inventory in the stores for the full quarter. Could you expand on that a little more?

Barry, you are correct, it wasn’t launched right at October 1st, but it was launched in the middle of October. We did have phones available in the market. We just didn’t have a lot of phones available in our stores. Sprint was sure that Best Buy’s and some of their big national retailers had phone. So it’s not completely correct that the phones weren’t there. We didn’t have a lot of the S’s but we had iPhone 4 really since their first day of launched. So part of this is we are actively trying to determine with the customer what is the best phone for their need. And the less they come in with a really strong opinion that they’ve got to have an iPhone, often times customers very happy with one of our Androids and we actually have those priced at a lower price point than the iPhone. So the customer is somewhat price sensitive and he is looking for functionality and not for the brand. It’s not that difficult sometimes to move them from an iPhone to one of our Androids. Barry Sine – Drexel Hamilton: What was the – if you don’t mind, what was the date when you did had the inventory in your stores on the 4S and what is your inventory situation now? Do you have devices and when new devices come out like an iPad 3 will you have availability when the rest of the Sprint retail stores nationally have inventory or will there be another lag?

We were no more impacted than other Sprint stores. They really do try to treat us pretty much like they do the rest of their stores. Sprint kind of had a momentary problem on the S’s and it wasn’t just Sprint, when the S came out everybody kind of suck those up really quickly. But we had S’s by – within a week to 10 days from the launch, so by the beginning the November. And October was not a particularly strong month for us, November and December were by far the stronger of the two months of the quarter. And going forward we have plenty of product now. We have no problem with availability and as far I know we will be getting any additional product at the same time that Sprint will offered in their other stores. Barry Sine – Drexel Hamilton: Okay, thank you. And now turning on the cable side of the business, the fourth quarter RGU adds cable were a little bit less than I was thinking of. You’ve spent quite a bit upgrading and for example if you look at video I think one of the things you’re doing in the video upgrades is upgrading to a digital plan with HD, DVR and some of that plan had been analog in the past. So why isn’t that a more attractive offering in the marketplace? Why aren’t you getting more traction with the network upgrades on the video side for example?

We are having growth on the digital side. If you look at kind of the video in two pieces, it’s the analog that we’re losing customers and it’s the digital HD that we’re gaining customers. You also have to remember that during the fourth quarter DIRECTV had a very, very aggressive promotion early on where they were offering the NFL package for free if you signed up. And so I won’t tell you that didn’t have an impact on our gross adds, the net adds because the customer could get a very attractive introductory price plus free NFL package. I believe that that was compelling for a lot of our customers whether they will remain a DIRECTV customer long-term. When next year they have to pay the full price for the NFL package and their promotion rolls off has to be seen, but that was a big impact on us in fourth quarter. Barry Sine – Drexel Hamilton: And what did you counter with in terms of packages and promos?

I really couldn’t anything that was comparable to that. I mean we continue to offer promotions of price points for a limited period of time of 90 days. We had worked with HBO and Starz to offer promotional periods where we can offer their product at free or reduced rate, but we just really don’t have access to anything like the NFL package. Barry Sine – Drexel Hamilton: And then just two numbers questions I guess for Adele, do you have the churn rate for prepaid in the fourth quarter?

Yes, I believe I do. It would have been 1.89%. I am sorry that’s postpaid, prepaid would have been 3.9% in the fourth quarter of 2011. The previous fourth quarter of 2010 it was 4.61% so we’ve seen some substantial improvement there. Barry Sine – Drexel Hamilton: Okay. And then Adele I also want to clarify on the depreciation numbers that you gave related to the wireless upgrade. How do we think about that accelerated depreciation vis-à-vis 2011, I think for 2011 depreciation and amortization was $55.8 million, when you say there is an additional $7 million, obviously we’re going to add that for the accelerated depreciation, but then there is going to be additional depreciation charges associated with the new plan that’s going in. So it’s going to be somewhere north of $55 million plus $7 million. Is that the right way to think about it?

It is the right way to think about it. And in general the CapEx spending in wireless is depreciated over roughly eight years. So that’s the right way to think about that. Barry Sine – Drexel Hamilton: Okay. Those are my questions. Thanks folks.

