What changed in this filing

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Item 9A. Controls and Procedures

2024-02-21 compared with 2023-02-22 · 328 added, 254 removed, 731 unchanged (44% of the section changed)

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Our certifying officers concluded that our disclosure controls and procedures were effective as of December 31, 2023.

Changes in Internal Control over Financial Reporting

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, the Company pursued a multi-year, phased approach to remediate its material weaknesses.

During the quarter ended December 31, 2022, the Company completed implementation of management's remediation plan.

Our 2022 accomplishments are summarized below.

• We formed a Company wide, cross functional task force of employees, charged with implementing the remediation plan with regular reports on progress provided to the Principal Executive Officer and Principal Financial Officer.

• We completed an implementation of a new enterprise resource planning (“ERP”) system and a lease accounting system.

In the process of deploying these new systems, we designed and implemented new, or otherwise enhanced existing, internal control activities to complement operational and administrative process changes required to support the functionality of our new ERP and lease accounting systems.

• We completed a reevaluation of our accounting policies including those established in conjunction with management’s remediation plan as reported in Item 9A of our 2021 Form 10-K.

As a result of this effort, we did not identify any new significant financial reporting risks that required implementation or enhancement of new or existing policies or key internal control activities.

• Employee incentives and professional development opportunities were thoughtfully designed and drove employee engagement, retention, and focus on our remediation plan.

Employee turnover did not have a significant impact on our remediation efforts.

Internal Control over Financial Reporting

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting.

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RSM US LLP, an independent registered public accounting firm, which audited the Company’s consolidated financial statements included in this Annual Report, has issued an attestation report on the Company’s internal control over financial reporting containing the disclosure required by this Item.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting .

OTHER INFORMATION

During the year ended December 31, 2023, none of our officers or directors adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Index to the Consolidated 2023 Financial Statements

Reports of Independent Registered Public Accounting Firm as of and for the Year Ended December 31, 2022

Report of Independent Registered Public Accounting Firm as of and for the Years Ended December 31, 202 1 and 2020

Reports of Independent Registered Public Accounting Firm as of and for the Year s Ended December 31, 202 3 and 2022

Report of Independent Registered Public Accounting Firm for the Year Ended December 31, 2021

Consolidated Financial Statements

Consolidated Balance Shee ts as of December 31, 2023 and 2022

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2022, 2021 and 2020

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2023, 2022 and 2021

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2023, 2022 and 2021

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Shenandoah Telecommunications Company and its subsidiaries (the Company) as of December 31, 2022, the related consolidated statements of comprehensive (loss) income, shareholders’ equity, and cash flows, for the year then ended, and the related notes to the consolidated financial statements and Schedule II – Valuation and Qualifying Accounts (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Shenandoah Telecommunications Company and its subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income (loss), shareholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes to the consolidated financial statements and Schedule II – Valuation and Qualifying Accounts (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also 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, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 21, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

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These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

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

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

Determining the Fair Value of Cable Franchise Rights

The communication of the critical audit matter does not alter in any way our opinion on the 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 relates.

Cable franchise rights impairment assessment

As described in Notes 2 and 6 to the financial statements, the Company’s indefinite-lived cable franchise rights are $64.3 million as of December 31, 2023.

The Company evaluates the recoverability of its cable franchise rights annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that it is more likely than not that the cable franchise rights’ carrying value exceeds its estimated fair value.

The Company performed a quantitative analysis which involved estimating the fair value of the cable franchise rights.

Management used a Greenfield Model, which is a valuation method under the income approach.

Under this approach, fair value is based on estimated after-tax discounted future cash flows, assuming an initial hypothetical start-up operation maturing into an average performing operation with similar rights.

The valuation technique used by management included theoretical assumptions of the costs that would be incurred to start-up operations when the only owned asset is the cable franchise right and the associated revenues, operating margins and capital expenditures expected to be incurred in the start-up years, which are inherently judgmental.

The Company assesses its cable franchise rights for impairment annually on October 1, or more frequently whenever events or substantive changes in circumstances indicate that it is more likely than not that the carrying value of the cable franchise rights exceeds its estimated fair value.

In connection with the annual evaluation, the Company first performs a qualitative assessment of whether it is more likely than not that the cable franchise rights are impaired.

In the event impairment is more likely than not, the fair value of the cable franchise rights is estimated, and an impairment charge is recognized for any excess of the carrying value over fair value.

On October 1, 2023, the Company performed a qualitative analysis and concluded there was no impairment.

This analysis involved, among other things, evaluating changes in forecasted revenue, operating margins, capital expenditures, the discount rate, as well as assessing the sensitivity of the estimated fair value of the cable franchise rights, previously determined using an income approach, to these and other relevant changes to valuation inputs on a cumulative basis, which is inherently judgmental and complex.

We identified the cable franchise rights impairment assessment as a critical audit matter because of the significant estimates and assumptions management used in the impairment analysis.

Auditing management’s judgments used in the impairment assessment regarding forecasts of future revenue, operating margins, capital expenditures, and the discount rate to be applied involved a high degree of auditor judgment and increased audit effort, including the use of our valuation specialist.

Auditing management’s judgments used in the impairment assessment regarding forecasts of future revenue, operating margins and capital expenditures and the discount rate, as well as evaluating management’s assessment of the sensitivity of the estimated fair value to the cumulative change in these and other

relevant valuation inputs, involved a high degree of auditor judgment and increased audit effort, including the use of our valuation specialist.

Our audit procedures related to the Company’s cable franchise rights impairment assessment included the following, among others:

• Obtaining an understanding of the relevant controls related to the Company’s cable franchise rights impairment analysis, and tested such controls for design and operating effectiveness, including controls over management’s review of the significant assumptions described above.

• Testing management’s process for developing the forecasts by (i) understanding management’s process for developing the forecasted revenue growth rates, forecasted margins, and forecasted capital expenditures during the start-up and growth phases, (ii) testing the completeness, accuracy, and relevance of the underlying data used in the forecast, and (iii) comparing these assumptions to historical results and to forecasted information included in external industry reports;

• Utilizing our valuation professionals to assist in (i) assessing the appropriateness of the valuation model method, and (ii) evaluating the reasonableness of the Company’s discount rate.

• Testing management’s process for performing the qualitative impairment assessment by (i) understanding management’s process for updating the forecasted revenue growth rates, operating margins, capital expenditures and estimated discount rate from previous forecasts and estimates, (ii) testing the completeness, accuracy, and relevance of the underlying data used in the updated forecast and discount rate, (iii) comparing these assumptions to historical results and to forecasted information included in external industry reports, and (iv) testing the accuracy of management’s assessment of sensitivity of the fair value of cable franchise rights to the cumulative change in relevant valuation inputs;

• Utilizing our valuation professionals to assist in evaluating the reasonableness of the discount rate.

/s/ RSM US LLP

We have served as the Company’s auditor since 2022.

Lauderdale, Florida

Boston, Massachusetts

February 21, 2024

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We have audited Shenandoah Telecommunications Company’s (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, Shenandoah Telecommunications Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2022, the related consolidated statements of comprehensive (loss) income, shareholders’ equity, and cash flows for the year ended December 31, 2022, and the related notes to the consolidated financial statements and Schedule II – Valuation and Qualifying Accounts, and our report dated February 22, 2023 expressed an unqualified opinion thereon.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income (loss), shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes to the consolidated financial statements and Schedule II – Valuation and Qualifying Accounts of the Company and our report dated February 21, 2024 expressed an unqualified opinion.

Basis for Opinion

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/s/ RSM US LLP

Lauderdale, Florida

Boston, Massachusetts

February 21, 2024

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Shenandoah Telecommunications Company and subsidiaries (the Company) as of December 31, 2021, the related consolidated statements of comprehensive (loss) income, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes and financial statement schedule II – Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with U.S.

We have audited the accompanying consolidated statements of comprehensive income (loss), shareholders’ equity, and cash flows of Shenandoah Telecommunications Company and subsidiaries (the Company) for the year ended December 31, 2021, and the related notes and financial statement schedule II – Valuation and Qualifying Accounts (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations of the Company and its cash flows for the year ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

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These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 2001 to 2022.

