Connections that matter most

2014 ANNUAL REPORT
Connections
that matter most
At Hargray, we keep our focus on the
connections that matter most to our
customers, colleagues, and community, so
we can achieve our mission of envisioning
and delivering customer delight.
CONTENTS
CONTENTS
2-3
A Note from the Chairman & CEO
4-9
Putting Customers First
Our customers are at the center of all we do, driving us to continually improve
our network quality, products, and services. Our almost 400 colleagues share a
common purpose and culture, which is one of the secrets to our success.
10-17
Investing in Network, Products, & Services
Our promise of value to our customers is to ensure our products and services
remain the most robust and reliable in the Lowcountry and Coastal Empire. In
order to deliver on this promise, we have to be innovative and forward-thinking,
investing time, energy, resources, and capital in our people and our network.
18-23
Strengthening Communities
Investing to help build a vibrant and connected community makes us a better
company. We realize our community is also our home, where we live, work, and
play. As one of the largest companies and employers in the region, we believe
these investments are part of our responsibility, and we want to be as helpful
and community-oriented as we can be.
1
2
2014 ANNUAL REPORT
A NOTE FROM THE
CHAIRMAN & CEO
CUSTOMERS, COLLEAGUES, AND FRIENDS: Welcome to our fourth annual report. We started producing these reports
in 2011 to share who we are and what we do at Hargray. If you know us well, hopefully you will recognize us in these pages.
If you do not know us well, we hope that this report will help you to get to know us better.
This year’s annual report is titled “Connections that matter most.” It is a fitting title because it describes what we do at
Hargray: We provide technology for people to connect with other people.
During 2014, we did more connecting than we have done in the past, and we did it better.
Part of our culture at Hargray is that we are very goal-oriented. Annually, we set company goals, departmental goals, and
individual goals. We measure our progress against these goals throughout the year—quarterly, monthly, weekly, daily, and
sometimes hourly.
And we ask our customers for their feedback. This year, we received almost 150 emails to thebuckstopshere@hargray.com,
which enables our customers to tell me and our senior management team about their experiences with Hargray—both good and
bad. The emails we received helped us celebrate many successes, and as importantly gave us the opportunity to provide better
service and fix persistent issues when we fell short.
(It’s always surprising to me how few
companies provide a direct
line to their CEO.)
“This past year was all about
continuous improvement ... for our
customers, our people and our products.”
Michael Gottdenker, Chairman & Chief Executive Officer
A NOTE FROM THE CHAIRMAN & CEO
We also believe firmly in continuous improvement and being self-reflective—both
individually and as an organization. These tenets provide the foundation for a
growth mindset, which is exactly what we did in 2014:
• We installed more than 100 miles of fiber to serve two new markets,
Statesboro and Hinesville Georgia, where we today offer High Speed Internet,
Video, and Voice services
• We installed fiber in Dataw Island, SC, enabling its 900 homes to receive
state-of-the-art services for the first time
• We almost doubled the number of cell phone towers that we serve with fiber,
enabling cell phone companies to launch advanced wireless services
throughout our footprint and beyond
• We purchased Kennedy Cablevision in Reidsville, Georgia, upgrading its
network to provide its customers with state-of-the-art services for the first time
• We launched new products and services, including residential Internet speeds
up to 100 Mbps, commercial gigabit Internet, and data center and managed
services products like Hosted Voice
• We expanded our internal training and development programs, including
ongoing technical training and certification and leadership training
• And we expanded our hiring efforts, adding over 80 colleagues in 2014 alone!
None of this growth would have been possible without our tremendously
dedicated and hardworking colleagues, who begin and end each day striving to
fulfill our mission to envision and deliver customer delight. In 2014, we honored
several colleagues who went above and beyond customer expectations and
celebrated them at our year-end colleague meeting.
Our connections to our community are also very important to us. We continue
to administer our Caring Coins program through which many of our customers
generously agree to round up their monthly bill with the proceeds going directly
to a variety of local charities. Additionally, we support our local military community
by offering paid internships to veterans through our Heroes at Hargray program.
We also partnered this past year with PulteGroup and Operation FINALLY HOME
to provide a local serviceman and his family with a custom-built home after he
sustained devastating injuries while in Afghanistan.