Our next question comes from Greg Burns with Sidoti & Company. Greg Burns – Sidoti & Company: Hi thanks for taking the question. I want to dig a little more in the improvement in prepaid churn. Was there any churn – was there anything, any specific puts and takes that are driving that lower and you need to see a sustainable level going forward or could we see some further improvement?

Hi Greg, this is Earle. Prepaid churn is quite seasonal. Once again we’ve not been in the business that long, but looking at other carriers, prepaid can be pretty seasonal. And if you look at the other prepaid carriers, they had pretty good churn numbers for the fourth quarter. So I can’t say that there is anything that we did specifically related to that, but we’re still trying to learn some patterns and also look at it geographically, will there be a difference between our prepaid customers who are in Central Pennsylvania which is significant part of that population, is it in the New York Harrisburg area which may it's a more urban area versus or quad-states area which is less urban I guess, nice way to putting it. Will there be a big difference there? Once again, we just haven’t had customers long enough to know what the real patterns are going to be. Greg Burns – Sidoti & Company: Okay, thanks. And in terms of the sequential improvement on the cable side, how much of that is being driven by some of the operational efficiencies you’re getting from the fiber backhaul upgraded and moving the voice customers on to your switches?

Both of those things happen late in third quarter or fourth quarter timeframe. So we really – fourth quarter was the – first quarter really started to see some of the impact of that. For all practical purposes on the voice side, what we were paying what we inherited from Jet, it was little, very little margin on voice customer. We’ve been able now to move them over to our switch and we control the backhaul of that and we have a very favorable contract with actually Verizon who completes the LTE for on our VOIP customers which allows for a nice margin there. As far as the backhaul, most of the construction of the backhauling that is going to carry all of the video in many cases as we consolidate head in and the backhaul for the data and voice is in place. And we’ll see a full year of that advantages in 2012. Greg Burns – Sidoti & Company: Okay, thank you very much.

Our next question is a follow-up from Ric Prentiss with Raymond James. Ric Prentiss – Raymond James: Thanks. A couple of follow-up, Chris maybe one for you, early on or in your remarks you mentioned 2012 would be a challenging year, lot of moving pieces. You mentioned part of that was your goal to have increasing revenue or increasing subscribers. You did not mentioned EBITDA, would the thought be that EBITDA can grow this year as well?

Yes. Definitely and that’s one of our key priorities and certainly one of the components of our incentive plan is trying to have to good growth in that area. Ric Prentiss – Raymond James: Okay. And then on the Vision project probably for Earle, can you talk a little bit about I think you mentioned that 274 cell sites that you want to touch in 2012 was aggressive. What’s kind of the gating factor in getting this network turned up as early as third quarter ‘12 and as you look at the project now that you guys are probably full bore on it?

So there are couple of parts of it. Now first of all we have to upgrade the switch before we can really implement any of the upgrades at the cell sites. And we’ve already started that process and we are optimistic that we’ll have the switch updated sometime mid second quarter. Once that is in place, we can start installing and bringing up the new equipment at the individual cell sites. So the other gating issues that we’re actually started early on as you’ve got to have significant backhaul, T1 backhaul doesn’t work. So that’s the reason why we have started our fiber-to-the-tower build out actually almost two years ago now. And we are going to use a combination of our own build out to our towers, naïve [ph] microwave which we are engineering right now, and then purchasing capacities from third-parties for the remaining sites. We’ve been aggressively negotiating those for the last 90 to 120 days in anticipation of this and actually have started signing some of those contracts right now. The other big issue is we have to evaluate cell site by cell site, are there any zoning issues that we’re going to have to deal with, are there any load issues on the tower that we’re going to have to deal with and obviously on those towers that we own, negotiations with the tower owner is pretty easy but the two-thirds of the towers that we lease capacity on, we have started that process. The good news is that Sprint has kind paid the way because many of the tower companies that we are on, Sprint is also on them elsewhere in the country. So it’s not that we’re having to educate them. They understand exactly what Network Vision is and how it’s going to impact the tower. So we’re moving through that process also. So although that many moving parts and to try to accomplish this in a very short period of time, it’s a big deal. One thing that we constantly think about is we’ve got to stay competitive with AT&T and Verizon. We know how aggressive they’ve been. So failure is not an option here. And we’ve got a good team in place. We’ve gotten some extra resources lined up because of our long time in this business and we have some very good relationships with contractors that we’ve been able to leverage. And then we’re obviously using Alcatel-Lucent as a primary contractor on this project. And we’ve had a long and good relationship with them. Ric Prentiss – Raymond James: Yes, I agree. Failure is not an option. Focus is critical so we were kind of glad to hear that. Sprint, if there was a discussion in the metro PCS, they’ve focused to Vision done, so that’s obviously critical. Another item on this Vision plan, so you mentioned microwave, at what percent of your size do you think you’ll put microwave on?

