Good day, ladies and gentlemen, and welcome to the Shenandoah Telecommunications Third Quarter Earnings Conference. At this time all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference is being recorded. I would now turn the call over to your host, Adele Skolits. Please go ahead.

Good morning and thank you for joining us. The purpose of today’s call is to review Shentel’s results for the quarter ended September 30, 2013. Our results were announced in a press release distributed this morning and the presentation we’ll be reviewing is included on the investor page of our website at www.shentel.com. For those of you participating via the web, the slides will be advanced automatically. Please note that an audio 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. As always, let me refer you to slide two of the presentation which contains our Safe Harbor disclaimer and remind you that this conference call may include forward-looking statements subject to certain risks and uncertainties. These may cause our actual results to differ materially from these statements. Shentel provides a detailed discussion of various risk factors in our SEC filings, which you’re strongly encouraged to review. You’re 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. These reconciliations are also provided in an appendix to today's slide presentation. I'll turn the call over to Chris now.

Thank you, Adele. We appreciate everyone joining us this morning. During the third quarter our financial performance showed significant improvement driven by customer growth and average revenue per user increases in the wireless and cable segments and from reduced operating expenses. Additionally our 4G wireless network upgrade remains on track for completion by the end of this year. On slide five you will see the net income increased over 390% to $6.7 million compared to $1.4 million in the prior year. It is important to note there were many unfavorable factors that impacted 2012 third quarter net income. On an apples-to-apples basis, third quarter adjusted OIBDA increased 12% to $28.7 million. Revenues were $77.5 million in the third quarter growing by 6.4%. Revenues increased as a result of wireless subscriber growth and increased smartphone fees. Additionally our cable segment revenues grew both from an increase and revenue generating units and from higher monthly revenue per customer. Turning to slide six. We again have positive net wireless additions in our postpaid services with the number of total postpaid customers up 1.8% over the year-end 2012 number and 3.4% higher than the third quarter 2012. We added 1,370 net postpaid customers during the quarter reaching a total of 267,667. Year-over-year we saw an 8.3% increase in prepaid customers and for the quarter we experienced a positive net addition of 1,297. We are pleased with this increase given that the second quarter of 2013 saw a 3,000 decline in prepaid related to more stringent requirements for subscriber eligibility in the subsidize assurance program. Our net service fee to Sprint increased from 12% of net billed revenues to 14% on August 1, 2008, excuse me 2013 which reduced net postpaid service revenue about $0.6 million, but net prepaid service revenues grew 31% due to…

Thank you, Chris. I will begin on slide 11. On this slide you see that both operating income and net income for the third quarter of 2013 had strong increases compared to the same quarter in 2012. Operating income increased over 145% reaching $13.3 million. Net income for the quarter was over $6.7 million, an increase of 375% over the third quarter of 2012. Earnings per basic and diluted share for Q3 ‘13 was $0.28, up from $0.06 in the prior year. While there have been significant improvements in the performance of our business, it’s important to consider that the 2012 results included the impact of several significant unfavorable events. These included the accelerated depreciation of 3G assets, the write-off of $780,000 of unamortized debt issuance cost and storm damage cost of $600,000 in the cable segment. Slide 12 shows the financial results after adjusting for these non-routine expenses, as well as certain non-cash expenses and applying to the third quarter of 2012 its share of the fourth quarter of 2012 payment from Sprint related to the prior quarter’s prepaid results. This gives us a better apples-to-apples comparison in order to evaluate the performance of the underlying businesses. As this slide shows, adjusted operating income before depreciation and amortization or OIBDA for Q3 ‘13 was $28.7 million, up $3.1 million or more than 12% from Q3 ‘12. In order to better understand the forces driving this growth, I have provided the OIBDA results by segment on slide 13. What you see from this table is that adjusted wireless OIBDA has grown by 15.5%. Cable results have improved by more than 13%. And wireline segment’s result is up over 2% over Q3, ‘12 since the growth in fiber sales and retail rates is once again offsetting the loss of long distance…

Thank you, Adele. Good morning. I'll start with a few Network Vision stuff. We are nearing the completion of the project and we'll be making an announcement in the coming weeks. Our primary emphasis has shifted to optimizing the network. Over 40% of all of our data traffic is LTE and we are approaching 15% of our voice traffic on 800 megahertz. Our customers are starting to notice the benefits of our investment. We assume there will be 15 months to 18 months before the marketplace acknowledges our efforts. We are doing local LTE advertising, but with Sprint's construction delayed and without the anticipated Sprint regional and national message, it will take longer for the prospective customers to acknowledge. Moving to slide 18, as of September 30 we had 267,667 postpaid customers up to 3.4% increase from a year ago. As shown on this slide we continue to see an increase in smartphone penetration with 72% of our postpaid users having a smarphone. We have over a 100,000 postpaid customers with an LTE device. During the third quarter we top 400,000 postpaid and prepaid customers with total penetration of almost 19.5% of covered POP. On slide 19, you see that we had 15,754 gross ads during the third quarter of 2013 compared to 18,427 in the same quarter of 2012. Last year approximately 20% of the gross ads were iDEN conversions with no iDEN conversions this quarter. Therefore we see the positive trend of a 6.5% increase in non-conversion gross ads. 55% of gross ads came to Shentel controlled channels in the third quarter of 2013 compared to 47% in the same quarter last year. Churn was down at 1.8%. Lower gross ads and the change in churn resulted in 1,370 net ads in 2013 compared to 3,842 last year.…

This concludes our prepared remarks. Stephanie, would you now like to review the instructions for posting the question.

Our first question comes from Ric Prentiss with Raymond James. Your line is open.

Couple of questions. First on the land line side, there is a little growth year-over-year, but there was a decline quarter-to-quarter. Can you talk a little bit about the seasonality and probably some new rates that we're in there?

I don’t know that there is a significant change in that business Ric, fiber deals come in, have a limited timeframe associated with some. You do see some adjustments to access fees as you go along, but for the most part I think that’s more noise than anything else.

So should we expect kind of that 2% year-over-year growth in that kind of low single-digits on the landline side than given the fiber sales you’re doing?

Yes.

Okay. And then Earle you’d mentioned that doing local advertising on the wireless side feeling that it could take 15 to 18 months before the market sees the benefit of what you did with Vision again Sprint’s status. Can you expand a little bit on that about how much local advertising you expect to and what do you think the effect might be on gross and net adds?

We do about $3 million plus a year in local advertising and so what we have currently doing is we are featuring the LTE along with the unlimited in the advertising that we're doing now. And we’ll be alternating throughout the year promotional and then more brand which would be LTE advertising. The problem that we've got is that we're very influenced by the Washington, Baltimore and Philadelphia markets and rely on the Sprint message coming out of those markets to help us get the word out. And because those are not markets that they've started launching in the LTE advertising again we're not getting that residual fact. But as we move towards the middle of next year and the Sprint advertisers more for about their LTE product, I think that will be a significant help for us.

Okay. And then Sprint had a pretty low percent of handsets upgrade within third quarter, I think they were just like 7% of the postpaid base, how are upgrades in your base?

We’ve had 6.2% of our base upgraded in the third quarter. From our historical past, we normally are in that 5.8% to 6% range. So we actually had a little bit than normal but still considerably lower than kind of the industry average.

Great. I’ll come back in, if there is time at the end for more questions. Thanks.

Rick I would add to the question earlier about wireline that you ought to consider that our runout of certain sales of the convert services business was being conducted through the wireline segment. So we were billing those buyers for the content that they were using at those properties for a certain period of time post sale of the convert services properties and we were really weren’t making money on that we recording the revenues and the cost of goods sold in the wireline segment related to those two and that stopped in the second quarter.

Okay. Thanks.

You are quite welcome.

Our next question comes from Barry Sine with Drexel Hamilton. Your line is open.

I want to start talking about the expenses in your wireless segment before you embarked on the 4G upgrade plans, you gave a lot of detail in terms of what impact that might have on ongoing operating expenses and depreciation, essentially duplicate OpEx into the depreciation. Now that we’re at the tail-end of that build, I’m assuming we are going to turn back at normal, are we still seeing some of those duplicative costs went to those run off and what does the run-rate for 2014 look like?

The accelerated depreciation is all but done, we time that to end at the point that the sell sides were replaced. And you will already see, and by the way our Q is being released this morning, you will already see the drop in depreciation as a result. The cost for the replacement of the backhaul is ongoing as we’ve terminated, we’ve experienced some termination fees related to canceling the copper lines. We also had some duplicative costs as you know, Barry related to paying for the existing lines as well as the new lines as we were shifting from the old technology to the new. I expected that will end in the fourth quarter as we get the final sell sides replaced.

Adele could you put a number around those higher operating expenses and what delta would look like in 2014?

We are not prepared to giving you guidance on 2014 at this point, but we did include the duplicative costs in our calls last year Barry so I would refer you to those.

Okay. And in terms of wireless marketing obviously with SoftBank in control of Sprint, they have talked about getting more aggressive as they did in the Japanese market some years ago. I am assuming it’s a little early to see any of that, but are you starting hear any, what are your thoughts on how that might impact your business more subscriber additions, more handset subsidies perhaps lower rates plans?

Barry this is Earle. I think that Sprint’s also talked about this that we are not going to see any significant shifts until next year until they are going to show their LTE set revision rollout. So I would anticipate that we will see a significant uptick in advertising and promotion activity at the end of next year or prior to that I am not expecting any significant changes.

