SHENANDOAH TELECOMMUNICATIONS COMPANY This management's discussion and analysis includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this report, the words "anticipate," "believe," "estimate," "expect," "intend," "plan" and similar expressions as they relate toShenandoah Telecommunications Company or its management are intended to identify these forward-looking statements. All statements regardingShenandoah Telecommunications Company's expected future financial position and operating results, business strategy, financing plans, forecasted trends relating to the markets in whichShenandoah Telecommunications Company operates and similar matters, including information concerning our response to COVID-19, are forward-looking statements. We cannot assure you that the Company's expectations expressed or implied in these forward-looking statements will turn out to be correct. The Company's actual results could be materially different from its expectations because of various factors, including those discussed below and under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for its fiscal year endedDecember 31, 2020 as well as natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, changes in general economic conditions, increases in costs, changes in regulation and other competitive factors. The following management's discussion and analysis should be read in conjunction with the Company's Annual Report on Form 10-K for its fiscal year endedDecember 31, 2020 , including the consolidated financial statements and related notes included therein. Overview
Management's Discussion and Analysis is organized around our reporting segments. Refer to Note 2, Discontinued Operations, and Note 14, Segment Reporting, in our unaudited condensed consolidated financial statements for additional information.
Recent Developments
OnJuly 1, 2021 , pursuant to the previously announced Asset Purchase Agreement (the "Purchase Agreement"), datedMay 28, 2021 , betweenShentel and T-Mobile USA, Inc. ("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$60 million settlement of the waived management fees by Sprint Corporation, an indirect subsidiary of T-Mobile ("Sprint"), and net of certain transaction expenses (the "Transaction"). The Company's Wireless assets and operations were classified as discontinued operations after Sprint delivered notice to the Company exercising its option to purchase the Wireless assets and operations onAugust 26, 2020 . 19 -------------------------------------------------------------------------------- Table of Contents Results of Operations Three Months EndedJune 30, 2021 Compared with the Three Months EndedJune 30, 2020 Three Months Ended June 30, Change ($ in thousands) 2021 % of Revenue 2020 % of Revenue $ % Revenue$ 60,700 100.0$ 54,336 100.0 6,364 11.7 Operating expenses 57,997 95.5 56,203 103.4 1,794 3.2 Operating income (loss) 2,703 4.5 (1,867) (3.4) 4,570 244.8 Other income, net 1,338 2.2 1,271 2.3 67 5.3 Income (loss) before taxes 4,041 6.7 (596) (1.1) 4,637 778.0 Income tax expense (benefit) 2,185 3.6 (60) (0.1) 2,245 3,741.7 Income (loss) from continuing operations 1,856 3.1 (536) (1.0) 2,392 446.3 Income from discontinued operations, net of tax 51,566 85.0 29,783 54.8 21,783 73.1 Net income$ 53,422 88.0$ 29,247 53.8 24,175 82.7 Revenue Revenue increased approximately$6.4 million , or 11.7%, during the three months endedJune 30, 2021 compared with the three months endedJune 30, 2020 , driven by growth of$6.1 million , or 12.2%, in the Broadband segment and$0.4 million , or 8.3%, in the Tower segment. Refer to the discussion of the results of operations for the Tower and Broadband segments, included within this quarterly report, for additional information. Operating expenses Operating expenses increased approximately$1.8 million , or 3.2%, during the three months endedJune 30, 2021 compared with the three months endedJune 30, 2020 , driven by$7.1 million in incremental Broadband operating expenses incurred primarily to support the expansion of ourGlo Fiber and Beam fixed wireless services partially offset by a$5.6 million decline in Corporate expenses due to a combination of lower cash and stock compensation, legal, and transaction fees. The cash compensation expense decline was driven by lower expected incentive bonus and the workforce reduction. The decline in stock compensation expense was due to delay of annual restricted stock grants. Earlier in the year, we implemented a workforce reduction plan whereby certain employees will leave the Company by 2022. We recognized a restructuring accrual for severance benefits payable to those employees totaling less than$0.1 million during the three months endedJune 30, 2021 , and expect to incur an additional$1.4 million of severance expense from continuing operations during the third quarter of 2021, following the sale of our Wireless assets and operations. The workforce reduction plan is expected to decrease the Company's annualized run-rate operating expenses for continuing operations by approximately$4.2 million . Income tax expense (benefit) Income tax expense increased approximately$2.2 million during the three months endedJune 30, 2021 compared with the three months endedJune 30, 2020 , primarily due to a$1.0 million non-cash charge related to the revaluation of deferred tax liabilities for a change in tax law in the state ofWest Virginia and changes in taxable income. Income from discontinued operations, net of tax Income from discontinued operations, net of tax, increased by$21.8 million during the three months endedJune 30, 2021 as compared with the three months endedJune 30, 2020 , primarily driven by a$22.9 million decline in depreciation and amortization primarily as a result of ceasing depreciation and amortization of assets held for sale during the third quarter of 2020, a$14.5 million decline in cost of services primarily due to ceasing amortization on our right of use assets under operating leases during the third quarter of 2020, a$3.5 million decline in selling, general and administrative due primarily to lower compensation and commissions, partially offset by a$9.7 million decline in service revenue and other related to the travel revenue settlement received from Sprint in 2020, and an$8.5 million of higher income tax driven by changes in taxable income. 