Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 21, 2014 | Jun. 28, 2013 |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'COGENT COMMUNICATIONS GROUP INC | ' | ' |
Entity Central Index Key | '0001158324 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $1.20 |
Entity Common Stock, Shares Outstanding | ' | 47,347,511 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $304,866 | $247,285 |
Accounts receivable, net of allowance for doubtful accounts of $1,871 and $3,083, respectively | 30,628 | 23,990 |
Prepaid expenses and other current assets | 18,777 | 9,978 |
Total current assets | 354,271 | 281,253 |
Property and equipment: | ' | ' |
Property and equipment | 985,084 | 889,229 |
Accumulated depreciation and amortization | -643,891 | -578,054 |
Total property and equipment, net | 341,193 | 311,175 |
Deferred tax assets - noncurrent | 50,861 | 5,546 |
Deposits and other assets ($448 and $442 restricted, respectively) | 8,776 | 8,557 |
Total assets | 755,101 | 606,531 |
Current liabilities: | ' | ' |
Accounts payable | 14,098 | 14,734 |
Accrued and other current liabilities | 31,465 | 26,519 |
Convertible senior notes - current portion, net of discount of $3,099 | 88,879 | ' |
Current maturities, capital lease obligations | 9,252 | 10,487 |
Total current liabilities | 143,694 | 51,740 |
Senior secured notes including premium of $5,423 and $0, respectively | 245,423 | 175,000 |
Capital lease obligations, net of current maturities | 152,527 | 127,461 |
Convertible senior notes, net of discount of $9,494 | ' | 82,484 |
Other long term liabilities | 19,965 | 10,067 |
Total liabilities | 561,609 | 446,752 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $0.001 par value; 75,000,000 shares authorized; 47,334,218 and 47,116,644 shares issued and outstanding, respectively | 47 | 47 |
Additional paid-in capital | 508,256 | 497,349 |
Accumulated other comprehensive income | 2,136 | 667 |
Accumulated deficit | -316,947 | -338,284 |
Total stockholders' equity | 193,492 | 159,779 |
Total liabilities and stockholders' equity | $755,101 | $606,531 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $1,871 | $3,083 |
Deposits and other assets, restricted (in dollars) | 448 | 442 |
Convertible senior notes, discount (in dollars) | 3,099 | 9,494 |
Senior secured notes, premium (in dollars) | $5,423 | $0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 47,334,218 | 47,116,644 |
Common stock, shares outstanding | 47,334,218 | 47,116,644 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' |
Service revenue | $347,979 | $316,973 | $305,500 |
Operating expenses: | ' | ' | ' |
Network operations (including $507, $529 and $510 of equity-based compensation expense, respectively, exclusive of amounts shown separately) | 150,225 | 143,642 | 132,160 |
Selling, general, and administrative (including $8,212, $7,794 and $7,185 of equity-based compensation expense, respectively) | 87,242 | 79,885 | 76,984 |
Depreciation and amortization | 64,358 | 62,478 | 59,850 |
Total operating expenses | 301,825 | 286,005 | 268,994 |
Operating income | 46,154 | 30,968 | 36,506 |
Release of lease obligation | ' | ' | 2,739 |
Interest income and other | 2,630 | 1,851 | 848 |
Interest expense | -41,797 | -36,319 | -34,511 |
Income (loss) before income taxes | 6,987 | -3,500 | 5,582 |
Income tax benefit (expense) | 49,702 | -751 | 1,960 |
Net income (loss) | 56,689 | -4,251 | 7,542 |
Comprehensive income (loss): | ' | ' | ' |
Net income (loss) | 56,689 | -4,251 | 7,542 |
Foreign currency translation adjustment | 1,469 | 1,249 | -1,626 |
Comprehensive income (loss) | $58,158 | ($3,002) | $5,916 |
Basic net income (loss) per common share (in dollars per share) | $1.22 | ($0.09) | $0.17 |
Diluted net income (loss) per common share (in dollars per share) | $1.21 | ($0.09) | $0.17 |
Dividends declared per common share (in dollars per share) | $0.76 | $0.21 | ' |
Weighted-average common shares -basic (in shares) | 46,286,735 | 45,514,844 | 45,180,485 |
Weighted-average common shares -diluted (in shares) | 46,996,904 | 45,514,844 | 45,704,052 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' |
Network operations, equity-based compensation expense | $507 | $529 | $510 |
Selling, general, and administrative, equity-based compensation expense | $8,212 | $7,794 | $7,185 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2010 | $151,801 | $46 | $482,737 | $1,044 | ($332,026) |
Balance (in shares) at Dec. 31, 2010 | ' | 45,838,510 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Forfeitures of shares granted to employees (in shares) | ' | -33,038 | ' | ' | ' |
Equity-based compensation | 8,620 | ' | 8,620 | ' | ' |
Foreign currency translation | -1,626 | ' | ' | -1,626 | ' |
Issuances of common stock (in shares) | ' | 224,920 | ' | ' | ' |
Exercises of options | 633 | ' | 633 | ' | ' |
Exercises of options (in shares) | ' | 95,311 | ' | ' | ' |
Common stock purchases and retirement | -2,969 | ' | -2,969 | ' | ' |
Common stock purchases and retirement (in shares) | ' | -232,356 | ' | ' | ' |
Net income (loss) | 7,542 | ' | ' | ' | 7,542 |
Balance at Dec. 31, 2011 | 164,001 | 46 | 489,021 | -582 | -324,484 |
Balance (in shares) at Dec. 31, 2011 | ' | 45,893,347 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Forfeitures of shares granted to employees (in shares) | ' | -82,580 | ' | ' | ' |
Equity-based compensation | 9,164 | ' | 9,164 | ' | ' |
Foreign currency translation | 1,249 | ' | ' | 1,249 | ' |
Issuances of common stock | 1 | 1 | ' | ' | ' |
Issuances of common stock (in shares) | ' | 1,338,120 | ' | ' | ' |
Exercises of options | 404 | ' | 404 | ' | ' |
Exercises of options (in shares) | ' | 42,341 | ' | ' | ' |
Common stock purchases and retirement | -1,265 | ' | -1,265 | ' | ' |
Common stock purchases and retirement (in shares) | ' | -74,584 | ' | ' | ' |
Excess income tax benefit | 25 | ' | 25 | ' | ' |
Dividends paid | -9,549 | ' | ' | ' | -9,549 |
Net income (loss) | -4,251 | ' | ' | ' | -4,251 |
Balance at Dec. 31, 2012 | 159,779 | 47 | 497,349 | 667 | -338,284 |
Balance (in shares) at Dec. 31, 2012 | 47,116,644 | 47,116,644 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Forfeitures of shares granted to employees (in shares) | ' | -46,335 | ' | ' | ' |
Equity-based compensation | 9,557 | ' | 9,557 | ' | ' |
Foreign currency translation | 1,469 | ' | ' | 1,469 | ' |
Issuances of common stock (in shares) | ' | 175,500 | ' | ' | ' |
Exercises of options | 1,218 | ' | 1,218 | ' | ' |
Exercises of options (in shares) | ' | 88,409 | ' | ' | ' |
Excess income tax benefit | 132 | ' | 132 | ' | ' |
Dividends paid | -35,352 | ' | ' | ' | -35,352 |
Net income (loss) | 56,689 | ' | ' | ' | 56,689 |
Balance at Dec. 31, 2013 | $193,492 | $47 | $508,256 | $2,136 | ($316,947) |
Balance (in shares) at Dec. 31, 2013 | 47,334,218 | 47,334,218 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | $56,689 | ($4,251) | $7,542 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 64,358 | 62,478 | 59,850 |
Amortization of debt discount and premium | 6,086 | 6,031 | 5,609 |
Equity-based compensation expense (net of amounts capitalized) | 8,719 | 8,323 | 7,695 |
Gain-release of lease obligation | ' | ' | -2,739 |
Gains-dispositions of assets and other, net | -1,001 | -971 | -96 |
Deferred income taxes | -50,069 | 2,692 | -5,735 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable | -6,293 | 1,247 | -1,554 |
Prepaid expenses and other current assets | -3,642 | 459 | -1,238 |
Deposits and other assets | 770 | -436 | 343 |
Accounts payable, accrued liabilities and other long-term liabilities | 6,234 | 4,371 | 6,137 |
Net cash provided by operating activities | 81,851 | 79,943 | 75,814 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of property and equipment | -49,031 | -44,337 | -45,856 |
Proceeds from asset sales | 50 | 141 | 44 |
Net cash used in investing activities | -48,981 | -44,196 | -45,812 |
Cash flows from financing activities: | ' | ' | ' |
Net proceeds from issuance of senior secured notes | 69,882 | ' | 170,512 |
Dividends paid | -35,352 | -9,549 | ' |
Principal payments of capital lease obligations | -11,164 | -16,794 | -15,540 |
Purchases of common stock | ' | -1,265 | -2,969 |
Proceeds from exercises of common stock options | 1,218 | 404 | 633 |
Net cash provided by (used in) financing activities | 24,584 | -27,204 | 152,636 |
Effect of exchange rate changes on cash | 127 | 535 | -714 |
Net increase in cash and cash equivalents | 57,581 | 9,078 | 181,924 |
Cash and cash equivalents, beginning of year | 247,285 | 238,207 | 56,283 |
Cash and cash equivalents, end of year | 304,866 | 247,285 | 238,207 |
Supplemental disclosures of cash flow information: | ' | ' | ' |
Cash paid for interest | 34,511 | 26,107 | 24,602 |
Cash paid for income taxes | 822 | 428 | 810 |
Non-cash investing and financing activities: | ' | ' | ' |
Capital lease obligations incurred | 33,428 | 17,805 | 41,959 |
Fair value of equipment acquired in leases | 8,029 | 273 | 2,365 |
Non-cash component of network equipment obtained in exchange transactions | $934 | $1,126 | ' |
Description_of_the_business_an
Description of the business and summary of significant accounting policies: | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Description of the business and summary of significant accounting policies: | ' | |||||||
Description of the business and summary of significant accounting policies: | ' | |||||||
1. Description of the business and summary of significant accounting policies: | ||||||||
Description of the business | ||||||||
Cogent Communications Group, Inc. (the "Company") is a Delaware corporation and is headquartered in Washington, DC. The Company is a facilities-based provider of low-cost, high-speed Internet access and Internet Protocol ("IP") communications services. The Company's network is specifically designed and optimized to transmit data using IP. The Company delivers its services primarily to small and medium-sized businesses, communications service providers and other bandwidth-intensive organizations in North America, Europe and Japan. | ||||||||
The Company offers on-net Internet access services exclusively through its own facilities, which run from its network to its customers' premises. The Company is not dependent on local telephone companies to serve its customers for its on-net Internet access services because of its integrated network architecture. The Company offers its on-net services to customers located in buildings that are physically connected to its network. The Company's on-net service consists of high-speed Internet access and IP connectivity ranging from 100 Megabits per second to 10 Gigabits per second of bandwidth. The Company provides its on-net Internet access services to its net-centric and corporate customers. The Company's net-centric customers include bandwidth-intensive users such as universities, other Internet service providers, telephone companies, cable television companies, web hosting companies, content delivery network companies and commercial content and application providers. These net-centric customers generally receive service in colocation facilities and in the Company's data centers. The Company operates data centers throughout North America and Europe that allow customers to collocate their equipment and access the Company's network. The Company's corporate customers are located in multi-tenant office buildings and typically include law firms, financial services firms, advertising and marketing firms and other professional services businesses. | ||||||||
In addition to providing its on-net services, the Company provides Internet connectivity to customers that are not located in buildings directly connected to its network. The Company provides this off-net service primarily to corporate customers using other carriers' facilities to provide the "last mile" portion of the link from the customers' premises to the Company's network. The Company also provides certain non-core services that resulted from acquisitions. The Company continues to support but does not actively sell these non-core services. | ||||||||
Summary of significant accounting policies | ||||||||
Principles of consolidation | ||||||||
The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and all of its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||
Reclassifications | ||||||||
Certain immaterial reclassifications have been made to prior years to conform to the current period's presentation. | ||||||||
Use of estimates | ||||||||
The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. | ||||||||
Revenue recognition and allowance for doubtful accounts | ||||||||
The Company's service offerings consist of on-net and off-net telecommunications services. Fixed fees are billed monthly in advance and usage fees are billed monthly in arrears. Revenues from telecommunication services are recognized when the services are performed, evidence of an arrangement exists, the fee is fixed and determinable and collection is probable. The probability of collection is determined by an analysis of credit history for new customers and historical payment patterns for existing customers. Service discounts and incentives related to telecommunication services are recorded as a reduction of revenue when granted. Fees billed in connection with customer installations are deferred and recognized ratably over the longer of the contract term or the estimated customer life. The Company expenses the direct costs associated with sales as incurred. | ||||||||
The Company invoices certain customers for amounts contractually due for unfulfilled minimum contractual obligations and recognizes a corresponding sales allowance equal to the amount invoiced resulting in the recognition of no net revenue at the time the customer is billed. The Company vigorously seeks payment of these amounts. The Company recognizes revenue for these billings as they are collected. | ||||||||
The Company establishes an allowance for doubtful accounts and other sales credit adjustments related to its trade receivables. Trade receivables are recorded at the invoiced amount and can bear interest. Allowances for sales credits are established through a reduction of revenue, while allowances for doubtful accounts are established through a charge to selling, general, and administrative expenses as bad debt expense. The Company assesses the adequacy of these reserves by evaluating factors, such as the length of time individual receivables are past due, historical collection experience, and changes in the credit worthiness of its customers. The Company also assesses the ability of specific customers to meet their financial obligations and establishes specific allowances related to these customers. If circumstances relating to specific customers change or economic conditions change such that the Company's past collection experience and assessment of the economic environment are no longer appropriate, the Company's estimate of the recoverability of its trade receivables could be impacted. Accounts receivable balances are written-off against the allowance for doubtful accounts after all means of internal collection activities have been exhausted and the potential for recovery is considered remote. The Company recognized bad debt expense, net of recoveries, of $3.5 million, $5.1 million and $4.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||
Network operations | ||||||||
Network operations expenses include the costs of personnel and related operating expenses associated with service delivery, network management, and customer support, network facilities costs, fiber and equipment maintenance fees, leased circuit costs, and access fees paid to building owners. The Company estimates its accruals for any disputed leased circuit obligations based upon the nature and age of the dispute. Network operations costs are impacted by the timing and amounts of disputed circuit costs. The Company generally records these disputed amounts when billed by the vendor and reverses these amounts when the vendor credit has been received or the dispute has otherwise been resolved. The Company does not allocate depreciation and amortization expense to its network operations expense. | ||||||||