As we look toward 2015, we anticipate further growth and expansion of our
network. As we work tirelessly to help make connections that matter most—with
our customers, colleagues, and neighbors—we thank you for your help in
making us the company that we are today.
Michael Gottdenker
Chairman & Chief Executive Officer
3
2014 ANNUAL REPORT
PUTTING
CUSTOMERS FIRST
KEEPING A LASER FOCUS ON OUR YEARLY
GOALS HAS YIELDED GREAT RESULTS.
Hargray Network Capital Investment
(2010 – 2014)
$40
OUR CUSTOMERS are at the center of all we do, driving
us to continually improve our network quality, products, and
services. Our almost 400 colleagues share a common purpose
and culture, which is one of the secrets to our success.
SUSTAINED SUCCESS
In order to fulfill our mission of envisioning and delivering customer delight, we must
continuously improve, setting company, departmental, and individual goals. In this
way, we are always aligned. As we look back over the past five years, it is evident
that our accomplishments have helped us become a stronger company, for both our
customers and our community.
Dollars in Millions
4
$30
$20
$10
0
2010
2011 Making product improvements—Network infrastructure, hardware
and software improvements provided meaningful upgrades to our
core products
2014 Investing in growth—Further expansion of our fiber network into Hinesville
and Statesboro, Georgia; acquisition of Kennedy Cablevision in Reidsville,
Georgia; contract to bring fiber to all homes in Dataw Island in
South Carolina
2012
2013
2014
Percentage of Residential High Speed Internet
customers with 15 Mbps or higher
2012 Strategic investments—Acquisition of Charter’s Beaufort cable system to
expand our presence in Beaufort, and acquisition of iTech in Savannah to
bring managed services into our product suite
2013 Capitalizing on investments—Expansion of our fiber network to connect 97
unique cell phone towers for national wireless carriers and expansion of
managed services contracts
2011
Over the past five years, we’ve invested more than $130 million
into our network to ensure our services remain competitive and
we’re continuing to offer our customers the speeds they need.
2014
2013
2012
2011
38%
28%
20%
7%
We continue to see a steady increase in the number of (residential) Internet
customers subscribing to advanced speeds of 15 Mbps and higher as
demand for bandwidth continues to double approximately every two years.
PUP
TU
T ITNTGI NCGU C
SU
TO
SM
T OE M
R SE RFSI RFSI TR S T///// 21
5
NET PROMOTER SCORE
Over the past two years, our total Net Promoter
Score and overall satisfaction scores have each
improved by 8 percent. In 2014, all areas related
to the technical support experience have shown
an improvement in satisfaction scores. Our
scores have also shown an improvement for
two consecutive years in all areas related to the
customer service experience.
The Net Promoter Score is an
index that gauges customers’ overall
satisfaction with a company’s product or service
and the customer’s loyalty to the brand.
6
2014 ANNUAL REPORT
148 EMAILS SENT TO
THE BUCK STOPS HERE IN 2014
Hearing directly from our customers is very
important to our senior management team.
It allows us to identify areas for additional
improvement in our company to further
our mission of envisioning and delivering
customer delight. We encourage our customers
to reach out directly to our CEO through
TheBuckStopsHere@Hargray.com so they
are able to tell us about their experiences—
both good and bad.
During 2014, TheBuckStopsHere@Hargray.com
received a total of 148 emails. Here are a few
examples of the messages we received during
the year.
Hi there,
I wanted to let you know that I had the pleasure of calling
Hargray level 2 tech support last week and received
exceptional service from your employee, Logan Nichols.
He went above and beyond with such enthusiasm and
professionalism that I feel compelled to write this note. I hope
you know what a good guy you have working for you.
Most sincerely,
[Hargray Customer]
Sir,
Today Cox has announced that they will be offering their
customers 1 Gbps Internet. This comes on the heels ofAT&T’s
announcement and Google’s continued roll-out of fiber in
more cities. When will Hargray offer these services to their
customers in order to stay competitive with other cable
providers such as Comcast? Thank you for your time.
[Hargray Customer]
Resolution: In 2014, Hargray added 100 Mbps Internet services
and began Fiber to the Home installations in areas such as
Dataw Island, both of which provide capability for increased
speeds in the future.