20 -------------------------------------------------------------------------------- Table of Contents Earlier in the year, we implemented a workforce reduction plan whereby certain employees will leave the Company by 2022. We recognized a restructuring accrual for severance benefits payable to those employees totaling$0.3 million during the three months endedJune 30, 2021 . Under our workforce reduction plan, we expect to incur an additional$2.6 million of severance expense within income from discontinued operations when the sale of our Wireless assets and operations is completed, in the third quarter of 2021.
Six Months Ended
The Company's consolidated results from operations are summarized as follows:
Six Months Ended June 30, Change
($ in thousands) 2021 % of Revenue 2020 % of Revenue $ %
Revenue $ 120,391 100.0 $ 107,470 100.0 12,921 12.0
Operating expenses 115,317 95.8 110,701 103.0 4,616 4.2
Operating income (loss) 5,074 4.2 (3,231) (3.0) 8,305 257.0
Other income, net 2,938 2.4 2,020 1.9 918 45.4
Income (loss) before taxes 8,012 6.7 (1,211) (1.1) 9,223 761.6
Income tax expense (benefit) 3,107 2.6 (825) (0.8) 3,932
476.6
Income (loss) from continuing operations 4,905 4.1 (386) (0.4) 5,291
1,370.7
Income from discontinued operations, net of tax 100,038 83.1 42,913 39.9 57,125 133.1 Net income$ 104,943 87.2$ 42,527 39.6 62,416 146.8 Revenue Revenue increased approximately$12.9 million , or 12.0%, during the six months endedJune 30, 2021 compared with the six months endedJune 30, 2020 , driven by growth of$11.5 million , or 11.5%, in the Broadband segment and$1.3 million , or 16.1%, in the Tower segment. Refer to the discussion of the results of operations for the Tower and Broadband segments, included within this quarterly report, for additional information. Operating expenses Operating expenses increased approximately$4.6 million , or 4.2%, during the six months endedJune 30, 2021 compared with the six months endedJune 30, 2020 , driven by$12.7 million incremental Broadband operating expenses incurred primarily to support the launch of ourGlo Fiber and Beam fixed wireless services partially offset by an$8.6 million decline in Corporate expenses due to a combination of lower cash and stock compensation, professional services, depreciation, legal and transaction fees. The cash compensation expense decline was driven primarily by lower expected incentive bonus and the workforce reduction. The decline in stock compensation was due to the delay of annual restricted stock grants. The decline in professional fees was driven by a reduction in temporary labor and audit fees primarily as a result of improvements in our internal control over financial reporting. Earlier in the year we implemented a workforce reduction plan whereby certain employees will leave the Company by 2022. We recognized a restructuring accrual for severance benefits payable to those employees totaling$0.7 million during the six months endedJune 30, 2021 , and expect to incur an additional$1.4 million of severance expense within income from continuing operations when the sale of our Wireless assets and operations is completed, in the third quarter of 2021. The workforce reduction plan is expected to decrease the Company's annualized run-rate operating expenses for continuing operations by approximately$4.2 million . Income tax expense (benefit) Income tax expense of approximately$3.1 million increased approximately$3.9 million during the six months endedJune 30, 2021 compared with the six months endedJune 30, 2020 , primarily due to a$1.0 million non-cash charge related to the revaluation of deferred tax liabilities for a change in tax law in the state ofWest Virginia and changes in taxable income. Income from discontinued operations, net of tax Income from discontinued operations, net of tax, increased by$57.1 million during the six months endedJune 30, 2021 as compared with the six months endedJune 30, 2020 , primarily driven by a$47.7 million decline in depreciation and amortization primarily as a result of ceasing depreciation and amortization of assets held for sale during the third quarter of 21 -------------------------------------------------------------------------------- Table of Contents 2020, a$28.5 million decline in cost of services primarily due to ceasing amortization on our right of use assets under operating leases during the third quarter of 2020,$6.0 million reduction in selling, general and administrative from lower compensation and commissions and advertising, a$2.3 million decline in interest expense primarily driven by lower interest rates on our term loans, partially offset by$21.1 million of higher income tax driven by changes in taxable income and$6.0 million increase in transaction fees. Earlier in the year we implemented a workforce reduction plan whereby certain employees will leave the Company by 2022. We recognized a restructuring accrual for severance benefits payable to those employees totaling$0.4 million during the six months endedJune 30, 2021 . Under our workforce reduction plan, we expect to incur an additional$2.6 million of severance expense within income from discontinued operations when the sale of our Wireless assets and operations is completed, in the third quarter of 2021.
