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2017 Annual Report
MID-ATLANTIC BROADBAND COMMUNITIES CORPORATION
ERNEST R. (RANDY) LAILChairman, MBC Board
Business Consultant & Director,Benchmark Bankshares, Inc.
& Benchmark Community Bank
EDWARD “TED” HODGES
Vice Chairman, MBC Board Partner, Clement &
Wheatley, PC
EARVING L. BLYTHE Vice President Emeritus
for Information Technology & CIO,
Virginia Tech (Retired)
DUANE DAHLQUIST, PEChairman Emeritus, MBC
BoardGeneral Manager,
Blue Ridge Power Agency
BEN DAVENPORT, JR.
Chairman, First Piedmont Corporation
BRYAN DAVIDCounty
Administrator,Orange County
For an all-digital version of this annual report, with clickable links to websites and more, please visit www.mbc-va.com/about-mbc.
NEW EMPLOYEES JOINED THE MBC TEAM 3
ECONOMIC DEVELOPMENT
INITIATIVE INVEST SOUTHERN VIRGINIA
WAS ESTABLISHED
MBC HAD
NETWORK RELIABILITY
99.993%SOVA INNOVATION CENTER OPENED IN
BEDFORD FOR RESEARCH ON TV
WHITE SPACE TECHNOLOGY
3 MBC-SPONSORED
FRC ROBOTICS TEAMS REPRESENTED SOUTHERN
VIRGINIA AT THE FIRST WORLD CHAMPIONSHIP IN ST. LOUIS
MBC CONTINUED WORK ON A PROJECT TO EXPAND TO THE SUBSEA
CABLE LANDING
STATION IN VIRGINIA BEACH
2017 MBC BOARD OF DIRECTORS
2016-17 YEAR IN REVIEW
THE FIRST
100 HOMES WERE
CONNECTED TO THE HOMEWORK NETWORK
2017 MBC BOARD OF DIRECTORSMARK D. HEATH
President/CEO,Martinsville-Henry
CountyEconomic Development
Corporation
DAVID HUDGINS Director of Member &
External Relations, Old Dominion Electric
Cooperative
WANDA BOSTICK JEFFRESS
Owner/Vice President, S.L. Jeffress Co.
& Jeffress Funeral Home
CHARLEY MAJORSExecutive Chairman,
American National Bank
BOB PICCHIPresident, Blue Ridge
Advisory Services Group
RICHARD SHUMAKER
Account Manager,Cisco Systems, Inc.
GARY WALKEROwner & Operator,
Cornerstone Insurance
Agency
Ernest R. (Randy) Lail, MBC Board Chairman Tad Deriso, MBC President & CEO
A Message from the MBC Board Chairman
A Message from the MBC President & CEO
I have been writing these letters for the annual report for several years now. I decided to look back and read the letters from prior years to see what the trends had been over the years. Interestingly, the messages have been very consistent. This letter will be no different. Strong, improving, consistent financial performance has been a hallmark of MBC over the years. MBC is constantly looking for new technologies that will improve the performance and reliability of a network that includes
over 1,800 miles of fiber that crisscross the region from Blacksburg to Virginia Beach. Looking for partners who not only help us push the reach of broadband into our communities but also help us explore any and all economic development opportunities.
Our Board of Directors continues to aggressively look for ways that MBC can be a catalyst for economic development and jobs in Southern Virginia. We are excited by the opportunities that the sea cable landing station in Virginia Beach will bring to Southern Virginia. We have been involved with Microsoft, Facebook and Telefonica from the beginning on this project that brings the first sea cable to Virginia. Along with several partners including Microsoft, we have worked to implement a test project in Halifax and Charlotte that brings broadband for educational purposes to homes using TV White Space spectrum. The new fiscal year will bring a new opportunity for MBC to further push economic development and jobs and we look forward to that endeavor.
We are fortunate to have a knowledgeable dedicated team that knows how to get things done. I know that I speak for the entire Board of Directors when I say thank you to the management and staff of MBC. There are many ways to serve in a community. As I write this in mid-December, the employees of MBC just spent a day working to build a playground and install a privacy fence for a local charitable organization. I thank them for all their efforts. I would also like to thank the members of the Board of Directors for their work. It is a group that not only has experience in the marketplace in which MBC operates but also understands the communities that MBC serves. I know that the job of furthering the MBC mission is important to all of them.
Thanks to all of these folks, and you, for your support and interest in MBC.
MBC had another steady year of operations as we’ve noticed increased revenue growth, continued reinvestment in our communities, and new global infrastructure projects.