PUTTING CUSTOMERS FIRST
Hello, Mr. Gottdenker.
I heard Glenn Beck mention on the radio today that The Blaze had just been picked up by a cable
company in South Carolina, and I hoped that it was Hargray, since you had told me a while back
that you were in negotiations with them, and felt pretty certain that eventually you’d have it in
the lineup. I don’t see anything on the Hargray website that indicates you’ve added it. Is it here,
or on the way, or if not, what’s the latest?
Thanks so much.
[Hargray Customer]
Resolution: The Blaze was subsequently added to Hargray’s Channel Lineup in June 2014.
This morning our cable and telephone lines were disconnected. I called Hargray customer
service and was told it was disconnected because I had not paid the bill for three months.
Hargray records showed the bill was sent to our home in July, Aug and September but it was
returned to Hargray with an undeliverable notice. I paid the $936 bill with a credit card. The
telephone and cable were turned on ... I have NEVER had a problem with my home postal
delivery in the 12 years we have lived in this house.
Your records show I consistently received monthly bills from Hargray since 2003 and promptly
paid my bills within 5 days of receiving them ...
Hargray’s Mission: To envision and deliver customer delight. What has happened to me shows
that customers are NOT important. I should have been contacted and asked why I had not paid
my bill, especially since I have never missed paying a bill for 12 years ... If I were in your shoes,
I would have a discussion about improving Hargray’s business and billing practices ... That is
what customer service is all about. Your mission statement would then be warranted.
Sincerely,
[Hargray Customer]
Resolution: While it was confirmed that the post office did, in fact, suspend mail delivery
in this instance, Hargray updated its process to include outbound calls to alert
customers when undeliverable mail jeopardizes continuity of service.
7
8
2014 ANNUAL REPORT
VOICE FOR THE CONSUMER
CHALLENGING RISING CONTENT COSTS
As programming costs continue to rise throughout the
industry, Hargray has been speaking up in support of our
customers, fighting for the fair price of quality entertainment.
Here’s what we’re doing to help:
IN 2014
WE RENEWED
• Participating in advocacy efforts to change the rules around how content
is purchased
MLB Network, Viacom Networks, ESPN/ABC/Disney
Networks, Scripps Networks, CBS, Fox, WGN, Showtime®,
and the NFL Network.
• Working with a buying group to purchase the majority of our content
to gain pricing parity with larger operators
WE ADDED
• Evaluating viewership and program ratings to decide when the value
of non-essential programming is not in line with the cost
WCSC (Charleston), SEC Network, Fusion, Sony Movies HD,
INSP Network, and Blaze Network.
• Partnering with networks that are willing to provide flexible packaging
that allows customers more choices
• Making our customers aware of the challenges and asking for
their feedback as we negotiate agreements on their behalf
• Offering alternatives to reduce bills in light of the increase
in programming costs
Content providers have increased
the cost of sports programming
by 65% over the past 4 years.
PUTTING CUSTOMERS FIRST
DIGITAL PRESENCE
To enhance our customers’ experiences and make doing business with Hargray easier than ever,
we updated our website to a responsive design, optimized for computers, tablets, smart TVs, and
smartphones. With the update, we also improved MyHargray account management, featuring
streamlined bill presentations and payment options.
With 71% of online Americans using social
media, Hargray connects with customers
by actively engaging on Facebook, Twitter,
Instagram, YouTube, and LinkedIn.
9
10
2014 ANNUAL REPORT
INVESTING IN NETWORK,
PRODUCTS, & SERVICES
OUR PROMISE of value to our customers is to ensure
our products and services remain the most robust and
reliable in the Lowcountry and Coastal Empire. In order
to deliver on this promise, we have to be innovative and
forward-thinking, investing time, energy, resources,
and capital in our people and network.
Our investments are enhancing the
quality of our network, which, in turn,
reinforces the quality of the services
we provide to all of our customers.
INVESTING IN NETWORK, PRODUCTS, & SERVICES
ADVANCING CAPABILITIES AND REACH
NETWORK EXPANSION
2014 was a big year for fiber. By continuing our expansion in new
and existing markets, we were able to increase the number of
High Speed Internet customers, including six of the 10 largest
enterprises in Savannah.