Broadband
Our Broadband segment provides broadband internet, video and voice services to residential and commercial customers in portions ofVirginia ,West Virginia ,Maryland ,Pennsylvania , andKentucky , via hybrid fiber coaxial cable under the brand name of Shentel, fiber optics under the brand name ofGlo Fiber and fixed wireless network under the brand name of Beam. The Broadband segment also leases dark fiber and provides Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. The Broadband segment also provides voice and DSL telephone services to customers inVirginia's Shenandoah County and portions of adjacent counties as a Rural Local Exchange Carrier ("RLEC"). These integrated networks are connected by over 7,000 fiber route mile network. This fiber optic network also supports our Wireless segment operations, which are currently classified as discontinued operations, and these intercompany transactions are reported at their market value. 22 -------------------------------------------------------------------------------- Table of Contents The following table indicates selected operating statistics of our Broadband segment:June 30 ,June 30, 2021 2020
Broadband homes and businesses passed (1) 278,952 220,442 Incumbent Cable (2)
210,787 207,269
Glo Fiber 46,368 13,173
Beam 21,797 -
Broadband customer relationships (3) 116,987 101,816
Residential & SMB RGUs:
Broadband Data 111,475 92,695
Incumbent Cable (2) 103,465 91,364
Glo Fiber 7,169 1,331
Beam 841 -
Video (2) 51,355 53,153
Voice (2) 34,664 32,252Total Residential & SMB RGUs (excludes RLEC) 197,494 178,100
Residential & SMB Penetration (4) Broadband Data 40.0 % 42.0 % Incumbent Cable 49.1 % 44.1 % Glo Fiber 15.5 % 10.1 % Beam 3.9 % - % Video 18.4 % 24.1 % Voice 14.4 % 16.5 % Residential & SMB ARPU (5) Broadband Data$ 78.05 $ 77.93 Incumbent Cable$ 78.30 $ 77.90 Glo Fiber$ 73.92 $ 82.25 Beam$ 72.38 $ - Video$ 100.06 $ 93.49 Voice$ 28.85 $ 29.51 Fiber route miles 7,041 6,478 Total fiber miles (6) 440,236 346,969
_______________________________________________________
(1)Homes and businesses are considered passed ("homes passed") if we can connect
them to our network without further extending the distribution system. Homes
passed is an estimate based upon the best available information. Homes passed
will vary among video, broadband data and voice services.
(2)The Company acquired Canaan Cable on December 31, 2020 adding 1,100 homes
passed, 512 data RGUs, 324 video RGUs and 164 voice RGUs.
(3)Customer relationships represent the number of billed customers who receive
at least one of our services.
(4)Penetration is calculated by dividing the number of users by the number of
homes passed or available homes, as appropriate.
(5)Average Revenue Per RGU calculation = (Residential & SMB Revenue * 1,000) /
average RGUs / 3 months
(6)Total fiber miles are measured by taking the number of fiber strands in a
cable and multiplying that number by the route distance. For example, a 10 mile
route with 144 fiber strands would equal 1,440 fiber miles.