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Cash and cash equivalents $ 139,255 $ 44,061

Accounts receivable, net of allowance for doubtful accounts of $ 776 and $ 352 , respectively

Accounts receivable, net of allowance for credit losses of $ 886 and $ 776 , respectively

19,782 20,615

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Retained earnings 584,069 580,554

Accumulated other comprehensive income, net of taxes 1,668 —

Total shareholders’ equity 652,670 638,007

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SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Years Ended December 31, 2023, 2022 and 2021

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Total operating expenses 277,755 275,329 247,669

Operating loss ( 7,958 ) ( 2,430 ) ( 2,601 )

Other (expense) income:

Other (expense) income, net ( 1,348 ) 8,665 3,187

(Loss) income from continuing operations before income taxes ( 9,306 ) 6,235 586

Income tax benefit ( 927 ) ( 1,694 ) ( 990 )

(Loss) income from continuing operations ( 8,379 ) 7,929 1,576

Operating income (loss) 9,624 ( 7,958 ) ( 2,430 )

Other income (expense):

Other income (expense), net 1,387 ( 1,348 ) 8,665

Income (loss) from continuing operations before income taxes 11,011 ( 9,306 ) 6,235

Income tax expense (benefit) 2,973 ( 927 ) ( 1,694 )

Income (loss) from continuing operations 8,038 ( 8,379 ) 7,929

Discontinued operations:

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Total income from discontinued operations, net of tax — — 990,902

Net (loss) income ( 8,379 ) 998,831 125,673

Net income (loss) 8,038 ( 8,379 ) 998,831

Other comprehensive income (loss):

Unrealized income (loss) on interest rate hedge, net of tax — 4,706 ( 5,014 )

Comprehensive (loss) income $ ( 8,379 ) $ 1,003,537 $ 120,659

Net (loss) income per share, basic and diluted:

Basic - (Loss) income from continuing operations $ ( 0.17 ) $ 0.16 $ 0.03

Unrealized income on interest rate hedges, net of tax 1,668 — 4,706

Comprehensive income (loss) $ 9,706 $ ( 8,379 ) $ 1,003,537

Net income (loss) per share, basic and diluted:

Basic - Income (loss) from continuing operations $ 0.16 $ ( 0.17 ) $ 0.16

Basic - Income from discontinued operations, net of tax — — 19.81

Basic net (loss) income per share $ ( 0.17 ) $ 19.97 $ 2.52

Diluted - (Loss) income from continuing operations $ ( 0.17 ) $ 0.16 $ 0.03

Basic net income (loss) per share $ 0.16 $ ( 0.17 ) $ 19.97

Diluted - Income (loss) from continuing operations $ 0.16 $ ( 0.17 ) $ 0.16

Diluted - Income from discontinued operations, net of tax — — 19.76

Diluted net (loss) income per share $ ( 0.17 ) $ 19.92 $ 2.51

Diluted net income (loss) per share $ 0.16 $ ( 0.17 ) $ 19.92

Weighted average shares outstanding, basic 50,396 50,155 50,026

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Net income — — 998,831 — 998,831

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

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

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

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

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 surrendered 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

Net income — — 998,831 — 998,831

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

Net loss — — ( 8,379 ) — ( 8,379 )

Dividends declared — — ( 3,991 ) — ( 3,991 )

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Balance, December 31, 2022 50,110 57,453 580,554 — 638,007

Net loss — — ( 8,379 ) — ( 8,379 )

Net income — — 8,038 — 8,038

Unrealized gain on interest rate swaps, net of tax — — — 1,668 1,668

Dividends declared — — ( 4,523 ) — ( 4,523 )

Stock-based compensation 231 10,823 — — 10,823

Common stock issued 2 44 — — 44

Shares surrendered for settlement of employee taxes upon issuance of vested equity awards ( 71 ) ( 1,387 ) — — ( 1,387 )

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Cash flows from operating activities:

Net (loss) income $ ( 8,379 ) $ 998,831 $ 125,673

Net income (loss) $ 8,038 $ ( 8,379 ) $ 998,831

Income from discontinued operations, net of tax — — 990,902

(Loss) income from continuing operations ( 8,379 ) 7,929 1,576

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 68,175 54,389 47,964

Amortization 724 817 739

Income (loss) from continuing operations 8,038 ( 8,379 ) 7,929

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 64,981 68,175 54,389

Amortization of intangible assets 490 724 817

Accretion of asset retirement obligations 621 531 421

Bad debt expense 1,972 1,028 1,220

Provision for credit losses 2,898 1,972 1,028

Stock-based compensation expense, net of amount capitalized 10,033 8,528 3,408

Deferred income taxes 2,973 ( 1,414 ) 22,263

Restructuring expense 1,251 1,727 —

Impairment expense 2,552 5,241 5,986

Gain on sale of FCC spectrum licenses ( 1,328 ) — —

Other, net ( 504 ) 427 2,208

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Net cash provided by operating activities - continuing operations 113,774 74,895 63,453

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

Net cash used in operating activities - discontinued operations — — ( 314,387 )

Net cash provided by (used in) operating activities 113,774 74,895 ( 250,934 )

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Capital expenditures ( 256,550 ) ( 189,609 ) ( 160,101 )

Cash disbursed for acquisitions — — ( 1,890 )

Refund received (cash disbursed) for deposit on FCC spectrum leases 3,996 — ( 16,118 )

Government grants received 1,904 — —

Proceeds from the sale of FCC spectrum licenses 17,300 — —

Refund received for deposit on FCC spectrum leases — 3,996 —

Proceeds from sale of assets and other 655 1,434 366

Net cash used in investing activities - continuing operations ( 236,691 ) ( 184,179 ) ( 159,735 )

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

Net cash provided by investing activities - discontinued operations — — 1,944,089

Net cash (used in) provided by investing activities ( 236,691 ) ( 184,179 ) 1,784,354

Cash flows from financing activities:

Proceeds from term loan borrowings 75,000 — —

Proceeds from credit facility borrowings 225,000 75,000 —

Payments for debt issuance costs ( 300 ) — ( 841 )

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Net cash provided by (used in) financing activities 218,111 69,001 ( 1,644,473 )

Net (decrease) increase in cash and cash equivalents ( 40,283 ) ( 111,053 ) 93,746

Net increase (decrease) in cash and cash equivalents 95,194 ( 40,283 ) ( 111,053 )

Cash and cash equivalents, beginning of period 44,061 84,344 195,397

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

Our Tower segment owns 222 cell towers and leases colocation space on those towers to wireless communications providers, refer to Note 14, Segment Reporting , for additional information.

Our Tower segment owns 219 macro cellular towers and leases colocation space on those towers to wireless communications providers.

See Note 15, Segment Reporting , for additional information.

Pending Acquisition of Horizon Acquisition Parent LLC

On October 24, 2023, Shentel entered into a definitive agreement to acquire 100 % of the equity interests in Horizon Acquisition Parent LLC (“Horizon”) for $ 385 million (the “Horizon Transaction”).

Consideration will consist of $ 305 million in cash and $ 80 million of Shentel common stock.

Horizon is a leading commercial fiber provider in Ohio and adjacent states serving national wireless providers, carriers, enterprises, and government, education and healthcare customers.

Based in Chillicothe, Ohio, Horizon was founded in 1895 as the incumbent local exchange carrier in Ross County, Ohio and rapidly expanded its fiber network over the past 14 years.

Most recently, Horizon has pursued a strategy of investing in Fiber-to-the-Home (“FTTH”) in tier 3 & 4 markets in Ohio.

• Shentel intends to fund the Horizon Transaction with a combination of existing cash resources, revolving credit facility capacity and an amended and upsized credit facility.

The Company has received $ 275 million in financing commitments from CoBank, Bank of America, Citizens Bank, N.A., and Fifth Third Bank, N.A..

This financing is expected to close in conjunction with the Horizon Transaction.

• GCM Grosvenor (“GCM”), a selling unit holder of Horizon, will exchange its equity interest in Horizon for 4.08 million shares of Shentel common stock with an aggregate value of $ 80 million based on a reference price of $ 19.60 resulting in GCM owning approximately 7 % of Shentel’s fully diluted common shares after the transaction is closed.

• Shentel has entered into a 7 % Participating Exchangeable Perpetual Preferred Stock (“Preferred Stock”) investment agreement with Energy Capital Partners (“ECP”), an existing Shentel shareholder and long-time infrastructure investor, to provide $ 81 million of growth capital to fund the FTTH network expansion, the government grant projects and general corporate purposes.

The dividend on the Preferred Stock can be paid in cash or in-kind at the option of the Company.

The Preferred Stock can be exchanged for Shentel common stock at an exchange price of $ 24.50 , a 25 % premium to the reference price of $ 19.60 , under certain conditions as outlined in the investment agreement.

This financing is expected to close in conjunction with the Horizon Transaction.