Foreign currency translation adjustment and comprehensive income (loss) | ||||||||
The consolidated financial statements of the Company's non-US operations are translated into US dollars using the period-end foreign currency exchange rates for assets and liabilities and the average foreign currency exchange rates for revenues and expenses. Gains and losses on translation of the accounts are accumulated and reported as a component of other comprehensive loss in stockholders' equity. The Company's only components of "other comprehensive income (loss)" are currency translation adjustments for all periods presented. | ||||||||
Financial instruments | ||||||||
The Company considers all highly liquid investments with an original maturity of three months or less at purchase to be cash equivalents. The Company determines the appropriate classification of its investments at the time of purchase and evaluates such designation at each balance sheet date. | ||||||||
At December 31, 2013 and December 31, 2012, the carrying amount of cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents at amortized cost, which approximates fair value based upon quoted market prices (Level 1). Based upon recent trading prices (Level 2—market approach) at December 31, 2013, the fair value of the Company's $92.0 million convertible senior notes was approximately $89.2 million. Based upon recent trading prices (Level 2—market approach) at December 31, 2013, the fair value of the Company's $240.0 million senior secured notes was approximately $260.7 million. | ||||||||
The Company was party to letters of credit totaling approximately $0.4 million as of December 31, 2013 and $0.4 million as of December 31, 2012. These letters of credit are secured by investments that are restricted and included in deposits and other assets. | ||||||||
Concentrations of credit risk | ||||||||
The Company's assets that are exposed to credit risk consist of its cash and cash equivalents, other assets and accounts receivable. As of December 31, 2013 and 2012, the Company's cash equivalents were invested in demand deposit accounts, overnight investments and money market funds. The Company places its cash equivalents in instruments that meet high-quality credit standards as specified in the Company's investment policy guidelines. Accounts receivable are due from customers located in major metropolitan areas in the United States, Europe, Canada and Mexico. Receivables from the Company's net-centric (wholesale) customers are generally subject to a higher degree of credit risk than the Company's corporate customers. | ||||||||
The Company relies upon an equipment vendor for the majority of its network equipment and is also dependent upon many third-party fiber providers for providing its services to its customers. | ||||||||
Property and equipment | ||||||||
Property and equipment are recorded at cost and depreciated once deployed using the straight-line method over the estimated useful lives of the assets. Useful lives are determined based on historical usage with consideration given to technological changes and trends in the industry that could impact the asset utilization. System infrastructure costs include the capitalized compensation costs of employees directly involved with construction activities and costs incurred by third party contractors. | ||||||||
Assets and liabilities under capital leases are recorded at the lesser of the present value of the aggregate future minimum lease payments or the fair value of the assets under lease. Leasehold improvements include costs associated with building improvements. The Company determines the number of renewal option periods, if any, included in the lease term for purposes of amortizing leasehold improvements and the lease term of its capital leases based upon its assessment at the inception of the lease for which the failure to renew the lease imposes a penalty on the Company in such amount that a renewal appears to be reasonably assured. Expenditures for maintenance and repairs are expensed as incurred. | ||||||||
Depreciation and amortization periods are as follows: | ||||||||
Type of asset | Depreciation or amortization period | |||||||
Indefeasible rights of use (IRUs) | Shorter of useful life or the IRU lease agreement; generally 15 to 20 years | |||||||
Network equipment | 3 to 8 years | |||||||
Leasehold improvements | Shorter of lease term or useful life | |||||||
Software | 5 years | |||||||
Owned buildings | 40 years | |||||||
Office and other equipment | 3 to 7 years | |||||||
System infrastructure | 5 to 10 years | |||||||
Long-lived assets | ||||||||
The Company's long-lived assets include property and equipment. These long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment is determined by comparing the carrying value of these long-lived assets to management's probability weighted estimate of the future undiscounted cash flows expected to result from the use of the assets. In the event an impairment exists, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset, which would be determined by using quoted market prices or valuation techniques such as the discounted present value of expected future cash flows, appraisals, or other pricing models. In the event there are changes in the planned use of the Company's long-term assets or the Company's expected future undiscounted cash flows are reduced significantly, the Company's assessment of its ability to recover the carrying value of these assets could change. | ||||||||
Asset retirement obligations | ||||||||
The Company's asset retirement obligations consist of restoration requirements for certain leased facilities. The Company recognizes a liability for the present value of the estimated fair value of contractual obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset in the period incurred. The present value of the fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. | ||||||||
Increases to the asset retirement obligation liability due to the passage of time are recognized within selling, general and administrative expenses in the Company's consolidated statements of operations. Changes in the liability due to revisions to estimates of future cash flows are recognized by increasing or decreasing the liability with the offset adjusting the carrying amount of the related long-lived asset. | ||||||||
Equity-based compensation | ||||||||
The Company recognizes compensation expense for its share-based payments granted to its employees based on their grant date fair values with the expense being recognized on a straight-line basis over the requisite service period. The Company begins recording equity-based compensation expense related to performance awards when it is considered probable that the performance conditions will be met. Equity-based compensation expense is recognized in the statement of operations in a manner consistent with the classification of the employee's salary and other compensation. | ||||||||
Debt with conversion options | ||||||||
The Company separately accounts for the liability and equity components of convertible debt instruments in a manner that reflects the issuer's nonconvertible debt borrowing rate when interest cost is recognized. The amortization of the resulting discount on the debt is recognized as part of interest expense in the Company's consolidated statements of operations. | ||||||||
The Company estimates the fair value of convertible notes on the issuance date. The fair value that is assigned to the liability component of convertible notes is determined using interest rates of similar debt that exclude a conversion feature and then applying that effective interest rate to the cash flows associated with the convertible notes to calculate the present value. | ||||||||
Income taxes | ||||||||
The Company's deferred tax assets or liabilities are computed based upon the differences between financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. Deferred income tax expenses or benefits are based upon the changes in the assets or liability from period to period. At each balance sheet date, the Company assesses the likelihood that it will be able to realize its deferred tax assets. Valuation allowances are established when management determines that it is "more likely than not" that some portion or all of the deferred tax asset may not be realized. The Company considers all available positive and negative evidence in assessing the need for a valuation allowance including its historical operating results, ongoing tax planning, and forecasts of future taxable income, on a jurisdiction by jurisdiction basis. The Company reduces its valuation allowance if the Company concludes that it is "more likely than not" that it would be able to realize its deferred tax assets. | ||||||||
Management determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured to determine the amount of benefit to be recognized in the financial statements. The Company adjusts its estimated liabilities for uncertain tax positions periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of its income tax expense. | ||||||||
Basic and diluted net (loss) income per common share | ||||||||
Basic earnings per share ("EPS") excludes dilution for common stock equivalents and is computed by dividing net income or (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of common stock equivalents, if dilutive. | ||||||||
Shares of restricted stock are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. As of December 31, 2013, 2012 and 2011, 1.0 million, 1.7 million and 0.8 million shares of restricted common stock, respectively, are not included in the computation of basic (loss) income per share, as the shares were not vested. | ||||||||
Using the "if-converted" method, the shares issuable upon conversion of the Company's 1.00% Convertible Senior Notes (the "Convertible Notes") were anti-dilutive for all periods. Accordingly, the impact has been excluded from the computation of diluted (loss) income per share. The Convertible Notes are convertible into shares of the Company's common stock yielding 1.9 million shares subject to certain adjustments set forth in the indenture. | ||||||||
The Company computes the dilutive effect of outstanding options using the treasury stock method. For the years ended December 31, 2012 and 2011 options to purchase 0.2 million and 0.1 million shares of common stock, respectively, are not included in the computation of diluted (loss) income per share as the effect would be anti-dilutive. | ||||||||
The following details the determination of the diluted weighted average shares for the year ended December 31, 2013 and 2011: | ||||||||
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2013 | 2011 | |||||||
Weighted average common shares—basic | 46,286,735 | 45,180,485 | ||||||
Dilutive effect of stock options | 76,884 | 83,192 | ||||||
Dilutive effect of restricted stock | 633,285 | 440,375 | ||||||
| | | | | | | | |
Weighted average common shares—diluted | 46,996,904 | 45,704,052 | ||||||
| | | | | | | | |
| | | | | | | | |
Recent accounting pronouncements—adopted | ||||||||
In May 2011, the FASB issued ASU 2011-04 relating to fair value measurement (FASB ASC Topic 820), which amends current guidance to achieve common fair value measurement and disclosure requirements in US GAAP and International Financial Reporting Standards. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted this pronouncement for its fiscal year beginning January 1, 2012. The adoption of this pronouncement did not have a material effect on the Company's consolidated financial statements. | ||||||||
Property_and_equipment
Property and equipment: | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and equipment: | ' | |||||||
Property and equipment: | ' | |||||||
2. Property and equipment: | ||||||||
Property and equipment consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Owned assets: | ||||||||
Network equipment | $ | 404,426 | $ | 375,230 | ||||
Leasehold improvements | 147,718 | 127,497 | ||||||
System infrastructure | 79,811 | 71,769 | ||||||
Software | 9,531 | 9,369 | ||||||
Office and other equipment | 12,521 | 10,558 | ||||||
Building | 1,532 | 1,471 | ||||||
Land | 130 | 125 | ||||||
| | | | | | | | |
655,669 | 596,019 | |||||||
Less—Accumulated depreciation and amortization | (521,290 | ) | (472,024 | ) | ||||
| | | | | | | | |
134,379 | 123,995 | |||||||
Assets under capital leases: | ||||||||
IRUs | 329,415 | 293,210 | ||||||
Less—Accumulated depreciation and amortization | (122,601 | ) | (106,030 | ) | ||||
| | | | | | | | |
206,814 | 187,180 | |||||||
| | | | | | | | |
Property and equipment, net | $ | 341,193 | $ | 311,175 | ||||
| | | | | | | | |
| | | | | | | | |
Depreciation and amortization expense related to property and equipment and capital leases was $64.3 million, $62.4 million and $59.7 million, for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||
The Company capitalizes the compensation cost of employees directly involved with its construction activities. In 2013, 2012 and 2011, the Company capitalized compensation costs of $7.4 million, $7.2 million and $7.1 million respectively. These amounts are included in system infrastructure costs. | ||||||||
In the fourth quarters of 2013 and 2012, the Company exchanged certain used network equipment for new network equipment resulting in gains of $0.9 million and $0.7 million respectively. | ||||||||
Accrued_and_other_liabilities
Accrued and other liabilities: | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued and other liabilities: | ' | |||||||
Accrued and other liabilities: | ' | |||||||
3. Accrued and other liabilities: | ||||||||
Accrued and other current liabilities as of December 31 consist of the following (in thousands): | ||||||||
2013 | 2012 | |||||||
Operating accruals | $ | 11,539 | $ | 8,283 | ||||
Deferred revenue—current portion | 4,174 | 4,132 | ||||||
Payroll and benefits | 2,952 | 2,358 | ||||||
Taxes—non-income based | 1,128 | 692 | ||||||
Interest | 11,672 | 11,054 | ||||||
| | | | | | | | |
Total | $ | 31,465 | $ | 26,519 | ||||
| | | | | | | | |
| | | | | | | | |
Asset retirement obligations | ||||||||
A reconciliation of the amounts related to its leased facility asset retirement obligations is as follows (in thousands): | ||||||||
Asset retirement obligations | ||||||||
Balance—December 31, 2010 | $ | 233 | ||||||
Effect of exchange rates | (5 | ) | ||||||
Amortization of discount | 11 | |||||||
| | | | | ||||
Balance—December 31, 2011 | 239 | |||||||
Effect of exchange rates | 5 | |||||||
Amortization of discount | 12 | |||||||
| | | | | ||||
Balance—December 31, 2012 | 256 | |||||||
Effect of exchange rates | 11 | |||||||
Amortization of discount | 12 | |||||||
| | | | | ||||
Balance—December 31, 2013 (recorded as other long term liabilities) | $ | 279 | ||||||
| | | | | ||||
| | | | | ||||
Longterm_debt
Long-term debt: | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Long-term debt: | ' | ||||||||||
Long-term debt: | ' | ||||||||||
4. Long-term debt: | |||||||||||
Senior secured notes | |||||||||||
On January 26, 2011 and on August 19, 2013, the Company issued its 8.375% Senior Secured Notes (the "Senior Notes") due February 15, 2018, for aggregate principal amounts of $175.0 million and $65.0 million, respectively, in private offerings for resale to qualified institutional buyers pursuant to SEC Rule 144A. The Senior Notes are secured and bear interest at 8.375% per annum. Interest is payable in cash semiannually in arrears on February 15 and August 15, of each year. On January 26, 2011, the Company received net proceeds of $170.5 million after deducting $4.5 million of issuance costs from issuing $175.0 million of Senior Notes. On August 19, 2013, the Company received net proceeds of $69.9 million after deducting $1.0 million of issuance costs from issuing $65.0 million of Senior Notes. The Senior Notes sold in August 2013 were sold at 109.00% of par value. The $5.9 million premium is being amortized as a reduction to interest expense to the maturity date using the effective interest rate method. Issuance costs are included in deposits and other assets. The net proceeds from the Senior Notes are intended to be used for general corporate purposes, the buyback of the Company's Convertible Notes if the holders exercise their put, and/or repurchases of its common stock or Convertible Notes or special or recurring dividends to the Company's stockholders. In the years ended December 31, 2013, 2012 and 2011, the Company incurred approximately $16.8 million, $15.2 million and $14.0 million of interest expense, respectively, related to the Senior Notes. | |||||||||||
