March 22, 2004
Dear Shareholder:
I am pleased to report on an excellent year for your Company, one in
which we achieved strong financial results and reached several significant
accomplishments.
Our financial performance was very positive in 2003.  For the first time in
our history, revenues exceeded $100 million, reaching a total of $105.9
million for the year.  While revenues increased by $12.9 million, our
operating expenses only increased by $3.6 million, resulting in a $9.3 million
improvement in operating income which reached $18.6 million.  Helped by
the one-time gain from the sale of our cellular partnership interest, our net
income was a record $32.1 million.  Our net income from continuing
operations, which excludes the cellular impact, reached $9.8 million.
While the last few years have not been kind to many companies in the
telecommunications industry, your Company has not just survived, it has
thrived.  In addition to the operating results, our balance sheet became even
stronger.  Total debt was again reduced, decreasing by $12.2 million to $43.3 million as of the end of the year.  At the
same time, our cash and equivalents at the end of the year was $28.7 million, while total assets were $185.4 million.  With
our total long-term debt equaling only 23.4 percent of total assets, your Company's balance sheet is envied in an industry
where many companies have encountered problems just meeting their debt obligations, much less being able to invest in
their future.
As previously announced, the Company completed the sale of our cellular partnership interest on February 28, 2003.
While our participation in cellular, a subset of the wireless industry, had been very profitable, competitive pressures in the
wireless industry were having an increasing impact.  We had already lost half of our customers, and growth in revenues
and profits had begun to slow.  Exiting the cellular segment through the sale allows the Company to focus on our
significantly larger digital PCS operation.  It also made available a large source of cash to finance our other operating
needs and future growth opportunities.
Our wireless priorities are now focused on improving results within our PCS operation.  After many years of multiple-
million dollar losses, our PCS business produced a slight profit in 2003.  While many non-recurring factors contributed to
this small profit, the basic operating results within this subsidiary showed significant improvement during 2003.  PCS
revenues grew 20.8 percent to a total of $67.0 million.  Operating income in this subsidiary was $2.9 million, an $8.2
million change from the previous year's loss.  Despite these improvements, we still have a long way to go before we are
earning a satisfactory return on our investment.
The Company continued its efforts to successfully grow revenues and profits from other lines of business and by
furnishing more and newer services in our enlarged footprint extending beyond Shenandoah County.  Revenues from our
information access services, which includes contract work on the 511Virginia Travel Project and Internet access services,
increased $0.6 million, to $7.0 million during 2003.  The Virginia Department of Transportation has requested proposals
to continue the 511 project for future years, as well as to expand it to cover all the interstate highways throughout the
Commonwealth.  The success of the project to date has attracted many other bidders competing against our Company to
win the contracts.  Our recently launched regional phone book, Shentel Pages, exceeded our initial revenue expectations.
It is hoped that a single source of phone listings and Yellow Page advertising, in both printed and online versions, will
increasingly be demanded by residents and businesses in the northern Shenandoah Valley region.
While our 2003 results have been good, we recognize we still have many challenges to overcome in order to continue