The closing of the Horizon Transaction remains subject to certain regulatory approvals and other customary closing conditions and is expected to close in the first half of 2024.

Summary of Significant Accounting Policies

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The Broadband segment also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as an RLEC.

These contracts are generally cancellable at the customer’s discretion without penalty at any time.

Transaction price is measured as the amount billed, which is generally determined by list prices for goods and services less discounts offered.

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As such, the amount of deferred revenue related to unsatisfied performance obligations is not necessarily indicative of the future revenue to be recognized from the Company’s existing customers.

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 one year .

Additionally, the Company incurs commission expenses related to in-house and third-party vendors which are capitalized and amortized over the expected customer benefit period.

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The carrying amounts reported in the Company’s consolidated financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short-term nature of these financial instruments.

The carrying amount of the Company's debt balance from term loans, which have a floating interest rate, approximate fair value.

The carrying amount of the Company’s long-term debt, which have a floating interest rate, approximates fair value.

The Company’s interest rate swaps are marked to market on a quarterly basis and are presented on the consolidated balance sheets at fair value.

Cash and cash equivalents:

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Generally, such investments are in excess of FDIC or SIPC insurance limits.

Allowance for doubtful accounts:

Allowance for credit losses:

Accounts receivable have been reduced by an allowance for amounts that may be uncollectible in the future.

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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, net, while the reciprocal changes in the liability representative of compensatory expense, are presented in selling, general and administrative expense in the Company’s consolidated statements of comprehensive income (loss).

The Company’s investments measured at cost primarily consist of CoBank’s Class A common stock derived from the CoBank patronage program.

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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.

Shentel capitalized $ 5.4 million and $ 0.7 million of interest costs for the years ended December 31, 2023 and 2022, respectively.

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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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.

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.

Indefinite-lived intangible assets are not amortized but rather, are subject to impairment testing annually, in the fourth quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable.

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Our reporting units align with our reportable segments.

We evaluated our reporting units for impairment on October 1, 2022 on the basis of qualitative factors.

We evaluated goodwill in each of our reporting units for impairment on October 1, 2023 on the basis of qualitative factors.

Our consideration of qualitative factors included but was not limited to macroeconomic conditions, industry and market conditions, company specific events, changes in circumstances, after tax cash flows and market capitalization trends.

We concluded that there were no indicators that a reporting unit impairment was more likely than not.

We evaluated our cable franchise rights for impairment on October 1, 2022 utilizing a quantitative assessment.

Our quantitative assessment compared an estimated fair value of the cable franchise rights to their book value.

To estimate fair value we used a greenfield model, a method under the income approach, which reflected the expected discounted cash flows of a notional start-up business with no assets other than the cable franchise rights being valued.

The primary assumptions utilized in the analysis include assumptions regarding revenue growth, the amount and timing of capital expenditures, EBITDA margins and the discount rate utilized.

We concluded that no impairment existed.

We evaluated our cable franchise rights and spectrum licenses for impairment on October 1, 2023 utilizing a qualitative assessment.

We concluded that there were no indicators that an impairment of these indefinite-lived intangible assets was more likely than not.

Long-lived assets:

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Our asset groups align with our reportable segments.

We evaluated our asset groups for impairment during the fourth quarter of 2022 and concluded that there were no indicators that an asset group impairment was more likely than not, with the exception of those described in Note 5, Property, Plant and Equipment.

We evaluated our asset groups for impairment during the fourth quarter of 2023 and concluded that there were no indicators that an

asset group impairment was more likely than not, with the exception of those described in Note 5, Property, Plant and Equipment.

Asset retirement obligations:

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Upon retirement of the related asset and performance of the asset retirement activities, the Company derecognizes the asset retirement obligation and records a gain or loss to reflect the difference between the Company’s estimate and the actual cost to retire the asset.

Current ARO liabilities are recorded in accrued liabilities and other in the Company’s consolidated balance sheets and noncurrent ARO liabilities are presented in the consolidated balance sheets as “Asset retirement obligations.”

Benefit plan obligations:

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($ in thousands) December 31, 2023 December 31, 2022

Pension plan $ — $ 2,393

Postretirement medical benefits plan $ 1,653 $ 1,869

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Total $ 3,943 $ 3,758

The pension plan is a frozen defined benefit plan.

Prior to December 31, 2023, Shentel maintained 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 .

This plan was amended on December 31, 2012, to freeze future benefit plan accruals for participants.

As of December 31, 2022 and 2021, the fair value of our pension plan assets were $ 21.3 million and $ 31.1 million, respectively.

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 $ 24.7 million and $ 33.5 million, at December 31, 2022 and 2021, respectively.

The Pension Plan liability was discounted at 4.90 % and 2.74 % at December 31, 2022 and 2021, respectively.

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

The expected termination will result in a payout of all existing obligations either through lump sum payments or through the purchase of annuity contracts at the option of the pension plan's participants.

The Company expects the pension plan termination to be completed by December 31, 2023.

Consequently, the net benefit plan obligation for the pension plan, with a balance of approximately $ 3.4 million, is presented in accrued liabilities and other in the Company's consolidated balance sheet at December 31, 2022.

On October 13, 2021, Shentel’s Board of Directors adopted a resolution to terminate its pension plan.

The Company terminated the pension plan and all benefits were distributed in June 2023 through the combination of lump sum payments and the purchase of non-participating annuity contracts at the option of the pension plan participants.

The Company made an additional $ 2.9 million contribution from its cash balance as a result of the settlement and recognized a settlement gain of $ 0.7 million in other income (expense) for the year ended December 31, 2023.

As of December 31, 2022, the fair value of our pension plan assets were $ 21.3 million.

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

Our pension plan’s projected benefit obligation was $ 24.7 million, at December 31, 2022, determined using a discount rate of 4.90 %.

The net benefit plan obligation for the pension plan, with a balance of approximately $ 3.4 million, is presented in accrued liabilities and other in the Company’s consolidated balance sheet at December 31, 2022.

The postretirement medical benefits plan is a frozen, unfunded, defined benefit 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, net, while the reciprocal changes in the liability representative of compensatory expense, are presented in selling, general and administrative expense in the Company's consolidated statement of comprehensive (loss) income.

The Company leases various telecommunications sites, warehouses, retail stores, and office facilities for use in our business.

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Income taxes:

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

financial statements.

Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

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Stock-based compensation:

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.

The fair value for the Company’s restricted stock units (“RSUs”) are determined using the Company’s stock price and the fair value for the Company’s Relative Total Shareholder Return (“RTSR”) awards are determined using a Monte Carlo simulation.

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The Company accelerates expense associated with eligible awards for employees who have achieved Retirement Eligibility on the later of the grant date or the date in which Retirement Eligibility is achieved.

Government grants:

Shentel receives grants from the U.S.

Government and its agencies, as well as various state governments under various programs designed to fund telecommunications operations and broadband infrastructure expansion into rural or underserved areas.

The grant programs are evaluated to determine if they represent grants related to revenue or capital expenditures.

Grants for revenue and operating activities are recorded as other revenue in the Company’s consolidated statements of comprehensive income (loss) as the services are provided.

Grants for capital expenditures are recorded as a reduction to the corresponding property, plant and equipment asset balance and are recognized through a reduction in depreciation expense over the life of the corresponding asset in the Company’s consolidated statements of operating income (loss).

Government grants related to revenue and operations are classified as operating cash inflows and grants for capital expenditures are classified as investing cash inflows.

The Company monitors government grants for requirements to ensure that conditions related to grants have been met and there is reasonable assurance that the Company will be able to retain the grant proceeds and to ensure that any contingencies that may arise from not meeting the conditions are appropriately recognized.

See Note 13, Government Grants for additional information.

The Company’s chief operating decision maker (“CODM”) regularly reviews the Company’s results to assess performance and allocates resources at the level of the Company’s two operating segments, Broadband and Tower.

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New Accounting Standards

In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2021-10, “ Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, ” (“ASU 2021-10”) 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.

We adopted ASU 2021-10 in 2022 and have included the new disclosure requirements in Note 12, Government Grants .

In October 2023, the FASB issued ASU 2023-06, “ Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, ” (“ASU 2023-06”) which aligns the disclosure and presentation requirements of a variety of the FASB’s ASC Topics with the requirements described in the SEC’s Disclosure Update and Simplification Initiative.

ASU 2023-06 will become effective for each amendment on the effective date of the SEC’s

corresponding disclosure rule changes.

