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Item 9A. Controls and Procedures

2022-02-28 compared with 2021-02-25 · 282 added, 349 removed, 746 unchanged (46% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer, Chief Financial Officer, and Chief 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)) as of December 31, 2020.

Our certifying officers concluded that, as a result of the material weaknesses in internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of December 31, 2020.

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)) as of December 31, 2021.

Our certifying officers concluded that, as a result of the material weaknesses in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of December 31, 2021.

Per Rules 13a-15(e) and 15d-15(e), the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C.

78a et seq.) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

78a et seq.) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the issuer’s management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In light of the material weaknesses described below, management performed additional analysis and other procedures to ensure that our consolidated financial statements were prepared in accordance with U.S.

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Changes in Internal Control over Financial Reporting

As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, the Company is pursuing a phased approach to remediate its material weaknesses, and management believes that a remediation effort of this magnitude will most likely extend over multiple years.

We implemented the following changes and improvements during 2020, including in the fourth quarter, under this phased approach:

• We added resources with skills and expertise in technical accounting and internal control over financial reporting to establish a resource complement that is commensurate with our baseline accounting, reporting, and information technology maintenance requirements.

• We successfully executed our remediation strategy on the treasury process, which includes cash, debt, interest expense, derivatives, and benefit obligations.

• We made significant progress towards remediation of the property, plant, and equipment and depreciation expense process, including:

• Completion of risk assessment procedures and initiation of control design activities over property, plant, and equipment and depreciation expense.

• Implementation of a redesigned process and various software tools to account for projects under construction.

We have designed and are implementing internal controls over this new process.

When the sale of our Wireless segment became probable late in the third quarter of 2020, we began to revise our risk assessment process and recalibrate ongoing control activities in relation to our smaller continuing operations.

The significant and incremental effort required by this recalibration, potential strategic transactions, and a volume of ongoing software development projects have led us to conclude that it is no longer feasible to complete our remediation plan by the end of 2021, as we had previously targeted.

Further, we need to complete scheduled updates to our enterprise resourcing planning (ERP) system over the next two years, which also places significant demands on our available resources.

While we have established a resource complement that is commensurate with our baseline accounting, reporting, and information technology maintenance requirements, such resource complement is not adequate to absorb the significant and incremental effort associated with these efforts while simultaneously continuing our phased remediation approach.

Accordingly, we will prioritize the recalibration of controls over our continuing operations and our ERP upgrade as we continue our phased remediation approach.

As a result of the changes described above, management identified various immaterial errors, some of which were corrected during 2020.

Other than the changes and improvements that occurred in the fourth quarter, which are included among the items discussed above, there have been no other changes in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, the Company is pursuing a multi-year, phased approach to remediate its material weaknesses.

There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

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In order to evaluate the effectiveness of internal control over financial reporting, under the direction of our certifying officers, we conducted an assessment using the criteria established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, our certifying officers concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2020 due to a material weakness in our control environment whereby the Company did not have a sufficient number of trained resources with expertise in technical accounting, internal control over financial reporting, and the design and implementation of information technology solutions to complete its remediation efforts.

As a result, we were unable to maintain effective information and communication processes, and did not have effective process-level control activities over the following areas:

• Property, plant, and equipment and depreciation expense

• Purchasing (current liabilities and operating expenses)

The control deficiencies described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis and therefore we concluded that the deficiencies represent material weaknesses in the Company’s internal control over financial reporting and our internal control over financial reporting was not effective as of December 31, 2020.

Based on this assessment, our certifying officers concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2021 due to a material weakness in our control environment.

Unusually high employee turnover and multiple priorities, including the need to recalibrate control activities for our smaller continuing operations, upgrade our lease accounting and enterprise resource planning (ERP) systems, and continue our remediation efforts placed strain on our resources.

As a result, the Company did not have effective information and communication processes and did not have effective control activities related to i) the design and operation of process-level controls over the accounting for purchases (current liabilities and operating expenses), property, plant, and equipment and related depreciation expense, and leases, and ii) reaching and documenting appropriate historical accounting conclusions related to capitalization of fulfillment costs, fees associated with leases, and cable replacement.

As a result of the deficiencies described above, there were immaterial misstatements, some of which were corrected during 2021, and an immaterial error restatement of the 2020 and 2019 consolidated financial statements.

The deficiencies described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis and therefore we concluded that the deficiencies represent material weaknesses in the Company’s internal control over financial reporting and our internal control over financial reporting was not effective as of December 31, 2021.

Our independent registered public accounting firm, KPMG LLP, who audited the consolidated financial statements included in this Annual Report on Form 10-K, issued an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

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Management’s Remediation Plan

The Company is committed to making further progress in its remediation efforts during 2021.

The following steps will continue to be executed until remediation of the material weaknesses is achieved:

• Retain and train individuals with the appropriate skills and experience related to technical accounting, internal control over financial reporting, and the design and implementation of information technology solutions.

Monitor and adjust resourcing as further assessments are completed.

• Enhance information and communication processes through information technology solutions to ensure that information needed for financial reporting is accurate, complete, relevant and reliable, and communicated in a timely manner.

• Strengthen project management over the design and implementation of information technology solutions to improve throughput.

• Extend the successful implementation of our phased approach to remediation of control activities over property, plant, and equipment and depreciation expense and purchasing.

• Report regularly to the audit committee on the progress and results of the remediation plan, including the identification, status, and resolution of internal control deficiencies.

The Company is committed to completing its remediation efforts during 2022.

Our 2021 accomplishments and 2022 plans are summarized below.

• We designed and began to configure new ERP and lease accounting systems that are scheduled to be implemented during 2022 along with newly designed controls and processes over purchasing (current liabilities and operating expenses), property, plant, and equipment and related depreciation expense, and leases.

• We will continue to re-evaluate previously adopted accounting policies to ensure they remain appropriate in light of our smaller continuing operations, and

• We will hire, retain and train individuals with the appropriate skills and experience related to technical accounting, internal control over financial reporting, and the design and implementation of information technology solutions to ensure we meet our remediation goals.

We will report regularly to the Audit Committee on the progress and results of the remediation plan, including the identification, status, and resolution of internal control deficiencies

OTHER INFORMATION

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Information required by Item 12 is incorporated herein by reference to the 2022 proxy statement appearing under the caption “Security Ownership.”

The Company awards stock options to its employees meeting certain eligibility requirements under two shareholder-approved Company Stock Incentive Plans, referred to as the 2005 Stock Incentive Plan and 2014 Equity Incentive Plan.

The 2014 Equity Incentive Plan authorizes grants of up to an addition 3.0 million shares over a ten-year period beginning in 2014.

As a result of the adoption of the 2014 Equity Incentive Plan, additional grants will not be made under the 2005 Stock Incentive Plan, but outstanding awards will continue to vest and options may continue to be exercised.

Outstanding options and the number of shares available for future issuance as of December 31, 2020 were as follows:

Number of securities to be issued upon exercise of outstanding options Weighted average exercise price of outstanding options Number of securities remaining available for future issuance

2005 Stock Incentive Plan 14,874 $ 6.64 —

The Company awards stock options to its employees meeting certain eligibility requirements under its shareholder-approved Company Stock Incentive Plan, referred to as the 2014 Equity Incentive Plan.

The 2014 Equity Incentive Plan authorizes grants of up to an additional 3.0 million shares over a ten-year period beginning in 2014.

Outstanding awards and the number of shares available for future issuance as of December 31, 2021 were as follows:

Number of securities to be issued upon exercise of outstanding options and RSUs Weighted average exercise price of outstanding options Number of securities remaining available for future issuance

2014 Equity Incentive Plan 482,673 $ — 1,599,094

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2022 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

Changes in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842), and all related amendments.

Basis for Opinion

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(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relate s .

Determination of costs capitalized into property, plant, and equipment

As discussed in Notes 2, 3, and 6 to the consolidated financial statements, the property, plant, and equipment, net balance (including property, plant, and equipment held for sale) as of December 31, 2020 was $740.1 million.

As discussed in Notes 2 and 6 to the consolidated financial statements, the property, plant, and equipment, net balance as of December 31, 2021 was $554.2 million.

The determination to capitalize, rather than expense, costs increases operating income and net income.

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The following material weaknesses have been identified and included in management’s assessment:

The Company’s control environment was not effective, because the Company did not have a sufficient number of trained resources with expertise in technical accounting, internal control over financial reporting, and the design and implementation of information technology solutions to complete its remediation efforts.

As a result, the Company was unable to maintain an effective information and communication process, and did not have effective process-level control activities over the following areas:

• Property, plant, and equipment and depreciation expense

• Purchasing (current liabilities and operating expenses)

The Company did not have an effective control environment due to insufficient resources.

As a result, the Company was unable to maintain effective information and communication processes and did not have effective control activities related to:

i) the design and operation of process-level controls over the accounting for purchases (current liabilities and operating expenses), property, plant, and equipment and related depreciation expense, and leases, and ii) reaching and documenting appropriate historical accounting conclusions related to the capitalization of contract fulfillment costs, upfront fees associated with lease arrangements, and cable repairs and maintenance.