In the summer, we began expansion into Statesboro and
Hinesville, Georgia. We installed more than 100 miles of fiber to
and within each city to deliver High Speed Internet, Voice and
Video services, and a portfolio of advanced commercial products.
We launched metro-fiber services for enterprises in Statesboro
and Hinesville, and commercial services in Reidsville, Glennville,
and Claxton through our acquisition of Kennedy Cablevision,
and we established our presence to global carriers in Atlanta,
enabling the beginning of a “carrier of carriers” business.
We also expanded into Reidsville in Southeast Georgia through
our acquisition of Kennedy Cablevision, which included an
upgrade to the network technology and infrastructure in
that community.
11
12
2014 ANNUAL REPORT
FIBER POWERS BUSINESSES AND HOMES
Our services are essential to every customer we serve. From
helping those at home stay connected to the things they love,
to offering the managed services that help businesses enhance
their security and productivity while cutting costs, we offer a full
suite of products and services to meet our customers’ needs.
Savannah
This year, we executed our biggest conversion since we entered
the Savannah market by seamlessly converting 10,000 phone
numbers from a competitor to our service in support of one of
the largest businesses in Savannah.
We also installed video and data service, including a robust Wi-Fi network in
a new dormitory for the Savannah College of Art & Design. With almost 450
students averaging four devices each, this was a great success.
Tanger Outlets
In the fall of 2014, Hargray secured an exclusive agreement to provide
services to the new Tanger Outlets in Pooler and began the underground
construction and inside wiring of fiber. As one of the largest retail operations
in the Savannah area, the Tanger Outlets include 100 new businesses under
one roof and an expected occupancy of at least 90% at all times.
$1.2 million capital investment for
continued expansion in Savannah.
INVESTING IN NETWORK, PRODUCTS, & SERVICES
HARGRAY BRINGS FIBER TO DATAW ISLAND
Hargray is bringing Fiber to the Home (FTTH) to Dataw Island,
a technology that will future-proof the area for years to come.
Along with benefiting existing residents, FTTH will be a great
added value when marketing Dataw to incoming residents,
allowing the community to promote this advanced technology
and offer the fastest Internet speeds available across
the country.
Underground construction of fiber to Dataw is estimated
to be completed during the summer of 2015.
As of spring 2015, 58% of Dataw
residents have committed to service —
and that number continues to climb!
13
14
2014 ANNUAL REPORT
DATA CENTER &
MANAGED SERVICES (DCMS)
HOSTED IP PBX
Hargray’s Data Center & Managed Services (DCMS) provide
businesses with enterprise-level technology services that
increase efficiency and data availability, improve system
reliability, and drive down costs.
Managed IT Services is a core DCMS offering, providing
businesses with 365-days-a-year support from a team of 16
engineers, available via Help Desk, who are just a phone call
or email away. This cost-effective approach eliminates the
need to hire full-time staff, while providing businesses with the
resources and advanced technology necessary for building
effective and efficient IT roadmaps.
Calling
Features
UC Mobility
Management
Portal
Collaboration
IP PBX
HARGRAY’S DATA CENTER &
MANAGED SERVICES:
• Managed IT Services
• Hosted Services
• Hosted Servers
• Data Storage, Backup
& Continuity Services
• IP Telephony & Unified
Communications
Headquarters
Regional
Office
Local
Branch
• Hosted IP PBX
•Virtualization
• Video Surveillance
Cloud-based communications services, such as Hargray Hosted IP PBX, are
effective solutions for businesses of all sizes, simplifying communications
infrastructures, alleviating upfront capital that can cost thousands of dollars,
and reducing the need for infrastructure management and maintenance.
With Hosted IP PBX, we are able to provide businesses the full features and
functionality they need to be productive, such as Voice Mail-to-email, Outlook
integration, and mobility options for users on the go.
INVESTING IN NETWORK, PRODUCTS, & SERVICES
FIBER TO THE TOWER (FTTT)
As part of our initiative to capitalize on industry trends relative to the growing
demand for data, Hargray provides Fiber to the Tower (FTTT) services to the
nation’s four largest wireless carriers. The growth of our FTTT business fuels
our rapid fiber expansion, delivering additional high-bandwidth services to other
enterprise and residential customers.