The Senior Notes are fully guaranteed on a senior secured basis, jointly and severally, by each of the Company's existing domestic and future material domestic subsidiaries, subject to certain exceptions and permitted liens. Under certain circumstances, the Company's subsidiaries may be released from these guarantees without the consent of the holders of the Senior Notes. The Senior Notes and the guarantees are secured by (i) first priority liens on substantially all of the Company's and guarantors' assets, (ii) all of the equity interests in any of its domestic subsidiaries and (iii) 65% of the equity interests of its first-tier foreign subsidiaries held by the Company and its guarantors. The Senior Notes and the guarantees represent the Company's and the guarantors' senior secured obligations and effectively rank equally and ratably with all of its and the guarantors' existing and future first lien obligations, to the extent of the value of the collateral securing such indebtedness, subject to permitted liens; are structurally subordinated to any existing and future indebtedness and liabilities of non-guarantor subsidiaries and rank equally in right of payment with all of its and the guarantors' existing and future senior indebtedness. | |||||||||||
The Company may redeem the Senior Notes, in whole or in part, at any time prior to February 15, 2015 at a price equal to 100% of the principal amount plus a "make-whole" premium, plus accrued and unpaid interest, if any, to the date of redemption. The "make whole" premium means, with respect to a note at any date of redemption, the greater of (i) 1.0% of the then-outstanding principal amount of such note and (ii) the excess of (A) the present value at such date of redemption of (1) the redemption price of such note at February 15, 2015, plus (2) all remaining required interest payments due on such note through February 15, 2015 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the Treasury Rate as of such date of redemption plus 50 basis points, over (B) the then-outstanding principal amount of such note. The Company may also redeem the Senior Notes, in whole or in part, at any time on or after February 15, 2015 at the applicable redemption prices specified under the indenture governing the Senior Notes plus accrued and unpaid interest, if any, to the date of redemption. The redemption prices (expressed as a percentage of the principal amount) are 104.118% during the 12-month period beginning on February 15, 2015, 102.094% during the 12-month period beginning on February 15, 2016 and 100.0% during the 12-month period beginning on February 15, 2017 and thereafter. In addition, the Company may redeem up to 35% of the Senior Notes before February 15, 2014 with the net cash proceeds from certain equity offerings at a redemption price of 108.375% of the principal amount plus accrued and unpaid interest. If the Company experiences specific kinds of changes of control, the Company must offer to repurchase all of the Senior Notes at a purchase price of 101.0% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date. | |||||||||||
The Company must offer to purchase with the proceeds of certain sales of assets totaling $20.0 million or greater, Senior Notes at 100.0% of the principal value of the notes plus accrued and unpaid interest. In the event of default, as defined in the indenture, holders of not less than 25.0% in aggregate principal amount of the Senior Notes then outstanding may declare all unpaid principal and accrued interest on all Senior Notes to be due and immediately payable. | |||||||||||
The indenture governing the Senior Notes, among other things, limits the Company's ability and its guarantors' ability to incur indebtedness; to pay dividends or make other distributions; to make certain investments and other restricted payments; to create liens; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; to incur restrictions on the ability of a subsidiary to pay dividends or make other payments; and to enter into certain transactions with its affiliates. | |||||||||||
Convertible senior notes | |||||||||||
In June 2007, the Company issued its Convertible Notes for an aggregate principal amount of $200.0 million in a private offering for resale to qualified institutional buyers pursuant to SEC Rule 144A. The Convertible Notes mature on June 15, 2027, are unsecured, and bear interest at 1.00% per annum. The Convertible Notes will rank equally with any future senior debt and senior to any future subordinated debt and will be effectively subordinated to all existing and future liabilities of the Company's subsidiaries and to any secured debt the Company may issue, to the extent of the value of the collateral. Interest is payable in cash semiannually in arrears on June 15 and December 15, of each year, beginning on December 15, 2007. The Company received net proceeds from the issuance of the Convertible Notes of $195.1 million, after deducting the original issue discount of 2.25% and issuance costs. The discount and other issuance costs are being amortized to interest expense using the effective interest method through June 15, 2014, which is the earliest put date. In 2008, the Company purchased an aggregate of $108.0 million of face value of the Convertible Notes for $48.6 million in cash in a series of transactions. | |||||||||||
Conversion process and other terms of the Convertible Notes | |||||||||||
The Convertible Notes are convertible into shares of the Company's common stock. Currently the conversion price is $47.52 per share, or 21.043 shares for each $1,000 principal amount of Convertible Notes, subject to additional adjustment for certain events, including the payment of dividends, as set forth in the indenture. Depending upon the price of the Company's common stock at the time of conversion, holders of the Convertible Notes will receive additional shares of the Company's common stock. Upon conversion of the Convertible Notes, the Company will have the right to deliver shares of its common stock, cash or a combination of cash and shares of its common stock. The Convertible Notes are convertible (i) during any fiscal quarter after the fiscal quarter ending September 30, 2007, if the closing sale price of the Company's common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter exceeds 130% of the conversion price in effect on the last trading day of the immediately preceding fiscal quarter, or (ii) specified corporate transactions occur, or (iii) the trading price of the Convertible Notes falls below a certain threshold, or (iv) if the Company calls the Convertible Notes for redemption, or (v) on or after April 15, 2027, until maturity. In addition, following specified corporate transactions, the Company will increase the conversion rate for holders who elect to convert notes in connection with such corporate transactions, provided that in no event may the shares issued upon conversion, as a result of adjustment or otherwise, result in the issuance of more than 36.8251 common shares per $1,000 principal amount. The Convertible Notes include an "Irrevocable Election of Settlement" whereby the Company may choose, in its sole discretion, and without the consent of the holders of the Convertible Notes, to waive its right to settle the conversion feature in either cash or stock or in any combination at its option. The Convertible Notes may be redeemed by the Company at any time after June 20, 2014 at a redemption price of 100% of the principal amount plus accrued interest. Holders of the Convertible Notes have the right to require the Company to repurchase for cash all or some of their notes on June 15, 2014, 2017 and 2022 and upon the occurrence of certain designated events at a redemption price of 100% of the principal amount plus accrued interest. | |||||||||||
Registration rights | |||||||||||
Under the terms of the Convertible Notes, the Company is required to use reasonable efforts to file and maintain a shelf registration statement with the SEC covering the resale of the Convertible Notes and the common stock issuable on conversion of the Convertible Notes. If the Company fails to meet these terms, the Company will be required to pay special interest on the Convertible Notes in the amount of 0.25% for the first 90 days after the occurrence of the failure to meet and 0.50% thereafter. In addition to the special interest, additional interest of 0.25% per annum will accrue in the event of default, as defined in the indenture. The Company filed a shelf registration statement registering the Convertible Notes and common stock issuable upon conversion of the Convertible Notes in July 2007. | |||||||||||
As of December 31, 2013, the Convertible Notes are classified as a current liability since the earliest put date in June 2014 is within one year. The Company separately accounted for the debt and equity components of its Convertible Notes in a manner that reflected its nonconvertible unsecured debt borrowing rate. The debt and equity components for the Convertible Notes were as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Principal amount of convertible senior notes | $ | 91,978 | $ | 91,978 | |||||||
Unamortized discount | (3,099 | ) | (9,494 | ) | |||||||
Net carrying amount | 88,879 | 82,484 | |||||||||
Additional paid-in capital | 74,933 | 74,933 | |||||||||
At December 31, 2013, the unamortized discount had a remaining recognition period of approximately six months. The amount of interest expense recognized and effective interest rate for the years ended December 31, 2013, 2012 and 2011 were as follows (in thousands): | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Contractual coupon interest | $ | 920 | $ | 920 | $ | 920 | |||||
Amortization of discount and costs | 6,409 | 5,886 | 5,405 | ||||||||
| | | | | | | | | | | |
Interest expense | $ | 7,329 | $ | 6,806 | $ | 6,325 | |||||
| | | | | | | | | | | |
Effective interest rate | 8.7 | % | 8.7 | % | 8.7 | % | |||||
Long-term debt maturities | |||||||||||
The aggregate future contractual maturities of long-term debt were as follows as of December 31, 2013 (in thousands): | |||||||||||
For the year ending December 31, | |||||||||||
2014 | $ | — | |||||||||
2015 | — | ||||||||||
2016 | — | ||||||||||
2017 | — | ||||||||||
2018 | 240,000 | ||||||||||
Thereafter(1) | 91,978 | ||||||||||
| | | | | |||||||
Total | $ | 331,978 | |||||||||
| | | | | |||||||
| | | | | |||||||
-1 | |||||||||||
The Convertible Notes mature in June 2027. Holders of the $92.0 million of Convertible Notes have the right to require the Company to repurchase for cash all or some of their notes on June 15, 2014, 2017 and 2022 at a redemption price of 100% of the principal amount plus accrued interest. | |||||||||||
Income_taxes
Income taxes: | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income taxes: | ' | ||||||||||
Income taxes: | ' | ||||||||||
5. Income taxes: | |||||||||||
The components of income (loss) before income taxes consist of the following (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Domestic | $ | 30,779 | $ | 20,411 | $ | 27,832 | |||||
Foreign | (23,792 | ) | (23,911 | ) | (22,250 | ) | |||||
| | | | | | | | | | | |
Total income (loss) before income taxes | $ | 6,987 | $ | (3,500 | ) | $ | 5,582 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The benefit (provision) for income taxes is comprised of the following (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | (83 | ) | 2,285 | (3,432 | ) | ||||||
Foreign | (284 | ) | (344 | ) | (369 | ) | |||||
Deferred: | |||||||||||
Federal | 49,317 | — | — | ||||||||
State | 995 | (1,245 | ) | 6,334 | |||||||
Foreign | (243 | ) | (1,447 | ) | (573 | ) | |||||
| | | | | | | | | | | |
Total income tax benefit (provision) | $ | 49,702 | $ | (751 | ) | $ | 1,960 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Our consolidated temporary differences comprising our net deferred tax assets at December 31, 2013 and 2012 are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred Tax Assets: | |||||||||||
Net operating loss carry-forwards | $ | 402,484 | $ | 385,578 | |||||||
Depreciation and amortization | 3,110 | 4,187 | |||||||||
Tax credits | 2,775 | 2,758 | |||||||||
Accrued liabilities and other | 3,748 | 6,138 | |||||||||
| | | | | | | | ||||
Total gross deferred tax assets | 412,117 | 398,661 | |||||||||
| | | | | | | | ||||
Deferred Tax Liabilities: | |||||||||||
Convertible notes | 1,150 | 3,415 | |||||||||
Equity-based compensation | 248 | 600 | |||||||||
| | | | | | | | ||||
Total gross deferred tax liabilities | 1,398 | 4,015 | |||||||||
| | | | | | | | ||||
Net deferred tax assets before valuation allowance | 410,719 | 394,646 | |||||||||
Valuation allowance | (354,537 | ) | (388,460 | ) | |||||||
| | | | | | | | ||||
Net deferred tax asset | $ | 56,182 | $ | 6,186 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
At each balance sheet date, the Company assesses the likelihood that it will be able to realize its deferred tax assets. The Company considers all available positive and negative evidence in assessing the need for a valuation allowance. At December 31, 2011, the Company concluded that it was more likely than not that it would be able to realize certain of its deferred tax assets primarily as a result of expected future taxable income related to its operations in certain state and municipal jurisdictions in the United States. Accordingly, the Company reduced the valuation allowance related to these deferred tax assets and recorded an income tax benefit of $6.3 million in the year ended December 31, 2011. At December 31, 2013, the Company concluded that it was more likely than not that it would be able to realize certain of its US Federal and state deferred tax assets primarily as a result of expected future US Federal taxable income related to its operations in the United States. Accordingly, the Company reduced the valuation allowance related to these deferred tax assets and recorded an income tax benefit of $52.2 million in the year ended December 31, 2013. As of December 31, 2013, the Company maintained a full valuation allowance against its other deferred tax assets consisting primarily of net operating loss carryforwards related to its foreign operations in Europe and Mexico and net operating losses in the United States that are limited for use under Section 382 of the Internal Revenue Code. | |||||||||||
As of December 31, 2013, the Company has combined net operating loss carry-forwards of approximately $1.3 billion. This amount includes federal and state net operating loss carry-forwards in the United States of approximately $395.8 million, net operating loss carry-forwards related to its European, Mexican and Japanese operations of approximately $897.9 million, $1.8 million and $0.1 million, respectively. Section 382 of the Internal Revenue Code in the United States limits the utilization of net operating losses when ownership changes, as defined by that section, occur. The Company has performed an analysis of its Section 382 ownership changes and has determined that the utilization of certain of its net operating loss carryforwards in the United States is limited and for those carryforwards with limitations the Company continues to maintain a valuation allowance. The net operating loss carryforwards in the United States will expire, if unused, between 2024 and 2029. The net operating loss carry-forwards related to the Company's Mexican and Japanese operations expire if unused, between 2019 and 2023. The net operating loss carry-forwards related to the Company's European operations include $727.8 million that do not expire and $170.0 million that expire between 2014 and 2028. | |||||||||||
