Good day, ladies and gentlemen, and welcome to the Shenandoah Telecommunications Co. Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, today's conference is being recorded. I would now like to turn the conference over to Adele Skolits, Chief Financial Officer. Ma'am, you may begin.

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, 2014. 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. 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 2 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 statements. 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 strong third quarter and I'm pleased to have this opportunity to provide details about the company's continued growth. On Slide 5, you'll see the third quarter 2014 net income increased 19.1% to $8 million attributable primarily to continued growth in our Wireless and Cable segments. For the quarter adjusted operating income before depreciation and amortization, or OIBDA, increased 15.9% to 33.3 million. Revenues were 82.3 million in the third quarter, a 6.1% increase from the prior year period. Revenues increased chiefly as a result of wireless subscriber growth and increased revenue per subscriber related to increased data fees and enhanced product mix. Our cable segment revenues also improved as a result of an increase in the number of revenue generating units, or RGUs, and higher average revenue per customer. Our wireless highlights start on Slide 6. Postpaid customers grew by 5.7% over last year and prepaid customers by 5.6%. Operating income grew 5.1% to 17.3 million. As a reminder, the net service fee to Sprint increased from 12% to 14% of net billed revenues on August 1, 2013. Turning to Slide 7, our cable segment also delivered significant growth in the quarter. Operating revenues increased 9.7% to 21 million, while cable's adjusted OIBDA grew by 75.2% to 3.4 million. Solid growth of 7.3% in RGUs drove this increase. On Slide 8, I've highlighted two additional areas of our business which continue to contribute significantly to our performance. Our nearly 4,000 route mile fiber network supports all areas of our business. This quarter it generated 8.1 million in revenues, up 15.7% over the prior year. The total value of fiber sales contracts executed this quarter was more than twice the amount executed in the same quarter in 2013.…

Thank you, Chris. I will begin will Slide 11 with our improved key financial metrics. Operating income was up 6.7% to $14.1 million and net income was up over 19% to $8 million. As a result, earnings per share rose to $0.33 per share for the quarter, up nearly 18%. On Slide 12, I've shown the calculations of adjusted OIBDA. Here you can see that adjusted OIBDA grew by nearly $4.6 million or 16%. Depreciation grew by $1.7 million as a result primarily of the incremental depreciation on the 4G wireless equipment installed over the course of the last year. Share-based compensation was down slightly. The loss on disposal of assets was up over $2 million as a result primarily of recording the cost of disposal of obsolete equipment removed from service when the cable networks were upgraded. Slide 13 shows our growth in adjusted OIBDA by segment. This quarter, once again, the cable segment led the way with a 75% improvement followed by wireline with a 21% improvement. The wireless segment had solid growth with an increase of -- in its adjusted OIBDA of 8%. On Slide 14, I’ve analyzed the changes in the adjusted wireless OIBDA results between Q3 '13 and Q3 '14. Postpaid revenues are up $1.8 million. A combination of factors drove this increase. Postpaid billing rates are up only 0.2% during this period for reasons Earle will review in a moment, while average customers have grown by 5.7%. Prepaid service revenues grew by $300,000 as a result of growth of 5.6% in the average number of prepaid customers. Network operating costs dropped by $800,000. In 2013, there were significant line costs associated with having redundant back haul as 3G base stations were removed and replaced with 4G base stations. The savings from not having this…

Thanks, Adele. Good morning, everyone. My remarks start on Slide 19. We ended the third quarter with 282,976 postpaid customers, a year-to-date increase of 9,255. That is 4,480 more year-to-date compared to 2013. Our postpaid smartphone penetration was 78%, with 64% of the postpaid smartphone users having an LTE phone and 18% having a tri-mode phone. From our launch of Framily in April through the end of the program in mid September, we added approximately 20,000 Framily users. In Q3, we added through gross additions and upgrades 8,129 Family Share plan units, 2,426 new $60 unlimited plans and 701 $50 unlimited plans. Gross and net additions are shown on Slide 20. Primarily driven by the Family Share plans and the $60 unlimited plan launched on August 22nd, our gross adds increased 28% over Q3 2013 to 20,095. This is the highest number of gross adds we've ever had in a quarter. Net adds were 5,303, an increase of 3,933 from the same quarter last year. We returned to a net importer in Q3 with ports-in exceeding ports-out from both Verizon and AT&T. Churn was 1.76%, up from the second quarter, but better than Q3 2013. Tablets were 20.9% of gross adds with tablets comprising 3.6% of the postpaid base at September 30. We don't have visibility on how phones were purchased through non-controlled channels. But through Shentel controlled channels, 39% of the gross adds used the Easy Pay plan, 1% the iPhone lease, with 60% still preferring the subsidized phone plans. 49% of gross activations were through Shentel controlled channels. Postpaid upgrades were high at 8.1%, with one-third coming through Shentel channels. Once again, we don't have visibility on how upgrade phones were purchased through non-controlled channels. But through Shentel controlled channels, 25% of all upgrades took Easy Pay, 1%…