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Three Months Ended
Broadband results from operations are summarized as follows:
Three Months Ended June 30, Change
($ in thousands) 2021 % of Revenue 2020 % of Revenue $ %
Broadband operating revenue
Residential & SMB $ 43,989 78.2 $ 37,684 75.2 6,305 16.7
Commercial Fiber 8,523 15.2 8,376 16.7 147 1.8
RLEC & Other 3,715 6.6 4,073 8.1 (358) (8.8)
Total broadband revenue 56,227 100.0 50,133 100.0 % 6,094 12.2
Broadband operating expenses
Cost of services 23,127 41.1 20,861 41.6 2,266 10.9
Selling, general, and administrative 12,806 22.8 9,465 18.9 3,341 35.3
Restructuring expense 27 - - - 27 -
Depreciation and amortization 11,775 20.9 10,307 20.6 1,468 14.2
Total broadband operating expenses 47,735 84.9 40,633 81.1 7,102 17.5
Broadband operating income $ 8,492 15.1 $ 9,500 18.9 (1,008) (10.6)
Residential & SMB (small & medium business) revenue
Residential & SMB revenue increased approximately $6.3 million , or 16.7%, during
the three months ended June 30, 2021 primarily driven by 20.3% year-over-year
growth in broadband revenue generating units ("RGUs") driven by demand for
higher speed data service and the expansion of our Glo Fiber and Beam services.
Commercial Fiber revenue
Commercial Fiber revenue was comparable with the prior period.
RLEC & Other revenue
RLEC & Other revenue decreased approximately $0.4 million , or 8.8%, compared
with the three months ended June 30, 2020 due primarily driven by the migration
of DSL subscribers to our broadband cable modem service and lower governmental
support. We expect RLEC revenue to continue to decline in future periods.
Cost of services
Cost of services increased approximately $2.3 million , or 10.9%, compared with
the three months ended June 30, 2020 , primarily driven by the growth of our Glo
Fiber and Beam fixed wireless products. This included a $0.7 million increase in
compensation expense from increased staffing, as well as a $0.9 million increase
in installation, maintenance, and other expenses. Higher video programming costs
drove the remaining increase of $0.5 million .
Selling, general and administrative
Due to the continued growth of our Broadband segment, our selling, general and
administrative expense increased $3.3 million or 35.3% compared with the three
months ended June 30, 2020 , driven by a $1.1 million increase in Glo Fiber and
Beam advertising and telemarketing expenses, a $1.0 million increase in software
and professional fees from enhancements to our back-office systems, a $0.5
million increase in commissions expense from higher sales volume arising from
our Glo Fiber service, and a $0.2 million increase in franchise and regulatory
fees.
Depreciation and amortization
Depreciation and amortization increased $1.5 million or 14.2%, compared with the
three months ended June 30, 2020 , primarily as a result of our network expansion
and the deployment of infrastructure necessary to support new fiber-to-the-home
service, Glo Fiber , and Beam fixed wireless.
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Six Months Ended
Broadband results from operations are summarized as follows:
Six Months Ended June 30, Change
($ in thousands) 2021 % of Revenue 2020 % of Revenue $ %
Broadband operating revenue
Residential & SMB $ 86,919 78.0 $ 74,693 74.8 12,226 16.4
Commercial Fiber 17,002 15.3 16,735 16.7 267 1.6
RLEC & Other 7,460 6.7 8,491 8.5 (1,031) (12.1)
Total broadband revenue 111,381 100.0 99,919 100.0 % 11,462 11.5
Broadband operating expenses
Cost of services 45,263 40.6 40,247 40.3 5,016 12.5
Selling, general, and administrative 23,531 21.1 19,169 19.2 4,362 22.8
Restructuring expense 132 0.1 - - 132 -
Depreciation and amortization 23,536 21.1 20,341 20.4 3,195 15.7
Total broadband operating expenses 92,462 83.0 79,757 79.8 12,705 15.9
Broadband operating income $ 18,919 17.0 $ 20,162 20.2 (1,243) (6.2)
Residential & SMB (small & medium business) revenue
Residential & SMB revenue increased approximately
Commercial Fiber revenue Commercial Fiber revenue was comparable with the prior period. RLEC & Other revenue RLEC & Other revenue decreased approximately$1.0 million , or 12.1%, compared with the six months endedJune 30, 2020 due primarily to a decline in residential DSL subscribers and lower governmental support. We expect RLEC revenue to continue to decline in future periods. Cost of services Cost of services increased approximately$5.0 million , or 12.5%, compared with the six months endedJune 30, 2020 , primarily driven by the growth of ourGlo Fiber and Beam fixed wireless products. This included a$2.3 million increase in compensation expense from increased staffing, as well as a$1.6 million increase in installation, maintenance, and other expenses. Higher video programming costs drove the remaining increase of$1.0 million . Selling, general and administrative Selling, general and administrative expense