The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2021 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

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Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Deferred charges and other assets 10,298 6,448

Non-current assets held for sale — 1,141,498

Total assets 890,733 2,024,396

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Total current liabilities 67,290 1,208,061

Long-term debt, less current maturities, net of unamortized loan fees — 688,464

Other long-term liabilities:

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Other liabilities 25,631 24,905

Non-current liabilities held for sale — 368,423

Total other long-term liabilities 181,168 239,284

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Retained earnings 592,924 534,440

Accumulated other comprehensive (loss) income, net of taxes ( 4,706 ) 308

Accumulated other comprehensive loss, net of taxes — ( 4,706 )

Total shareholders’ equity 642,275 577,051

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Selling, general and administrative 82,451 85,016 77,846

Restructuring expense 1,727 — —

Impairment expense 5,986 — —

Depreciation and amortization 55,206 48,703 46,786

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Operating loss ( 2,430 ) ( 2,601 ) ( 1,342 )

Other income:

Other income, net 8,665 3,187 3,280

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Income from continuing operations 7,929 1,576 1,932

Discontinued operations:

Income from discontinued operations, net of tax 94,667 124,097 53,568

Gain on the sale of discontinued operations, net of tax 896,235 — —

Total income from discontinued operations, net of tax 990,902 124,097 53,568

Net income 998,831 125,673 55,500

Other comprehensive income:

Unrealized (loss) income on interest rate hedge, net of tax ( 5,014 ) ( 7,972 ) 50

Net gains (losses) on interest rate swaps, net of tax 4,706 ( 5,014 ) ( 7,972 )

Comprehensive income $ 1,003,537 $ 120,659 $ 47,528

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Weighted average shares outstanding, diluted 50,149 50,024 50,101

Cash dividend declared per share $ 0.34 $ 0.29 $ 0.27

Cash dividends declared per share $ 18.82 $ 0.34 $ 0.29

See accompanying notes to consolidated financial statements.

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Balance, December 31, 2018 49,630 47,456 388,496 8,280 444,232

Immaterial correction of accumulated error (Note 1) ( 3,838 ) ( 3,838 )

Balance, December 31, 2018 (adjusted) 49,630 47,456 384,658 8,280 440,394

Net income — — 55,500 — 55,500

Change in accounting principle - adoption of accounting standard — — 56,097 — 56,097

Other comprehensive gain, net of tax — — — 50 50

Dividends declared ($ 0.27 per share)

— — ( 13,386 ) — ( 13,386 )

Net loss on interest rate swaps, net of tax — — — ( 7,972 ) ( 7,972 )

Dividends declared — — ( 14,442 ) — ( 14,442 )

Dividends reinvested in common stock 14 499 — — 499

Share repurchases ( 200 ) ( 7,231 ) — — ( 7,231 )

Stock based compensation 184 4,182 — — 4,182

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Net income — — 125,673 — 125,673

Other comprehensive loss, net of tax — — — ( 7,972 ) ( 7,972 )

Dividends declared ($ 0.29 per share)

— — ( 14,442 ) — ( 14,442 )

Net loss on interest rate swaps, net of tax — — — ( 5,014 ) ( 5,014 )

Dividends declared — — ( 16,950 ) — ( 16,950 )

Dividends reinvested in common stock — ( 2 ) — — ( 2 )

Share repurchases ( 200 ) ( 7,231 ) — — ( 7,231 )

Stock based compensation 156 6,833 — — 6,833

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Common stock issued 1 31 — — 31

Annual dividend reinvestment 12 526 — — 526

Shares retired for settlement of employee taxes upon issuance of vested equity awards ( 48 ) ( 2,217 ) — — ( 2,217 )

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Net income — — 998,831 — 998,831

Other comprehensive gain (loss), net of tax — — — ( 5,014 ) ( 5,014 )

Dividends declared ($ 0.34 per share)

— — ( 16,950 ) — ( 16,950 )

Dividends reinvested in common stock — ( 2 ) — — ( 2 )

Net gain on interest rate swaps, net of tax — — — 4,706 4,706

Dividends declared — — ( 940,347 ) — ( 940,347 )

Stock based compensation 133 3,661 — — 3,661

Stock options exercised — 36 — — 36

Common stock issued 1 31 — — 31

Annual dividend reinvestment 12 526 — 526

Shares retired for settlement of employee taxes upon issuance of vested equity awards ( 36 ) ( 1,627 ) — — ( 1,627 )

Common stock issued to acquire non-controlling interest in nTelos 76 — — — —

Balance, December 31, 2021 49,965 $ 49,351 $ 592,924 $ — $ 642,275

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Deferred income taxes 22,263 14,906 16,681

Gain from patronage and investments ( 1,311 ) ( 4,769 ) ( 3,112 )

Restructuring expense 1,727 — —

Impairment expense 5,986 — —

Gain from patronage and investments and other 481 ( 1,311 ) ( 4,769 )

Changes in assets and liabilities:

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Net cash provided by operating activities - continuing operations 63,453 53,359 42,329

Net cash provided by operating activities - discontinued operations 249,508 216,816 211,448

Net cash provided by operating activities 302,867 259,145 265,647

Net cash (used) provided by operating activities - discontinued operations ( 314,387 ) 249,508 216,816

Net cash (used) provided by operating activities ( 250,934 ) 302,867 259,145

Cash flows from investing activities:

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Net cash used in investing activities - continuing operations ( 159,735 ) ( 138,088 ) ( 93,678 )

Net cash used in investing activities - discontinued operations ( 17,500 ) ( 71,656 ) ( 131,710 )

Net cash used in investing activities ( 155,588 ) ( 165,334 ) ( 187,800 )

Net cash provided (used) in investing activities - discontinued operations 1,944,089 ( 17,500 ) ( 71,656 )

Net cash provided (used) in investing activities 1,784,354 ( 155,588 ) ( 165,334 )

Cash flows from financing activities:

Payments for debt issuance costs ( 841 ) — —

Dividends paid, net of dividends reinvested ( 940,256 ) ( 16,424 ) ( 13,943 )

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Net cash used in financing activities ( 1,644,473 ) ( 53,533 ) ( 77,246 )

Net increase in cash and cash equivalents 93,746 16,565 6,501

Net (decrease) increase in cash and cash equivalents ( 111,053 ) 93,746 16,565

Cash and cash equivalents, beginning of period 195,397 101,651 85,086

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All of these operations are contained within our Broadband reporting segment.

Our Tower segment owns 223 cell towers and leases colocation space on those towers to wireless communications providers, including our discontinued wireless operation, refer to Note 3, Discontinued Operations , and Note 15, Segment Reporting , for additional information.

Our Tower segment owns 223 cell towers and leases colocation space on those towers to wireless communications providers, refer to Note 15, Segment Reporting , for additional information.

Revision of Prior Period Financial Statements

In connection with the preparation of our unaudited condensed consolidated financial statements for the three months ended March 31, 2020, we determined that certain errors existed in our previously issued financial statements.

Specifically:

• Prepaid and other assets, a component of current assets held for sale, as of December 31, 2019, were understated by $ 2.7 million, deferred tax liabilities were understated by $ 0.7 million, and retained earnings were understated by $ 2.0 million as the result of a failure to properly account for handsets that were utilized as demo phones in certain wireless retail stores within our area of operation.

All of the impact to retained earnings is attributable to 2017 and prior years.

• Property, plant and equipment, net, classified as held for sale, and deferred income tax liabilities, as of December 31, 2019 were understated by $ 1.4 million and $ 0.4 million, respectively.

Depreciation, contained within discontinued operations, was overstated by $ 1.4 million for the year and quarter ended December 31, 2019.

Income tax expense and net income were understated by $ 0.4 million and $ 1.0 million, respectively, for the year and quarter ended December 31, 2019.

We evaluated these errors under the U.S.

Securities and Exchange Commission's ("SEC's") authoritative guidance on materiality and the quantification of the effect of prior period misstatements on financial statements, and we have determined that the impact of these errors on our prior period consolidated financial statements is immaterial.

However, since the correction of these errors in the first quarter of 2020 could have become material to our results of operations for the year ending December 31, 2020, we revised our prior period financial statements to correct these errors herein.

For the year and quarter ended December 31, 2019, the correction of these errors resulted in a $ 0.02 increase in both basic and diluted earnings per share from discontinued operations.

Immaterial correction of accumulated error

During 2021, the Company determined that an error existed in our previously issued financial statements related to the capitalization of labor costs associated with customer installation activities at existing service locations for the Broadband segment.

These activities were incorrectly recognized as capitalized contract fulfillment costs since the adoption of Accounting Standards Codification 606, Revenue from contracts with customers, (“ASC 606”) on January 1, 2018.

The costs should have been expensed according to application of historical accounting policy in place prior to the adoption of ASC 606, and pursuant to industry specific guidance ASC 922 Entertainment – Cable Television.

The error was evaluated under the U.S.

Securities and Exchange Commission's ("SEC's") authoritative guidance on materiality and the quantification of the effect of prior period misstatements on the Company’s financial statements.

Although the Company has determined such error to be immaterial to its prior annual and interim financial statements, the cumulative effect of the error would be material if corrected in the current year.

Therefore, the Company revised its historical financial statements to properly reflect the historical accounting policy elected pursuant to ASC 922.

The cumulative impact of such error, relative to earnings, for the period prior to 2019 was insignificant.