Candice, this concludes our prepared remarks. Would you now review the instructions proposing a question?

Absolutely. (Operator Instructions) And our first question comes from the line of Ric Prentiss of Raymond James. Your line is now open.

A couple of questions. First, very strong adds in the quarter obviously wireless and cable RGUs. When you think about the competitive positioning within wireless, Sprint updated their rate plans kind of mid September-ish. As you look at the progress throughout the quarter, did that help? I'm trying to think as you look at kind of the months play out, June, July, August, September and into October, as we went to the summer time, did you see any changes?

Ric, this is Earle. The answer is definitely yes. The Framily plan really were too complex and we required the customer to do too much as far as building their own group. And so that was a difficult sale and it took an awful lot of time in the stores or for any of our distribution to sell that. When they did launch their new price plans towards the end of August, what we saw was a significant increase in store traffic. You can see by the percentages, we still sold a significant number of subsidized phone plans because that's what it turned out to be in the best interest of the customer as we did a consultive sale. But it really did significantly change the dynamic of having folks come in to inquire about Sprint.

And as far as the kind of gross add traffic and porting, as you mentioned you turned net positive in the quarter. Was that really skewed to the back end of the quarter as we kind of think through what fourth quarter and the holiday selling season could look like?

And as far as the kind of gross add traffic and porting, as you mentioned you turned net positive in the quarter. Was that really skewed to the back end of the quarter as we kind of think through what fourth quarter and the holiday selling season could look like?

Well, obviously it was stronger at the last bit, but we actually were in a positive porting position for the entire quarter. It actually turned at the end of the second quarter, even though at the second quarter we overall had a net port-out, we actually saw the turn at the end of the second quarter and then continue through the third.

And then the other dynamic in the wireless world is Sprint has obviously become more relevant. You talk about how that really has resonated with customers driving traffic. It seems to have driven a response by Verizon. What have you noticed in your marketplaces as far as the competitive dynamics of the different players out there?

Verizon has always been a strong competitor. But as we talked about before, we have more distribution points than any other carrier. And so although it does have an impact, we didn't see a tremendous change in the dynamics.

And then my final question is on the EIP. You've had it now for a little while. 39% I think is what you said through your channels for taking it. We've seen U.S. Cellular put up some numbers today that they saw kind of a similar thing or maybe about a third, 35% were taking it. Does this feel kind of like where the customer decision point comes from if you don't steer it one way or the other?

And then my final question is on the EIP. You've had it now for a little while. 39% I think is what you said through your channels for taking it. We've seen U.S. Cellular put up some numbers today that they saw kind of a similar thing or maybe about a third, 35% were taking it. Does this feel kind of like where the customer decision point comes from if you don't steer it one way or the other?

I think the answer is yes. It probably actually comes a little higher. When the customer is walking in, I think they're probably somewhat predisposed because they've heard about it. But then when we spend some time on a consultive sale, oftentimes a subsidized phone plan works out better for them. Although we don't have the details for the non-controlled, anecdotally we actually believe that the percentage of subsidized plans is still very, very strong in the nationals and part of that is the amount of time that it takes to actually process an EIP sale versus a subsidized phone sale. And so we can understand that in a big box store, it may actually -- the sales person may be steering them more to a subsidized plan simply because of the amount of time it takes. But we hope to have more information on that by our next call.

Thank you. (Operator Instructions) And we have a follow-up from the line of Ric Prentiss of Raymond James. Your line is now open.