Revenues continue to trend in a positive direction, and MBC has maintained our efficient cost structure. We’re proud that
we are able to reinvest over $1 million this year in projects that impact our community reinvestments, expand our regional economic development impact, and invest in new last mile technologies. We are wrapping up the final phase of the TV White Space Homework Gap project with Microsoft which is one of the largest deployments of its kind in the World. Microsoft recently announced their commitment to rural communities through their Airband Initiative, looking to enable broadband to 2 million people who are unserved in rural areas over the next five years. MBC is proud to be one of the early supporters of this initiative and look forward to participating in their Connect Americans Now initiative rolling out in 2018.
The new subsea fiber cables arriving in Virginia Beach from Europe and South America give us hopeful optimism that new economic development opportunities will occur from this new global network infrastructure arriving at the front door of Virginia. MBC has recently rebranded our regional economic development outreach to the “Invest Southern Virginia” brand and we’re confident that we can drive more Foreign Direct Investments into Southern Virginia as a result of the new cables and our direct outreach to international companies.
The MBC team continues to perform admirably and are the main reason MBC can accomplish so many things for our region. We remain focused on improving the economic environment of Southern Virginia and look forward to more great things in 2018!
In 2016, Virginia Beach was announced as the location of the first subsea cable landing station in the Mid-Atlantic United States to serve as the landing point for new subsea cables and to add diversity for the subsea cable environment in the Atlantic. Since this announcement, a 24,000 square foot cable landing station is in the final stages of construction in Corporate Landing Business Park to support the first two subsea cables landing in Virginia Beach.
The first cable, MAREA, a partnership between Microsoft, Facebook, and Telxius that connects Virginia Beach to Bilbao, Spain, has been completed and is expected to be operational in the first quarter of 2018. The second cable, BRUSA, from Telxius will connect Virginia Beach to Brazil and is expected to be operational in the third quarter of 2018. Several other subsea cables have been in the planning phases, so the expectation is more announcements will be forthcoming in 2018.
The new subsea fiber routes and cable landing station in Virginia Beach give the Commonwealth of Virginia a substantial competitive advantage on the world stage when it comes to promoting and recruiting businesses to invest in our region. Demand for services on these cables drove the investments to place them and MBC is in the process of building high capacity services into the new cable landing station. In 2017, MBC received Board approval to expand our network to Virginia Beach to support this cable landing station and to create more opportunities for business in Southern Virginia.
MBC Expands Network to Virginia Beach for New Subsea Cable Landings
AtlanticOcean
E
urope (B
ilbao, S
pain)
South America (R
io D
e Jan
eiro
, Brazil)
Washington, D.C.
McLean
Richmond
Petersburg
Norfolk
Virginia BeachEmporiaSouth
HillClarksvilleSouth BostonDanville
Martinsville
RockyMount
Keysville
LynchburgRoanokeChristiansburg
Floyd
Wytheville
Gate CityBristol Independence
Boone
Asheville
Young Harris
Atlanta
Charlotte
Raleigh
Ashburn
Culpeper
Charlottesville
Fredericksburg
Wise
Global Network Infrastructure Arriving in Virginia Brings Optimism for New Economic Development Opportunities
ECONOMIC DEVELOPMENT ANNOUNCEMENTS IN SOUTHERN VIRGINIACompany Name Location Business Description New Jobs Investment ($)
Eastman Chemical Company Henry County Expansion of performance films manufacturing 15 11,700,000 Applied Felts* Henry County Manufacturer of liners for sewer pipes 15 3,000,000 CML Logistics Prince Edward County Post-industrial plastic scrap recovery and distribution 10 150,000 Liquid Performance of America, Inc. Franklin County Company manufactures cleaning, detailing, and performance products for
automotives, motorcycles, marine, and industrial markets2 475,000
Bassett Furniture Industries, Inc. Henry County Furniture manufacturer expansion 22 1,500,000 SteelFab, Inc. Emporia Structural steel fabrication 18 2,144,600 Blue Ridge Aquaculture Henry County Fish feed mill 5 3,200,000 Novatech* Henry County Window and door manufacturing 50 3,000,000 JTI Leaf Services, LLC* Danville Tobacco leaf warehouse 0 8,570,000 Wal-Mart Stores, Inc. Dinwiddie County Distribution facility for retailer 75 4,000,000 Intertape Polymer Group* Pittsylvania County Manufacturer of paper and film based pressure sensitive and water
activated tapes, polyethylene and specialized polyolefin films, woven coated fabrics and complementary packaging systems for industrial and retail use.