The Company is currently assessing the impact of adopting ASU 2023-06 on the consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, ” (“ASU 2023-07”).

The amendments in ASU 2023-07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

These enhanced disclosures requirements also include, but are not limited to, the requirement to disclose other segment items by reportable segment, the title and the position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance.

The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently assessing the impact of adopting ASU 2023-07 on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, ” (“ASU 2023-09”).

ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024.

The Company is currently assessing the impact of adopting ASU 2023-09 on the consolidated financial statements and related disclosures.

Revenue from Contracts with Customers

Our Broadband segment provides broadband data, video and voice services to residential, SMB and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania and Kentucky, via fiber optic and hybrid fiber coaxial cable networks.

The Broadband segment also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as an RLEC.

Contract Assets

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The Company incurs commission expenses related to in-house and third-party vendors which are capitalized and amortized over the expected customer benefit period which is approximately six years .

Amortization of capitalized commission expenses is recorded in selling, general and administrative expenses in the Company's consolidated statements of comprehensive (loss) income.

The Company’s current contract assets are included in prepaid expenses and other and the Company’s non-current contract assets are included in deferred charges and other assets in its consolidated balance sheets.

Amortization of capitalized commission expenses is recorded in selling, general and administrative expenses in the Company’s consolidated statements of comprehensive income (loss).

The following tables present the activity of current and non-current contract assets:

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Contract Liabilities

The Company’s contract liabilities include services that are billed in advance and recorded as deferred revenue, as well as installation fees that are changed upfront without transfer of commensurate goods or services to the customer.

The Company’s contract liabilities include services that are billed in advance and recorded as deferred revenue, as well as installation fees that are charged upfront without transfer of commensurate goods or services to the customer.

The Company’s current contract liabilities are included in advanced billings and customer deposits in its consolidated balance sheets and the Company’s non-current contract liabilities are included in other liabilities in its consolidated balance sheets.

The current contract liabilities at December 31, 2021 were recognized within revenues in the Company’s consolidated statement of comprehensive (loss) income during 2022.

Shentel anticipates the current contract liability balance of $ 9.5 million as of December 31, 2022 to be recognized within revenues in the next twelve months and the non-current contract liability balance of $ 1.9 million to be recognized within revenues after twelve months.

No customers accounted for more than 10% of revenue for the years ended December 31, 2022, 2021, and 2020 and no customer made up more than 10% of accounts receivable at December 31, 2022 and 2021.

Refer to Note 14, Segment Reporting , for a summary of the Company's revenue streams.

Shentel’s current contract liability balances were $ 10.0 million and $ 9.5 million as of December 31, 2023 and 2022, respectively.

Shentel’s non-current contract liability balances were $ 1.0 million and $ 1.9 million as of December 31, 2023 and 2022, respectively.

Shentel expects its current contract liability balances to be recognized as revenues during the twelve-month periods following the respective balance sheet dates and its non-current contract liability balances to be recognized as revenues after the twelve-month periods following the respective balance sheet dates.

No customer accounted for more than 10% of revenue for the years ended December 31, 2023, 2022, and 2021 and no customer made up more than 10% of accounts receivable at December 31, 2023 and 2022.

See Note 15, Segment Reporting , for a summary of the Company’s revenue streams.

Investments consist of the following:

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The fair value of the SERP investments are based on unadjusted quoted prices in active markets and are classified as Level 1 of the fair value hierarchy.

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.

At December 31, 2021, $ 0.8 million of SERP investments were presented as prepaid expenses and other (current assets).

Those investments were liquidated in July 2022 to pay the current portion of our SERP obligation.

Cost method investments :

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 $ 10.1 million and $ 10.0 million at December 31, 2023 and 2022, respectively.

We recognized approximately $ 70.7 thousand, $ 2.0 million and $ 4.2 million of patronage income in other income (expense) in 2022, 2021 and 2020, respectively.

Historically, approximately 75 % of the patronage distributions were collected in cash and 25 % in equity.

We recognized approximately $ 0.5 million, $ 0.1 million and $ 2.0 million of patronage income in other income (expense) in 2023, 2022 and 2021, respectively.

The Company expects that approximately 88 % of the patronage distributions will be collected in cash and 12 % in equity in 2024.

Equity method investments:

At December 31, 2022, the Company had a 20.0 % ownership interest in Valley Network Partnership (“ValleyNet”).

The Company and ValleyNet purchase capacity on one another’s fiber network through related party transactions.

We recognized revenue of $ 0.7 million, $ 0.7 million, and $ 0.9 million from providing service to ValleyNet during 2022, 2021, and 2020, respectively.

We recognized cost of service of $ 0.1 million, $ 1.2 million, and $ 2.7 million for the use of ValleyNet’s network during 2022, 2021, and 2020, respectively.

During 2023, ValleyNet ceased operations and was dissolved.

In April 2023, Shentel received a payment of $ 0.1 million, representing Shentel’s remaining capital in the partnership, and the investment balance was derecognized from Shentel’s consolidated balance sheets.

Prior to the commencement of dissolution proceedings, the Company and ValleyNet purchased capacity on one another’s fiber network, through related party transactions.

Property, Plant and Equipment

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

The Company's accounts payable as of December 31, 2022 included amounts associated with capital expenditures of approximately $ 43.8 million.

Cash flows for accounts payable and capital expenditures exclude this activity.

The Company’s accounts payable as of December 31, 2023 and 2022 included amounts associated with capital expenditures of approximately $ 51.1 million and $ 43.8 million, respectively.

Depreciation and amortization expense was $ 65.0 million, $ 68.2 million, and $ 54.4 million for the years ended December 31, 2023, 2022, and 2021, respectively.

In 2022, the Company improved internal controls over property, plant, and equipment.

The enhanced controls identified fully depreciated assets no longer held by the Company.

Accordingly, the Company made adjustments to reduce the cost of buildings and structures, cable and fiber, and equipment and software by $ 0.3 million, $ 0.1 million, and $ 62.9 million, respectively, with an offset to accumulated depreciation at December 31, 2022.

In the fourth quarter of 2021, due to the availability of grants awarded under various governmental initiatives in support of rural fiber to the home (“FTTH”) broadband network expansion projects, we decided to cease further expansion of our Beam branded fixed wireless edge-out strategy, which is offered under our Broadband segment.

During year ended December 31, 2023, the Company disposed of fully depreciated property, plant and equipment assets, which reduced plant in service by approximately $ 26.0 million, with a corresponding offset to accumulated depreciation and amortization.

The majority of disposals related to Beam assets as a result of the cessation of Beam assets described in the following paragraph.

In the fourth quarter of 2021, due to the availability of grants awarded under various governmental initiatives in support of rural FTTH broadband network expansion projects, we decided to cease further expansion of our Beam branded fixed wireless edge-out strategy, which is offered under our Broadband segment.

During the second quarter of 2022, the Company permanently ceased operating 20 of our 55 Beam fixed wireless sites.

Consequently, Shentel recorded an impairment charge of $ 4.1 million.

On August 23, 2022, the Company entered into a definitive asset purchase agreement (the “Spectrum Purchase Agreement”) with a wireless carrier pursuant to which the Company agreed to sell certain FCC spectrum licenses and leases utilized in the Company's Beam branded fixed wireless service for total consideration of approximately $ 21.5 million, composed of $ 17.7 million cash and approximately $ 3.8 million of liabilities to be assumed by the wireless carrier (the “Spectrum Transaction”).

The Spectrum Transaction is expected to close in the first half of 2023, subject to the receipt of regulatory approvals and other customary closing conditions.

As a result of the Spectrum Transaction, the Company ceased its remaining Beam operations in the fourth quarter of 2022 and accelerated depreciation for remaining Beam network assets.

Shentel recorded $ 7.4 million in accelerated depreciation for the year ended December 31, 2022.

The Company ceased its remaining Beam operations in the fourth quarter of 2022 and accelerated depreciation for remaining Beam network assets, which were expected to have limited use through 2023.

Shentel recorded $ 7.4 million in accelerated depreciation during the year ended December 31, 2022 and impaired the remaining $ 1.5 million of Beam property, plant and equipment assets during the year ended December 31, 2023.

Shentel also recorded $ 1.3 million in restructuring costs related to severance and other exit costs associated with the cessation of Beam operations during the year ended December 31, 2022.

No restructuring costs related to Beam were recorded during the year ended December 31, 2023.