We believe that these wireless carriers’ ongoing confidence in our network and
service quality represents a validation of the fact that we have the most reliable,
technologically advanced network in the Lowcountry.
The largest wireless carriers with the most
demanding networks continue to choose
Hargray’s robust and reliable network
solution over national competitors.
In 2014
Hargray almost doubled the
number of unique towers we
serve with fiber and increased
the total bandwidth provided
from 11.2 Gbps to 19.4 Gbps.
15
16
2014 ANNUAL REPORT
INCREASED DATA SPEEDS FOR THE HOME
Today, more than ever, Americans seek a customized entertainment
experience. With 77% of the U.S. population using multiple connected
devices (PCs, tablets and smartphones) while watching TV, the
demand for bandwidth for content streaming has increased greatly.
As a result, we increased our Internet speeds earlier this year to
feature 100 Mbps, allowing our customers to do more than ever
before. Thanks in part to our upgrade in speed, our service area is
now ranked in the top 20 fastest growth areas in the U.S.
According to Nielsen, 2 in 5 U.S. households
subscribe to at least one video streaming service,
and those that subscribe spend nearly an
hour or more viewing each day.
Upgrading to a
smart home can
INCREASE A HOME’S
VALUE UP TO 5%
and makes it more
attractive for resale
INVESTING IN NETWORK, PRODUCTS, & SERVICES
TV EVERYWHERE
Hargray’s launch of TV Everywhere allows customers to enjoy all of their favorite
shows on their smartphones, tablets, or laptops, from virtually any location.
According to Nielsen, nearly 126 million Americans
watch video on a smartphone
at least once a month.
*As of December 2014
17
18
2014 ANNUAL REPORT
STRENGTHENING
COMMUNITIES
Congeniality Customer
& Collegiality Delight
INVESTING TO HELP BUILD a vibrant and connected community
makes us a better company. We realize our community is also
our home, where we live, work, and play. As one of the largest
companies and employers in the region, we believe these
investments are part of our responsibility, and we want to be
as helpful and community-oriented as we can be.
Passion
CORE
VALUES
Continuous
Improvement
Accountability
Leadership by Example
CORE VALUES
Everything we do is driven by our core values. From training our colleagues, to our
health-conscious initiatives, to our community outreach and support. Employing a
strong value system makes us an even stronger company.
Throughout the year, we used these values to roll out fundamental
competencies required for each level of management.
This way, we’re able to identify the characteristics
that make leaders successful so we can
incorporate them into our
daily performance.
At Hargray, we’re committed to living
our mission statement. Our core values
guide us in achieving customer delight.
STRENGTHENING COMMUNITIES
2014 was a big year for Hargray’s Zero
Heroes. Here are a few highlights,
showcasing team members who
exceeded customer expectations.
ZERO HERO
Connecting with the community requires
dedication and an “always on” approach toward
network reliability, innovation, and passion for
service. We developed our ZEROHERO program
to promote this approach as an internal initiative
for Hargray colleagues to strive for zero—zero
network outages, zero errors, zero hassle for our
customers—while recognizing the individuals
and teams who went above and beyond to make
connections happen.
“Marshall (Reynolds) was one of the best,
most knowledgeable and courteous techs
I have ever dealt with in solving issues
over the phone.”
Andrew M., Customer
19
20
2014 ANNUAL REPORT
TRAINING INVESTMENT
Hargray knows that with a core value of continuous improvement, dedication
to training is imperative through both financial and time investments. Hargray
employs a blend of dedicated resources to provide thorough training opportunities
for all colleagues.
TRAINING IN 2014 INCLUDED:
REP PREP
for residential and business sales representatives
LEADERSHIP DEVELOPMENT
HEALTHY HARGRAY INITIATIVE
classes and seminars
With the Healthy Hargray program, we provide the opportunity for colleagues
to maximize their health and wellness, while minimizing their contributions to
premiums. Through this initiative, our colleagues experience the added benefit
of truly understanding their health status and becoming informed consumers of
health care.