As of and for the Year Ended

December 31, 2020

($ in thousands) Pre-Adjustment Error Correction Post-Adjustment

Consolidated Balance Sheet:

Prepaid expenses and other $ 9,631 $ ( 2,109 ) $ 7,522

Deferred charges and other assets 11,650 ( 5,202 ) 6,448

Deferred income taxes 150,652 ( 1,968 ) 148,684

Retained earnings 539,783 ( 5,343 ) 534,440

Consolidated Statement of Comprehensive Income:

Cost of services 88,203 1,454 89,657

Income before income taxes 2,040 ( 1,454 ) 586

Income tax (benefit) expense ( 586 ) ( 404 ) ( 990 )

Income from continuing operations 2,626 ( 1,050 ) 1,576

Net income 126,723 ( 1,050 ) 125,673

Comprehensive income 121,709 ( 1,050 ) 120,659

Net income per share, basic and diluted:

Basic - Income from continuing operations $ 0.05 $ ( 0.02 ) $ 0.03

Basic - Net income per share $ 2.54 $ ( 0.02 ) $ 2.52

Diluted - Income from continuing operations $ 0.05 $ ( 0.02 ) $ 0.03

Diluted - Net income per share $ 2.53 $ ( 0.02 ) $ 2.51

As of and for the Year Ended

December 31, 2019

($ in thousands) Pre-Adjustment Error Correction Post-Adjustment

Consolidated Balance Sheet:

Prepaid expenses and other $ 11,178 $ ( 2,510 ) $ 8,668

Deferred charges and other assets 9,267 ( 3,349 ) 5,918

Deferred income taxes 137,567 ( 1,565 ) 136,002

Retained earnings, beginning of year 388,496 ( 3,838 ) 384,658

Retained earnings, end of year 430,010 ( 4,294 ) 425,716

Consolidated Statement of Comprehensive Income:

Cost of services 82,949 623 83,572

Income before income taxes 2,561 ( 623 ) 1,938

Income tax (benefit) expense 173 ( 167 ) 6

Income from continuing operations 2,388 ( 456 ) 1,932

Net income 55,956 ( 456 ) 55,500

Comprehensive income 47,984 ( 456 ) 47,528

Net income per share, basic and diluted:

Basic - Income from continuing operations $ 0.05 $ ( 0.01 ) $ 0.04

Basic - Net income per share $ 1.12 $ ( 0.01 ) $ 1.11

Diluted - Income from continuing operations $ 0.05 $ ( 0.01 ) $ 0.04

Diluted - Net income per share $ 1.12 $ ( 0.01 ) $ 1.11

Summary of Significant Accounting Policies

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Property, plant and equipment is stated at cost less accumulated depreciation.

The Company capitalizes all costs associated with the purchase, deployment and installation of property, plant and equipment, including

interest costs and internal labor costs on major capital projects during the period of their construction.

The Company capitalizes all costs associated with the purchase, deployment and installation of property, plant and equipment, including interest costs and internal labor costs on major capital projects during the period of their construction.

Maintenance expense is recognized as incurred when repairs are performed that do not extend the life of property, plant and equipment.

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Depreciation is calculated on the straight-line method over the estimated useful lives of the assets.

Labor costs associated with customer installation activities at existing service locations are expensed as incurred under industry specific guidance.

Leasehold improvements are depreciated over the lesser of their useful lives or respective lease terms.

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While some cable franchises and spectrum licenses are issued for a fixed time (generally ten years and up to fifteen years, respectively), renewals have been granted routinely and at nominal costs.

The Company believes it will be able to meet all requirements necessary to secure renewal of its cable franchise rights and spectrum licenses.

The Company believes it will be able to meet all requirements necessary to secure renewal of its cable franchise

rights and spectrum licenses.

Moreover, the Company has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of our cable franchises or spectrum licenses and as a result, we account for cable franchise rights and spectrum licenses as indefinite-lived intangible assets.

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Long-lived Assets:

Finite-lived intangible assets, property, plant, and equipment, and other long-lived assets are amortized or depreciated over their estimated useful lives, as summarized in the respective footnotes below.

These assets are evaluated for impairment based on the identification of asset groups.

Our asset groups align with our reporting segments.

Our asset groups align with our reportable segments.

We evaluated our asset groups for impairment during the fourth quarter of 2021.

We concluded that there were no indicators that an asset group impairment had been triggered during the years ended December 31, 2020, 2019, or 2018.

We concluded that there were no indicators that an asset group impairment was more likely than not during the years ended December 31, 2021, 2020, or 2019.

Advertising Costs:

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Advertising expense for the years ended December 31, 2021, 2020 and 2019 was $ 4.4 million, $ 2.7 million and $ 3.5 million, respectively.

Benefit Obligations:

The Benefit obligations caption includes the following plans:

Benefit Plan Obligations:

The Benefit Plan Obligations caption includes the following:

($ in thousands) December 31, 2021 December 31, 2020

Pension Plan $ 2,393 $ 7,961

Postretirement Plan 3,997 3,573

SERP Plan 2,687 2,278

Postretirement Medical Benefits Plan 3,506 3,997

Supplemental executive retirement plan ("SERP") 2,317 2,687

Total $ 8,216 $ 14,645

The pension plan is frozen and covers certain employees who were employed by nTelos prior to October 1, 2003.

The pension plan is a frozen defined benefit plan.

Benefits under the plan vested after five years of plan service and were based on years of service and an average of the five highest consecutive years of compensation subject to certain reductions if the employee elects to receive the benefit prior to age 65 .

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As of December 31, 2021 and 2020, the fair value of our Pension Plan assets were $ 31.1 million and $ 27.0 million, respectively.

These investments are held in index funds, and are valued based on the net asset value per share.

These investments are held in mutual funds, and are valued based on the net asset value per share.

Our Pension Plan's projected benefit obligation was $ 33.5 million and $ 34.9 million, at December 31, 2021 and 2020, respectively.

The Pension Plan liability was discounted at 2.74 % and 2.41 % at December 31, 2021 and 2020, respectively.

The postretirement benefit plan is a frozen, unfunded, defined benefit plan.

It covers certain health care benefits for certain retirees who were employed by an acquiree and meet eligibility requirements.

On October 13, 2021, the Company adopted a resolution to terminate its pension plan effective December 31, 2021.

Following adoption of the resolution, on October 28, 2021, the Company provided notice of intent to terminate the pension plan to participants.

The Company expects to complete the termination of the plan, and settle all obligations thereunder, in 2022.

The postretirement medical benefits plan is a frozen, unfunded, defined benefit plan.

The postretirement plan liability was discounted at 2.70 % and 2.32 % at December 31, 2021 and 2020, respectively.

The service component of defined benefit plan expense is immaterial and is included in selling, general, and administrative expense.

Following our adoption of ASU 2017-17, Compensation—Retirement Benefits (Topic 715):

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, on January 1, 2018, all other components of benefit plan expense are presented in Other income (expense) and our policy is to immediately recognize actuarial gains and losses into earnings.

The Supplemental Executive Retirement Plan ("SERP") is a benefit plan that provides deferred compensation to certain employees.

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, on January 1, 2018, all components of benefit plan expense are presented in Other income, net and our policy is to immediately recognize actuarial gains and losses into earnings.

The SERP is a benefit plan that provides deferred compensation to certain employees.

The Company holds investments in a rabbi trust as a source of funding for future payments under the plan.

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The benefit obligation to participants is always equal to the value of the SERP assets under ASC 710 Compensation.

Changes to the investments’ fair value are presented in Other income (expense), while the reciprocal changes in the liability are presented in selling, general and administrative expense.

Share Repurchase Program :

On November 4, 2019, our program to repurchase up to $ 80 million of common stock became effective and expired on the 2020 anniversary.

During the fourth quarter of 2019, we repurchased 200,410 shares under the program at an average price of $ 36.08 ;

there were no repurchases made during the year ended December 31, 2020.

Our common shares have zero par value and our policy is to record the entire repurchase as a reduction of additional paid-in capital.

Repurchased shares are canceled and revert to a status of “authorized and unissued” under Virginia law.

Changes to the investments’ fair value are presented in Other income, net, while the reciprocal changes in the liability representative of compensatory expense, are presented in selling, general and administrative expense.

New Accounting Standards

The Company adopted ASU No.

2016-13, Financial Instruments - Credit Losses ("ASC 326"):

Measurement of Credit Losses on Financial Instruments , as of January 1, 2020 using the modified retrospective transition method.

ASC 326 requires the application of a current expected credit loss (“CECL”) impairment model to financial assets measured at amortized cost including trade accounts receivable, net investments in leases, and certain off-balance-sheet credit exposures.

Under the CECL model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information.

Furthermore, the CECL model requires financial assets with similar risk characteristics to be analyzed on a collective basis.

There was no significant impact to consolidated financial statements upon adoption.

The Company adopted ASU No.

2018-15, Intangibles - Goodwill and Other - Internal-Use Software ("ASC 350"):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, as of January 1, 2020.

This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

Upon adoption of the standard, implementation costs were capitalized in the period incurred and will be amortized over the term of the hosting arrangement.

There was no significant impact to consolidated financial statements upon adoption.

In March 2020, the FASB issued ASU 2020-04 “ Reference Rate Reform (Topic 848):

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This optional relief generally allows for contract modifications solely related to the replacement of the reference rate to be accounted for as a continuation of the existing contract instead of as an extinguishment of the contract, and therefore would not require reassessment of a previous accounting determination.

The Company's Credit Agreement and interest rate swaps have LIBOR as a reference rate.

We plan to apply the accounting relief as relevant contract modifications are made to our Credit Agreement and interest rate swap contracts during the course of the reference rate reform transition period.

The Company's Credit Agreement has LIBOR as a reference rate.

We plan to apply the accounting relief as any relevant contract modifications are made to our Credit Agreement during the course of the reference rate reform transition period.

The optional relief can be applied beginning January 1, 2020, and ending December 31, 2022.

We implemented Accounting Standards Codification ("ASC") 842- Leases, ("ASC 842"), on January 1, 2019 using the modified retrospective method and thus did not retroactively adjust prior periods.

ASC 842 replaced previous leasing guidance with a comprehensive lease measurement and recognition standard and expanded disclosure requirements.

The new standard required lessees to recognize most leases on their balance sheet as liabilities, along with the corresponding right-of-use, or ROU, assets.