Goodwill and Intangible Assets

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Finite-lived intangibles:

FCC spectrum licenses — — — 6,811 ( 672 ) 6,139

Subscriber relationships 28,425 ( 27,370 ) 1,055 28,425 ( 26,910 ) 1,515

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Amortization expense was $ 0.5 million, $ 0.7 million and $ 0.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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 respect to the licenses subject to final approval and issuance by the 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.

The FCC approved the Company’s final application for the licenses in the third quarter of 2022, resulting in the issuance of the licenses with a deposit value of $ 12.1 million.

The Company recorded these licenses as indefinite-lived intangible assets.

These licenses are not subject to the Spectrum Transaction described above.

The remaining $ 4.0 million of the deposit was returned to the Company in the form of a cash refund in the fourth quarter of 2022.

As described in Note 5, Property, Plant and Equipment , the Company entered into the Spectrum Purchase Agreement to sell FCC spectrum licenses associated with Beam.

On August 23, 2022, the Company entered into a definitive asset purchase agreement (the “Spectrum Purchase Agreement”) with a wireless carrier pursuant to which the Company agreed to sell certain FCC spectrum licenses and leases utilized in the Company’s Beam branded fixed wireless service for total consideration of approximately $ 21.1 million, composed of $ 17.3 million cash and approximately $ 3.8 million of liabilities to be assumed by the wireless carrier (the “Spectrum Transaction”).

As a result of the expected sale, the Company concluded that the FCC spectrum licenses met the held for sale criteria.

accordingly, $ 13.8 million of indefinite-lived licenses and $ 5.9 million of finite-lived licenses are presented as held for sale, along with the corresponding $ 3.8 million of operating lease liabilities related to the finite-lived licenses.

The Company evaluated the events described here and in Note 5, Property, Plant and Equipment and determined that these events do not represent a strategic shift in the Company’s business.

Accordingly, $ 13.8 million of indefinite-lived licenses and $ 5.9 million of finite-lived licenses are presented as held for sale, along with the corresponding $ 3.8 million of operating lease liabilities related to the finite-lived licenses, as of December 31, 2022.

Upon the closing of the Spectrum Transaction on July 6, 2023, the respective balances were derecognized, resulting in a gain of $ 1.3 million recorded in other income (expense) .

The Company evaluated these events and determined that the Spectrum Transaction does not represent a strategic shift in the Company’s business.

Our finite-lived intangible assets are amortized over the following estimated useful lives:

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2023 December 31,

Deposit for FCC spectrum licenses $ — $ 16,118

Prepaid maintenance expenses $ 5,157 $ 7,444

Broadband contract acquisition costs 2,675 2,809

SERP investments — 801

Interest rate swaps 1,443 —

Other 2,507 1,256

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Broadband contract acquisition costs $ 5,958 $ 5,837

Interest rate swaps 798 —

Prepaid expenses and other 6,942 7,422

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Pension plan — 3,341

Restructuring accrual 146 1,761

Other current liabilities 6,434 11,259

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2023 December 31,

Noncurrent portion of deferred revenue $ 18,679 $ 19,749

Noncurrent portion of deferred lease revenue $ 18,194 $ 18,679

Noncurrent portion of financing leases 1,395 1,500

FCC spectrum license obligations — 3,807

Other liabilities $ 19,883 $ 20,218

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For the year ended December 31, 2021, we recognized expenses of $ 1.7 million and $ 2.2 million, presented in continuing and discontinued operations, respectively.

No restructuring expenses were incurred during the year ended December 31, 2023.

Asset Retirement Obligations:

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

Current ARO liabilities are recorded in accrued liabilities and other in the Company’s consolidated balance sheets.

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

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Balance at end of year $ 10,878 $ 11,368 $ 9,824

At December 31, 2022, our operating leases had a weighted average remaining lease term of twenty years and a weighted average discount rate of 4.5 %.

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

We recognized $ 7.6 million, $ 7.1 million and $ 6.6 million of operating lease expense for the years ended December 31, 2022, 2021 and 2020, respectively.

We recognized $ 0.6 million of interest and depreciation expense on finance leases for each of the years ended December 31, 2022, 2021 and 2020.

The Company leases various broadband network and telecommunications sites, fiber optic cable routes, warehouses, retail stores and office facilities for use in our business.

The components of lease costs were as follows:

Classification Years Ended December 31,

(in thousands) 2023 2022 2021

Finance lease cost

Amortization of leased assets Depreciation $ 477 $ 477 $ 498

Interest on lease liabilities Interest expense 78 83 95

Operating lease cost Operating expense 1

6,982 7,570 7,063

Lease cost $ 7,537 $ 8,130 $ 7,656

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(1) Operating lease expense is presented in cost of service or selling, general and administrative expense based on the use of the relevant facility.

Variable lease payments and short-term lease expense were both immaterial.

We remitted $ 6.1 million, $ 5.6 million, and $ 4.4 million of operating lease payments during the years ended December 31, 2022, 2021 and 2020, respectively.

We also obtained $ 2.5 million, $ 11.1 million and $ 6.8 million of leased assets in exchange for new operating lease liabilities, including new and modified agreements, recognized during the years ended December 31, 2022, 2021 and 2020, respectively.

The following table summarizes the expected maturity of lease liabilities at December 31, 2023:

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Present value of lease liabilities $ 51,439 $ 1,499 $ 52,938

We recognized $ 18.4 million, $ 11.1 million, and $ 9.1 million of operating lease revenue for the years ended December 31, 2022, 2021 and 2020, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in service revenue and other in the consolidated statements of comprehensive (loss) income.

2023 December 31,

Operating leases

Weighted average remaining lease term (years) 19.2 19.8

Weighted average discount rate 4.9 % 4.5 %

Finance leases

Weighted average remaining lease term (years) 12.3 13.1

Weighted average discount rate 5.2 % 5.2 %

Years Ended December 31,

(in thousands) 2023 2022 2021

Cash paid for operating lease liabilities

$ 6,379 $ 6,116 $ 5,643

Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modifications of existing leases)

$ 2,037 $ 2,527 $ 11,140

The Company recognized $ 18.5 million, $ 18.4 million and $ 11.1 million of operating lease revenue for the years ended December 31, 2023, 2022 and 2021, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in service revenue and other in the consolidated statements of comprehensive income (loss).

Substantially all of our lease revenue relates to fixed lease payments.

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Total $ 81,425

Our Credit Agreement, dated July 1, 2021 (the “Credit Agreement”) contains (i) a $ 100 million, five-year undrawn revolving credit facility (the “Revolver”), (ii) a $ 150 million five-year delayed draw amortizing term loan (“Term Loan A-1”) and (iii) a $ 150 million seven-year delayed draw amortizing term loan (“Term Loan A-2” and collectively with Term Loan A-1, the “Term Loans”).

On May 17, 2023, Shentel entered into Amendment No.

1 to Credit Agreement (the “Amendment”) to its existing Credit Agreement, dated as of July 1, 2021, with various financial institutions party thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders (as amended, the “Credit Agreement”), which contains (i) a $ 100 million, five-year undrawn revolving credit facility (the “Revolver”), (ii) a $ 150 million five-year delayed draw amortizing term loan (“Term Loan A-1”) and (iii) a $ 150 million seven-year delayed draw amortizing term loan (“Term Loan A-2” and collectively with Term Loan A-1, the “Term Loans”).

The following loans were outstanding under the Credit Agreement:

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Total debt, net of unamortized loan fees $ 299,899 $ 74,954

Both Term Loan A-1 and Term Loan A-2 bear interest at one-month LIBOR plus a margin of 1.50 %.

The Amendment extended the period during which the Company could borrow under the Term Loans from July 1, 2023 to December 31, 2023.

The Amendment also extended the date on which the Term Loans must begin to be repaid in quarterly principal installments from September 30, 2023 to March 31, 2024.

In addition, the Amendment amended the Credit Agreement to update the benchmark interest rate from the one-month term London Inter-Bank Offered Rate (“LIBOR”) to a rate based on the one-month term Secured Overnight Financing Rate (“SOFR”), added a 10 bps credit spread adjustment for loans that bear interest based on Term SOFR and made certain other conforming changes.

All other material terms and conditions of the Credit Agreement were unchanged.

Management evaluated the amendment and concluded that the amendment was a modification of the existing Credit Agreement and, therefore, modification accounting was applied.

Both Term Loan A-1 and Term Loan A-2 bore interest at one-month LIBOR plus a margin of 1.60 % until May 2023 and now bears interest at one-month term SOFR plus a margin of 1.60 %.

The margin of 1.60 % is variable and determined by the Company’s net leverage ratio.

Interest is paid monthly.