increased$4.4 million , or 22.8%, compared with the six months endedJune 30, 2020 , driven by a$1.9 million increase in software and professional fees, a$0.7 million increase in commissions expense from higher sales volume arising from ourGlo Fiber service,$0.5 million increase in telemarketing fees,$0.3 million increase in compensation expense from higher staffing to support ourGlo Fiber and Beam fixed wireless services, and a$0.3 million increase in advertising expense. Restructuring expense Earlier in the year, we implemented a workforce reduction program that impacted certain broadband employees and as a result we incurred$0.1 million of severance expenses. Depreciation and amortization Depreciation and amortization increased$3.2 million or 15.7%, compared with the six months endedJune 30, 2020 , primarily as a result of our network expansion and the deployment of infrastructure necessary to support new fiber-to-the-home service,Glo Fiber , and fixed wireless solution, Beam. 25 -------------------------------------------------------------------------------- Table of Contents Tower Our Tower segment owns cell towers and leases colocation space on the towers to wireless communications providers, including our Wireless segment that is currently classified as a discontinued operation. Substantially all of our owned towers are built on ground that we lease from the respective landlords. The colocation space that is leased to our discontinued Wireless operations is priced at our estimate of fair market value. The following table indicates selected operating statistics of the Tower segment: June 30, June 30, 2021 2020 Macro tower sites 223 220 Tenants (1) 448 413 Average tenants per tower 1.9 1.8
_______________________________________________________
(1)Includes 239 and 206 intercompany tenants for our Wireless operations,
(reported as a discontinued operation), and Broadband operations, as of
Three Months EndedJune 30, 2021 Compared with the Three Months EndedJune 30, 2020 Three Months Ended June 30, Change ($ in thousands) 2021 % of Revenue 2020 % of Revenue $ % Tower revenue$ 4,614 100.0$ 4,259 100.0 % 355 8.3 Tower operating expenses 2,105 45.6 2,030 47.7 75 3.7 Tower operating income$ 2,509 54.4$ 2,229 52.3 280 12.6 Revenue Revenue increased approximately$0.4 million , or 8.3%, during the three months endedJune 30, 2021 compared with the three months endedJune 30, 2020 , due to an 8.5% increase in tenants.
Revenue earned from leasing colocation space to our discontinued wireless
operations was approximately
Operating expenses Operating expenses were consistent with the prior year period.
Six Months Ended
Tower results from operations are summarized as follows:
Six Months Ended June 30, Change
($ in thousands) 2021 % of Revenue 2020 % of Revenue $ %
Tower revenue $ 9,279 100.0 $ 7,989 100.0 % 1,290 16.1
Tower operating expenses 4,068 43.8 3,965 49.6 103 2.6
Tower operating income $ 5,211 56.2 $ 4,024 50.4 1,187 29.5
Revenue
Revenue increased approximately $1.3 million , or 16.1%, during the six months
ended June 30, 2021 compared with the six months ended June 30, 2020 , due to an
8.5% increase in tenants and a 6.2% increase in average revenue per tenant.
Revenue earned from leasing colocation space to our discontinued wireless
operations was approximately
Operating expenses
Operating expenses were consistent with the prior year period.
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Financial Condition, Liquidity and Capital Resources
On July 1, 2021 , pursuant to the Purchase Agreement, 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, net of certain transaction
expenses. The Company used approximately $684 million of the proceeds received
from the sale to fully repay all outstanding principal amounts under, and
terminate, the then-existing credit agreement (the "Prior Credit Agreement"),
refer to Note 9, Debt , for additional information, and to fully repay and
terminate our interest rate swaps, refer to Note 10, Derivatives and Hedging.
Sources and Uses of Cash: Our principal sources of liquidity are our cash and
cash equivalents, cash generated from operations, proceeds available under our
New Credit Agreement, and proceeds from the disposition of our Wireless assets
and operations.
As of June 30, 2021 our cash and cash equivalents totaled $248.8 million . Giving
effect to the closing of the Transaction, the Special Dividend, termination of
the Prior Credit Agreement and the execution of the New Credit Agreement (as
defined below) as if those events had occurred on June 30, 2021 , the Company
would have had approximately $480 million of liquidity as of June 30, 2021 on a
pro forma basis.
Operating activities from continuing operations generated approximately $28.2
million during the six months ended June 30, 2021 , representing a decrease of
$1.1 million compared with 2020, driven by changes in working capital.