See Note 9, Leases for more information.

We adopted ASU No.

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We utilize the portfolio approach as our policy to release the income tax effects from accumulated OCI as the entire portfolio is liquidated, sold, or extinguished.

In November 2021, the FASB issued ASU 2021-10, “ Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, ” which requires entities to provide disclosures on material government assistance transactions for annual reporting periods.

The disclosures include information about the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements and any significant terms and conditions of the agreements, including commitments and contingencies.

The new standard is effective for the Corporation on January 1, 2022 and only impacts annual financial statement disclosures.

The adoption is not expected to have a material effect on our consolidated financial statements.

Discontinued Operations

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Shortly thereafter, the Company committed to a plan to sell the discontinued Wireless operations.

The final and binding appraisal process was completed on February 1, 2021.

Expected sale proceeds are $ 1.95 billion based upon the appraisal process and other agreements between the parties.

We expect to enter into a definitive asset purchase agreement with T-Mobile during the first quarter 2021 and expect that the transaction will close during the second quarter 2021, subject to customary closing conditions and required regulatory approvals.

The assets and liabilities that are expected to transfer in the sale are presented as held for sale within our Consolidated Balance Sheets.

This disposal group excludes the accounts receivable and certain current liabilities generated by our Wireless operations because they are expected to be settled separately from the sale.

Such accounts receivable totaled $ 51.7 million and $ 51.0 million at December 31, 2020 and December 31, 2019, respectively, and such current liabilities totaled $ 6.1 million and $ 27.7 million at December 31, 2020 and December 31, 2019, respectively.

During the fourth quarter of 2020 and subsequent thereto, the parties agreed that our pension and postretirement plan liabilities due to certain current and former Wireless employees would not transfer in the sale.

Our identification of assets and liabilities held for sale as of December 31, 2020 and 2019 has been updated accordingly, and could change again based on the terms of the final asset purchase agreement.

The transaction is structured as an asset sale for income tax purposes.

As a result, no current or deferred tax assets or liabilities are included within the disposal group.

While our long-term debt does not transfer in the sale, its provisions require us to repay all of the debt upon consummation of the sale.

Our debt is therefore presented outside of the disposal group as a current liability at December 31, 2020.

Our related interest rate swap liabilities are also presented outside of the disposal group as a current liability at December 31, 2020 because management intends to settle it at consummation.

The expected divestiture of our Wireless operations represents a strategic shift in the Company’s business and qualifies as a discontinued operation.

Accordingly, the operating results and cash flows from our Wireless operations have been reflected as discontinued operations in our Consolidated Statements of Comprehensive Income and the Consolidated Statements of Cash Flows.

Similarly, the results of our Wireless operations are no longer presented as a reporting segment.

Because repayment of the debt is contractually triggered by the sale, the related interest expense is presented within discontinued operations under the relevant authoritative guidance.

Consistent with the internal reporting provided to our chief operating decision maker, we previously allocated certain corporate management overhead costs to the former Wireless segment which may no longer be allocated to discontinued operations under the relevant authoritative guidance.

Accordingly, we elected to recast our segment reporting note, to reflect the reattribution of these expenses in all presented periods in a manner that is also consistent with our updated internal reporting.

The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the consolidated balance sheets, are as follows:

On July 1, 2021, pursuant to the previously announced Asset Purchase Agreement (the “Purchase Agreement”), dated May 28, 2021, between Shentel and T-Mobile, Shentel completed the sale to T-Mobile of its Wireless assets and operations for cash consideration of approximately $ 1.94 billion, inclusive of the approximately $ 60 million settlement of the waived management fees by Sprint, and net of certain transaction expenses (the “Transaction”).

The assets and liabilities that transferred in the sale (the "disposal group") were presented as held for sale within our historical consolidated balance sheets, and discontinued operations within our historical consolidated statements of comprehensive income.

The transaction was structured as an asset sale for income tax purposes.

As a result, no current or deferred tax assets or liabilities were included within the disposal group.

While the Company’s long-term debt did not transfer in the sale, its provisions required full repayment of all outstanding amounts, concurrent with the consummation of the sale.

Accordingly, all debt balances and related interest rate swap liabilities were therefore presented outside of the disposal group as a current liability as of December 31, 2020, and.

the related interest expense and debt extinguishment costs were presented within discontinued operations under the relevant authoritative guidance.

The carrying amounts of the major classes of assets and liabilities, classified as held for sale in the consolidated balance sheets, were as follows:

(in thousands) December 31,

2020 December 31,

Inventory $ 5,746

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Current assets held for sale $ 1,133,294

Property, plant and equipment, net $ — $ 338,427

Intangible assets, net — 228,593

Goodwill — 146,383

Operating lease right-of-use assets — 384,010

Deferred charges and other assets — 44,085

Non-current assets held for sale $ — $ 1,141,498

Total assets held for sale $ 1,133,294 $ 1,196,575

Current operating lease liabilities $ 409,887

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Current liabilities held for sale $ 452,202

Non-current operating lease liabilities $ — $ 337,661

Asset retirement obligations — 30,762

Non-current liabilities held for sale $ — $ 368,423

Total liabilities held for sale $ 452,202 $ 422,335

Income from discontinued operations, net of tax in the consolidated statements of comprehensive income consist of the following for the years ended December 31, 2021, 2020 and 2019:

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Selling, general and administrative 17,514 34,011 39,128

Severance expense 465 — —

Depreciation and amortization — 62,930 111,467

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Other (expense) income:

Interest expense ( 20,455 ) ( 29,286 ) ( 34,838 )

Debt extinguishment ( 11,032 ) — —

Interest expense and other, net ( 9,178 ) ( 20,455 ) ( 29,286 )

Gain on sale of disposition of Wireless assets and operations 1,227,531 — —

Income before income taxes 1,352,563 167,941 69,878

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Income from discontinued operations, net of tax $ 990,902 $ 124,097 $ 53,568

Our Broadband and Tower segments recognize revenue for their respective provision of cell site backhaul service and leased colocation space to the discontinued Wireless operations.

That revenue is earned under contracts executed at our estimate of fair market value, which will transfer upon consummation of the sale.

Accordingly, we expect to have a level of continuing involvement with the discontinued operations via these pre-existing contractual arrangements.

Revenue recognized within continuing operations pursuant to these agreements is disclosed in Note 15, Segment Reporting .

Because the right to use space on our owned cell towers and the related lease liability will be transferred in the sale, they have been included in our disposal group under the relevant authoritative guidance.

These right of use assets and lease liabilities were previously eliminated within our consolidated financial statements.

Total assets and total liabilities as of December 31, 2019 therefore increased by $ 34 million as a result.

Under the relevant authoritative guidance, consummation of the sale will trigger or accelerate the recognition of certain expense related to contingent deal advisory fees, severance costs, recognition of our interest rate swap losses in net income, and loss on debt extinguishment.

Our estimate of the related range of reasonably possible expense extends from $ 0 if the sale is not consummated to $ 35.9 million.

Consummation of the sale triggered the recognition of approximately $ 21.2 million of incremental selling costs during 2021, for contingent deal advisory fees and severance expenses, which are netted against the gain on sale of disposition of Wireless assets and operations.

In addition, also triggered by the disposition event, we recognized an $ 11.0 million loss on debt extinguishment and incurred interest expense of approximately $ 2.6 million on the termination of our interest rate swaps in connection with the Wireless sale.

The Company generated $ 10.2 million in revenue from T-Mobile throughout the remainder of 2021 after the consummation of the sale.

Revenue from Contracts with Customers

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Installation fees charged upfront without transfer of commensurate goods or services to the customer are allocated to services and are recognized ratably over the longer of the contract term or the period in which the unrecognized fee remains material to the contract, which we estimate to be about one year.

Additionally, the Company incurs commission and installation costs related to in-house and third-party vendors which are capitalized and amortized over the expected weighted average customer life which is approximately five years .

Additionally, the Company incurs commission costs related to in-house and third-party vendors which are capitalized and amortized over the expected weighted average customer life which is approximately six years .

Below is a summary of the Broadband segment's capitalized contract acquisition costs:

(in thousands) 2021 2020

Beginning Balance $ 7,358 $ 5,147

Commission payments 3,229 4,399

Contract amortization ( 2,440 ) ( 2,188 )

Ending Balance $ 8,147 $ 7,358

Our Broadband segment also provides Ethernet and Wavelength fiber optic services to commercial fiber customers under capacity agreements, and the related revenue is recognized over time.

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Those amounts are recognized ratably over the longer of the contract term or the period in which the unrecognized fee remains material to the respective contract.

A related contract liability of $ 2.8 million was recognized at December 31, 2020, which we expect to recognize into revenue at the rate of approximately $ 0.8 million per year.

A related contract liability of $ 3.5 million at December 31, 2021, is expected to be recognized into revenue at the rate of approximately $ 0.2 million per year.

The Broadband segment also leases dedicated fiber optic strands to customers as part of “dark fiber” agreements, which are accounted for as leases under ASC 842.

Our Tower segment leases space on owned cell towers to our Wireless and Broadband segments, and to other wireless carriers.

Our Tower segment leases space on owned cell towers to our Broadband segment, and to other wireless carriers.

Revenue from these leases is accounted for under ASC 842.

Refer to Note 15, Segment Reporting , for a summary of these revenue streams.

Below is a summary of the Broadband segment's capitalized contract acquisition and fulfillment costs:

(in thousands) 2020 2019

Beginning Balance $ 11,005 $ 10,091

Contract payments 8,154 6,518

Contract amortization ( 4,490 ) ( 5,604 )

Ending Balance $ 14,669 $ 11,005

No customers accounted for more than 10% of revenue for the years ended December 31, 2021, 2020 and 2019 and no customer made up more than 10% of accounts receivable at December 31, 2021 and December 31, 2020.