We’re thinking it’s going to about 30% and our goal is that there would never be more than three or four hops on the microwave and this is going to be primarily focused on the edges of our network. And they will come into a hub which has or tower that does have fiber to it but as we’ve looked at it, you could almost kind of assume that the microwave will be the peripheral backhaul, but the core backhaul through especially the high usage sites will all be fiber based. Ric Prentiss – Raymond James: All right, and I assume from the tower negotiations if you do put microwave on there, lot of times that has to be on a different RAD Center too right?

Yes. Ric Prentiss – Raymond James: So little bit run through microwave?

That is correct. Ric Prentiss – Raymond James: Okay. And then Adele maybe an update on the financing of the program?

We have available to us on under our current credit facility, the $50 million revolver and a $100 million accordion. We have projections that indicate that we will need over the course of this two years as much as $125 million of incremental funding. So I certainly could make that happen with our existing syndicated lenders and that’s certainly an option we’ll be looking at. We’ll also be looking at alternative options that may enable us to extend the maturities of those debts and fully amortize the debt which the current facility does not do. Ric Prentiss – Raymond James: Any thought on rates, it seems like the debt market is pretty open to a lot of these type projects?

It is and I believe that we will get a competitive rate there as you know we pay LIBOR plus three percent right now, that it will be slightly higher than that but hard to say at this point until we’re further along in the process where we might end up. Ric Prentiss – Raymond James: That makes sense. And then maybe one more for Chris, we’ve heard from a lot of the regional carriers including Atlantic Tele-Network, they just finished up just before you guys. Well we’ve heard a lot of discussion, there is a lot of M&A buzz in the industry, obviously in terms of buzz somebody that might have been associated with you guys. What are you seeing in the M&A environment out there? Is there anything of interest to you guys?

I guess Ric, we won’t comment on speculative transactions. I guess our focus this year as we said is going to be on the Network Vision project which is for us historically a very large, very intense program. We have the cable investment that we have to finish up, our upgrades, and then start improving the results in that. So I guess our philosophy is we’ll certainly look at anything that may make sense, but I think this year our priorities are really going to be on the business we have and improvements in those areas. Ric Prentiss – Raymond James: I think that’s the right focus. Thanks for that.

And at this time, I’d like to turn it back over to Adele for any closing remarks.

Do we have any further questions at this point, John?

Yes, ma’am we do have a question from Greg Burns with Sidoti & Company. Greg Burns – Sidoti & Company: Hi, Adele, just one last quick one on the D&A [ph] for this year. Is there any meaningful offset the incremental depreciation on the amortization line from the Sprint prepaid going off a little bit?

Yes there is. The Sprint prepaid as we’ve talked about before is essentially amortized over what’s believed to be the life of the customer. So you can assume that every month we assume that that balance increased by 1.8% as that percentage of customers turn off. So essentially that amortization declines over the life of the customer and if you need details on that Greg, I can certainly share them if I haven’t done so in the past. Greg Burns – Sidoti & Company: Okay, great. Thank you very much.

And at this time, I’d like to turn over to Adele for any closing remarks.

That’s all we have. My information was included on the press release announcing this call, so please let me know if there is additional information you’d like us to include on future calls. Thank you for participating.

And again, ladies and gentlemen, this does conclude today’s conference. We thank you for your participation. You may now disconnect.