Operating activities from discontinued operations generated
Net cash used in investing activities for continuing operations increased$25.5 million during the six months endedJune 30, 2021 , compared with the six months endedJune 30, 2020 , primarily due to the following: •$26.7 million increase in capital expenditures due primarily to higher spending in the Broadband segment driven by ourGlo Fiber and Beam market expansions. •Net cash used in investing activities for discontinued operations decreased$12.8 million to$0.9 million during the six months endedJune 30, 2021 , due to postponement of expansion projects in contemplation of the pending sale of our Wireless assets and operations. Net cash used in financing activities for continuing operations during the six months endedJune 30, 2021 was consistent with the six months endedJune 30, 2020 .
Net cash used in financing activities for discontinued operations during the six
months ended
Indebtedness: OnJuly 1, 2021 , we entered into a new Credit Agreement (the "New Credit Agreement") with various financial institutions party thereto. The New Credit Agreement provides for the following three credit facilities (collectively, the "Facilities"), in an aggregate amount equal to$400 million: (i) a$100 million five-year revolving credit facility (the "Revolver"), (ii) a$150 million five-year delay draw amortizing term loan (the "Term Loan A-1") and (iii) a$150 million seven-year delay draw amortizing term loan (the "Term Loan A-2" and, together with the Term Loan A-1, the "Term Loans"). The New Credit Agreement includes a provision under which the Company may request that additional term loans be made to it in an amount not to exceed the sum of (1) the greater of (a)$75 million and (b) 100% of Consolidated EBITDA (as defined in the New Credit Agreement), calculated on a pro forma basis in accordance with the New Credit Agreement, plus (2) an additional unlimited amount subject to a maximum Total Net Leverage Ratio (as defined in the New Credit Agreement) of 4.00:1.00, calculated on a pro forma basis in accordance with the New Credit Agreement, subject to the receipt of commitments from one or more lenders for any such additional term loans and other customary conditions. The availability of the Facilities to the Company is subject to the satisfaction or waiver of certain customary conditions set forth in the New Credit Agreement. The Company may use the proceeds from the Revolver and the Term Loans to finance capital expenditures, provide working capital, and for other general corporate purposes of the Company and its subsidiaries, including the payment of fees and expenses in connection with the foregoing. If drawn on, the Term Loans will be repaid in quarterly principal installments commencing onSeptember 30, 2023 , with the unpaid balance of the Term Loans due at maturity, as set forth in the New Credit Agreement. We have not made any borrowing under the New Credit Agreement as of this date. We do not expect to draw upon any portion of the New Credit Agreement until the fourth quarter of 2021. 27
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Disposition of Wireless: We currently expect that the after-tax proceeds from theJuly 1, 2021 , sale of our Wireless assets and operations will be approximately$1.5 billion . The transaction will be accounted for as an asset sale for income tax purposes. Cash proceeds from the sale were required to be used to immediately repay our outstanding indebtedness. Principal payments on our debt have thus been presented as cash used to finance our discontinued operations. The Company used a portion of the after-tax proceeds from the sale of our Wireless assets and operations to, among other things: •Repay and terminate approximately$684 million of outstanding term loans under our Prior Credit Agreement, and associated interest rate swap liabilities, concurrent with the closing of the disposition; •Issue a special dividend of$18.75 per share to Company shareholders, or approximately$937 million in the aggregate (the "Special Dividend"), payable onAugust 2, 2021 , to shareholders of record as of the close of business onJuly 13, 2021 . We expect our cash on hand, proceeds received from the disposition of Wireless assets and operations, cash flow from continuing operations, and availability of funds from our New Credit Agreement, will be sufficient to meet our anticipated liquidity needs for business operations for the next twelve months. There can be no assurance that we will continue to generate cash flows at or above current levels or that we will be able to raise additional financing to support the Company's planned capital expenditures.
We expect our capital expenditures to exceed the cash flow provided from
continuing operations through 2023, as we expand our
The actual amount and timing of our future capital requirements may differ materially from our estimate depending on the demand for our products and services, new market developments and expansion opportunities.
Our cash flows from continuing operations could be adversely affected by events outside our control, including, without limitation, changes in overall economic conditions, regulatory requirements, changes in technologies, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. Our ability to attract and maintain a sufficient customer base, particularly in our Broadband markets, is critical to our ability to maintain a positive cash flow from operations. The foregoing events individually or collectively could affect our results. Critical Accounting Policies
There have been no material changes to the critical accounting policies as
previously disclosed in Part II, Item 8 of our Annual Report on Form 10-K for
the year ended
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