Investments consist of the following:

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SERP Investments at fair value:

The Supplemental Executive Retirement Plan (“SERP”) is a benefit plan that provides deferred compensation to certain employees.

The Company holds the related investments in a rabbi trust as a source of funding for future payments under the plan.

The SERP’s investments were designated as trading securities and will be liquidated and paid out to the participants upon retirement.

The Company holds the SERP investments in a rabbi trust as a source of funding for future payments under the plan.

The SERP’s investments were designated as trading securities and will be liquidated and paid out to the participants six months after retirement.

The benefit obligation to participants is always equal to the value of the SERP assets under ASC 710, Compensation .

Changes to the 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 :

Our investment in CoBank’s Class A common stock represented substantially all of our cost method investments with a balance of $ 9.8 million and $ 8.7 million at December 31, 2020 and 2019, respectively.

Our investment in CoBank’s Class A common stock, derived from the CoBank patronage program, represented substantially all of our cost method investments with a balance of $ 10.3 million and $ 9.8 million at December 31, 2021 and 2020, respectively.

We recognized approximately $ 2.0 million, $ 4.2 million and $ 4.2 million of patronage income in Other income (expense) in 2021, 2020 and 2019, respectively.

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Property, plant and equipment, net $ 554,162 $ 440,427

Property, plant and equipment net, increased due primarily to capital expenditures in the Broadband segment driven by our Glo Fiber market expansion.

In Q4 2021, the Company ceased expansion of its Beam network, resulting in abandonment of related property, plant and equipment.

Consequently, the Company recorded $ 6.0 million of impairment charges related to abandonment of Beam property, plant and equipment after estimating the salvage value based on quoted prices for the assets.

Goodwill and Intangible Assets

Other intangible assets consisted of the following:

The Company's intangible assets consisted of the following:

December 31, 2021 December 31, 2020

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Total goodwill and intangible assets $ 117,257 $ ( 27,426 ) $ 89,831 $ 133,376 $ ( 26,617 ) $ 106,759

We acquired Canaan Cable ("Canaan") on December 31, 2020.

The $ 2.1 million acquisition price was allocated as follows:

$ 1.1 million of property, plant and equipment;

$ 0.4 million to subscriber relationships;

and $ 0.6 million of goodwill.

We remitted $ 1.89 million of the acquisition price at closing.

The remaining $ 210 thousand was accrued and represents a non-cash investing and financing activity.

During the third quarter of 2020, the Company completed the purchase of certain indefinite-lived CBRS spectrum licenses for an aggregate cost of $ 16.1 million, within our Broadband segment.

Spectrum licenses in the CBRS band are issued by the Federal Communications Commission (“FCC”) and provide us priority access rights over general access users other than incumbents, in that specific band, in accordance with the FCC’s three-tier CBRS band spectrum sharing framework to utilize designated radio frequency spectrum within specific geographic service areas to provide wireless communication services.

During the third quarter of 2019, the Company purchased certain indefinite-lived spectrum licenses for $ 13.8 million and finite-lived spectrum licenses for $ 4.7 million.

We acquired Big Sandy Broadband, Inc.

(“Big Sandy”) on February 28, 2019.

The $ 10 million acquisition price was allocated as follows:

$ 4.6 million of property, plant and equipment;

$ 2.8 million of subscriber relationships;

and $ 2.6 million of goodwill.

During the third quarter of 2020, the Company was awarded certain indefinite-lived Citizens Broadband Radio Service ("CBRS") spectrum licenses to be used within the Broadband segment.

The Company paid an aggregate deposit of $ 16.1 million with the licenses subject to final approval and issuance by the Federal Communications Commission (“FCC”).

The licenses will provide us priority access rights over general access users other than incumbents, in that specific band, in accordance with the FCC’s three-tier CBRS band spectrum sharing framework to utilize designated radio frequency spectrum within specific geographic service areas to provide wireless communication services.

The FCC has delayed the issuance of the licenses because the allowable spectrum ownership levels for certain of our investors would be exceeded should the licenses be issued.

The Company is currently in discussions with the FCC and is considering to forego the issuance of certain licenses included in this transaction covering 15 markets with a cost basis of approximately $ 4.5 million in exchange for a refund and expects resolution in early 2022.

The entire deposit of $ 16.1 million is classified within prepaid expenses and other in the Company's consolidated balance sheet as of December 31, 2021.

For the years ended December 31, 2021, 2020 and 2019, amortization expense was approximately $ 0.8 million, $ 0.7 million and $ 0.5 million, respectively.

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2021 December 31,

Deposit for FCC spectrum licenses $ 16,118 $ —

Prepaid maintenance expenses 8,391 4,018

Broadband contract acquisition and fulfillment costs 4,417 4,898

Interest rate swaps — 1,382

Broadband contract acquisition costs 2,502 2,308

SERP investments 801 —

Other 2,018 1,196

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2021 December 31, 2020

Broadband contract acquisition and fulfillment costs $ 10,252 $ 6,107

Broadband contract acquisition costs $ 5,645 $ 5,050

Prepaid expenses and other 4,653 1,398

Interest rate swaps — 1,252

Deferred charges and other assets $ 10,298 $ 6,448

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Sales and property taxes payable 1,065 1,072

Restructuring accrual 1,761 —

Other current liabilities 8,739 5,881

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Other liabilities $ 25,631 $ 24,905

Restructuring activities

During 2021, in connection with the disposition of our Wireless segment, we implemented a restructuring plan whereby certain employees were notified of their pending dismissal under the workforce reduction program.

The following table identifies severance activity that has occurred as a result of the plan:

(in thousands) Year Ended

December 31, 2021

Beginning Balance January 1, 2021 $ —

Expense (1) 3,862

Payments (2) ( 2,101 )

Ending Balance - December 31, 2021 $ 1,761

_______________________________________________________

(1) For the year ended December 31, 2021, approximately $ 2.2 million of expense was recognized within discontinued operations and $ 1.7 million in continuing operations.

(2) For the year ended December 31, 2021, approximately $ 1.4 million of payments were attributable to discontinued operations and $ 0.7 million in continued operations.

Asset Retirement Obligations:

Our asset retirement obligations arise from certain of our leases and generally require us to remove our towers from ground leases.

Below is a summary:

Our asset retirement obligations ("ARO") arise from certain of our leases and generally require us to remove our towers from ground leases.

The Company's estimates related to ARO were revised during 2021 resulting in recognition of an additional obligation of $ 4.3 million.

Below is a summary of our current and non-current asset retirement obligations:

Years Ended December 31,

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The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate.

At December 31, 2020, our operating leases had a weighted average remaining lease term of twenty-three years and a weighted average discount rate of

At December 31, 2021, our operating leases had a weighted average remaining lease term of twenty years and a weighted average discount rate of 4.4 %.

Our finance leases had a weighted average remaining lease term of fourteen years and a weighted average discount rate of 5.2 %.

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We remitted $ 5.6 million of operating lease payments during 2021.

We also obtained $ 6.8 million of leased assets in exchange for new operating lease liabilities recognized during 2020.

We also obtained $ 11.1 million and $ 6.8 million of leased assets in exchange for new operating lease liabilities recognized during 2021 and 2020, respectively.

The following table summarizes the expected maturity of lease liabilities at December 31, 2021:

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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 at December 31, 2020:

Below is a summary of our contractual minimum rental receipts expected under the lease agreements in place at December 31, 2021:

(in thousands) Operating Leases

2022 $ 14,460

2027 and thereafter 28,915

Total $ 87,737

Our syndicated Credit Agreement includes a $ 75 million, five-year undrawn revolving credit facility, as well as the following term loans:

(in thousands) December 31,

2020 December 31,

Term loan A-1 $ 229,437 $ 258,571

Term loan A-2 468,481 473,469

697,918 732,040

unamortized loan fees 9,455 11,926

Total debt, net of unamortized loan fees $ 688,463 $ 720,114

Term Loan A-1 bears interest at one-month LIBOR plus a margin of 1.50 %, while Term Loan A-2 bears interest at one-month LIBOR plus a margin of 1.75 %.

LIBOR resets monthly.

Our cash payments for interest were $ 10.4 million and $ 18.6 million during 2021 and 2020, respectively.

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.

The Credit Agreement contains affirmative and negative covenants customary to secured credit facilities, including restrictions on our ability to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of the Company’s businesses.

Total dividends, distributions, and redemptions of capital stock generally cannot exceed the sum of $ 25 million plus 60 % of the Company's consolidated net income from January 1, 2016 to the date of declaration of such dividends, distributions or redemptions.

The financial covenants of the Credit Facility include:

• a limitation on the Company’s total leverage ratio, calculated as Consolidated EBITDA, as defined by the Credit Facility agreement, of less than or equal to 3.50 to 1.00 from December 31, 2018 through December 31, 2019, then 3.25 to 1.00 through December 31, 2021, and 3.00 to 1.00 thereafter;

• a minimum debt service coverage ratio, calculated as Consolidated EBITDA minus certain cash tax payments divided by the sum of all scheduled principal payments on the Credit Facility plus cash payments for interest, greater than or equal to 2.00 to 1.00;

• the Company must maintain a minimum liquidity balance, calculated as availability under the Revolver Facility plus unrestricted cash and cash equivalents, of greater than $ 25 million at all times.

As shown below, as of December 31, 2020, the Company was in compliance with the financial covenants in its credit agreements.