The interest rate was 4.39 % at December 31, 2022.

The interest rate was 6.95 % and 5.89 % at December 31, 2023 and December 31, 2022, respectively.

Our cash payments for interest were $ 8.4 million, $ 0.6 million and $ 10.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Interest paid in 2021 and 2020 was incurred and paid under a prior credit agreement which was repaid in connection with the sale of the Wireless business in 2021.

Refer to Note 15, Discontinued Operations , for details concerning the sale of the Wireless business.

Shentel is charged commitment fees on unutilized portions

of its Revolver and Term Loans.

The Company recorded $ 0.7 million related to these fees for the year ended December 31, 2022, which is included in other (expense) income, net in the consolidated statements of comprehensive (loss) income.

The Credit Agreement contains a borrowing deadline of June 30, 2023, after which the Company will not be able to borrow against the undrawn portion of the Term Loans.

The Company expects to borrow the remaining $ 225.0 million available under the Term Loans by the borrowing deadline.

Interest paid in 2021 was incurred and paid under a prior credit agreement which was repaid in connection with the sale of the Wireless business in 2021.

See Note 16, Discontinued Operations , for details concerning the sale of the Wireless business.

Shentel is charged commitment fees on unutilized portions of its Revolver and Term Loans.

The Company recorded $ 0.5 million, $ 0.7 million and $ 0.5 million related to these fees for the year ended December 31, 2023, 2022 and 2021, respectively, which are included in other (expense) income, net in the consolidated statements of comprehensive income (loss).

The Credit Agreement includes various covenants, including total net leverage ratio and debt service coverage ratio financial covenants.

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.

Shentel’s Term Loans require quarterly payments based on a percentage of the outstanding balance.

Based on the outstanding balance as of December 31, 2022, Term Loan A-1 requires quarterly principal repayments of $ 0.2 million from September 30, 2023 through June 30, 2024;

Based on the outstanding balance as of December 31, 2023, Term Loan A-1 requires quarterly principal repayments of $ 0.9 million from March 31, 2024 through June 30, 2024;

then increasing to $ 1.9 million quarterly from September 30, 2024 through March 31, 2026, with the remaining balance due June 30, 2026.

Based on the outstanding balance as of December 31, 2023, Term Loan A-2 requires quarterly principal repayments of $ 0.4 million through March 31, 2028, with the remaining balance due June 30, 2028.

These scheduled payments are also summarized below:

The following table summarizes the expected payments of Shentel’s outstanding borrowings as of December 31, 2023:

(in thousands) Amount

2028 and thereafter 35,813

Total $ 300,000

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In the event borrowings are made in the future, the entire outstanding principal amount borrowed is due June 30, 2026.

The International Exchange (ICE) Benchmark Administration ceased the publication of one-week and two-month LIBOR on December 31, 2021 and the remaining tenors (overnight, one-month, three-month, six-month and 12-month) will cease to be published on June 30, 2023.

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

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 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.

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.

Derivatives and Hedging

During the second quarter of 2023, Shentel entered into pay fixed ( 2.90 %), receive variable (one-month term SOFR) interest rate swaps totaling $ 150.0 million of notional principal (the “Swaps”).

The Swaps contain monthly payment terms beginning in May 2024, which extend through their maturity dates in June 2026.

The Swaps are designated as cash flow hedges, representing 50 % of the Company’s expected outstanding debt.

The Company uses the Swaps to manage its exposure to interest rate risk for its long-term variable-rate Term Loans.

The table below presents the fair value of the Swaps as well as their classification in the consolidated balance sheets.

The fair value of these instruments was estimated using an income approach and observable market inputs (Level 2):

(in thousands) December 31,

Balance sheet line items containing derivative financial instruments:

Prepaid expenses and other $ 1,443

Deferred charges and other assets 798

Total fair value of derivatives designated as hedging instruments $ 2,241

The Swaps were determined to be highly effective hedges and therefore all change in the fair value of the Swaps was recognized in other comprehensive income.

The Company recognized $ 1.7 million of unrealized gains net of deferred taxes totaling $ 0.6 million for 2023.

Since the Company did not have outstanding interest rate swaps in the prior year period, there were no gains or losses recorded for 2022.

Shentel expects to begin reclassifying amounts related to the Swaps from accumulated other comprehensive income to interest expense in May 2024, when the payment periods of the Swaps begin.

The Company previously held interest rate swaps that were designated as cash flow hedges related to variable-rate long-term debt that were settled in connection with the sale the Company’s Wireless assets and operations described in Note 16, Discontinued Operations.

Similar to the Company’s current Swaps, these interest rate swaps were used to manage its exposure to interest rate risk.

These interest rate swaps were determined to be highly effective hedges their through the settlement dates in 2021.

Upon settlement in 2021, the Company reclassified the remaining balance from accumulated other comprehensive income to the Company’s consolidated statements of comprehensive income (loss), resulting in a net gain on interest rate swaps of $ 4.7 million.

The Company files a consolidated U.S.

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Total current provision ( 170 ) 487 ( 23,957 )

Deferred (benefit) expense

Deferred expense (benefit)

Federal taxes 3,851 ( 1,119 ) 25,518

State taxes ( 708 ) ( 295 ) ( 3,255 )

Total deferred (benefit) expense ( 1,414 ) 22,263 14,906

Income tax benefit $ ( 927 ) $ ( 1,694 ) $ ( 990 )

Total deferred expense (benefit) 3,143 ( 1,414 ) 22,263

Income tax expense (benefit) $ 2,973 $ ( 927 ) $ ( 1,694 )

Effective tax rate 27.0 % 10.0 % ( 27.2 ) %

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(in thousands) 2023 2022 2021

Expected tax (benefit) expense at federal statutory $ ( 1,954 ) $ 1,310 $ 24

State income taxes, net of federal tax effect ( 410 ) 438 54

Expected tax expense (benefit) at federal statutory $ 2,312 $ ( 1,954 ) $ 1,310

State income tax expense (benefit), net of federal tax effect 657 ( 410 ) 438

Revaluation of deferred tax liabilities ( 1,373 ) — ( 5,206 )

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

Excess tax expense (benefit) from share based compensation and other expense, net 818 144 ( 1,068 )

Excess tax deficiency from share-based compensation and other expense, net 854 818 144

Valuation allowance 523 619 —

Income tax benefit $ ( 927 ) $ ( 1,694 ) $ ( 990 )

The change in effective tax rate between 2022 and 2021 was primarily a result of decreased income tax benefit due to a one-time benefit realized in 2021 as a result of the 2021 disposition of Wireless assets and operations (see Note 15, Discontinued Operations ).

The Company's cash payments for income taxes were $ 0.1 million and $ 11.2 million for the years ended December 31, 2022 and 2021, respectively.

The Company's cash refunds for income taxes were $ 9.5 million for the year ended December 31, 2020.

Income tax expense (benefit) $ 2,973 $ ( 927 ) $ ( 1,694 )

The change in effective tax rate between 2023 and 2022 was primarily a result of higher pre-tax income in 2023.

The Company received $ 25.6 million in cash refunds for income taxes for the year ended December 31, 2023.

The Company’s cash payments for income taxes were $ 0.1 million, $ 0.1 million, and $ 11.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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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Deferred tax assets:

Net operating loss carry-forwards $ 59,814 $ 28,398

Leases 14,208 14,809

Asset retirement obligations 2,827 2,972

Net operating loss carry-forwards 28,398 5,878

Pension liabilities 978 2,148

Benefit plan obligations 1,017 978

Accruals and stock-based compensation 4,075 3,087

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The Company also had approximately $ 97.2 million of state net operating losses, which can be carried forward indefinitely.

The Company's income tax benefit for the year ended December 31, 2022 included tax expense of $ 0.6 million for a valuation allowance on deferred tax assets related to federal net operating losses expected to expire unutilized.

The Company had no valuation allowances on deferred tax assets as of December 31, 2021.

The Company’s income tax expense (benefit) for the years ended December 31, 2023 and 2022 included tax expense of $ 0.5 million and $ 0.6 million, respectively, for the valuation allowance on deferred tax assets related to federal net operating losses expected to expire unused.

The Company recorded no valuation allowances prior to December 31, 2022.

As of December 31, 2023 and 2022, the Company had no unrecognized tax benefits.

The Company is not currently subject to state or federal income tax audits as of December 31, 2022.

The Company’s returns are generally open to examination from 2020 forward and the net operating losses acquired from nTelos are open to examination from 2004 forward.