Two other quick ones. Earle, you mentioned that the 2015 budget is not set yet. I think it might be similar to the original 2014, even in deploying Spark -- begin to playing Spark mid-year. Talk to us a little bit about what's going on with the Spark project in your markets. Sprint seems to have been, with the new CEO, maybe pulling back a little bit as far as how many markets or certainly how fast they'll approach those markets. What are you thinking about the timeline of deploying it and how much money it might involve and how many sites?

Two other quick ones. Earle, you mentioned that the 2015 budget is not set yet. I think it might be similar to the original 2014, even in deploying Spark -- begin to playing Spark mid-year. Talk to us a little bit about what's going on with the Spark project in your markets. Sprint seems to have been, with the new CEO, maybe pulling back a little bit as far as how many markets or certainly how fast they'll approach those markets. What are you thinking about the timeline of deploying it and how much money it might involve and how many sites?

Well we have -- we've been doing the work this year, kind of the groundwork this year. We have identified about 125 or so sites where we believe that there is going to be the additional data demand that would justify the Spark investment and that's primarily in our 'metro areas', Harrisburg, Pennsylvania; Winchester, Virginia; Hagerstown, Maryland. In some of those markets we have very high penetration. And as you can see, we've already launched the third carrier on some of our sites and so obviously those would be the sites that would be the highest priority for Spark. We will have the sites prepared to be able to launch Spark on over 100 sites by the end of this year, early next year. Our plan is actually to launch 50 sites to 75 sites in 2015. That may change based on how the reality lays out. But our estimated cost is in the $150,000 to $175,000 per site kind of all in including equipment and the installation. So the amount is certainly a lot less than it would be to sell split to get that additional capacity. And so we will be building clusters of Spark kind of in our metro area. We don't see there's a lot of practical applications for it in our more rural areas. Exceptions for that could be a truck stop on an interstate or on the Pennsylvania Turnpike where there is a tremendous amount of usage there, especially overnight we would drop a Spark site in there. But generally, it's going to be only in our metro areas.

And when you say you've done some of the groundwork prepping it, is any of the $150,000 to $175,000 per site been spent already or is that what would be spent once you actually do start dropping the equipment physically in?

What we have been really doing is if we had to modify any leases on towers to get additional access, we're able to use a combination antenna at 800 and 1,900, but we will have to put 2.5 antennas on the tower. So the primary work that we are working on at this point in time is to make sure that we have, if we needed to modify any of the tower leases to get additional space, that we get that done. So the amount we spend is very, very nominal. We've not put any purchase orders in yet.

So it's been more of the legwork to get ready to run and then the run will happen and the spend of $150,000 to $175,000 will happen as you hit the sites specifically?

Absolutely.

But as far as timing and logistics, you will be ready to run faster than say Sprint's vision project went and maybe even faster than your vision project went when you actually [multiple speakers].

Yes. I think we've learned a tremendous amount in our network vision, even though it was successful, we learned an awful lot and I think we are prepared to hit the ground running. And we will definitely have sites up the second half of next year and potentially even move them up sooner if needed.

Okay. And the new rate plans from Sprint, you mentioned not a lot of the iPhone leasing, iPhone for life type take rates out there. But the new rate plans do bring pricing down as well as give more data. What are your feelings as far as what the trends and ARPU are looking like as far as how the ARPU is making over to you?

Well, on the iPhone leasing, that really is probably not a good view, because we only had it for a couple of weeks. So I think that that will probably be a higher percentage going forward. As far as what the overall impact is, you can see that it had some impact in the third quarter. We were down $0.84. I know that there have been some percentages thrown out when I look at other carriers who have been more aggressive in lowering their prices sooner. For us, we are expecting less, kind of in the 5% range, I guess, is how this will probably impact our ARPU. I think the fourth quarter will certainly give us a much better view of exactly what the impact is going to be.

And them the hope obviously being that you are seeing the complexity gone, traction in the store that adds could come in nicer now that there's a relevant kind of not complex rate plan out there in the [multiple speakers].

I think we really do expect that there will be higher volumes of traffic. And the fourth quarter is always a very busy quarter, so I think the real test will be the first quarter if we see that momentum continues through the fourth into the first quarter.

Thank you. And I am showing no further questions at this time. I would like to turn the call back over to Ms. Skolits for any closing remarks.

Thank you for participating. Please let me know if there are any additional details you would like to see in the future. My contact information was provided on the press release. This concludes our call.