Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker. The Company has three reportable segments, which the Company operates and manages as strategic business units organized by lines of business: (1) Wireless, (2) Cable, and (3) Wireline. A fourth segment, Other, primarily includes Shenandoah Telecommunications Company, the parent holding company.

The Wireless segment provides digital wireless service as a PCS affiliate to a portion of a four-state area covering the region from Harrisburg, York and Altoona, Pennsylvania, to Harrisonburg, Virginia, south-central and western Virginia, West Virginia, and small portions of North Carolina, Kentucky and Ohio. The Wireless segment also owns cell site towers built on leased land, and leases space on these towers to both affiliates and non-affiliated service providers.

The Cable segment provides video, internet and voice services in Virginia, West Virginia and Maryland, and leases fiber optic facilities throughout southern Virginia and West Virginia. It does not include video, internet and voice services provided to customers in Shenandoah County, Virginia.

The Wireline segment provides regulated and unregulated voice services, DSL internet access, and long distance access services throughout Shenandoah County and portions of Rockingham, Frederick, Warren and Augusta counties, Virginia. The segment also provides video and cable modem services in portions of Shenandoah County, and leases fiber optic facilities throughout the northern Shenandoah Valley of Virginia, northern Virginia and adjacent areas along the Interstate 81 corridor through West Virginia, Maryland and portions of central and southern Pennsylvania.

Three Months Ended June 30, 2017

(in thousands)



	Wireless		Cable		Wireline		Other			Eliminations			Consolidated Totals
External revenues
Service revenues	$	107,681	$	26,883	$	5,128	$	—		$	—		$	139,692
Other	5,218		2,095		6,253		—			—			13,566
Total external revenues	112,899		28,978		11,381		—			—			153,258
Internal revenues	1,234		586		8,195		—			(10,015		)	—
Total operating revenues	114,133		29,564		19,576		—			(10,015		)	153,258

Operating expenses
Costs of goods and services, exclusive of depreciation and amortization shown separately below	38,469		14,911		9,330		—			(9,329		)	53,381
Selling, general and administrative, exclusive of depreciation and amortization shown separately below	29,637		4,867		1,683		7,521			(686		)	43,022
Integration and acquisition expenses	4,124		—		—		(446		)	—			3,678
Depreciation and amortization	35,551		6,090		3,155		129			—			44,925
Total operating expenses	107,781		25,868		14,168		7,204			(10,015		)	145,006
Operating income (loss)	$	6,352	$	3,696	$	5,408	$	(7,204	)	$	—		$	8,252

Three Months Ended June 30, 2016

(in thousands)



	Wireless		Cable		Wireline		Other			Eliminations			Consolidated Totals
External revenues
Service revenues	$	86,873	$	24,167	$	4,820	$	—		$	—		$	115,860
Other	6,280		1,923		6,246		—			—			14,449
Total external revenues	93,153		26,090		11,066		—			—			130,309
Internal revenues	1,141		311		7,525		—			(8,977		)	—
Total operating revenues	94,294		26,401		18,591		—			(8,977		)	130,309

Operating expenses
Costs of goods and services, exclusive of depreciation and amortization shown separately below	35,236		14,564		8,808		—			(8,312		)	50,296
Selling, general and administrative, exclusive of depreciation and amortization shown separately below	23,010		4,794		1,670		4,885			(665		)	33,694
Integration and acquisition expenses	5,276		—		—		14,778			—			20,054
Depreciation and amortization	23,495		5,879		2,933		108			—			32,415
Total operating expenses	87,017		25,237		13,411		19,771			(8,977		)	136,459
Operating income (loss)	$	7,277	$	1,164	$	5,180	$	(19,771	)	$	—		$	(6,150	)

Six Months Ended June 30, 2017

(in thousands)



	Wireless		Cable		Wireline		Other			Eliminations			Consolidated Totals
External revenues
Service revenues	$	215,867	$	53,294	$	10,176	$	—		$	—		$	279,337
Other	11,261		4,129		12,411		—			—			27,801
Total external revenues	227,128		57,423		22,587		—			—			307,138
Internal revenues	2,468		1,154		16,143					(19,765		)	—
Total operating revenues	229,596		58,577		38,730		—			(19,765		)	307,138

Operating expenses
Costs of goods and services, exclusive of depreciation and amortization shown separately below	76,788		30,139		18,603		—			(18,388		)	107,142
Selling, general and administrative, exclusive of depreciation and amortization shown separately below	58,101		9,725		3,359		13,367			(1,377		)	83,175
Integration and acquisition expenses	7,916		—		—		251			—			8,167
Depreciation and amortization	71,303		11,879		6,286		261			—			89,729
Total operating expenses	214,108		51,743		28,248		13,879			(19,765		)	288,213
Operating income (loss)	$	15,488	$	6,834	$	10,482	$	(13,879	)	$	—		$	18,925

Six Months Ended June 30, 2016

(in thousands)



	Wireless		Cable		Wireline		Other			Eliminations			Consolidated Totals
External revenues
Service revenues	$	139,052	$	48,507	$	9,779	$	—		$	—		$	197,338
Other	9,484		3,768		12,290		—			—			25,542
Total external revenues	148,536		52,275		22,069		—			—			222,880
Internal revenues	2,276		572		14,901		—			(17,749		)	—
Total operating revenues	150,812		52,847		36,970		—			(17,749		)	222,880

Operating expenses
Costs of goods and services, exclusive of depreciation and amortization shown separately below	51,815		29,210		17,450		—			(16,418		)	82,057
Selling, general and administrative, exclusive of depreciation and amortization shown separately below	34,524		9,902		3,275		8,750			(1,331		)	55,120
Integration and acquisition expenses	5,276		—		—		15,110			—			20,386
Depreciation and amortization	31,988		11,974		5,967		225			—			50,154
Total operating expenses	123,603		51,086		26,692		24,085			(17,749		)	207,717
Operating income (loss)	$	27,209	$	1,761	$	10,278	$	(24,085	)	$	—		$	15,163

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



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2017			2016			2017			2016
Total consolidated operating income (loss)	$	8,252		$	(6,150	)	$	18,925		$	15,163
Interest expense	(9,389		)	(5,904		)	(18,489		)	(7,524		)
Non-operating income, net	1,297			167			2,672			723
Income before income taxes	$	160		$	(11,887	)	$	3,108		$	8,362

The Company’s assets by segment are as follows:



(in thousands)	June 30, 2017		December 31, 2016
Wireless	$	1,039,531	$	1,101,716
Cable	225,954		218,471
Wireline	123,123		115,282
Other	54,391		48,938
Consolidated totals	$	1,442,999	$	1,484,407