Actual Covenant Requirement

Total leverage ratio 2.0 3.25 or Lower

Debt service coverage ratio 6.6 2.0 or Higher

Minimum liquidity balance (in millions) $ 270.4 $ 25.0 or Higher

Rate quotations provided by a group of banks that sustain LIBOR will no longer be required after 2021.

As a result, it is uncertain whether LIBOR will continue to be quoted after 2021.

Our term loans and interest rate swaps identify LIBOR as a reference rate and mature after 2021.

As discussed in Note 3, Discontinued Operations , upon consummation of the Transaction, the Company used approximately $ 681 million of the proceeds received from the sale to fully repay all outstanding principal amounts under, and terminate the Credit Agreement existing as of June 30, 2021 ("Prior Credit Agreement").

On July 1, 2021, the Company entered into a Credit Agreement (the “Credit Agreement”) with various financial institutions thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

The Credit Agreement provides for three credit facilities (collectively, the “Facilities”), in an aggregate amount equal to $ 400 million:

(i) a $ 100 million five-year revolving credit facility (the “Revolver”), (ii) a $ 150 million five-year delay draw

amortizing term loan (the “Term Loan A-1”) and (iii) a $ 150 million seven-year delay draw amortizing term loan (the “Term Loan A-2” and, together with the Term Loan A-1, the “Term Loans”).

The Credit Agreement includes a provision under which the Company may request that additional term loans be made to it in an amount not to exceed the sum of (1) the greater of (a) $ 75 million and (b) 100% of Consolidated EBIDTA (as defined in the Credit Agreement), calculated on a pro forma basis in accordance with the Credit Agreement, plus (2) an additional unlimited amount subject to a maximum Total Net Leverage Ratio (as defined in the Credit Agreement) of 4.00 :1.00, calculated on a pro forma basis in accordance with the Credit Agreement, subject to the receipt of commitments from one or more lenders for any such additional term loans and other customary conditions.

The Company may use the proceeds from the Revolver and the Term Loans to finance capital expenditures, provide working capital, and for other general corporate purposes of the Company and its subsidiaries, including the payment of fees and expenses in connection with the foregoing.

The Term Loans, when drawn upon, are to be repaid in quarterly principal installments commencing on September 30, 2023, with the unpaid balance of the Term Loans due at maturity, as set forth in the Credit Agreement.

Interest payments on outstanding loans are required monthly, beginning in the period of the initial and any subsequent draws.

Rates for borrowing under the Credit Agreement are based, at the Company’s election, upon whether the borrowing is a LIBOR loan or a base rate loan.

LIBOR loans will bear interest at an adjusted LIBOR rate (which shall be no less than 0.00 %) plus an applicable margin ranging from 1.50 % to 2.75 % for the Term Loan A-1 and the Revolver and from 1.50 % to 3.00 % for the Term Loan A-2, depending on the Company’s Total Net Leverage Ratio.

Base rate loans will bear interest at a base rate plus an applicable margin ranging from 0.50 % to 1.75 % for the Term Loan A-1 and the Revolver and from 0.50 % to 2.00 % for the Term Loan A-2, depending on the Company’s Total Net Leverage Ratio.

In addition, under the terms of the Credit Agreement, the Company agrees to pay the Lenders a fee on undrawn portions of the Term Loans and Revolver from time to time.

This fee rate is dependent on the Company’s Total Net Leverage Ratio and ranges from a rate per annum equal to 0.200 % to 0.375 %.

The Credit Agreement contains representations and warranties, and affirmative and negative financial covenants usual and customary for similar secured credit facilities, each of which are applicable to the Company and its subsidiaries, including covenants governing the ability of the Company and its subsidiaries, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, enter into transactions with affiliated persons, make investments or change the nature of the Company’s and its subsidiaries’ businesses.

The Company is also subject to certain financial covenants to be measured on a trailing twelve month basis on the last day of each calendar quarter.

These covenants include:

• maintaining a Total Net Leverage Ratio (as defined in the Credit Agreement) not greater than 4.25 to 1.00 (subject to customary increased leverage periods following certain qualifying acquisitions);

• maintaining a Debt Service Coverage Ratio (as defined in the Credit Agreement) not less than 2.00 to 1.00.

Indebtedness outstanding under any of the Facilities may be accelerated upon the occurrence of an Event of Default (as defined in the Credit Agreement).

As of December 31, 2021, the Company had not drawn on the Term Loans or the Revolver and was in compliance with the financial covenants in its credit agreements.

The International Exchange (ICE) Benchmark Administration (the “IBA”) ceased the publication of one-week and two-month LIBOR on December 31, 2021 and expects to phase-out the remaining tenors (overnight, one-month, three-month, six-month and 12-month) on June 30, 2023.

Our term loans and revolver identify LIBOR as a reference rate for tenors ceasing on June 30, 2023 and mature after 2023.

Alternative reference rates that replace LIBOR may not yield the same or similar economic results over the terms of the financial instruments.

The transition from LIBOR could result in us paying higher or lower interest rates on our current LIBOR-indexed term loans, affect the fair value of the derivative instruments we hold, or affect our ability to effectively use interest rate swaps to manage interest rate risk.

The transition from LIBOR could result in us paying higher or lower interest rates on our current LIBOR-indexed Term Loans.

Our Credit Agreement includes provisions that provide for the identification of a LIBOR replacement rate.

Due to the uncertainty regarding the transition from LIBOR-indexed financial instruments, including when it will happen, and the manner in which an alternative reference rate will apply, we cannot yet reasonably estimate the expected financial impact of the LIBOR transition.

As discussed in Note 3, Discontinued Operations , the terms of our long term debt agreements require us to repay all of our debt upon consummation of the sale of our Wireless operations, which is expected to occur during the first half of 2021.

Management also intends to settle the related interest rate swaps upon consummation.

Both are therefore presented outside of the disposal group as a current liability at December 31, 2020.

Due to the uncertainty regarding the transition from LIBOR-indexed financial instruments and the manner in which an alternative reference rate will apply, we cannot yet reasonably estimate the expected financial impact of the LIBOR transition.

Any changes to the reference rate will be agreed through an amendment to the Credit Agreement and are expected to reference the Secured Overnight Financing Rate, though the timing of such amendment and applicability to any future amounts owed under the Credit Agreement are not certain at this time.

Derivatives and Hedging

The Company's interest rate swaps are pay-fixed ( 1.16 %), receive-variable (one month LIBOR) that hedged approximately 41 % of outstanding debt with outstanding notional amounts totaling $ 289.4 million and $ 339.8 million December 31, 2020 and 2019, respectively.

The fair value of these instruments was estimated using an income approach and observable market inputs.

The hedge was determined to be highly effective and therefore all of the change in its fair value was recognized through other comprehensive income.

Derivative balances are presented as follows in our consolidated balance sheet:

(in thousands) December 31,

2020 December 31,

Balance sheet location of derivative financial instruments:

Prepaid expenses and other $ — $ 1,382

Deferred charges and other assets — 1,252

Accrued liabilities and other 4,048 —

Total derivatives designated as hedging instruments $ 4,048 $ 2,634

Market expectations of the projected LIBOR decreased significantly during 2020, which drove the fair value of our interest rate swaps to a liability.

The table below summarizes changes in accumulated other comprehensive income (loss) by component:

(in thousands) Gains (Losses) on

As discussed in Note 3, Discontinued Operations , upon consummation of the Transaction, the Company used approximately $ 2.6 million of the proceeds received from the sale to fully satisfy its obligations under, and terminate, the interest rate swaps.

Amounts reclassified from accumulated other comprehensive income (loss) are presented as part of income from discontinued operations.

The table below summarizes changes in accumulated other comprehensive income (loss) by component, including the reclassification from accumulated other comprehensive income (loss) into earnings following the swap termination:

(in thousands) (Losses) Gains on

Hedges Income Tax

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Comprehensive

Income (Loss), net of taxes

(Loss) Income, net of taxes

Balance as of December 31, 2020 $ ( 4,048 ) $ ( 658 ) $ ( 4,706 )

Net change in unrealized (loss) gain ( 8,444 ) 2,806 ( 5,638 )

Other comprehensive income (loss) before reclassifications 1,447 ( 361 ) 1,086

Amounts reclassified from accumulated other comprehensive income (loss) to interest expense 2,601 1,019 3,620

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Balance as of December 31, 2021 $ — $ — $ —

As of December 31, 2020, the Company estimates that $ 3.2 million will be reclassified as a reduction of interest expense during the next twelve months.

The Company files a consolidated U.S.

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Effective tax rate ( 27.2 ) % ( 168.9 ) % 0.3 %

A reconciliation of income taxes determined by applying the federal and state tax rates to income (loss) is as follows:

A reconciliation of income tax expense (benefit) determined by applying the federal and state tax rates to income before income taxes is as follows:

Years Ended December 31,

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State income taxes, net of federal tax effect 438 54 15

Revaluation of U.S.

deferred income taxes — — ( 760 )

Excess tax benefit from share based compensation and other, net ( 1,068 ) ( 380 ) ( 535 )

Revaluation of deferred tax liabilities ( 5,206 ) — —

Stranded tax effects reclassified from other comprehensive income 1,620 — —

Excess tax benefit from share based compensation and other expense, net 144 ( 1,068 ) ( 380 )

Income tax (benefit) expense $ ( 1,694 ) $ ( 990 ) $ 6

The effective tax rate in 2020 decreased from 2019, primarily as a result of higher excess tax benefits from share based compensation.