The Company has not provided for US deferred income taxes or foreign withholding taxes on its undistributed earnings for certain non-US subsidiaries earnings or cumulative translation adjustments because these earnings and adjustments are intended to be permanently reinvested in operations outside the United States. | |||||||||||
In the normal course of business the Company takes positions on its tax returns that may be challenged by taxing authorities. The Company evaluates all uncertain tax positions to assess whether the position will more likely than not be sustained upon examination. If the Company determines that the tax position is more likely than not to be sustained, the Company records the amount of the benefit that is more likely than not to be realized when the tax position is settled. This liability, including accrued interest and penalties, is included in other long-term liabilities in the accompanying balance sheets and was $1.1 million as of December 31, 2013 and $1.7 million as of December 31, 2012. The Company expects that its liability for uncertain tax positions will decrease by approximately $0.3 million during the twelve months ended December 31, 2014, due to the expiration of certain statutes of limitation, however, actual changes in the liability for uncertain tax positions could be different than currently expected. If recognized, changes in the Company's total unrecognized tax benefits would impact the Company's effective income tax rate. The roll-forward of the liability for uncertain tax positions is below and excludes interest and penalties. | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Beginning balance of unrecognized tax benefits | $ | 1,312 | $ | 2,875 | $ | 698 | |||||
Change attributable to tax positions taken during a prior period | (51 | ) | 745 | 2,177 | |||||||
Decrease attributable to settlements with taxing authorities | (1,655 | ) | — | ||||||||
Decrease attributable to lapses of statutes of limitation | (261 | ) | (653 | ) | — | ||||||
| | | | | | | | | | | |
Ending balance of unrecognized tax benefits | $ | 1,000 | $ | 1,312 | $ | 2,875 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. The Company is subject to US federal tax and state tax examinations for years 2004 to 2013. The Company is subject to tax examinations in its foreign jurisdictions generally for years 2005 to 2013. | |||||||||||
The following is a reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements (in thousands). | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Federal income tax benefit (provision) at statutory rates | $ | (2,445 | ) | $ | 1,225 | $ | (1,954 | ) | |||
Effect of: | |||||||||||
State income taxes, net of federal benefit | (281 | ) | (387 | ) | (1,368 | ) | |||||
State tax credits | 272 | 315 | 146 | ||||||||
Foreign rate differential | 255 | 227 | 1,071 | ||||||||
Foreign tax expense | (122 | ) | (96 | ) | (342 | ) | |||||
Net operating loss limitation | (238 | ) | (1,081 | ) | — | ||||||
Non-deductible expenses | (464 | ) | (2,551 | ) | (597 | ) | |||||
Changes in tax reserves | 503 | 1,552 | (2,969 | ) | |||||||
Other | 35 | 23 | 278 | ||||||||
Changes in valuation allowance | 52,187 | 22 | 7,695 | ||||||||
| | | | | | | | | | | |
Income tax benefit (provision) | $ | 49,702 | $ | (751 | ) | $ | 1,960 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Commitments_and_contingencies
Commitments and contingencies: | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and contingencies: | ' | ||||
Commitments and contingencies: | ' | ||||
6. Commitments and contingencies: | |||||
Capital leases—fiber lease agreements | |||||
The Company has entered into lease agreements with numerous providers of dark fiber primarily under 15-20 year IRUs typically with additional renewal terms. Once the Company has accepted the related fiber route, leases that meet the criteria for treatment as capital leases are recorded as a capital lease obligation and an IRU asset. The interest rate used in determining the present value of the aggregate future minimum lease payments is determined by adding a premium to the US treasury interest rate for the lease term. The future minimum payments under these agreements are as follows (in thousands): | |||||
For the year ending December 31, | |||||
2014 | $ | 28,965 | |||
2015 | 22,584 | ||||
2016 | 21,714 | ||||
2017 | 21,663 | ||||
2018 | 21,592 | ||||
Thereafter | 246,032 | ||||
| | | | | |
Total minimum lease obligations | 362,550 | ||||
Less—amounts representing interest | (200,771 | ) | |||
| | | | | |
Present value of minimum lease obligations | 161,779 | ||||
Current maturities | (9,252 | ) | |||
| | | | | |
Capital lease obligations, net of current maturities | $ | 152,527 | |||
| | | | | |
| | | | | |
Release of lease obligation | |||||
In the year ended December 31, 2011, the requirements for extinguishment were met and the Company was released from an obligation under an IRU capital lease obligation totaling $2.7 million resulting in a gain. The IRU asset related to this obligation had been fully impaired in 2008 when it was determined that the IRU asset was no longer in use. | |||||
Current and potential litigation | |||||
In accordance with the accounting guidance for contingencies, the Company accrues its estimate of a contingent liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Where it is probable that a liability has been incurred and there is a range of expected loss for which no amount in the range is more likely than any other amount, the Company accrues at the low end of the range. The Company reviews its accruals at least quarterly and adjusts them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. The Company has taken certain positions related to its obligations for leased circuit and dark fiber costs which could result in a loss of up to $1.9 million in excess of the amount accrued at December 31, 2013. | |||||
Certain former sales employees of the Company filed a collective action against the Company in December 2011 in the United States District Court, Southern District of Texas, Houston Division alleging misclassification of the Company's sales employees throughout the US in violation of the Fair Labor Standards Act. The lawsuit seeks to recover pay for allegedly unpaid overtime and other damages, including attorney's fees. The Company denies the claims and believes that the claims for unpaid overtime are without merit. The Company believes its classification of sales employees is in compliance with applicable law. | |||||
In January 2013, a former sales employee filed in the Superior Court of Santa Clara County, California a lawsuit alleging misclassification of sales employees under California wage and hour laws. The lawsuit sought certification as a class action and sought to recover pay for allegedly unpaid overtime and other damages, including attorney's fees. The lawsuit has been dismissed. | |||||
In the normal course of business the Company is involved in other legal activities and claims. Because such matters are subject to many uncertainties and the outcomes are not predictable with assurance, the liability related to these legal actions and claims cannot be determined with certainty. Management does not believe that such claims and actions will have a material impact on the Company's financial condition or results of operations. Judgment is required in estimating the ultimate outcome of any dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiations or settle any litigation. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material. | |||||
Operating leases and building access agreements | |||||
The Company leases office space, network equipment sites, and data center facilities under operating leases. The Company also enters into building access agreements with the landlords of multi-tenant office buildings. The Company pays fees for the maintenance of its leased dark fiber and in certain cases the Company enters into operating lease commitments for fiber. Future minimum annual payments under these arrangements are as follows (in thousands): | |||||
For the year ending December 31, | |||||
2014 | $ | 54,103 | |||
2015 | 44,803 | ||||
2016 | 38,160 | ||||
2017 | 31,208 | ||||
2018 | 27,576 | ||||
Thereafter | 148,031 | ||||
| | | | | |
$ | 343,881 | ||||
| | | | | |
| | | | | |
Expenses related to these arrangements were $58.1 million in 2013, $55.8 million in 2012 and $55.7 million in 2011. | |||||
Unconditional purchase obligations | |||||
Unconditional purchase obligations for equipment and services totaled approximately $24.4 million at December 31, 2013 that includes amounts due under a network equipment purchase agreement with a vendor. Under the equipment purchase agreement the Company is required to order network equipment through 2016. As of December 31, 2013, the Company had also committed to additional dark fiber IRU capital and operating lease agreements totaling approximately $37.1 million in future payments to be paid over periods of up to 20 years. These obligations begin when the related fiber is accepted, which is generally expected to occur in 2014. Future minimum payments under these obligations are approximately, $32.6 million, $1.1 million, $1.0 million, $1.0 million and $1.1 million for the years ending December 31, 2014 to December 31, 2018, respectively, and approximately $24.7 million, thereafter. | |||||
Defined contribution plan | |||||
The Company sponsors a 401(k) defined contribution plan that provides for a Company matching payment. The Company matching payments were $0.4 million for 2013, $0.4 million for 2012 and $0.4 million 2011 and were paid in cash. | |||||
Stockholders_equity
Stockholders' equity: | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Stockholders' equity: | ' | |||||||||||
Stockholders' equity: | ' | |||||||||||
7. Stockholders' equity: | ||||||||||||
Authorized shares | ||||||||||||
The Company has 75.0 million shares of authorized $0.001 par value common stock and 10,000 authorized but unissued shares of $0.001 par value preferred stock. The holders of common stock are entitled to one vote per common share and, subject to any rights of any series of preferred stock, dividends may be declared and paid on the common stock when determined by the Company's board of directors. | ||||||||||||
Common stock buybacks | ||||||||||||
The Company's board of directors has approved $50.0 million for purchases of the Company's common stock under a buyback program (the "Buyback Program"). There is approximately $45.8 million remaining for purchases under the Buyback Program. During the year ended December 31, 2012 and 2011, the Company purchased approximately 0.1 million and 0.2 million shares of its common stock, respectively, for approximately $1.3 million and $3.0 million, respectively. These common shares were subsequently retired. There were no purchases of the Company's common stock in 2013. | ||||||||||||
Dividends on common stock | ||||||||||||
Dividends are recorded as a reduction to retained earnings. Dividends on unvested restricted shares of common stock are paid as the awards vest. The Company's initial quarterly dividend payment was made in the third quarter of 2012. In addition to the Company's regular quarterly dividends, in 2013, the Company's board of directors approved an additional return of capital program (the "Capital Program") for the Company's shareholders. Under the Capital Program the Company plans on returning an additional capital to the Company's shareholders each quarter through either stock buybacks or a special dividend or a combination of stock buybacks and a special dividend. The aggregate payment under the Capital Program initially was at least $10.0 million each quarter and was increased to be at least $10.5 million each quarter. Amounts paid under the Capital Program are in addition to the Company's regular quarterly dividend payments. The initial $10.0 million ($0.22 per share) quarterly dividend payment under the Capital Program was paid to holders of record on November 27, 2013 on December 20, 2013. The total dividend paid on December 20, 2013 totaled $0.37 per share. On February 19, 2014, the Company's board of directors approved the payment of the Company's regular quarterly dividend of $0.16 per common share and a $10.5 million dividend ($0.23 per share) under the Company's Capital Program. The total dividend for the first quarter of 2014 of $0.39 per share will be paid to holders of record on March 7, 2014. This estimated $17.9 million dividend payment is expected to be made on March 27, 2014. | ||||||||||||
A summary of the Company's quarterly dividends paid since its initial dividend payment is as follows (in thousands, except per share amounts): | ||||||||||||
Dividend Period | Amount per | Record Date | Payment Date | Dividends Paid | ||||||||
Common Share | ||||||||||||
Q3 2012 | $ | 0.1 | August 22, 2012 | September 12, 2012 | $ | 4,537 | ||||||
Q4 2012 | $ | 0.11 | November 21, 2012 | December 12, 2102 | $ | 5,012 | ||||||
Q1 2013 | $ | 0.12 | March 4, 2013 | March 15, 2013 | $ | 5,489 | ||||||
Q2 2013 | $ | 0.13 | May 31, 2013 | June 18, 2013 | $ | 6,145 | ||||||
Q3 2013 | $ | 0.14 | September 5, 2013 | September 25, 2013 | $ | 6,512 | ||||||
Q4 2013 | $ | 0.37 | November 27, 2013 | December 20, 2013 | $ | 17,206 | ||||||
The payment of any future dividends and any other returns of capital will be at the discretion of the Company's board of directors and may be reduced, eliminated or increased and will be dependent upon the Company's financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Company's board of directors. | ||||||||||||
Stock_option_and_award_plan
Stock option and award plan: | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Stock option and award plan: | ' | ||||||||||
Stock option and award plan: | ' | ||||||||||
8. Stock option and award plan: | |||||||||||
Incentive award plan | |||||||||||
The Company grants restricted stock and options for common stock under its award plan, the 2004 Incentive Award Plan, as amended (the "Award Plan"). Stock options granted under the Award Plan generally vest over a four-year period and have a term of ten years. Grants of shares of restricted stock granted under the Award Plan generally vest over periods ranging from three to four years. Compensation expense for all awards is recognized over the service period. Awards with graded vesting terms are recognized on a straight-line basis. Certain option and share grants provide for accelerated vesting if there is a change in control, as defined. For grants of restricted stock, when an employee terminates prior to full vesting the employee retains their vested shares and the employees' unvested shares are returned to the plan. For grants of options for common stock, when an employee terminates prior to full vesting, the employee may elect to exercise their vested options for a period of ninety days and any unvested options are returned to the plan. Shares issued to satisfy awards are provided from the Company's authorized shares. As of December 31, 2013 there were a total of 0.1 million shares available for grant. | |||||||||||
The Company had granted restricted shares that were subject to certain performance conditions based upon the Company's operating metrics. The Company recorded approximately $0.1 million and $1.1 million, respectively, of equity-based compensation expense related to the restricted shares subject to performance conditions in the years ended December 31, 2012 and 2011, respectively. | |||||||||||
The accounting for equity-based compensation expense requires the Company to make estimates and judgments that affect its financial statements. These estimates include the following. | |||||||||||
Expected Dividend Yield—Prior to the initial declaration of a quarterly cash dividend in the third quarter of 2012, the Company used an expected dividend yield of 0% as the Company did not historically pay cash dividends on its common stock. The Company now uses an expected dividend yield based upon expected annual dividends and the stock price. | |||||||||||
Expected Volatility—The Company uses its historical volatility for a period commensurate with the expected term of the option. | |||||||||||