The Company is currently involved in one state income tax audit and no federal income tax audits as of December 31, 2023.

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 4,200,000 shares over a ten-year period beginning in 2014.

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;

The Company’s 2014 Equity Incentive Plan (the “2014 Plan”) allows for the grant of equity based incentive compensation to all employees.

The 2014 Plan authorized grants of up to an additional 4,200,000 shares over a ten-year period beginning in 2014.

As of December 31, 2023, approximately 1,521,963 shares remained available for future issuance under the 2014 Plan.

The 2014 Plan expired on February 18, 2024 and the Company’s Board of Directors approved the resolution to adopt the 2024 Equity Incentive Plan (the “2024 Plan”) on February 13, 2024.

The Board of Directors has recommend the plan to be presented to the shareholders of the Company at the April 30, 2024 Annual Shareholder Meeting to vote for the approval of the 2024 Plan.

The 2024 Plan will authorize grants of up to an additional 3,000,000 shares over a ten-year period beginning no sooner than the effective date of March 1, 2024.

Under the 2014 Plan and the 2024 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.

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Approximately 200,000 RSUs with a weighted average grant price of $ 25.01 vested and 9,000 RSUs with a weighted average grant price of $ 21.67 were forfeited during the year ended December 31, 2023.

The total fair value of RSUs vested was $ 3.3 million during the year ended December 31, 2022.

total fair value of RSUs vested was $ 5.0 million during the year ended December 31, 2023.

Approximately 825,000 RSUs with a weighted average grant price of $ 21.16 remained outstanding as of December 31, 2023.

The Company granted approximately 134,000 RTSRs at a weighted average grant price of $ 23.64 to employees during the year ended December 31, 2023.

Approximately 46,000 RTSRs with a weighted average grant price of $ 33.83 vested and 6,000 RTSRs with a weighted average grant price of $ 36.28 were forfeited during the year ended December 31, 2022.

The total fair

value of RSUs vested was $ 1.2 million during the year ended December 31, 2022.

Approximately 30,000 RTSRs with a weighted average grant price of $ 36.27 vested and no RTSRs were forfeited during the year ended December 31, 2023.

The total fair value of RTSRs vested was $ 1.1 million during the year ended December 31, 2023.

Approximately 293,000 RTSRs with a weighted average grant price of $ 25.80 remained outstanding as of December 31, 2023.

As described above, the amount of RTSRs issued are adjusted on the vesting date.

The amounts above exclude the adjustment and issuance of RTSRs based on actual performance, which totaled approximately 9,000 awards for the year ended December 31, 2022.

The vested amounts above exclude the vesting date adjustment and issuance of RTSRs based on actual performance, which totaled approximately 13,000 RTSRs, resulting in lower shares issued upon vesting of the RTSRs than originally granted.

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

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(in thousands, except per share amounts) 2023 2022 2021

Calculation of net income per share:

(Loss) income from continuing operations $ ( 8,379 ) $ 7,929 $ 1,576

Calculation of net income (loss) per share:

Income (loss) from continuing operations $ 8,038 $ ( 8,379 ) $ 7,929

Income from discontinued operations, net of tax — — 990,902

Net (loss) income $ ( 8,379 ) $ 998,831 $ 125,673

Net income (loss) $ 8,038 $ ( 8,379 ) $ 998,831

Basic weighted average shares outstanding 50,396 50,155 50,026

Basic net (loss) income per share - continuing operations $ ( 0.17 ) $ 0.16 $ 0.03

Basic net income (loss) per share - continuing operations $ 0.16 $ ( 0.17 ) $ 0.16

Basic net income per share - discontinued operations — — 19.81

Basic net (loss) income per share $ ( 0.17 ) $ 19.97 $ 2.52

Basic net income (loss) per share $ 0.16 $ ( 0.17 ) $ 19.97

Effect of stock-based compensation awards outstanding:

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Diluted weighted average shares outstanding 50,715 50,155 50,149

Diluted net (loss) income per share - continuing operations $ ( 0.17 ) $ 0.16 $ 0.03

Diluted net income (loss) per share - continuing operations $ 0.16 $ ( 0.17 ) $ 0.16

Diluted net income per share - discontinued operations — — 19.76

Diluted net (loss) income per share $ ( 0.17 ) $ 19.92 $ 2.51

Diluted net income (loss) per share $ 0.16 $ ( 0.17 ) $ 19.92

There were approximately 117,000 and 259,000 anti-dilutive awards outstanding for the years ended December 31, 2023 and 2021, respectively.

There were approximately 365,000 potentially dilutive equity awards for the year ended December 31, 2022;

however, these securities were excluded from the calculation of diluted weighted average shares outstanding due to the fact that they were anti-dilutive as a result of the Company’s net loss for the year ended December 31, 2022.

The Company paid a special dividend of $ 18.75 per share on August 2, 2021 (the “Special Dividend”).

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In 2021, Shentel commenced negotiations with various governmental entities to receive awards under broadband infrastructure grant programs to strategically expand the Company’s broadband network in order to provide broadband services to unserved residences in the partnering counties in Virginia, Maryland and West Virginia.

Throughout 2021 and 2022, in partnership with

counties in the respective states, Shentel has been awarded grants under the Virginia Telecommunication Initiative (“VATI”) and the Rural Digital Opportunity Fund (“RDOF”) in Virginia, the Connect Maryland Network Infrastructure Grant Program (“Connect MD”) in Maryland, and the Major Broadband Projects Strategies (“MBPS”) in West Virginia.

Throughout 2021, 2022 and 2023, in partnership with counties in the respective states, Shentel has been awarded grants under the Virginia Telecommunication Initiative (“VATI”) and the Rural Digital Opportunity Fund (“RDOF”) in Virginia, the Connect Maryland Network Infrastructure Grant Program (“Connect MD”) in Maryland, and the Major Broadband Projects Strategies (“MBPS”) and Line Extension Advancement and Development (“LEAD”) programs in West Virginia.

The following table summarizes the awards under each program:

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Total $ 85,751

To receive such grant distributions, we entered into agreements with each partnering county in Virginia and Maryland and expect to complete similar agreement in West Virginia.

To receive such grant distributions, the Company entered into agreements with each partnering county in Virginia, Maryland and West Virginia.

These agreements outline certain build-out milestones.

The network is required to meet certain performance conditions to ensure that minimum download and upload speeds are able to be provided to the underserved residences.

The network is required to meet certain performance conditions to ensure that minimum download and upload speeds are able to be provided to the unserved residences.

As discussed in Note 2, Summary of Significant Accounting Policies , government assistance that is used to fund capital expenditures is recorded as a reduction to property, plant and equipment.

Given the primary purpose of the programs listed above is to fund build-out of the Company’s broadband network, amounts recognized under these programs are recorded as a reduction to the related property, plant and equipment and cash receipts are presented as cash flows from investing activities in the Company’s consolidated statements of cash flows.

The Company recognizes grant receivables at the time it becomes probable that the Company will be eligible to receive the grant, which is estimated to correspond with the date when specified build-out milestones are achieved.

The grant is treated as a reduction to the corresponding property, plant and equipment asset balance and is recognized through a reduction in depreciation expense over the life of the corresponding asset.

Reimbursable amounts are dependent upon the actual construction costs.

The Company has not recognized any amounts under these programs as of December 31, 2022 and 2021.

As a result of these programs, the Company received $ 1.9 million in cash reimbursements during the year ended December 31, 2023 and has recorded approximately $ 1.9 million in accounts receivable as of December 31, 2023.

The Company did not recognize any amounts under these programs during the years ended December 31, 2022 and 2021 or as of December 31, 2022.

Commitments and Contingencies

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The scheduled payments under those obligations are summarized in Note 8, Leases .

We also have outstanding unconditional purchase commitments to procure marketing services and IT software licenses through 2026.

We also have outstanding unconditional purchase commitments to procure programming, marketing services and IT software licenses through 2026.

For the years ended December 31, 2023, 2022 and 2021 we paid $ 4.6 million, $ 5.2 million and $ 3.4 million, respectively, for the programming, marketing and IT software license purchase commitments.

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(in thousands) Purchase Commitments

2028 and thereafter 109

Total $ 9,647

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Segment Reporting

Shentel has presented Residential & SMB - Cable Markets and Residential & SMB - Glo Fiber Markets separately for 2023.

These revenues were previously reported in one line under the description “Residential & SMB”.

Shentel has amended the presentation for 2022 and 2021.

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 (loss) income and the consolidated statements of cash flows.

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 (loss) 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.