The effective tax rate in 2021 decreased from 2020, primarily as a result of recognition of non-cash deferred tax benefits triggered by the disposition of Wireless assets and operations, (see Note 3 – Discontinued Operations ), which drove a reduction in the Company’s future estimated tax rate, as apportionable income and expenses for higher tax rate jurisdictions was reduced, resulting in a revaluation of deferred tax liabilities during the year ended December 31, 2021.

The Company's net cash payments for income taxes were $ 459.1 million in the year ended December 31, 2021, which included $ 434.3 million of payments related to the taxable gain from the sale of the Wireless business.

The Company's cash payments for income taxes were $ 11.2 million in the year ended December 31, 2020.

The Company received cash refunds for income taxes of $ 9.5 million in the year ended December 31, 2019.

Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply in the year of reversal or settlement and arise from temporary differences between the US GAAP and tax bases of the following assets and liabilities:

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Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, taxable income in prior carryback years if available and tax planning strategies in making this assessment.

Based upon the level of historical taxable income and projections for future taxable income over the periods for which the deferred tax assets are deductible, the Company believes it more likely than not that the net deferred tax assets will be realized.

Based upon the level of historical taxable income, projections for future taxable income over the periods for which the deferred tax assets are deductible, and the option to elect out of bonus depreciation on in-serviced fixed assets, the Company believes it more likely than not that the net deferred tax assets will be realized.

The Company has a deferred tax asset of $ 5.9 million related to federal and various state net operating losses.

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The Company's returns are generally open to examination from 2018 forward and the net operating losses acquired from nTelos are open to examination from 2002 forward.

Earnings per Share & Stock Compensation

The Company maintains two shareholder-approved Company Stock Incentive Plans allowing for the grant of equity based incentive compensation to essentially all employees.

The 2005 Plan authorized grants of up to 2,880,000 shares over a ten-year period beginning in 2005.

The term of the 2005 Plan expired in February 2014;

outstanding awards will continue to vest and options may continue to be exercised, but no additional awards will be granted under the 2005 Plan.

Stock Compensation, Earnings per Share, and Dividends

The Company's 2014 Stock Incentive Plan ("the Plan") allows for the grant of equity based incentive compensation to all employees.

The Plan authorizes grants of up to an additional 3,000,000 shares over a ten-year period beginning in 2014.

Under these Plans, grants may take the form of stock awards, awards of options to acquire stock, stock appreciation rights, and other forms of equity based compensation;

Under the Plan, grants may take the form of stock awards, awards of options to acquire stock, stock appreciation rights, and other forms of equity based compensation;

both options to acquire stock and stock awards were granted.

The Company granted approximately 200 thousand restricted stock units (RSUs) to employees and directors during 2021 at an average market price of $ 28.99 .

The Company also granted, approximately 40 thousand Relative Total Shareholder Return (“RTSR”) awards to employees at an average value of $ 56.32 during 2020.

Restricted stock units generally have service requirements only or performance and service requirements with vesting periods ranging from one year for directors to four years for employees.

RTSR awards vest over three years .

The Company also granted, approximately 59 thousand performance-based Relative Total Shareholder Return (“RTSR”) awards to employees at an average value of $ 34.05 during 2020.

On July 2, 2021, the Company’s Board of Directors declared a special dividend of $ 18.75 per share on the issued and outstanding shares of the Company’s common stock (the “Special Dividend”).

On August 4, 2021, in accordance with the Plan, the Company's Board of Directors adopted a resolution to modify the outstanding equity awards to offset the grantees’ loss in intrinsic value caused by the disposition of wireless and the decline in the Company's share price following the Special Dividend.

Approximately 81 thousand awards were issued, split between RSUs and RTSRs, as a result of this modification.

No other terms or conditions of the outstanding equity awards were modified, no incremental expense was required to be recognized, and there was no significant impact to dilutive securities.

The Company's RSUs generally have service requirements only or performance and service requirements with vesting periods ranging from one year for directors to four years for employees.

RTSR awards generally vest over an approximate three year period.

The performance factor applied to the RTSR awards is based upon the Company's stock performance compared to a group of peer companies.

The actual number of shares to be issued and can range from 0 % to 150 % of the awards granted.

The actual number of shares to be issued can range from 0 % to 150 % of the awards granted.

The cost of employee services received in exchange for share-based awards classified as equity is measured using the estimated fair value of the award on the date of the grant, and the related expense is recorded using the straight-line method consistent with the recipient's respective service period.

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Stock compensation expense, net $ 3,408 $ 5,907 $ 3,367

As of both December 31, 2020 and 2019, there was $ 3.7 million of total unrecognized compensation cost related to non-vested incentive awards that are expected to be recognized over a weighted average period of 2.6 years.

As of December 31, 2021, there was $ 5.9 million of total unrecognized compensation cost related to non-vested incentive awards that are expected to be recognized over weighted average period of 1.8 years.

We utilize the treasury stock method to calculate the impact on diluted earnings per share that potentially dilutive stock-based compensation awards have.

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Diluted net income per share $ 19.92 $ 2.51 $ 1.11

There were fewer than 110 thousand anti-dilutive awards outstanding during 2020, 2019, and 2018.

There were approximately 259 thousand anti-dilutive awards outstanding during 2021 and fewer than 110 thousand anti-dilutive awards outstanding during 2020 and 2019.

The Special Dividend was paid on August 2, 2021.

The total payout to Shentel shareholders, including amounts reinvested in the Company’s stock via the Company’s Dividend Reinvestment Plan, was approximately $ 937 million.

In addition to the Special Dividend, on October 27, 2021, the Company Board of Directors declared the annual dividend of $ 0.07 per share on the

issued and outstanding shares of the Company's common stock (the "Annual Dividend").

The Annual Dividend was paid on December 1, 2021.

The total payout to Shentel shareholders, including amounts reinvested in the Company’s stock via the Company’s Dividend Reinvestment Plan, was approximately $ 3 million.

Commitments and Contingencies

We are committed to make payments to satisfy our lease liabilities and long-term debt.

The scheduled payments under those obligations are summarized in the respective notes above.

We are also committed to make annual payments of approximately $ 108.0 thousand on our FCC spectrum license obligation through 2039.

We are committed to make payments to satisfy our lease liabilities.

The scheduled payments under those obligations are summarized in Note 9, Leases.

We also have outstanding unconditional purchase commitments to procure marketing services and IT software licenses through 2026 and commitments for licenses to access Educational Broadband Service (“EBS”) spectrum channels through 2039.

For the years ended December 31, 2021, 2020 and 2019 we paid $ 3.4 million, $ 1.4 million and $ 0.5 million, respectively, for the marketing services and IT software license purchase commitments.

For each of the years ended December 31, 2021, 2020 and 2019, we paid approximately $ 0.1 million for access to certain EBS spectrum channels.

The Company is obligated to make the following future minimum payments under the non-cancelable terms of these commitments as of December 31, 2021:

(in thousands) Purchase Commitments

2027 and thereafter 109

Total $ 8,592

The Company is subject to claims and legal actions that may arise in the ordinary course of business.

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Segment Reporting

The expected divestiture of our Wireless operations represents a strategic shift in the Company’s business and qualifies as a discontinued operation.

As a result, the operating results and cash flows related to the Wireless segment have been reflected as discontinued operations in our Consolidated Statements of Comprehensive Income and the Consolidated Statements of Cash Flows.

Similarly, the results of our Wireless operations are no longer presented as a reporting segment.

Accordingly, we have recast our reporting of the remaining segments to reflect the reattribution of these expenses in all presented periods in a manner consistent with our updated internal reporting.

The divestiture of our Wireless operations on July 1, 2021 represented a strategic shift in the Company’s business which therefore qualified the segment as a discontinued operation.

As a result, for all periods presented, the operating results and cash flows related to the Wireless segment were reflected as a discontinued operation in our Consolidated Statements of Comprehensive Income and the Consolidated Statements of Cash Flows.

The tables below reflect the results of operations of the Company's reportable segments in continuing operations, consistent with internal reporting used by the Company.

Intercompany revenue is primarily derived from services provided to the discontinued operation, for periods prior to the divestiture.

Year ended December 31, 2021:

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Selling, general and administrative 47,840 1,197 33,414 82,451

Restructuring expense 202 — 1,525 1,727

Impairment expense 5,986 — — 5,986

Depreciation and amortization 47,937 2,053 5,216 55,206

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Income from continuing operations before income taxes $ 6,235 $ 586 $ 1,938

The Company’s 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.

Quarterly Results (unaudited)

The following table reflects selected quarterly results for the Company.

Amounts were adjusted from their previous presentation as a result of the error correction discussed in Note 1.

Three Months Ended

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Revenue $ 59,691 $ 60,700 $ 62,244 $ 62,604

Operating (loss) income ( 1,364 ) ( 1,867 ) 470 1,614

Operating income (loss) 2,230 2,390 851 ( 7,901 )

Income (loss) from continuing operations 2,945 1,626 6,495 ( 3,137 )

Income from discontinued operations, net of tax 13,129 29,784 33,509 47,675

Income (loss) from discontinued operations, net of tax 48,472 51,566 ( 406 ) ( 4,965 )

Gain on the sale of discontinued operations, net of tax — — 886,732 9,503

Net income 51,417 53,192 892,821 1,401

Basic - (Loss) income from continuing operations $ — $ ( 0.01 ) $ 0.03 $ 0.03

Basic - Income (loss) from continuing operations $ 0.06 $ 0.03 $ 0.13 $ ( 0.06 )

Basic - Income from discontinued operations, net of tax $ 0.97 $ 1.04 $ 17.73 $ 0.09

Basic net income per share $ 1.03 $ 1.07 $ 17.86 $ 0.03

Diluted - (Loss) income from continuing operations $ — $ ( 0.01 ) $ 0.03 $ 0.03

Diluted - Income (loss) from continuing operations $ 0.06 $ 0.03 $ 0.13 $ ( 0.06 )

Diluted - Income from discontinued operations, net of tax $ 0.97 $ 1.03 $ 17.68 $ 0.09

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Revenue $ 53,134 $ 54,336 $ 55,173 $ 58,132

Operating (loss) income ( 1,765 ) 915 681 ( 550 )

Operating income (loss) ( 1,648 ) ( 2,361 ) ( 121 ) 1,529

Income (loss) from continuing operations ( 55 ) ( 893 ) 985 1,539

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Exhibit Description

2.1 Agreement and Plan of Merger, dated as of August 10, 2015, by and among Shenandoah Telecommunications Company, Gridiron Merger Sub, Inc.

and NTELOS Holdings Corp., filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, dated August 11, 2015.