Risk-Free Interest Rate—The Company uses the zero coupon US Treasury rate during the quarter having a term that most closely resembles the expected term of the option. | |||||||||||
Expected Term of the Option—The Company estimates the expected life of the option term by analyzing historical stock option exercises. | |||||||||||
Forfeiture Rates—The Company estimates its forfeiture rate based on historical data with further consideration given to the class of employees to whom the options or shares were granted. | |||||||||||
The weighted-average per share grant date fair value of options was $9.44 in 2013, $9.00 in 2012 and $7.90 in 2011. The following assumptions were used for determining the fair value of options granted in the three years ended December 31, 2013: | |||||||||||
Years Ended December 31, | |||||||||||
Black-Scholes Assumptions | 2013 | 2012 | 2011 | ||||||||
Dividend yield | 2 | % | 1.3 | % | 0 | % | |||||
Expected volatility | 58.5 | % | 61.6 | % | 63.2 | % | |||||
Risk-free interest rate | 0.8 | % | 0.7 | % | 1.6 | % | |||||
Expected life of the option term (in years) | 4.8 | 4.8 | 4.9 | ||||||||
Stock option activity under the Company's Award Plan during the year ended December 31, 2013, was as follows: | |||||||||||
Number of | Weighted-Average | ||||||||||
Options | Exercise Price | ||||||||||
Outstanding at December 31, 2012 | 238,490 | $ | 14.87 | ||||||||
Granted | 58,472 | $ | 30.5 | ||||||||
Cancelled | (32,976 | ) | $ | 21.55 | |||||||
Exercised—intrinsic value $1.4 million; cash received $1.2 million | (88,409 | ) | $ | 13.78 | |||||||
| | | | | | | | ||||
Outstanding at December 31, 2013—$3.7 million intrinsic value and 5.9 years weighted-average remaining contractual term | 175,577 | $ | 19.36 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Exercisable at December 31, 2013—$2.8 million intrinsic value and 4.3 years weighted-average remaining contractual term | 114,361 | $ | 15.65 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Expected to vest—$3.5 million intrinsic value and 5.6 years weighted-average remaining contractual term | 160,798 | $ | 18.42 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
A summary of the Company's non-vested restricted stock awards as of December 31, 2013 and the changes during the year ended December 31, 2013 are as follows: | |||||||||||
Non-vested awards | Shares | Weighted-Average | |||||||||
Grant Date | |||||||||||
Fair Value | |||||||||||
Non-vested at December 31, 2012 | 1,683,588 | $ | 16.12 | ||||||||
Granted | 175,500 | $ | 27.82 | ||||||||
Vested | (773,430 | ) | $ | 15.2 | |||||||
Forfeited | (46,335 | ) | $ | 18.06 | |||||||
| | | | | | | | ||||
Non-vested at December 31, 2013 | 1,039,323 | $ | 18.69 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
The weighted average per share grant date fair value of restricted stock granted was $27.82 in 2013 (0.2 million shares), $17.74 in 2012 (1.3 million shares) and $14.09 in 2011 (0.2 million shares). The fair value was determined using the quoted market price of the Company's common stock on the date of grant. The fair value of shares of restricted stock vested in the years ended December 31, 2013, 2012 and 2011 was approximately $21.7 million, $8.8 million, and $7.7 million respectively. | |||||||||||
Equity-based compensation expense related to stock options and restricted stock was $8.7 million, $8.3 million and $7.7 million for the years ended December 31, 2013, 2012, and 2011, respectively. The Company capitalized compensation expense related to stock options and restricted stock of $0.8 million, $0.8 million and $0.9 million for the years ended December 31, 2013, 2012, and 2011, respectively. As of December 31, 2013 there was $14.7 million of total unrecognized compensation cost related to non-vested equity-based compensation awards. That cost is expected to be recognized over a weighted average period of 2.1 years. | |||||||||||
Related_party_transactions
Related party transactions: | 12 Months Ended |
Dec. 31, 2013 | |
Related party transactions: | ' |
Related party transactions: | ' |
9. Related party transactions: | |
Office lease | |
The Company's headquarters is located in an office building owned by Niobium LLC (a successor to 6715 Kenilworth Avenue Partnership). The two owners of the company are the Company's Chief Executive Officer, who has a 51% interest in the partnership and his wife who has a 49% interest. The Company paid $0.6 million in 2013, 2012 and in 2011 for rent and related costs (including taxes and utilities) to this company, respectively. In November 2012, the lease was extended an additional two years through August 31, 2015 and is cancellable by the Company upon 60 days' notice. The Company's audit committee reviews and approves all transactions with related parties. | |
Geographic_information
Geographic information: | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Geographic information: | ' | ||||||||||
Geographic information: | ' | ||||||||||
10. Geographic 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 in deciding how to allocate resources and in assessing the Company's performance. The Company has one operating segment. Below are the Company's service revenues and long lived assets by geographic region (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Service Revenue | |||||||||||
North America | $ | 274,320 | $ | 253,396 | $ | 240,116 | |||||
Europe | 73,659 | 63,577 | 65,384 | ||||||||
| | | | | | | | | | | |
Total | $ | 347,979 | $ | 316,973 | $ | 305,500 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
December 31, | December 31, | ||||||||||
2013 | 2012 | ||||||||||
Long lived assets, net | |||||||||||
North America | $ | 251,352 | $ | 225,060 | |||||||
Europe | 89,879 | 86,162 | |||||||||
| | | | | | | | ||||
Total | $ | 341,231 | $ | 311,222 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
The majority of North American revenue consists of services delivered within the United States. | |||||||||||
Quarterly_financial_informatio
Quarterly financial information (unaudited): | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly financial information (unaudited): | ' | |||||||||||||
Quarterly financial information (unaudited): | ' | |||||||||||||
11. Quarterly financial information (unaudited): | ||||||||||||||
Three months ended | ||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||
2013 | 2013 | 2013 | 2013(1)(2) | |||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||
Service revenue | $ | 84,553 | $ | 85,803 | $ | 87,761 | $ | 89,859 | ||||||
Network operations, including equity-based compensation expense | 37,309 | 37,076 | 37,441 | 38,400 | ||||||||||
Operating income | 9,905 | 11,601 | 12,577 | 12,065 | ||||||||||
Net income | 361 | 1,607 | 2,122 | 52,599 | ||||||||||
Net income per common share—basic | 0.01 | 0.03 | 0.05 | 1.14 | ||||||||||
Net income per common share—diluted | 0.01 | 0.03 | 0.05 | 1.1 | ||||||||||
Weighted-average number of common shares—basic | 45,537,607 | 46,040,692 | 46,171,194 | 46,302,926 | ||||||||||
Weighted-average number of common shares—diluted | 46,435,677 | 46,769,184 | 46,823,167 | 48,800,560 | ||||||||||
-1 | ||||||||||||||
As described in Note 5, during the fourth quarter of 2013 the Company reversed its valuation allowance against its US federal and certain state deferred income tax assets. | ||||||||||||||
-2 | ||||||||||||||
Diluted earnings per share for the fourth quarter of 2013 assumes the conversion of the Convertible Notes since the Convertible Notes are dilutive this quarter. The assumed conversion of the Convertible Notes was anti-dilutive for the other periods presented. Diluted earnings per share for the fourth quarter of 2013 is determined by adding back $1.2 million of interest expense from the Convertible Notes to net income and including 1.9 million shares from the assumed conversion of the Convertible Notes in the weighted-average number of common dilutive shares. | ||||||||||||||
Three months ended | ||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||
2012 | 2012 | 2012 | 2012 | |||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||
Service revenue | $ | 76,888 | $ | 77,817 | $ | 79,656 | $ | 82,612 | ||||||
Network operations, including equity-based compensation expense | 34,338 | 35,112 | 36,541 | 37,651 | ||||||||||
Operating income | 5,968 | 7,801 | 8,032 | 9,169 | ||||||||||
Net (loss) | (2,090 | ) | (1,791 | ) | (94 | ) | (276 | ) | ||||||
Net (loss) per common share—basic and diluted | (0.05 | ) | (0.04 | ) | (0.00 | ) | (0.01 | ) | ||||||
Weighted-average number of common shares—basic and diluted | 45,241,418 | 45,313,804 | 45,377,732 | 45,492,847 |
Schedule_II_VALUATION_AND_QUAL
Schedule II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Schedule II VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||
Schedule II VALUATION AND QUALIFYING ACCOUNTS | ' | |||||||||||||
Schedule II | ||||||||||||||
COGENT COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES | ||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
(in thousands) | ||||||||||||||
Description | Balance at | Charged to | (Deductions) | Balance at | ||||||||||
Beginning of | Costs and | End of | ||||||||||||
Period | Expenses | Period | ||||||||||||
Allowance for doubtful accounts (deducted from accounts receivable)(a) | ||||||||||||||
Year ended December 31, 2011 | $ | 2,464 | $ | 6,299 | $ | (5,418 | ) | $ | 3,345 | |||||
Year ended December 31, 2012 | $ | 3,345 | $ | 6,058 | $ | (6,320 | ) | $ | 3,083 | |||||
Year ended December 31, 2013 | $ | 3,083 | $ | 4,731 | $ | (5,943 | ) | $ | 1,871 | |||||
Allowance for Unfulfilled Customer Purchase Obligations (deducted from accounts receivable) | ||||||||||||||
Year ended December 31, 2011 | $ | 1,576 | $ | 4,870 | $ | (4,587 | ) | $ | 1,859 | |||||
Year ended December 31, 2012 | $ | 1,859 | $ | 6,888 | $ | (7,065 | ) | $ | 1,682 | |||||
Year ended December 31, 2013 | $ | 1,682 | $ | 4,690 | $ | (4,228 | ) | $ | 2,144 | |||||
Deferred tax valuation allowance | ||||||||||||||
Year ended December 31, 2011 | $ | 357,915 | $ | 20,837 | $ | (8,459 | ) | $ | 370,293 | |||||
Year ended December 31, 2012 | $ | 370,293 | $ | 18,200 | $ | (33 | ) | $ | 388,460 | |||||
Year ended December 31, 2013 | $ | 388,460 | $ | 5,542 | $ | (39,465 | ) | $ | 354,537 | |||||
(a) | ||||||||||||||
Bad debt expense, net of recoveries, was approximately $3.5 million for the year ended December 31, 2013, $5.1 million for the year ended December 31, 2012 and $4.3 million for the year ended December 31, 2011. | ||||||||||||||
Description_of_the_business_an1
Description of the business and summary of significant accounting policies: (Policies) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Description of the business and summary of significant accounting policies: | ' | |||||||
Principles of consolidation | ' | |||||||
Principles of consolidation | ||||||||
The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and all of its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||
Reclassifications | ' | |||||||
Reclassifications | ||||||||
Certain immaterial reclassifications have been made to prior years to conform to the current period's presentation. | ||||||||
Use of estimates | ' | |||||||
Use of estimates | ||||||||
The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. | ||||||||
Revenue recognition and allowance for doubtful accounts | ' | |||||||
Revenue recognition and allowance for doubtful accounts | ||||||||
The Company's service offerings consist of on-net and off-net telecommunications services. Fixed fees are billed monthly in advance and usage fees are billed monthly in arrears. Revenues from telecommunication services are recognized when the services are performed, evidence of an arrangement exists, the fee is fixed and determinable and collection is probable. The probability of collection is determined by an analysis of credit history for new customers and historical payment patterns for existing customers. Service discounts and incentives related to telecommunication services are recorded as a reduction of revenue when granted. Fees billed in connection with customer installations are deferred and recognized ratably over the longer of the contract term or the estimated customer life. The Company expenses the direct costs associated with sales as incurred. | ||||||||
The Company invoices certain customers for amounts contractually due for unfulfilled minimum contractual obligations and recognizes a corresponding sales allowance equal to the amount invoiced resulting in the recognition of no net revenue at the time the customer is billed. The Company vigorously seeks payment of these amounts. The Company recognizes revenue for these billings as they are collected. | ||||||||
The Company establishes an allowance for doubtful accounts and other sales credit adjustments related to its trade receivables. Trade receivables are recorded at the invoiced amount and can bear interest. Allowances for sales credits are established through a reduction of revenue, while allowances for doubtful accounts are established through a charge to selling, general, and administrative expenses as bad debt expense. The Company assesses the adequacy of these reserves by evaluating factors, such as the length of time individual receivables are past due, historical collection experience, and changes in the credit worthiness of its customers. The Company also assesses the ability of specific customers to meet their financial obligations and establishes specific allowances related to these customers. If circumstances relating to specific customers change or economic conditions change such that the Company's past collection experience and assessment of the economic environment are no longer appropriate, the Company's estimate of the recoverability of its trade receivables could be impacted. Accounts receivable balances are written-off against the allowance for doubtful accounts after all means of internal collection activities have been exhausted and the potential for recovery is considered remote. The Company recognized bad debt expense, net of recoveries, of $3.5 million, $5.1 million and $4.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||
Network operations | ' | |||||||
Network operations | ||||||||
Network operations expenses include the costs of personnel and related operating expenses associated with service delivery, network management, and customer support, network facilities costs, fiber and equipment maintenance fees, leased circuit costs, and access fees paid to building owners. The Company estimates its accruals for any disputed leased circuit obligations based upon the nature and age of the dispute. Network operations costs are impacted by the timing and amounts of disputed circuit costs. The Company generally records these disputed amounts when billed by the vendor and reverses these amounts when the vendor credit has been received or the dispute has otherwise been resolved. The Company does not allocate depreciation and amortization expense to its network operations expense. | ||||||||
Foreign currency translation adjustment and comprehensive income (loss) | ' | |||||||
Foreign currency translation adjustment and comprehensive income (loss) | ||||||||
The consolidated financial statements of the Company's non-US operations are translated into US dollars using the period-end foreign currency exchange rates for assets and liabilities and the average foreign currency exchange rates for revenues and expenses. Gains and losses on translation of the accounts are accumulated and reported as a component of other comprehensive loss in stockholders' equity. The Company's only components of "other comprehensive income (loss)" are currency translation adjustments for all periods presented. | ||||||||
Financial instruments | ' | |||||||
Financial instruments | ||||||||
The Company considers all highly liquid investments with an original maturity of three months or less at purchase to be cash equivalents. The Company determines the appropriate classification of its investments at the time of purchase and evaluates such designation at each balance sheet date. | ||||||||