0 22,010,000
Microsoft Corp. Mecklenburg County Data center 44 251,590,000 Rock Wood Products of Dillwyn, Inc. Buckingham County Sawmill for wood pallet manufacturing 12 8,750,000 Essel Propack America LLC* Danville Aluminium tubing manufacturer 4 6,000,000 Service Center Metals Prince George County Manufacturer of aluminum extrusions 35 25,000,000 Blue Ridge Fiberboard Danville Fiberboard manufacturing 26 2,145,500 TMI Autotech Inc. Halifax County Manufacturer of Ariel Atom supercar and carbon-fiber composite autoparts 20 525,000 Ballad Brewing Danville Craft brewery 2 1,500,000 Kyocera SGS Precision Tool* Danville High performance end mill, drill, stainless steel medical tool, and coating 35 9,500,000 ALDI US* Dinwiddie County Division headquarters and distribution center 145 57,000,000 Solid Stone Fabrics Henry County Manufacturer and distributor of stretch fabrics 22 1,500,000 Dominion Energy Powhatan County Solar farm 0 40,776,000 Overfinch* Danville Land Rover upfitting and customization 41 1,945,300 Standard Insurance Company* Campbell County Inbound call center for insurance company 178 1,714,200
Notes: *Indicates foreign affiliation Total Private Sector Investment & Jobs Created 776 467,695,600 All announcements are subject to revision July 2016 - June 2017Source: Virginia Economic Development Partnership www.yesvirginia.org
Microsoft Announces Fifth Expansion in Mecklenburg County
Demand for cloud services continues to grow, and Microsoft continues to expand capacity to meet the needs of their customers. In November 2016, Microsoft announced a fifth expansion of their data center site in Mecklenburg County, Virginia, bringing $251.6 million in investment and 44 new jobs. The investment that Microsoft has made at the Mecklenburg data center since 2010 has brought more than $1.99 billion in investment and over 260 new jobs
to the Southern Virginia region. MBC is proud to continue to support this investment in Southern Virginia.
Joe AnwylForeign Direct Investment Consultant
Invest Southern Virginia is an economic development initiative, led and funded by MBC, designed to attract growing technology, data center and advanced manufacturing companies to expand and locate to Southern Virginia. Working in partnership with local and regional business leaders, Invest Southern Virginia markets the region to prospective national and international companies seeking a premiere east coast location with a specifically trained workforce, pro-business environment and connected infrastructure.
Invest Southern Virginia’s mission is to attract new technology, data center and advanced manufacturing companies to the region to boost economic development and build a stronger community. Joe Anwyl is currently leading this initiative in England. There are plans to expand this initiative into other countries and the U.S. west coast. To learn more about this initiative, please visit www.investsouthernvirginia.com.
Invest Southern Virginia is Promoting the Benefits of Doing Business in Southern Virginia
For the second year in a row, the Altavista Bionic Eagles captured the MBC Challenge Cup title by finishing highest
at the end of tournament play.
The Martinsville High School MADawgs
won the #MBCChallengeCup
social media challenge by generating
28,900 mentions for their team on Facebook, Twitter,
and Instagram!
And the MBC Challenge Cup Goes To...
The Altavista Bionic Eagles
A Southern Virginia Triple ThreatThis season, three MBC-sponsored teams qualified for FIRST World Championship. The Piedmont Governor’s School STAGS (1262), G.W. High Team Talon (1598), and Altavista Bionic Eagles (5279) all competed in this world tournament in St. Louis, MO. When presented with the option, once again the three teams displayed the very essence of FIRST’s value of Coopertition by foregoing the prize trip and splitting the prize money so that all three teams could gain the experience and honor of competing at FIRST’s most prestigious tournament.
2017 MBC-Sponsored FIRST FRC Team StatsRobotics in
Southern VirginiaAs an advocate of STEM-based workforce development in Southern Virginia, MBC proudly sponsors all eleven FIRST FRC robotics teams in the region. Since 2012, MBC has invested over $275,000 in this high school robotics program that provides training in electronics, programming, pneumatics, business/marketing, as well as other fields.
Awards 4
District Event Finalists 5
District Championship Berths 5
District Championship Winners 1
World Championship Berths 3
MBC Deploys TV White Space Technology to Close Homework Gap
The Homework NetworkBringing Free Educational Internet to Homes of Charlotte and Halifax County Students
MID-ATLANTIC BROADBAND COMMUNITIES CORPORATION
The Homework Network is a joint initiative between MBC and Microsoft to close the “homework gap” in rural Southern Virginia using TV White Space technology. The Homework Network provides students in Kindergarten through 12th grade educational internet access at their homes at no cost to their families. With this connection, the students can access any online resource that they can at school, allowing the students to do online research and complete online assignments from the comfort of their own homes.