Okay. And my last question is regarding the capital structure. As you talk about in the press release, we should see a significant decline in CapEx going forward, even with the higher spending. You have a very, very clean balance sheet, still a relatively low dividend yield. What is the management and the Board thinking about in terms of potentially to return value to the shareholders?

Barry this is Chris. I guess we see four options really for the use of additional free cash flow, our first priority is going to continue to be to invest in growing the company, we could invest whether it’s expanding our current networks to reach new customers, such as building a new fiber rail or making acquisition that grows one of our existing segment, that would be our preference and our top priority. Lease likely would to do stock buybacks. With very limited flow that we have in our stock, we are not sure that would be a wise choice. So then that leaves, if we don’t have any compelling investment options then most likely use would be to increase cash dividends to shareholders and then consider accelerating the repayment of our debt.

Great. Thank you very much.

Our next question comes from David Dickson with FBR Capital Markets. Your line is open.

Thank you. Good morning. We are fortunate to be, are there things, I'm just going to looking at the launch of the Sprint stock, differentiated LTE service. Earle, I want to ask a couple of questions around that in terms of postpaid sub-momentum and CapEx in coming years, really focusing on Sprint stock as that the triband service to provide something quite differentiated on LTE and grow market share. It is an incremental build of remote radios and antennas. So it should be a rather quick build out rather than to what we have seen in the past to the return or replace. So I'm just wondering if you are forecasting the build in region overtime, the other benefit from some postpaid momentum I think Sprint anticipating or whether you would be looking at benefits from those devices as they are treated with Sprint building across all of its sides nationwide which is largely an open area, 24% of geography. So I wanted to just get an update on your thinking there, if I could. Thanks.

David, this is Earle. Yes, we have been certainly watching that closely and continuing to have ongoing conversations with Sprint about the use of the 2.5 spectrum. As Sprint has said, they are going to start in their largest metropolitan areas for two reasons. Number one obviously this could be a great differentiator, but they also need the additional spectrum in those markets. We don't have that spectrum constraint in the next couple of years as we project out the data usage on our customers. But we’ll not be probably on the same timeline as Sprint. We see ourselves probably lagging Sprint a little bit on the build out of the Spark 2.5. So as we're kind of looking at our next couple of years, we see that at the earliest being a 2015 event. And then we would start, obviously on a much different scale, we would start in our most populated areas and start building out the core of that with the 2.5 and then moving out as we saw it was prudent based on the cost and the usage.

And Earle just to clarify could that require a renegotiation of the management agreement?

It will. Today we don’t have specific permission to use the 2.5, but we’ve started those discussions and I believe that it will look enough a lot like the amendment that we did to get the G Block and the 800.

Terrific. And then just a question on LTE performance and your spectrum strategy here that was on LTE 1900 and 800, if I heard correctly, you have the 40% of data on LTE. That’s a mix of 1900 and 800 right now, is it or primarily 1900?

It’s all 1900. We won’t be launching, the only thing we have on 800 right now is voice. We will be launching our initial LTE and 800 towards the end of the first quarter. And we’ll be rolling that out as Sprint turns the 800 spectrum over to us.

And as it carries a list and perhaps some observations on voice, what’s the opportunity to reform 1900 PCS as voice-based 800, stronger signal strength there. What's the opportunity there on the PCS to [reform]?

There is a lot of opportunity. Actually we will start reforming the 1900 to LTE by late 2014 as we see more and more customers moving up 3G phone on to a 4G phone, we’ll be able to recapture some of that capacity and then move it to LTE.

Great. And then lastly just on the LTE performance, what are you seeing in terms of throughput and [latency] thus far?

We are getting up to 20 meg of speed, but I would say probably the average is more in the 8 to 10 range and little are no latency.

And that's on the 2.5 just on B Block?

Yes.

And so Earle you had mentioned there in terms of reform that’s factored into, you are not saying spectrum constraints for the next two years?

Right.

Terrific. And then just lastly, within that approval you expected to of building, obviously going to look at different options there, but do you see any opportunity to manage the level build, is there any [OpEx] there?

Obviously we've said in the past, we would love to extend our relationship with Sprint if there was an opportunity, but we don’t have anything specific at this point.

Okay. Got it. Thanks very much.

Our next question is a follow-up from Ric Prentiss of Raymond James. Your line is open.

Yeah. I want to circle back on some of the items I came up on the Sprint call the other day. Sprint had seen a significant effect in third quarter from what they call mixed customers or mixed accounts where a corporate account had iDEN handsets, but also CDMA handsets. iDEN got turned off at end of June, but the CDMA side of those accounts came up as Sprint noted quite significantly in third quarter and expected to still see a sizable amount coming off in fourth quarter. I know you didn’t have the iDEN side of things, but did you experience anything in the quarter kind of the similar [vein]?