At December 31, 2013 and December 31, 2012, the carrying amount of cash and cash equivalents, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents at amortized cost, which approximates fair value based upon quoted market prices (Level 1). Based upon recent trading prices (Level 2—market approach) at December 31, 2013, the fair value of the Company's $92.0 million convertible senior notes was approximately $89.2 million. Based upon recent trading prices (Level 2—market approach) at December 31, 2013, the fair value of the Company's $240.0 million senior secured notes was approximately $260.7 million. | ||||||||
The Company was party to letters of credit totaling approximately $0.4 million as of December 31, 2013 and $0.4 million as of December 31, 2012. These letters of credit are secured by investments that are restricted and included in deposits and other assets. | ||||||||
Concentrations of credit risk | ' | |||||||
Concentrations of credit risk | ||||||||
The Company's assets that are exposed to credit risk consist of its cash and cash equivalents, other assets and accounts receivable. As of December 31, 2013 and 2012, the Company's cash equivalents were invested in demand deposit accounts, overnight investments and money market funds. The Company places its cash equivalents in instruments that meet high-quality credit standards as specified in the Company's investment policy guidelines. Accounts receivable are due from customers located in major metropolitan areas in the United States, Europe, Canada and Mexico. Receivables from the Company's net-centric (wholesale) customers are generally subject to a higher degree of credit risk than the Company's corporate customers. | ||||||||
The Company relies upon an equipment vendor for the majority of its network equipment and is also dependent upon many third-party fiber providers for providing its services to its customers. | ||||||||
Property and equipment | ' | |||||||
Property and equipment | ||||||||
Property and equipment are recorded at cost and depreciated once deployed using the straight-line method over the estimated useful lives of the assets. Useful lives are determined based on historical usage with consideration given to technological changes and trends in the industry that could impact the asset utilization. System infrastructure costs include the capitalized compensation costs of employees directly involved with construction activities and costs incurred by third party contractors. | ||||||||
Assets and liabilities under capital leases are recorded at the lesser of the present value of the aggregate future minimum lease payments or the fair value of the assets under lease. Leasehold improvements include costs associated with building improvements. The Company determines the number of renewal option periods, if any, included in the lease term for purposes of amortizing leasehold improvements and the lease term of its capital leases based upon its assessment at the inception of the lease for which the failure to renew the lease imposes a penalty on the Company in such amount that a renewal appears to be reasonably assured. Expenditures for maintenance and repairs are expensed as incurred. | ||||||||
Depreciation and amortization periods are as follows: | ||||||||
Type of asset | Depreciation or amortization period | |||||||
Indefeasible rights of use (IRUs) | Shorter of useful life or the IRU lease agreement; generally 15 to 20 years | |||||||
Network equipment | 3 to 8 years | |||||||
Leasehold improvements | Shorter of lease term or useful life | |||||||
Software | 5 years | |||||||
Owned buildings | 40 years | |||||||
Office and other equipment | 3 to 7 years | |||||||
System infrastructure | 5 to 10 years | |||||||
Long-lived assets | ' | |||||||
Long-lived assets | ||||||||
The Company's long-lived assets include property and equipment. These long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment is determined by comparing the carrying value of these long-lived assets to management's probability weighted estimate of the future undiscounted cash flows expected to result from the use of the assets. In the event an impairment exists, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset, which would be determined by using quoted market prices or valuation techniques such as the discounted present value of expected future cash flows, appraisals, or other pricing models. In the event there are changes in the planned use of the Company's long-term assets or the Company's expected future undiscounted cash flows are reduced significantly, the Company's assessment of its ability to recover the carrying value of these assets could change. | ||||||||
Asset retirement obligations | ' | |||||||
Asset retirement obligations | ||||||||
The Company's asset retirement obligations consist of restoration requirements for certain leased facilities. The Company recognizes a liability for the present value of the estimated fair value of contractual obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset in the period incurred. The present value of the fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. | ||||||||
Increases to the asset retirement obligation liability due to the passage of time are recognized within selling, general and administrative expenses in the Company's consolidated statements of operations. Changes in the liability due to revisions to estimates of future cash flows are recognized by increasing or decreasing the liability with the offset adjusting the carrying amount of the related long-lived asset. | ||||||||
Equity-based compensation | ' | |||||||
Equity-based compensation | ||||||||
The Company recognizes compensation expense for its share-based payments granted to its employees based on their grant date fair values with the expense being recognized on a straight-line basis over the requisite service period. The Company begins recording equity-based compensation expense related to performance awards when it is considered probable that the performance conditions will be met. Equity-based compensation expense is recognized in the statement of operations in a manner consistent with the classification of the employee's salary and other compensation. | ||||||||
Debt with conversion options | ' | |||||||
Debt with conversion options | ||||||||
The Company separately accounts for the liability and equity components of convertible debt instruments in a manner that reflects the issuer's nonconvertible debt borrowing rate when interest cost is recognized. The amortization of the resulting discount on the debt is recognized as part of interest expense in the Company's consolidated statements of operations. | ||||||||
The Company estimates the fair value of convertible notes on the issuance date. The fair value that is assigned to the liability component of convertible notes is determined using interest rates of similar debt that exclude a conversion feature and then applying that effective interest rate to the cash flows associated with the convertible notes to calculate the present value. | ||||||||
Income taxes | ' | |||||||
Income taxes | ||||||||
The Company's deferred tax assets or liabilities are computed based upon the differences between financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. Deferred income tax expenses or benefits are based upon the changes in the assets or liability from period to period. At each balance sheet date, the Company assesses the likelihood that it will be able to realize its deferred tax assets. Valuation allowances are established when management determines that it is "more likely than not" that some portion or all of the deferred tax asset may not be realized. The Company considers all available positive and negative evidence in assessing the need for a valuation allowance including its historical operating results, ongoing tax planning, and forecasts of future taxable income, on a jurisdiction by jurisdiction basis. The Company reduces its valuation allowance if the Company concludes that it is "more likely than not" that it would be able to realize its deferred tax assets. | ||||||||
Management determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured to determine the amount of benefit to be recognized in the financial statements. The Company adjusts its estimated liabilities for uncertain tax positions periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of its income tax expense. | ||||||||
Basic and diluted net (loss) income per common share | ' | |||||||
Basic and diluted net (loss) income per common share | ||||||||
Basic earnings per share ("EPS") excludes dilution for common stock equivalents and is computed by dividing net income or (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of common stock equivalents, if dilutive. | ||||||||
Shares of restricted stock are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. As of December 31, 2013, 2012 and 2011, 1.0 million, 1.7 million and 0.8 million shares of restricted common stock, respectively, are not included in the computation of basic (loss) income per share, as the shares were not vested. | ||||||||
Using the "if-converted" method, the shares issuable upon conversion of the Company's 1.00% Convertible Senior Notes (the "Convertible Notes") were anti-dilutive for all periods. Accordingly, the impact has been excluded from the computation of diluted (loss) income per share. The Convertible Notes are convertible into shares of the Company's common stock yielding 1.9 million shares subject to certain adjustments set forth in the indenture. | ||||||||
The Company computes the dilutive effect of outstanding options using the treasury stock method. For the years ended December 31, 2012 and 2011 options to purchase 0.2 million and 0.1 million shares of common stock, respectively, are not included in the computation of diluted (loss) income per share as the effect would be anti-dilutive. | ||||||||
The following details the determination of the diluted weighted average shares for the year ended December 31, 2013 and 2011: | ||||||||
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2013 | 2011 | |||||||
Weighted average common shares—basic | 46,286,735 | 45,180,485 | ||||||
Dilutive effect of stock options | 76,884 | 83,192 | ||||||
Dilutive effect of restricted stock | 633,285 | 440,375 | ||||||
| | | | | | | | |
Weighted average common shares—diluted | 46,996,904 | 45,704,052 | ||||||
| | | | | | | | |
| | | | | | | | |
Recent accounting pronouncements-adopted | ' | |||||||
Recent accounting pronouncements—adopted | ||||||||
In May 2011, the FASB issued ASU 2011-04 relating to fair value measurement (FASB ASC Topic 820), which amends current guidance to achieve common fair value measurement and disclosure requirements in US GAAP and International Financial Reporting Standards. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted this pronouncement for its fiscal year beginning January 1, 2012. The adoption of this pronouncement did not have a material effect on the Company's consolidated financial statements. | ||||||||
Description_of_the_business_an2
Description of the business and summary of significant accounting policies: (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Description of the business and summary of significant accounting policies: | ' | |||||||
Schedule of depreciation and amortization periods | ' | |||||||
Type of asset | Depreciation or amortization period | |||||||
Indefeasible rights of use (IRUs) | Shorter of useful life or the IRU lease agreement; generally 15 to 20 years | |||||||
Network equipment | 3 to 8 years | |||||||
Leasehold improvements | Shorter of lease term or useful life | |||||||
Software | 5 years | |||||||
Owned buildings | 40 years | |||||||
Office and other equipment | 3 to 7 years | |||||||
System infrastructure | 5 to 10 years | |||||||
Schedule of diluted weighted average shares | ' | |||||||
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2013 | 2011 | |||||||
Weighted average common shares—basic | 46,286,735 | 45,180,485 | ||||||
Dilutive effect of stock options | 76,884 | 83,192 | ||||||
Dilutive effect of restricted stock | 633,285 | 440,375 | ||||||
| | | | | | | | |
Weighted average common shares—diluted | 46,996,904 | 45,704,052 | ||||||
| | | | | | | | |
| | | | | | | | |
Property_and_equipment_Tables
Property and equipment: (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and equipment: | ' | |||||||
Schedule of property and equipment | ' | |||||||
Property and equipment consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Owned assets: | ||||||||
Network equipment | $ | 404,426 | $ | 375,230 | ||||
Leasehold improvements | 147,718 | 127,497 | ||||||
System infrastructure | 79,811 | 71,769 | ||||||
Software | 9,531 | 9,369 | ||||||
Office and other equipment | 12,521 | 10,558 | ||||||
Building | 1,532 | 1,471 | ||||||
Land | 130 | 125 | ||||||
| | | | | | | | |
655,669 | 596,019 | |||||||
Less—Accumulated depreciation and amortization | (521,290 | ) | (472,024 | ) | ||||
| | | | | | | | |
134,379 | 123,995 | |||||||
Assets under capital leases: | ||||||||
IRUs | 329,415 | 293,210 | ||||||
Less—Accumulated depreciation and amortization | (122,601 | ) | (106,030 | ) | ||||
| | | | | | | | |
206,814 | 187,180 | |||||||
| | | | | | | | |
Property and equipment, net | $ | 341,193 | $ | 311,175 | ||||
| | | | | | | | |
| | | | | | | | |
Accrued_and_other_liabilities_
Accrued and other liabilities: (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued and other liabilities: | ' | |||||||
Schedule of accrued and other current liabilities | ' | |||||||
Accrued and other current liabilities as of December 31 consist of the following (in thousands): | ||||||||
2013 | 2012 | |||||||
Operating accruals | $ | 11,539 | $ | 8,283 | ||||
Deferred revenue—current portion | 4,174 | 4,132 | ||||||
Payroll and benefits | 2,952 | 2,358 | ||||||
Taxes—non-income based | 1,128 | 692 | ||||||
Interest | 11,672 | 11,054 | ||||||
| | | | | | | | |
Total | $ | 31,465 | $ | 26,519 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of reconciliation of the amounts related to leased facility asset retirement obligations | ' | |||||||
A reconciliation of the amounts related to its leased facility asset retirement obligations is as follows (in thousands): | ||||||||
Asset retirement obligations | ||||||||
Balance—December 31, 2010 | $ | 233 | ||||||
Effect of exchange rates | (5 | ) | ||||||
Amortization of discount | 11 | |||||||
| | | | | ||||
Balance—December 31, 2011 | 239 | |||||||
Effect of exchange rates | 5 | |||||||
Amortization of discount | 12 | |||||||
| | | | | ||||
Balance—December 31, 2012 | 256 | |||||||
Effect of exchange rates | 11 | |||||||
Amortization of discount | 12 | |||||||
| | | | | ||||
Balance—December 31, 2013 (recorded as other long term liabilities) | $ | 279 | ||||||
| | | | | ||||
| | | | | ||||
Longterm_debt_Tables
Long-term debt: (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Long-term debt: | ' | ||||||||||
Schedule of debt and equity components for the Convertible Notes | ' | ||||||||||
The debt and equity components for the Convertible Notes were as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Principal amount of convertible senior notes | $ | 91,978 | $ | 91,978 | |||||||
Unamortized discount | (3,099 | ) | (9,494 | ) | |||||||
Net carrying amount | 88,879 | 82,484 | |||||||||
Additional paid-in capital | 74,933 | 74,933 | |||||||||
Schedule of interest expense recognized and the effective interest rate for the Convertible Notes | ' | ||||||||||
The amount of interest expense recognized and effective interest rate for the years ended December 31, 2013, 2012 and 2011 were as follows (in thousands): | |||||||||||
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Contractual coupon interest | $ | 920 | $ | 920 | $ | 920 | |||||
Amortization of discount and costs | 6,409 | 5,886 | 5,405 | ||||||||
| | | | | | | | | | | |
Interest expense | $ | 7,329 | $ | 6,806 | $ | 6,325 | |||||
| | | | | | | | | | | |
Effective interest rate | 8.7 | % | 8.7 | % | 8.7 | % | |||||
Schedule of aggregate future contractual maturities of long-term debt | ' | ||||||||||