ONGOING TECHNICAL CERTIFICATION
Hargray colleagues regularly show their commitment to health by donating blood,
running 5Ks, or using their lunch break to take a spinning or yoga class.
and training
DEVELOPMENT AND IMPLEMENTATION
of new product and technological training
Hargray colleagues who participate fully
in the Healthy Hargray program have paid
reduced premiums since 2011.
STRENGTHENING COMMUNITIES
COMMUNITY LEADERSHIP
PROGRAM SPOTLIGHT
Julie Serafino
As part of Hargray’s commitment to developing leaders
and supporting local businesses, we actively contribute
to the Hilton Head Island-Bluffton Chamber of Commerce
Leadership Program.
Julie Serafino, Assistant General Counsel for Hargray, participated in the 2014-15
Leadership Program. Julie co-developed the “Follow the Fiddlers” installation, a series of 10
bronze crab sculptures strategically placed throughout Old Town Bluffton, aiming to inspire
awareness and preservation of Bluffton’s history and natural resources, while attracting
visitors to the area and engaging them in a fun, interactive experience.
21
22
2014 ANNUAL REPORT
CARING COINS
HEROES AT HARGRAY
At Hargray, we are dedicated to strengthening and enriching the
communities we serve. That’s why we established the Hargray Caring
Coins Foundation, a program that raises money for nonprofit groups
through donations from our customers. By choosing to round up their
monthly bills, our customers have helped us donate more than
$2.5 million to organizations in our community.
In 2013, we launched Heroes at Hargray, an employment program
designed to help military veterans transition into the civilian workforce
following the end of their military service to provide them with hands-on
training through paid internships of up to one year.
Contributions as little as
50¢ per month have added up to
$2.5 million to help our community
This year, all of our Heroes at Hargray interns have advanced to either I&R
technician trainee roles or have already become I&R technicians. One of
our interns, Tom Deal, has even taken on an interim stretch assignment as
the supervisor of our distribution center.
We’re continuing to actively seek candidates for the Heroes at Hargray
program by attending job fairs at military locations like Parris Island and
Fort Stewart.
Between 2013 and 2014, we offered
internships to 11 veterans, 6 of whom
are still with us today!
STRENGTHENING COMMUNITIES
OPERATION FINALLY HOME
In the fall of 2014, we were honored to partner with PulteGroup and Operation
FINALLY HOME to outfit local military serviceman Sergeant Holland and his
family with a beautiful, custom-built home after he sustained several
devastating injuries while fighting in Afghanistan.
With the help of hundreds of volunteers and other businesses
from our local military community, we were able to build a
fully functional and custom-designed home for Sergeant
Holland and his family, allowing them to gain their lives
back and continue moving forward in a safe,
comfortable environment.
“Stories like this make giving back to the
community so rewarding. I cannot thank Hargray enough
for all that you did in helping Sergeant Holland and his family get
back on their feet so that they can focus on his rehabilitation.”
— J. Dow Drury, Construction Manager, Coastal Carolinas-Hilton Head, PulteGroup
23
24
2014 ANNUAL REPORT
LOOKING TO THE FUTURE
When Hargray was started, business in the Lowcountry and Coastal Empire meant doing
business face-to-face with a team our customers could depend on; it meant getting to
know our customers’ names and their stories, and it meant keeping unsurpassed customer
service and community outreach at the top of our priority list. Today, we maintain that
philosophy while we expand our network and continue to bring our customers the product
and service enhancements they’ll enjoy.
Throughout the years, our company has grown to 377 locally based colleagues. Our
products are rapidly progressing, and we celebrate a different success story every day.
But, even as our company evolves, one thing has remained the same: Great success starts
with great connections, and we owe our success to you. THANK YOU!
The successes of 2014
were made possible by the
hard work and dedication of
our colleagues, who, in
each of their own ways,
envisioned and delivered
customer delight.
LOOKING TO THE FUTURE
Connections
that matter most
Putting Customers First
Investing in Network, Products, & Services
Strengthening Communities
25
Envisioning and delivering
Customer Delight
HARGRAY COMMUNICATIONS GROUP, INC.
1.877.HARGRAY | hargray.com
© 2015, Hargray Communications Group, Inc.; logos are registered trademarks
and as such, protected property of their respective companies; all rights reserved.