In May 2017, the project celebrated the connection of the first 100 homes with a ribbon cutting ceremony in South Boston, Virginia. The goal of this project is to reach 1,000 households and 2,500 students throughout Charlotte and Halifax Counties.
Paul Garnett, Microsoft’s Senior Director of Affordable Access Initiatives
Ribbon Cutting to Celebrate the First 100 Homes Served
Project Partners
The Homework Network is currently comprised of 15 towers, most located at public school campuses in Charlotte and Halifax Counties. Each tower has radios that broadcast a signal using TV White Space technology to the equipment that is installed on the student’s home.
To receive service, an antenna and a TV white space equipment box is installed on the student’s home. The outside equipment is connected to a router on the inside of the house with a single wire. Once the equipment has been installed, students can access any content online that they can access at school from the comfort of their own home.
Benefits of the Homework Network for Charlotte and Halifax County Students
The Homework Network provides students with free, in-home educational internet at no cost.
Having access to in-home educational internet means students can complete homework assignments from the comfort of home. Today 70% of teachers assign homework that requires students to use the internet to complete.
Through the Homework Network, students can easily finish assigned schoolwork, collaborate with others and turn in assignments seamlessly.
Research shows that 58% of students receive higher grades on work that was completed with the help of the internet.
Today, only 50% of students living in Charlotte and Halifax County can access the internet at home. Every household that signs up reduces that percentage and gives another student the opportunity to thrive academically.
+
+
+
+
+
SOVA Innovation Center Opens in Bedford County
West-Coast Based Technology Company Adaptrum Partners with MBC to Set Up Research Facility at the Center for Advanced Engineering and Research
In June 2017, the ribbon was cut for the SOVA Innovation Center, a partnership between Adaptrum and MBC located at the Center for Advanced Engineering and Research in Bedford County, Virginia. This new facility is Adaptrum’s home for research and development and operations on the East Coast. The center will drive fundamental advances and applied applications for TV White Space technology, engage with leading academic institutions focused on TVWS wireless and dynamic spectrum access techniques, serve as a test bed for new and improved next-generation products, and support products and services for regional customers and projects.
"Bedford County is the perfect location for Adaptrum's East Coast R&D and office center," said Haiyun Tang, Founder & CEO of Adaptrum. "The Innovation Center will focus on advancing our technologies, and serve as a launching pad for Adaptrum products and services while showcasing the Virginia TVWS deployment to further expand business opportunities in the East Coast."
Upgrading the MBC Network 2017
D - Ciena Packet Optical Expansion
The Ciena project extended the packet optical network to southeastern Virginia. This positions MBC to offer robust Ethernet services in that area. The Smithfield, Windsor, Surry, and Franklin nodes all had Ciena Z22 packet optical switches installed. MBC also did a “fill in” in the Kenbridge node.
B - An Additional Infinera Route to Ashburn
The Infinera 3rd route into Ashburn was completed to provide MBC with additional long haul capacity into Northern Virginia.
A - New Interconnection in Richmond
MBC met a strategic need by installing a new Infinera chassis in a Richmond area POP. This will provide a means for MBC to provide new services that can be delivered in the Southern Virginia region. It also provides an additional hand off point for long haul services. By having this interconnection point closer to the MBC region, latency will be reduced.
A
B
D
C - New Regional Laterals
In FY17, 43 new buildings came on-net on the MBC network. New fiber laterals were built, adding an estimated 15 miles of fiber to the regional network.
C
Cash and Cash EquivalentsShort Term InvestmentsAccounts ReceivableInventoryPrepaid ExpensesNet Fixed Assets, Temporarily RestrictedNet Fixed Assets, OperatingOther Assets
Total Assets
5,065,124250,000 977,236 713,616
853,198 46,328,226 19,557,046
176,189
73,920,635 Accounts Payable
Accrued LiabilitiesLong-term Debt ObligationsDeferred RevenueTotal Liabilities
Unrestricted Net AssetsTemporarily Restricted Net AssetsTotal Net Assets
Total Liabilities and Net Assets
70,472 425,303
- 13,619,720 14,115,495
13,476,915 46,328,225 59,805,140
73,920,635
Consolidated Revenue
Cost of Network Operations/Tower Construction
Operating Margin
Sales and Marketing ExpenseAdministrative ExpenseOther Income (Expense)
Net Earnings from Operating Activities
FY2016
10,596,449
4,142,086
6,454,363
666,934 3,285,718 (289,047)
2,212,664
*These numbers are derived from audited financial statements.