We did, but to a much, much lesser extent. It was a handful of customers who fit into that kind of profile and did migrate to another carrier, but nothing to the same extent that Sprint has.

So when you say handful you literally have enough customers that also includes the subscriptions is fairly small is that we are talking?

Well, these are customers with 50 to 100 lines, but a handful of customers plus some of half a dozen.

But any of them are five or six on that 50, I mean could we have seen a couple of hundred hit to ads?

Yeah. I mean we lost a couple of business customers in the third quarter that was related to that kind of overall theme.

Sure, okay. And then as you look into fourth quarter, do you have any visibility on how many more of those are to come?

I am not aware of any that are talking to us right now, but I don’t think it’s going to a big issue for us.

Okay. And on the call with Sprint the other day they also kind of alluded to potential interest of hosting third-parties, you guys have your own towers so that’s kind of nice also. But what are your thoughts about hosting third-party’s spectrum on your assets and what that might mean to the competitive landscape?

That was one of the reasons to do Network Vision. We always saw that as kind of a potential revenue stream. We are not afraid to sell services to our competitors we do it all the time being a small player you’ve got to have to, I always joke that one of our biggest fiber customers is Dish who we compete against on the side of cable. So if there is an opportunity to host somebody else’s spectrum on our side, we are more than happy to do that.

And just like Spark might be lagged out a little bit given new population density, third-party hosting might come to you first for that kind of same reason that you are more suburban role that might be where third-parties have some interest, is that [their] thought?

Could very well be, and we are prepared, that was, as I said that was part of our planning when we did Network Vision. As you remember when Network Vision was just hitting stories, there was lot of discussion about light [swayed]. We were prepared to move forward with Sprint on that project. So if another opportunity does come forward, we’ll jump in.

Great. And then on the CapEx side, it got reduced to $102 million for 2013, I think Earle you mentioned that there was some flipping of $17 million had to do with fiber capacity and I missed the third part, I was just trying to frame what was that within the wireless category, maybe what was the slipping out into ’14?

The biggest single project was a couple of fiber-to-the-towers to other carriers. We thought that those projects would be more mature this year, but the delays in getting the contract signed have pushed virtually all of the -- we've done the engineering this year, but all the construction will be done next year. And that represents almost 40% of that number.

Okay.

It's just fiber build out on success base. There is some capacity both on the cable side and wireless side. And then we had a couple of real building projects, the total of those were across all three segments and that was about $3 million of that. So there really is no one project that represents the majority of the 17, but the biggest slice of that is actually fiber builds.

And given that success base, but do you still feel the success is there, because the engineering that could bode well as you constructed in ‘14 for fiber revenue on the land mine side?

Absolutely.

Okay. And then, the $17 million that shift out the significant reduction to CapEx from ‘13 to ‘14 includes the impact of that 17 shifting out as well.

Yes.

Okay, great. Thanks guys.

Our next question is a follow-up from David Dickson with FBR Capital Markets. Your line is open.

Thanks very much. Just a follow-up on the relative weakness in the Sprint network in adjacent areas at all due to Network Vision, just looking back looking at the historical quantity, has the Sprint Network ever been in a position of relative strength in those adjacent areas? I am trying to get a sense of whether porting trends could touch that not just to traditional levels, but I am asking to a level better than before the upgrade?

If I look at over the relationship with Sprint as one would expect they started building out the core of their metropolitan areas first. And as we've moved towards over the 10-year period they got this coverage got better and better where we interconnected with them at the borders. We're now kind of in that same pattern over again where they have started the LTE build out at the core and we expect that they will one of the last sites that will be done will be the ones that are deferred to south for them. So that’s the reason why I am kind of focusing on the 15 to 18 months timeframe because we do receive some negative comments from our customers who travel that they go from our virtually complete LTE network, they cross the border and then they’re back at 3G until they get to downtown D.C. or downtown Baltimore [and the scenario send to them]. So we're anxious for Sprint to finish up because we do think there will be some significant value to us by having the LTE experience be seamless to the customer.

These are (inaudible) that’s already back to traditional levels and if they’re in the line the following trend is in line now with previously?

They are moving that way, we're not at back there yet, but we should be back there, I mean if the trend line continue we’d be back there by early next year.

Okay, that's good clarification. Thank you so much.

I am showing no further questions. At this time, I would now turn the call back over to Adele Skolits for closing remarks.

Thank you for participating. As I said earlier, our 10-Q was filed this morning. And if you have further questions, please let me know my contact information was provided in the press release. Thank you very much for participating.

Thank you. Ladies and gentlemen that does conclude today’s conference. You may all disconnect and have a wonderful day.