The aggregate future contractual maturities of long-term debt were as follows as of December 31, 2013 (in thousands): | |||||||||||
For the year ending December 31, | |||||||||||
2014 | $ | — | |||||||||
2015 | — | ||||||||||
2016 | — | ||||||||||
2017 | — | ||||||||||
2018 | 240,000 | ||||||||||
Thereafter(1) | 91,978 | ||||||||||
| | | | | |||||||
Total | $ | 331,978 | |||||||||
| | | | | |||||||
| | | | | |||||||
-1 | |||||||||||
The Convertible Notes mature in June 2027. Holders of the $92.0 million of Convertible Notes have the right to require the Company to repurchase for cash all or some of their notes on June 15, 2014, 2017 and 2022 at a redemption price of 100% of the principal amount plus accrued interest. | |||||||||||
Income_taxes_Tables
Income taxes: (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income taxes: | ' | ||||||||||
Schedule of components of income (loss) before income taxes | ' | ||||||||||
The components of income (loss) before income taxes consist of the following (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Domestic | $ | 30,779 | $ | 20,411 | $ | 27,832 | |||||
Foreign | (23,792 | ) | (23,911 | ) | (22,250 | ) | |||||
| | | | | | | | | | | |
Total income (loss) before income taxes | $ | 6,987 | $ | (3,500 | ) | $ | 5,582 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of benefit (provision) for income taxes | ' | ||||||||||
The benefit (provision) for income taxes is comprised of the following (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | (83 | ) | 2,285 | (3,432 | ) | ||||||
Foreign | (284 | ) | (344 | ) | (369 | ) | |||||
Deferred: | |||||||||||
Federal | 49,317 | — | — | ||||||||
State | 995 | (1,245 | ) | 6,334 | |||||||
Foreign | (243 | ) | (1,447 | ) | (573 | ) | |||||
| | | | | | | | | | | |
Total income tax benefit (provision) | $ | 49,702 | $ | (751 | ) | $ | 1,960 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of deferred tax assets (liabilities) | ' | ||||||||||
Our consolidated temporary differences comprising our net deferred tax assets at December 31, 2013 and 2012 are as follows (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
Deferred Tax Assets: | |||||||||||
Net operating loss carry-forwards | $ | 402,484 | $ | 385,578 | |||||||
Depreciation and amortization | 3,110 | 4,187 | |||||||||
Tax credits | 2,775 | 2,758 | |||||||||
Accrued liabilities and other | 3,748 | 6,138 | |||||||||
| | | | | | | | ||||
Total gross deferred tax assets | 412,117 | 398,661 | |||||||||
| | | | | | | | ||||
Deferred Tax Liabilities: | |||||||||||
Convertible notes | 1,150 | 3,415 | |||||||||
Equity-based compensation | 248 | 600 | |||||||||
| | | | | | | | ||||
Total gross deferred tax liabilities | 1,398 | 4,015 | |||||||||
| | | | | | | | ||||
Net deferred tax assets before valuation allowance | 410,719 | 394,646 | |||||||||
Valuation allowance | (354,537 | ) | (388,460 | ) | |||||||
| | | | | | | | ||||
Net deferred tax asset | $ | 56,182 | $ | 6,186 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of reconciliation of unrecognized tax benefits | ' | ||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Beginning balance of unrecognized tax benefits | $ | 1,312 | $ | 2,875 | $ | 698 | |||||
Change attributable to tax positions taken during a prior period | (51 | ) | 745 | 2,177 | |||||||
Decrease attributable to settlements with taxing authorities | (1,655 | ) | — | ||||||||
Decrease attributable to lapses of statutes of limitation | (261 | ) | (653 | ) | — | ||||||
| | | | | | | | | | | |
Ending balance of unrecognized tax benefits | $ | 1,000 | $ | 1,312 | $ | 2,875 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements | ' | ||||||||||
The following is a reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements (in thousands). | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Federal income tax benefit (provision) at statutory rates | $ | (2,445 | ) | $ | 1,225 | $ | (1,954 | ) | |||
Effect of: | |||||||||||
State income taxes, net of federal benefit | (281 | ) | (387 | ) | (1,368 | ) | |||||
State tax credits | 272 | 315 | 146 | ||||||||
Foreign rate differential | 255 | 227 | 1,071 | ||||||||
Foreign tax expense | (122 | ) | (96 | ) | (342 | ) | |||||
Net operating loss limitation | (238 | ) | (1,081 | ) | — | ||||||
Non-deductible expenses | (464 | ) | (2,551 | ) | (597 | ) | |||||
Changes in tax reserves | 503 | 1,552 | (2,969 | ) | |||||||
Other | 35 | 23 | 278 | ||||||||
Changes in valuation allowance | 52,187 | 22 | 7,695 | ||||||||
| | | | | | | | | | | |
Income tax benefit (provision) | $ | 49,702 | $ | (751 | ) | $ | 1,960 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Commitments_and_contingencies_
Commitments and contingencies: (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and contingencies: | ' | ||||
Schedule of future minimum annual payments under capital lease arrangements | ' | ||||
The future minimum payments under these agreements are as follows (in thousands): | |||||
For the year ending December 31, | |||||
2014 | $ | 28,965 | |||
2015 | 22,584 | ||||
2016 | 21,714 | ||||
2017 | 21,663 | ||||
2018 | 21,592 | ||||
Thereafter | 246,032 | ||||
| | | | | |
Total minimum lease obligations | 362,550 | ||||
Less—amounts representing interest | (200,771 | ) | |||
| | | | | |
Present value of minimum lease obligations | 161,779 | ||||
Current maturities | (9,252 | ) | |||
| | | | | |
Capital lease obligations, net of current maturities | $ | 152,527 | |||
| | | | | |
| | | | | |
Schedule of future minimum annual payments under operating lease and tenant license agreements | ' | ||||
Future minimum annual payments under these arrangements are as follows (in thousands): | |||||
For the year ending December 31, | |||||
2014 | $ | 54,103 | |||
2015 | 44,803 | ||||
2016 | 38,160 | ||||
2017 | 31,208 | ||||
2018 | 27,576 | ||||
Thereafter | 148,031 | ||||
| | | | | |
$ | 343,881 | ||||
| | | | | |
| | | | | |
Stockholders_Equity_Tables
Stockholders' Equity: (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Stockholders' equity: | ' | |||||||||||
Summary of the Company's quarterly dividends since the initial dividend payment | ' | |||||||||||
A summary of the Company's quarterly dividends paid since its initial dividend payment is as follows (in thousands, except per share amounts): | ||||||||||||
Dividend Period | Amount per | Record Date | Payment Date | Dividends Paid | ||||||||
Common Share | ||||||||||||
Q3 2012 | $ | 0.1 | August 22, 2012 | September 12, 2012 | $ | 4,537 | ||||||
Q4 2012 | $ | 0.11 | November 21, 2012 | December 12, 2102 | $ | 5,012 | ||||||
Q1 2013 | $ | 0.12 | March 4, 2013 | March 15, 2013 | $ | 5,489 | ||||||
Q2 2013 | $ | 0.13 | May 31, 2013 | June 18, 2013 | $ | 6,145 | ||||||
Q3 2013 | $ | 0.14 | September 5, 2013 | September 25, 2013 | $ | 6,512 | ||||||
Q4 2013 | $ | 0.37 | November 27, 2013 | December 20, 2013 | $ | 17,206 |
Stock_option_and_award_plan_Ta
Stock option and award plan: (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Stock option and award plan: | ' | ||||||||||
Schedule of assumptions used for determining the fair value of options granted | ' | ||||||||||
Years Ended December 31, | |||||||||||
Black-Scholes Assumptions | 2013 | 2012 | 2011 | ||||||||
Dividend yield | 2 | % | 1.3 | % | 0 | % | |||||
Expected volatility | 58.5 | % | 61.6 | % | 63.2 | % | |||||
Risk-free interest rate | 0.8 | % | 0.7 | % | 1.6 | % | |||||
Expected life of the option term (in years) | 4.8 | 4.8 | 4.9 | ||||||||
Schedule of stock option activity | ' | ||||||||||
Number of | Weighted-Average | ||||||||||
Options | Exercise Price | ||||||||||
Outstanding at December 31, 2012 | 238,490 | $ | 14.87 | ||||||||
Granted | 58,472 | $ | 30.5 | ||||||||
Cancelled | (32,976 | ) | $ | 21.55 | |||||||
Exercised—intrinsic value $1.4 million; cash received $1.2 million | (88,409 | ) | $ | 13.78 | |||||||
| | | | | | | | ||||
Outstanding at December 31, 2013—$3.7 million intrinsic value and 5.9 years weighted-average remaining contractual term | 175,577 | $ | 19.36 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Exercisable at December 31, 2013—$2.8 million intrinsic value and 4.3 years weighted-average remaining contractual term | 114,361 | $ | 15.65 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Expected to vest—$3.5 million intrinsic value and 5.6 years weighted-average remaining contractual term | 160,798 | $ | 18.42 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of non-vested restricted stock awards | ' | ||||||||||
Non-vested awards | Shares | Weighted-Average | |||||||||
Grant Date | |||||||||||
Fair Value | |||||||||||
Non-vested at December 31, 2012 | 1,683,588 | $ | 16.12 | ||||||||
Granted | 175,500 | $ | 27.82 | ||||||||
Vested | (773,430 | ) | $ | 15.2 | |||||||
Forfeited | (46,335 | ) | $ | 18.06 | |||||||
| | | | | | | | ||||
Non-vested at December 31, 2013 | 1,039,323 | $ | 18.69 | ||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Geographic_information_Tables
Geographic information: (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Geographic information: | ' | ||||||||||
Schedule of service revenues and long lived assets by geographic region | ' | ||||||||||
The Company has one operating segment. Below are the Company's service revenues and long lived assets by geographic region (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Service Revenue | |||||||||||
North America | $ | 274,320 | $ | 253,396 | $ | 240,116 | |||||
Europe | 73,659 | 63,577 | 65,384 | ||||||||
| | | | | | | | | | | |
Total | $ | 347,979 | $ | 316,973 | $ | 305,500 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
December 31, | December 31, | ||||||||||
2013 | 2012 | ||||||||||
Long lived assets, net | |||||||||||
North America | $ | 251,352 | $ | 225,060 | |||||||
Europe | 89,879 | 86,162 | |||||||||
| | | | | | | | ||||
Total | $ | 341,231 | $ | 311,222 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Quarterly_financial_informatio1
Quarterly financial information (unaudited): (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Quarterly financial information (unaudited): | ' | |||||||||||||
Schedule of quarterly financial information | ' | |||||||||||||
Three months ended | ||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||
2013 | 2013 | 2013 | 2013(1)(2) | |||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||
Service revenue | $ | 84,553 | $ | 85,803 | $ | 87,761 | $ | 89,859 | ||||||
Network operations, including equity-based compensation expense | 37,309 | 37,076 | 37,441 | 38,400 | ||||||||||
Operating income | 9,905 | 11,601 | 12,577 | 12,065 | ||||||||||
Net income | 361 | 1,607 | 2,122 | 52,599 | ||||||||||
Net income per common share—basic | 0.01 | 0.03 | 0.05 | 1.14 | ||||||||||
Net income per common share—diluted | 0.01 | 0.03 | 0.05 | 1.1 | ||||||||||
Weighted-average number of common shares—basic | 45,537,607 | 46,040,692 | 46,171,194 | 46,302,926 | ||||||||||
Weighted-average number of common shares—diluted | 46,435,677 | 46,769,184 | 46,823,167 | 48,800,560 | ||||||||||
-1 | ||||||||||||||
As described in Note 5, during the fourth quarter of 2013 the Company reversed its valuation allowance against its US federal and certain state deferred income tax assets. | ||||||||||||||
-2 | ||||||||||||||
Diluted earnings per share for the fourth quarter of 2013 assumes the conversion of the Convertible Notes since the Convertible Notes are dilutive this quarter. The assumed conversion of the Convertible Notes was anti-dilutive for the other periods presented. Diluted earnings per share for the fourth quarter of 2013 is determined by adding back $1.2 million of interest expense from the Convertible Notes to net income and including 1.9 million shares from the assumed conversion of the Convertible Notes in the weighted-average number of common dilutive shares. | ||||||||||||||
Three months ended | ||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||
2012 | 2012 | 2012 | 2012 | |||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||
Service revenue | $ | 76,888 | $ | 77,817 | $ | 79,656 | $ | 82,612 | ||||||
Network operations, including equity-based compensation expense | 34,338 | 35,112 | 36,541 | 37,651 | ||||||||||
Operating income | 5,968 | 7,801 | 8,032 | 9,169 | ||||||||||
Net (loss) | (2,090 | ) | (1,791 | ) | (94 | ) | (276 | ) | ||||||
Net (loss) per common share—basic and diluted | (0.05 | ) | (0.04 | ) | (0.00 | ) | (0.01 | ) | ||||||
Weighted-average number of common shares—basic and diluted | 45,241,418 | 45,313,804 | 45,377,732 | 45,492,847 |
Description_of_the_business_an3
Description of the business and summary of significant accounting policies: (Details) (USD $) | 12 Months Ended | |||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2007 | Dec. 31, 2013 | Dec. 31, 2013 | Aug. 19, 2013 | Jan. 26, 2011 | Dec. 31, 2013 |
Minimum | Maximum | Convertible senior notes | Convertible senior notes | Convertible senior notes | Senior notes | Senior notes | Senior notes | Senior notes | ||||
MB | MB | Level 2 | Level 2 | |||||||||
Description of the business and summary of significant accounting policies: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bad debt expense, net of recoveries | $3.50 | $5.10 | $4.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of debt issued | ' | ' | ' | ' | ' | 92 | 200 | ' | 240 | 65 | 175 | ' |
Debt instrument, amount | ' | ' | ' | ' | ' | ' | ' | 89.2 | ' | ' | ' | 260.7 |
Letters of credit, outstanding amount | $0.40 | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
On-net service - high-speed Internet access and IP connectivity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Speed per second of bandwidth (in megabits/gigabits) | ' | ' | ' | 100 | 10,240 | ' | ' | ' | ' | ' | ' | ' |
Description_of_the_business_an4
Description of the business and summary of significant accounting policies: (Details 2) | 12 Months Ended |
Dec. 31, 2013 | |
Indefeasible rights of use (IRUs) | Minimum | ' |
Property and equipment | ' |
Depreciation or amortization period | '15 years |
Indefeasible rights of use (IRUs) | Maximum | ' |
Property and equipment | ' |
Depreciation or amortization period | '20 years |
Network equipment | Minimum | ' |
Property and equipment | ' |
Depreciation or amortization period | '3 years |
Network equipment | Maximum | ' |
Property and equipment | ' |
Depreciation or amortization period | '8 years |
Software | ' |
Property and equipment | ' |
Depreciation or amortization period | '5 years |
Owned buildings | ' |
Property and equipment | ' |
Depreciation or amortization period | '40 years |
Office and other equipment | Minimum | ' |
Property and equipment | ' |
Depreciation or amortization period | '3 years |
Office and other equipment | Maximum | ' |
Property and equipment | ' |
Depreciation or amortization period | '7 years |
System infrastructure | Minimum | ' |
Property and equipment | ' |
Depreciation or amortization period | '5 years |
System infrastructure | Maximum | ' |
Property and equipment | ' |
Depreciation or amortization period | '10 years |
Description_of_the_business_an5
Description of the business and summary of significant accounting policies: (Details 3) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2007 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Convertible senior notes | Convertible senior notes | Convertible senior notes | Convertible senior notes | Restricted stock | Restricted stock | Restricted stock | Options | Options | Options | ||||||||||||
Basic and diluted net (loss) income per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted common stock not included in computation of basic (loss) income per share as shares were not vested (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 800,000 | 1,700,000 | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | 1.00% | 1.00% | 1.00% | ' | ' | ' | ' | ' | ' |
Number of shares yield after conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,900,000 | 1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares not included in the computation of diluted loss per share as the effect would be anti-dilutive | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 100,000 |