Ass
ets
Liab
ility
& E
qu
ity
Op
era
tin
gIn
com
e S
tate
me
nt
11,502,819250,000
1,786,897 577,708 494,936
42,261,511 21,438,639
202,779
78,515,289 373,630
1,484,304 -
18,588,679 20,446,613
15,807,165 42,261,511
58,068,676
78,515,289
FY2017
14,323,566
7,320,407
7,003,159
830,182 3,808,817
(33,910)
2,330,250
2016-17 Financials
In fiscal year 2017,
Mid-Atlantic Broadband
spent a total of
$9,064,407.Of those funds spent in Virginia, $2,134,356 (60%) was spent with
companies headquartered in Southern Virginia
$588,673 (17%) was spent with certified Small, Women and
Minority (SWaM) firms registered in Virginia
$3,560,231 (39%) was spent with companies
headquartered in the Commonwealth of Virginia
2016-17 Financials
39% spent in
state
60% spent in region
17% spent with
SWaM
-
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
600,000.00
700,000.00
800,000.00
900,000.00
1,000,000.00
1,100,000.00
MBC Monthly Revenue FY2016-FY2017
Sarah Miller brings with her 15 years of telecom experience. She began her career with Lumos Networks managing enterprise accounts and quickly transitioned into more complex opportunities with municipalities and government agencies. Most recently, she has managed wholesale/carrier accounts throughout the Mid-Atlantic Region with Uniti Fiber. Trade shows and industry events come easy to Sarah due to her enthusiasm and outgoing personality. Forging lasting relationships has been the foundation of her success and this can be attributed to her Southern roots. She is a Virginia native, growing up in the New River Valley, currently residing in Christiansburg, with her husband, Greg, and their two fun
loving pups and cat.
Patricia Conner brings with her ten years of accounting experience. Patricia graduated summa cum laude from Longwood University with a Bachelor of Science in Business Administration with a concentration in accounting. She began her career with an accounting firm performing tax and audit services, where she obtained her Certified Public Accountant license. Patricia then moved into governmental accounting at a municipality for approximately six
years before coming to MBC.
She is a native of Halifax County, Virginia and currently resides there with her husband, Adam, and their
two daughters.
Mark Varah joined MBC after 20+ years of leadership in financial and operating roles in Fortune 100, start-up, and not for profit enterprises. His industry sector experience includes technology, defense, automotive, social services, and venture capital. Most recently, Mark served as CFO and Director for a venture funded software company. He holds a B.S. in Mechanical Engineering from Stanford University and a MBA from the University of California, Berkeley.
Patricia ConnerFinance Manager
Sarah MillerCarrier Sales Manager
Mark VarahChief Financial Officer
2017 Staff Additions
MBC Joins Connected2Fiber
If you would like an on-net building list, please email Sarah Miller ([email protected]) and we will be glad to add you
to our distribution.
In May, MBC joined Connected2Fiber, implementing The Connected World Software-as-a-Service (SaaS) platform and the Building List Manager. With Connected2Fiber, MBC now has a platform than can create, design and program building lists to be distributed in customer-preferred formats in less than four clicks. MBC also has access to the visualization tool, showing our entire internal team our routes, OnNet and NearNet buildings and key market data, eliminating version control or manual updates. This platform has helped MBC to drive growth.
FCC Chairman Ajit Pai Visits Southern Virginia
Bridging the digital divide and connecting all Americans to the Internet have been priorities for Federal Communications Commission Chairman Ajit Pai since day one. In July, Chairman Pai made a visit to South Boston, VA to learn firsthand the benefits of the Homework Network, providing educational internet access to students in Halifax and Charlotte County.
Photos courtesy of Suhail Khan (Microsoft)
Chairman Pai sits down with local leaders and community members to talk about the digital divide in Southern Virginia and how the Homework Network is helping to close this divide.
Charlotte County student Dylan Harris and Chairman Pai discuss how the Homework Network helped him to become more productive and efficient in his education. Dylan used to have to travel 15-20 minutes one way to find connectivity to complete online assignments.
Chairman Pai with Dylan and his mother, Gwendolyn. With reliable connectivity through the Homework Network, Dylan was able to complete his online assignments from the comfort of his own home, solving a critical access issue for his family.
Headquarters Office
Southern VA Technology Park1100 Confroy Drive, Suite 4
South Boston, VA 24592
Richmond Office
SunTrust Center919 East Main Street
Suite 1000Richmond, VA 23219
Read, watch, and see more about MBC at www.mbc-va.com.
Office Locations