2.1 Asset Purchase Agreement, dated May 28, 2021, between Shenandoah Telecommunications Company and T-Mobile USA, Inc.

(incorporated by reference from Exhibit 2.1 to the Company's Current Report on Form 8-K filed on June 1, 2021).

3.1 Amended and Restated Articles of Incorporation of Shenandoah Telecommunications Company, effective August 31, 2019, filed as exhibit 3.2 to the Company's Quarterly Report on Form 10-Q dated September 30, 2019.

3.2 Amended and Restated Bylaws of Shenandoah Telecommunications Company, effective October 29, 2019, filed as exhibit 3.3 to the Company's Quarterly Report on Form 10-Q dated September 30, 2019.

3.2 Amended and Restated Bylaws of Shenandoah Telecommunications Company, effective February 22, 2022 , filed as exhibit 3.

1 to the Company's Current Report on Form 8-K filed o n February 2 8 , 2 022 .

4.1 Description of the Company's Common Stock Registered Under Section 12 of the Exchange Act of 1934

10.1 Shenandoah Telecommunications Company Dividend Reinvestment Plan filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-3D (No.

10.2 Sprint PCS Management Agreement dated as of November 5, 1999 by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., and Shenandoah Personal Communications Company filed as Exhibit 10.4 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.3 Sprint PCS Services Agreement dated as of November 5, 1999 by and between Sprint Spectrum L.P.

and Shenandoah Personal Communications Company filed as Exhibit 10.5 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.4 Sprint Trademark and Service Mark License Agreement dated as of November 5, 1999 by and between Sprint Communications Company, L.P.

and Shenandoah Personal Communications Company filed as Exhibit 10.6 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.5 Sprint Spectrum Trademark and Service Mark License Agreement dated as of November 5, 1999 by and between Sprint Spectrum L.P.

and Shenandoah Personal Communications Company filed as Exhibit 10.7 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.6 Addendum I to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., and Shenandoah Personal Communications Company filed as Exhibit 10.8 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.7 Asset Purchase Agreement dated November 5, 1999 by and among Sprint Spectrum L.P., Sprint Spectrum Equipment Company, L.

P., Sprint Spectrum Realty Company, L.P., and Shenandoah Personal Communications Company, serving as Exhibit A to Addendum I to the Sprint PCS Management Agreement and as Exhibit 2.6 to the Sprint PCS Management Agreement filed as Exhibit 10.9 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.8 Addendum II dated August 31, 2000 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., and Shenandoah Personal Communications Company filed as Exhibit 10.10 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.9 Addendum III dated September 26, 2001 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., and Shenandoah Personal Communications Company filed as Exhibit 10.11 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.10 Addendum IV dated May 22, 2003 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., and Shenandoah Personal Communications Company filed as Exhibit 10.12 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.11 Addendum V dated January 30, 2004 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., and Shenandoah Personal Communications Company filed as Exhibit 10.13 to the Company’s Report on Form 10-K for the year ended December 31, 2003.

10.2 Credit Agreement, dated July 1, 2021, by and among Shenandoah Telecommunications Company, certain of its subsidiaries as guarantors, CoBank ACB, as administrative agent, and the other lenders party thereto (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 1, 2021).

10.3 Supplemental Executive Retirement Plan as amended and restated, filed as Exhibit 10.14 to the Company’s Current Report on Form 8-K dated March 23, 2007.

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and Shenandoah Personal Communications Company, filed as Exhibit 10.45 to the Company’s Current Report on Form 8-K dated July 8, 2010.

10.20 Letter Agreement modifying section 10.2.7.2 of Addendum X dated March 15, 2010 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., Sprint Communications Company L.P.

and Shenandoah Personal Communications Company, filed as Exhibit 10.49 to the Company’s Quarterly Report on Form 10-Q dated August 8, 2011.

10.21 Addendum XII dated February 1, 2012 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., Sprint Communications Company L.P.

and Shenandoah Personal Communications Company, filed as Exhibit 10.51 to the Company’s Current Report on Form 8-K dated February 2, 2012.

10.22 Addendum XIII dated September 14, 2012 to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., Sprint Communications Company L.P.

and Shenandoah Personal Communications, LLC, filed as Exhibit 10.53 to the Company’s Current Report on Form 8-K dated September 17, 2012.

10.23 Addendum XIV dated as of November 19, 2012, to Sprint PCS Management Agreement by and among Sprint Spectrum L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., Sprint Communications Company L.P.

and Shenandoah Personal Communications, LLC, filed as Exhibit 10.42 to the Company’s Annual Report on Form 10-K dated March 5, 2013.

10.24 Addendum XV dated as of March 11, 2013, to Sprint PCS Management Agreement by and among Sprint Spectrum, L.P., WirelessCo, L.P., APC PCS, LLC, PhillieCo, L.P., Sprint Communications Company L.P.

and Shenandoah Personal communications, LLC, filed as Exhibit 10.43 to the Company’s Quarterly Report on Form 10-Q dated May 3, 2013.

10.25 Addendum XVI dated as of December 9, 2013 to Sprint PCS Management Agreement by and among Sprint Spectrum, L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., Sprint Communications Company L.P.

and Shenandoah Personal Communications, LLC, filed as Exhibit 10.45 to the Company’s Quarterly Report on Form 10-Q dated May 2, 2014.

10.26 Addendum XVII dated as of April 11, 2014, to Sprint PCS Management Agreement by and among Sprint Spectrum, L.P., Wireless Co, L.P., APC PCS, LLC, Phillie Co, L.P., Sprint Communications Company L.P.

and Shenandoah Personal Communications, LLC, filed as Exhibit 10.46 to the Company’s Quarterly Report on Form 10-Q dated May 2, 2014.

10.11 2014 Equity Incentive Plan filed as Appendix A to the Company’s Definitive Proxy Statement filed on March 13, 2014 (No.

10.28 Master Agreement dated as of August 10, 2015, by and among SprintCom, Inc.

and Shenandoah Personal Communications, LLC, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 11, 2015.

10.29 Addendum XVIII dated as of August 10, 2015, to Sprint PCS Management Agreement by and among SprintCom, Inc., Phillie Co, L.P., and Shenandoah Personal Communications, LLC, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated August 11, 2015.

10.30 Amended and Restated Master Agreement, dated as of May 6, 2016, by and between Shenandoah Personal Communications, LLC and SprintCom, Inc, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated May 6, 2016.

10.31 Addendum XIX to Sprint PCS Management Agreement, dated as of May 6, 2016, by and among Sprint Spectrum L.P., Wireless Co, LLC, APC PCS, LLC, Phillie Co, LLC, Sprint Communications Company L.P., Shenandoah Personal Communications, LLC and SprintCom, Inc, filed as Exhibit 10.2 to the Company's Current Report on Form 8-K, dated May 6, 2016.

10.32 Consent and Agreement, dated as of May 6, 2016, by and among Sprint Spectrum L.P., Wireless Co, LLC, APC PCS, LLC, Phillie Co, LLC, Sprint Communications Company L.P., Shenandoah Personal Communications, LLC and SprintCom, Inc.

and CoBank, ACB, filed as Exhibit 10.3 to the Company's Current Report on Form 8-K, dated May 6, 2016.

10.33 Addendum XX to Sprint PCS Management Agreement dated as of March 9, 2017 by and among Sprint Spectrum L.P.;

Sprint Communications Company, L.P.;

SprintCom, Inc.;

Horizon Personal Communications, LLC;

and Shenandoah Personal Communications, LLC filed as Exhibit 10.

1 to the Company’s Current Report on Form 8-K filed on March 15, 2017.

10.34 Addendum XXI to Sprint PCS Management Agreement dated as of February 1, 2018 by and among Sprint Spectrum L.P;

Sprint Communications Company, L.P.;

SprintCom, Inc.;

and Shenandoah Personal Communications, LLC filed as Exhibit 10.1to the Company’s Current Report on Form 8-K filed on February 5, 2018.

10.35 Expansion Agreement dated as of February 1, 2018 by and among Sprint Spectrum L.P.;

SprintCom, Inc.;

and Shenandoah Personal Communications, LLC filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 5, 2018.

10.36 Credit Agreement dated as of November 9, 2018, by and among Shenandoah Telecommunications Company, certain of its subsidiaries, CoBank, ACB, as administrative agent, and the other lenders party thereto filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated November 9, 2018.

10.12 Form of Stock Option Awards for Executives under the 2014 Equity Incentive Plan.

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February 28, 2022 (Principal Financial Officer)

STOBBE Vice President - Chief Accounting Officer

ROMPS Vice President - Chief Accounting Officer

February 28, 2022 (Principal Accounting Officer)

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Leigh Ann Schultz

BARNES Director

February 28, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures