Good morning, everyone and welcome to the Shenandoah Telecommunications Second Quarter 2015 Earnings Conference Call. Today's conference is being recorded. At this time, I would now 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 June 30, 2015. 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 Web site at www.shentel.com. Please note that an audio replay of this 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 3 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. We had a solid second quarter and I'm pleased to be able to share details about the company's continued growth. On Slide 5, you'll see the second quarter 2015 net income increased over 21% to $10.5 million compared to the prior year attributable primarily to the continued growth in the wireless and cable segment. Adjusted operating income before depreciation and amortization or OIBDA for the quarter increased almost 13% to $37.2 million. Revenues were $85.7 million in the second quarter, an increase of over 5% from the prior year period. Increased revenues in the wireless segment were the result of wireless subscriber growth which more than offset the decline in build revenue per customer. Our cable segment revenues also improved as a result of an increase in the number of revenue generating units or RGUs, video rate increases and customer selecting premium digital TV and high-speed data packages. Our wireless highlights start on Slide 6, we saw a growth in the wireless segment with increase customers for our post and prepaid offerings. This growth was a result of combining our regional advertising efforts with Sprint's national marketing campaigns and aggressively marketing the benefits of our enhanced network and local customer service capabilities. Postpaid customers grew by 6.8% compared to the prior year and prepaid customers by 5.3%. Operating income for the quarter grew almost 10% when compared to the second quarter of 2014. Turning to Slide 7, you see that our cable segment continued its improving trend and delivered strong growth in the quarter as demand for our high-speed Internet and voice services outpaced the anticipated decrease in video subscribers. Operating revenues increased about 16% to $24.2 million while cable adjusted OIBDA grew 46% to $5.7 million. RGU growth of…

Thank you, Chris. I will begin my remarks on Slide 10, which summarizes our Q2 2015 results. As you can see, all of our key financial metrics rose substantially in Q2 2015 over Q2 2014, with operating income up 19%, net income up 22%. Basic earnings per share up 19% and diluted EPS up 23%. On Slide 11, I have shown the calculation of adjusted OIBDA for Q2 2015 and Q2 2014. Here you can see that adjusted OIBDA grew by nearly $4.2 million or 13%. Depreciation grew by nearly $1.1 million as a result primarily of the incremental depreciation on network enhancements required to meet the growing data needs of our customers. Incremental share-based compensation was up in Q2 2015 over Q2 2014 by just $76,000. Finally, the loss on the disposal of assets was up $95,000 in Q2 2015. Slide 12, shows our growth and adjusted OIBDA by segment for the same period. Cable led the way again with a 46% improvement followed by wireline with a 12% increase. The wireless segment posted a healthy 9% growth in OIBDA. The cable improvements are consistent with longer term trends as Chris mentioned earlier. OIBDA margins also grew significantly in all three segments. On Slide 13, I have analyzed the changes in the adjusted wireless OIBDA results between Q2 2015 and Q2 2014. Postpaid handset and customer acquisition costs are down by $2.4 million. As Earle will discuss in greater detail in a moment, the shift to leasing and equipment installment willing to finance handsets drove this decrease and a related shift in postpaid service pricing. The postpaid billing rates were down 8.9% during this period. So while average customers grew by 6.4%, net postpaid service revenues dropped by $300,000. Prepaid revenues grew by $1.2 million related primarily to growth…

Thanks Adele, and good morning, everyone. Starting on Slide 16, we ended the quarter with 296,492 postpaid users up almost 7% in the past year and 441,923 total users for a penetration rate of 20%; 81% of our postpaid users have a smartphone; 90% of our smartphones have LTE capability with 58% also having Spark capabilities. Slide 17 shows we more than doubled the net postpaid additions in Q2 at 5,414, the increase in the net adds was a result of higher gross adds at 17,734 and lower churn at 1.4%. Q2 churn at 1.4% is the lowest quarterly churn in Shentel's history with both May and June at approximately 1.3%. You see that Shentel controlled channels only produced 36% of gross adds in Q2 with the advent of easy pay and leasing, our local agents used Sprint inventory rather than Shentel inventory and therefore accounted as non-Shentel controlled distribution. In reality, there has not been any fundamental shift in where customers are buying their phones just how we classify them. Let me provide you some additional postpaid stat. Our [port-in] [ph] ratio increased in the second quarter to 1.84 to 1. Phones represented 63% of the net adds, while tablets and connected devices were 37%. As of June 30, tablets were 5.3% of the postpaid base, 32% of our gross adds took traditional subsidized phone plan down from 42% in the first quarter, 31% selected installment sales and 37% leased their phones. As of June 30, 72% of our base remains unsubsidized phone plan. Postpaid upgrades for the quarter were 8.7% of the base; 29% of the upgrades came through Shentel stores. The break down of second quarter upgrade were 37% staying on subsidized plans, 19% on installment plans and 44% leasing their phones. We believe that the Cut…

This concludes our prepared remarks. Christy, please review the instructions for posing a question.

Absolutely. [Operator Instructions] We will go first to Ric Prentiss of Raymond James.

Thanks. Good morning.

Good morning.

Good morning.

First question like to ask you guys is, there has been a lot of speculation in the markets about Sprint doing a massive network densification, earlier you talked about your Spark progress and getting your stuff ready and you are ahead of schedule as you have been passed. When you think about Sprint's plans, what do you think the impact on Shen and also can this help to 5 Mbps speed that you are getting average out there?

What will help – significantly help the 5 Mbps is going to be Spark. When we implement smart, we will be able to have a wider carrier and will be able to provide higher speeds. As far as densification, with almost 550 sites, we are pretty dense already. We have – we are looking at using some small cells, but we see particularly in our area that we are going to focus some on specific hotspots rather than using them for coverage or for capacity on a broader level. We believe with the amount of spectrum and the number of sites we have and the addition of the 125 Spark lights we are going to have a very dense network. The one thing we are looking at doing is, we are reengineering some of our sites to go from 3 sectors to 6 sectors, which help us with some capacity where we think we may need in the future.

That makes sense. Last time Sprint did their vision project, there was part of my desk required a period of time, seemed to had a little effect on you guys. Any thoughts on what Sprint's next generation will do kind of on your edges or your cities surrounding your area?

Well, we still – they are always impacted by the quality of the Sprint network around us. They have been able to bring up some additional capacity, but they still having some capacity issues in the outer suburbs of the big cities. And it is impacting us. We continue to monitor it closely and look forward to them adding some capacity through the densification and things can only get better from here. The fact that our churn was 1.4 this quarter, I think reflects the quality of our network and the improving quality of their network and we are looking forward to that continue to drop.

It makes sense. And you teed up my second question, churn obviously astounding lowest ever 1.4% if you kind of factor what do you think is driving that where it's can go from here, and it does seem like the industry as a whole really has seen churn come down, so is it somewhat related to the EIP plans also?

Well, I'm sure it is. But, I think one of the things that we really are seeing is the pay off for our network capital spend. We have -- although Sprint has done anything nationally, we've been running for about a year a local branding campaign talking about the power of our towers and all the marketing research we do has told us it really has paid off. And so I think that in combination with the great readings we're getting from route metrics in our Harrisburg market, which was one of our weakest spots early on as we try to catch up with AT&T and Verizon and coverage. And I think all of those things combined are starting to really pay dividend. Price is important, but all the research that we do and this has been true for years and it continues to be true. The number one issue with customers is the quality of the network. So ultimately no matter what your price is, if you're not providing a quality network on a consistent basis you're going to lose customers. And I think our capital spend and our continued capital spend is going to keep us in a good position.

Great thanks, Earle.

[Operator Instructions] Our next question comes from the line of Kevin Smithen of Macquarie. Your line is open.

Thanks. I wondered if you could talk a little bit about some of the ARPU pressure that you've been seeing some of the new Sprint plans kind of where are you in the migration of your base on to these new plans and kind of when do you start to see the ARPU pressure abating, you've delivered good sub growth and churn and EBITDA been excellent. But just kind of curious when we might, how much longer you think we got in this ARPU service revenue pressure?

Kevin, you've asked a lot of questions in one. I'll try to remember them all as I'm answering your question. Obviously, as we've said and always have been the case we follow Sprint pricing. And so they have continued to have some downward pressure as the industry is – they responded to the industry. As I mentioned in my prepared remarks, we still have a significant percentage of our customers new and existing customers taking the subsidized plan. Just because they walk in the door we don't push them to an installment or a lease. We try to do the consultive sale as we always have and determine what's in their best interest. And for some customers just that comfort of knowing that the phone is included is where they want to be. I think we're going to continue to see an increase in the percentage of leased and installment sales phones. But I think that we're going to continue to have 25% plus or minus of folks who are going to stay on that subsidized plan. One thing that we're going to start seeing roll-off towards the end of the year there was -- as you recall there was some fairly significant promotions that Sprint ran and the last part of last year that we worked for one year. We're going to see some of those credits rolling off at the end of the year, which I think is going to give us some relief as far as what the average revenues look like. And we're continuing to -- we're different because we don't report as everyone else does that $20 a month or whatever that they're getting for the installment or the lease on the phone. It doesn't show up on our financials. And so we're going to…

No, no, no is very comprehensive. Thank you very much.

[Operator Instructions]

Doesn't look like we've got any more questions, Christy. So thank you everyone for participating. Please let me know if there are additional details you'd like to see in future calls. My contact information was on today's press release.