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External revenue

Residential & SMB $ 193,974 $ — $ — $ 193,974

Residential & SMB - Cable Markets $ 176,879 $ — $ — $ 176,879

Residential & SMB - Glo Fiber Markets 35,103 — — 35,103

Commercial Fiber 42,132 — — 42,132

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Selling, general and administrative 62,834 1,412 39,385 103,631

Restructuring expense 849 — 402 1,251

Impairment expense 2,552 — — 2,552

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External revenue

Residential & SMB $ 177,530 $ — $ — $ 177,530

Residential & SMB - Cable Markets $ 175,681 $ — $ — $ 175,681

Residential & SMB - Glo Fiber Markets 18,293 — — 18,293

Commercial Fiber 38,821 — — 38,821

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Service revenue and other 248,830 18,541 — 267,371

Revenue for service provided to the discontinued Wireless operations 4,459 5,311 ( 545 ) 9,225

Intercompany revenue and other 185 378 ( 563 ) —

Total revenue 249,015 18,919 ( 563 ) 267,371

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External revenue

Residential & SMB $ 154,956 $ — $ — $ 154,956

Residential & SMB - Cable Markets $ 169,183 $ — $ — $ 169,183

Residential & SMB - Glo Fiber Markets 8,347 — — 8,347

Commercial Fiber 30,842 — — 30,842

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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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Capital expenditures $ 156,131 $ 977 $ 2,993 $ 160,101

A reconciliation of the total of the reportable segments’ operating (loss) income to consolidated (loss) income from continuing operations before income taxes is as follows:

A reconciliation of the total of the reportable segments’ operating income (loss) to consolidated income (loss) from continuing operations before income taxes is as follows:

Years Ended December 31,

(in thousands) 2023 2022 2021

Total consolidated operating loss $ ( 7,958 ) $ ( 2,430 ) $ ( 2,601 )

Other (expense) income, net ( 1,348 ) 8,665 3,187

(Loss) income from continuing operations before income taxes $ ( 9,306 ) $ 6,235 $ 586

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 applicable.

Total consolidated operating income (loss) $ 9,624 $ ( 7,958 ) $ ( 2,430 )

Other income (expense), net 1,387 ( 1,348 ) 8,665

Income (loss) from continuing operations before income taxes $ 11,011 $ ( 9,306 ) $ 6,235

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 As a result, total assets by reportable segment have not been presented.

Discontinued Operations

On July 1, 2021, pursuant to the 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 Transaction (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 (loss) income.

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 and 2020:

Income from discontinued operations, net of tax in the consolidated statements of comprehensive income (loss) consist of the following for December 31, 2021:

(in thousands)

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Income from discontinued operations, net of tax $ 990,902

There was no material income from discontinued operations for the year ended December 31, 2022.

There was no material income from discontinued operations for the years ended December 31, 2023 and 2022.

Valuation and Qualifying Accounts

Changes in the Company’s allowance for doubtful accounts for accounts receivable for the years ended December 31, 2022, 2021 and 2020 are summarized below:

(in thousands) Balance at Beginning of Year Recoveries added to allowance Bad debt expense Write-offs Balance at End of Year

Changes in the Company’s allowance for credit losses for accounts receivable for the years ended December 31, 2023, 2022 and 2021 are summarized below:

(in thousands) Balance at Beginning of Year Recoveries added to allowance Provision for Credit Losses Write-offs Balance at End of Year

Year Ended December 31, 2023

Allowance for doubtful accounts $ 352 $ 414 $ 1,972 $ ( 1,962 ) $ 776

Allowance for credit losses $ 776 $ 424 $ 2,898 $ ( 3,212 ) $ 886

Year Ended December 31, 2022

Allowance for doubtful accounts $ 614 $ 530 $ 1,028 $ ( 1,820 ) $ 352

Allowance for credit losses $ 352 $ 414 $ 1,972 $ ( 1,962 ) $ 776

Year Ended December 31, 2021

Allowance for doubtful accounts $ 533 $ 758 $ 1,220 $ ( 1,897 ) $ 614

Allowance for credit losses $ 614 $ 530 $ 1,028 $ ( 1,820 ) $ 352

Exhibits Index

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(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 25, 2022 , filed as exhibit 3.1 to the Company's Current Report on Form 8-K filed on October 27 , 2022.

2.2 Agreement and Plan of Merger, dated October 24, 2023, by and among Shenandoah Telecommunications Company, Fox Merger Sub I Inc., Fox Merger Sub II LLC, Horizon Acquisition Parent LLC, Novacap TMT V, L.P.

and the Sellers set forth on the signature pages thereto ( inc orporated by reference from Exh ibit 2.1 to the Company ’ s Current Report on Form 8-K filed on October 26 , 2023 ).

2.3 Investment Agreement, dated October 24, 2023, by and among Shenandoah Telecommunications Company, Shentel Broadband Holding Inc., ECP Fiber Holdings, LP and, solely for the limited purposes specified therein, Hill City Holdings, LP (incorporated by reference from Exhibit 2.

2 to the Company’s Current Report on Form 8-K filed on October 26, 2023).

3.1 Amended and Restated Articles of Incorporation of Shenandoah Telecommunications Company, effective August 31, 2019 (incorporated by reference from E xhibit 3.2 to the Company ’ s Quarterly Report on Form 10-Q filed on September 30, 2019 ) .

3.2 Amended and Restated Bylaws of Shenandoah Telecommunications Company, effective October 25, 2022 (incorporated by reference from E xhibit 3.1 to the Company ’ s Current Report on Form 8-K filed on October 27, 2022 ) .

Description of the Company ’ s Common Stock Registered Under Section 12 of the Exchange Act of 1934.

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

4.2 Shenandoah Telecommunications Company Dividend Reinvestment Plan (incorporated by reference from Exhibit 4.4 to the Company’s Registration Statement on Form S-3D (No.

10.1 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).

10.2 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.

10.3 2014 Equity Incentive Plan filed as Appendix A to the Company’s Definitive Proxy Statement filed on March 13, 2014 (No.

Amendment No.

1 to Credit Agreement, dated May 17, 2023, among Shenandoah Telecommunications Company, certain of its subsidiaries, CoBank ACB, as administrative agent, and the other lenders party thereto.

10.3 Consent and Amendment No.

2 to Credit Agreement, dated October 24, 2023, by and among Shenandoah Telecommunications Company, certain of its subsidiaries, CoBank ACB, as administrative agent, and the lenders party thereto (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 26, 2023).

10.4 Commitment Letter, dated October 24, 2023, by and among Shenandoah Telecommunications Company, certain of its subsidiaries, CoBank ACB, Citizens Bank, N.A., Bank of America, N.A.

and Fifth Third Bank, National Association.

(incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 26, 2023).

Supplemental Executive Retirement Plan as amended and restated (incorporated by referen ce from Exhibit 10.14 to the Company’s Current Report on Form 8-K filed on March 23, 2007 ) .

2014 Equity Incentive Plan (incorporated by reference from Appendix A to the Company’s Definitive Proxy Statement filed on March 13, 2014 (No.

333-196990) ) .

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

*10.5 Form of Restricted Stock Unit Award for Executives under the 2014 Equity Incentive Plan.

*10.6 Form of RTSR Performance Share Unit Award for Executives under the 2014 Equity Incentive Plan.

10.7 Form of Severance Agreement, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 11, 2020.

10.8 Form of Strategic Retention Performance Share Unit Award, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 23, 2022.

10.8 Form of Restricted Stock Unit Award for Executives under the 2014 Equity Incentive Plan (incorporated by reference from Exhibit 10.

5 to the Company’s Annual Report on Form 10-K filed on February 2 2, 2023 ) .

Form of RTSR Performance Share Unit Award for Executives under the 2014 Equity Incentive Plan (incorporated by reference from Exhibit 10 .

6 to the Company’s Annual Report on Form 10-K filed on February 22, 2023 ).

Form of Strategic Retention Performance Share Unit Award (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 23, 2022).

10.11 Form of Severance Agreement (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 11, 2020).

*21 List of Subsidiaries.

*23.1 Consent of RSM US L L P, Independent Registered Public Accounting Firm.

*23.1 Consent of RSM US LLP, Independent Registered Public Accounting Firm.

*23.2 Consent of KPMG LLP, Independent Registered Public Accounting Firm.

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**32 Certifications pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C.

S henandoah T elecommunications C omp any I ncentive A ward R ecoupment P olic y.

(101) Formatted in XBRL (Extensible Business Reporting Language)

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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