Diluted weighted average shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average common shares -basic | 46,302,926 | 46,171,194 | 46,040,692 | 45,537,607 | 45,492,847 | 45,377,732 | 45,313,804 | 45,241,418 | 46,286,735 | 45,514,844 | 45,180,485 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dilutive effect of awards (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 633,285 | 440,375 | ' | 76,884 | ' | 83,192 |
Weighted average common shares -diluted | 48,800,560 | 46,823,167 | 46,769,184 | 46,435,677 | 45,492,847 | 45,377,732 | 45,313,804 | 45,241,418 | 46,996,904 | 45,514,844 | 45,704,052 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property_and_equipment_Details
Property and equipment: (Details) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
Owned assets: | Owned assets: | Network equipment | Network equipment | Leasehold improvements | Leasehold improvements | System infrastructure | System infrastructure | Software | Software | Office and other equipment | Office and other equipment | Building | Building | Land | Land | Property, equipment and capital leases | Property, equipment and capital leases | Property, equipment and capital leases | Indefeasible rights of use (IRUs) | Indefeasible rights of use (IRUs) | ||||
Property and equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, gross | $985,084,000 | $889,229,000 | ' | $655,669,000 | $596,019,000 | $404,426,000 | $375,230,000 | $147,718,000 | $127,497,000 | $79,811,000 | $71,769,000 | $9,531,000 | $9,369,000 | $12,521,000 | $10,558,000 | $1,532,000 | $1,471,000 | $130,000 | $125,000 | ' | ' | ' | $329,415,000 | $293,210,000 |
Less -Accumulated depreciation and amortization | -643,891,000 | -578,054,000 | ' | -521,290,000 | -472,024,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -122,601,000 | -106,030,000 |
Total property and equipment, net | 341,193,000 | 311,175,000 | ' | 134,379,000 | 123,995,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 206,814,000 | 187,180,000 |
Depreciation and amortization expense | 64,358,000 | 62,478,000 | 59,850,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 64,300,000 | 62,400,000 | 59,700,000 | ' | ' |
Non-cash component of network equipment obtained in exchange transactions | 934,000 | 1,126,000 | ' | ' | ' | 900,000 | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capitalized salaries and related benefits of employees | $7,400,000 | $7,200,000 | $7,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued_and_other_liabilities_1
Accrued and other liabilities: (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accrued and other current liabilities | ' | ' | ' |
Operating accruals | $11,539 | $8,283 | ' |
Deferred revenue -current portion | 4,174 | 4,132 | ' |
Payroll and benefits | 2,952 | 2,358 | ' |
Taxes -non-income based | 1,128 | 692 | ' |
Interest | 11,672 | 11,054 | ' |
Total | 31,465 | 26,519 | ' |
Reconciliation of the amounts related to asset retirement obligations | ' | ' | ' |
Balance at the beginning of the period | 256 | 239 | 233 |
Effect of exchange rates | 11 | 5 | -5 |
Amortization of discount | 12 | 12 | 11 |
Balance at the end of the period | $279 | $256 | $239 |
Longterm_debt_Details
Long-term debt: (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 19, 2013 | Jan. 26, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2007 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2013 |
Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Senior Notes | Convertible senior notes | Convertible senior notes | Convertible senior notes | Convertible senior notes | Convertible senior notes | Convertible senior notes | Convertible senior notes | Convertible senior notes | |||
Prior to February 15, 2015 | 12-month period beginning on February 15, 2015 | 12-month period beginning on February 15, 2016 | 12-month period beginning on February 15, 2017 and thereafter | Prior to February 15, 2014 | D | June 15, 2014, 2017 and 2022 | After June 20, 2014 | |||||||||||||
Long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | 8.38% | 8.38% | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | 1.00% | 1.00% | 1.00% | ' | ' | ' | ' |
Aggregate principal amount of debt issued | ' | ' | $65,000,000 | $175,000,000 | $240,000,000 | ' | ' | ' | ' | ' | ' | ' | $200,000,000 | $92,000,000 | $92,000,000 | ' | ' | ' | ' | ' |
Proceeds from issuance of long-term debt, net of issuance costs | ' | ' | 69,900,000 | 170,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | 195,100,000 | ' | ' | ' | ' | ' | ' | ' |
Debt issuance costs | ' | ' | 1,000,000 | 4,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premium price of debt instrument (as a percent) | ' | ' | 109.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior secured notes, premium (in dollars) | 5,423,000 | 0 | 5,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Security of senior notes and guarantees, expressed as a percentage of equity interests of first-tier foreign subsidiaries held by Company and its guarantors | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount that the holders of the Convertible Notes may require the Company to repurchase | ' | ' | ' | ' | ' | ' | ' | 100.00% | 104.12% | 102.09% | 100.00% | 108.38% | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% |
Percentage of outstanding principal amount used in calculation of make-whole premium | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate used to compute make-whole premium, description of variable interest rate | ' | ' | ' | ' | 'Treasury Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate used to compute make-whole premium, basis points added to reference rate (as a percent) | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum percentage of principal amount of debt instrument which the entity may redeem with proceeds from certain equity offerings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount at which notes will be required to be repurchased in the event of a change of control | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum amount of proceeds from certain asset sales at which company must offer to purchase notes | ' | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount at which notes will be required to be repurchased upon meeting minimum proceeds from certain asset sales | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum percentage of principal amount of debt instrument at which holder may declare unpaid principal and accrued interest to be due and payable | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of original issuance discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.25% | ' | ' | ' | ' | ' | ' | ' |
Aggregate face value of debt purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 108,000,000 | ' | ' |
Purchase of convertible notes in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 48,600,000 | ' | ' |
Initial conversion price of notes (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $47.52 | $47.52 | ' | ' | ' | ' | ' |
Conversion ratio, number of shares per $1,000 principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.021043 | ' | ' | ' | ' | ' |
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' |
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order to make the notes redeemable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' |
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order to make the notes convertible | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 130.00% | ' | ' | ' | ' | ' |
Conversion ratio minimum, number of shares per $1,000 principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.0368251 | ' | ' | ' | ' | ' |
Special interest rate required to be paid for first 90 days after failure to maintain shelf registration statement with SEC (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' |
Initial period to charge special interest after failure to maintain shelf registration statement with SEC | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | ' | ' |
Special interest rate required to be paid after the first 90 day period after failure to maintain shelf registration statement with SEC (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' |
Additional interest rate in the event of default (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' |
Debt and equity components for the Convertible Notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 91,978,000 | 91,978,000 | 91,978,000 | ' | ' | ' | ' |
Unamortized discount | -3,099,000 | -9,494,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -3,099,000 | -3,099,000 | -9,494,000 | ' | ' | ' | ' |
Net carrying amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,879,000 | 88,879,000 | 82,484,000 | ' | ' | ' | ' |
Additional paid-in capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 74,933,000 | 74,933,000 | 74,933,000 | ' | ' | ' | ' |
Amount of interest expense recognized and effective interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining recognition period of unamortized discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' | ' | ' | ' | ' |
Contractual coupon interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 920,000 | 920,000 | 920,000 | ' | ' | ' |
Amortization of discount and costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,409,000 | 5,886,000 | 5,405,000 | ' | ' | ' |
Interest expense | ' | ' | ' | ' | 16,800,000 | 15,200,000 | 14,000,000 | ' | ' | ' | ' | ' | ' | 1,200,000 | 7,329,000 | 6,806,000 | 6,325,000 | ' | ' | ' |
Effective interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.70% | 8.70% | 8.70% | 8.70% | ' | ' | ' |
Long-term debt maturities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 240,000,000 | 240,000,000 | ' | ' | ' | ' | ' |
Thereafter | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 91,978,000 | 91,978,000 | ' | ' | ' | ' | ' |
Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $331,978,000 | $331,978,000 | ' | ' | ' | ' | ' |
Income_taxes_Details
Income taxes: (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
subsidiary | |||
Components of (loss) income before income taxes | ' | ' | ' |
Domestic | $30,779,000 | $20,411,000 | $27,832,000 |
Foreign | -23,792,000 | -23,911,000 | -22,250,000 |
Income (loss) before income taxes | 6,987,000 | -3,500,000 | 5,582,000 |
Current provision | ' | ' | ' |
State income tax | -83,000 | 2,285,000 | -3,432,000 |
Foreign income tax | -284,000 | -344,000 | -369,000 |
Deferred provision | ' | ' | ' |
Federal income tax | 49,317,000 | ' | ' |
State Income tax | 995,000 | -1,245,000 | 6,334,000 |
Foreign income tax | -243,000 | -1,447,000 | -573,000 |
Income tax benefit (provision) | 49,702,000 | -751,000 | 1,960,000 |
Deferred Tax Assets: | ' | ' | ' |
Net operating loss carry-forwards | 402,484,000 | 385,578,000 | ' |
Depreciation and amortization | 3,110,000 | 4,187,000 | ' |
Tax credits | 2,775,000 | 2,758,000 | ' |
Accrued liabilities and other | 3,748,000 | 6,138,000 | ' |
Total gross deferred tax assets | 412,117,000 | 398,661,000 | ' |
Deferred Tax Liabilities: | ' | ' | ' |
Convertible Notes | 1,150,000 | 3,415,000 | ' |
Equity-based compensation | 248,000 | 600,000 | ' |
Total gross deferred tax liabilities | 1,398,000 | 4,015,000 | ' |
Net deferred tax assets before valuation allowance | 410,719,000 | 394,646,000 | ' |
Valuation allowance | -354,537,000 | -388,460,000 | ' |
Net deferred tax asset | 56,182,000 | 6,186,000 | ' |
Income tax benefit due to reduction in valuation allowance | 52,200,000 | ' | 6,300,000 |
Number of subsidiaries filing income tax returns in U.S. federal, and various state and foreign jurisdictions | 1 | ' | ' |
Net operating loss carry-forwards | ' | ' | ' |
Combined net operating loss carry-forwards | 1,300,000,000 | ' | ' |
Uncertain tax positions | ' | ' | ' |
Liability for uncertain tax positions, including accrued interest and penalties | 1,100,000 | 1,700,000 | ' |
Expected decrease in liability for uncertain tax positions | 300,000 | ' | ' |
Reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) | ' | ' | ' |
Beginning balance of unrecognized tax benefits | 1,312,000 | 2,875,000 | 698,000 |
Gross increases-tax positions in prior periods | -51,000 | 745,000 | 2,177,000 |
Decrease attributable to settlements with taxing authorities | ' | -1,655,000 | ' |
Decrease attributable to lapses of statutes of limitation | -261,000 | -653,000 | ' |
Ending balance of unrecognized tax benefits | 1,000,000 | 1,312,000 | 2,875,000 |
Reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements | ' | ' | ' |
Federal income tax at statutory rates | -2,445,000 | 1,225,000 | -1,954,000 |
State income tax, net of federal benefit | -281,000 | -387,000 | -1,368,000 |
State tax credits | 272,000 | 315,000 | 146,000 |
Foreign rate differential | 255,000 | 227,000 | 1,071,000 |
Foreign tax expense | -122,000 | -96,000 | -342,000 |
Net operating loss limitation | -238,000 | -1,081,000 | ' |
Non-deductible expenses | -464,000 | -2,551,000 | -597,000 |
Change in tax reserves | 503,000 | 1,552,000 | -2,969,000 |
Other | 35,000 | 23,000 | 278,000 |
Change in valuation allowance | 52,187,000 | 22,000 | 7,695,000 |
Income tax benefit (provision) | 49,702,000 | -751,000 | 1,960,000 |
United States | ' | ' | ' |
Net operating loss carry-forwards | ' | ' | ' |
Combined net operating loss carry-forwards | 395,800,000 | ' | ' |
Europe | ' | ' | ' |
Net operating loss carry-forwards | ' | ' | ' |
Combined net operating loss carry-forwards | 897,900,000 | ' | ' |
Net operating loss carry-forwards not subject to expiration | 727,800,000 | ' | ' |
Net operating loss carry-forwards subject to expiration | 170,000,000 | ' | ' |
Mexico | ' | ' | ' |
Net operating loss carry-forwards | ' | ' | ' |
Combined net operating loss carry-forwards | 1,800,000 | ' | ' |
Japan | ' | ' | ' |
Net operating loss carry-forwards | ' | ' | ' |
Combined net operating loss carry-forwards | $100,000 | ' | ' |
Commitments_and_contingencies_1
Commitments and contingencies: (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Future minimum payments under capital lease agreements | ' | ' | ' |
2014 | $28,965,000 | ' | ' |
2015 | 22,584,000 | ' | ' |
2016 | 21,714,000 | ' | ' |
2017 | 21,663,000 | ' | ' |
2018 | 21,592,000 | ' | ' |
Thereafter | 246,032,000 | ' | ' |
Total minimum lease obligations | 362,550,000 | ' | ' |
Less-amounts representing interest | -200,771,000 | ' | ' |
Present value of minimum lease obligations | 161,779,000 | ' | ' |
Current maturities | -9,252,000 | -10,487,000 | ' |
Capital lease obligations, net of current maturities | 152,527,000 | 127,461,000 | ' |
Release of lease obligation | ' | ' | ' |
Gain from extinguishment of capital lease obligation | ' | ' | 2,739,000 |
Future minimum annual payments under operating lease arrangements | ' | ' | ' |
2014 | 54,103,000 | ' | ' |
2015 | 44,803,000 | ' | ' |
2016 | 38,160,000 | ' | ' |
2017 | 31,208,000 | ' | ' |
2018 | 27,576,000 | ' | ' |
Thereafter | 148,031,000 | ' | ' |
Total minimum lease obligations | 343,881,000 | ' | ' |
Expenses related to operating lease arrangements | 58,100,000 | 55,800,000 | 55,700,000 |
Minimum | ' | ' | ' |
Commitments and contingencies | ' | ' | ' |
Capital lease term | '15 years | ' | ' |
Maximum | ' | ' | ' |
Commitments and contingencies | ' | ' | ' |
Capital lease term | '20 years | ' | ' |
Estimate of possible loss in excess of the amount accrued | $1,900,000 | ' | ' |
Commitments_and_contingencies_2
Commitments and contingencies: (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Future minimum payments under unconditional purchase obligations | ' | ' | ' |
2014 | $32.60 | ' | ' |
2015 | 1.1 | ' | ' |
2016 | 1 | ' | ' |
2017 | 1 | ' | ' |
2018 | 1.1 | ' | ' |
Thereafter | 24.7 | ' | ' |
Defined contribution plan | ' | ' | ' |
Matching cash payments towards defined contribution plan | 0.4 | 0.4 | 0.4 |
Equipment and services | ' | ' | ' |
Unconditional purchase obligations | ' | ' | ' |
Unconditional purchase obligation | 24.4 | ' | ' |
Dark fiber IRU capital and operating lease agreements | ' | ' | ' |
Unconditional purchase obligations | ' | ' | ' |
Unconditional purchase obligation | $37.10 | ' | ' |
Maximum period of maintenance payment | '20 years | ' | ' |
Stockholders_equity_Details
Stockholders' equity: (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||||||
Dec. 20, 2013 | Sep. 25, 2013 | Jun. 18, 2013 | Mar. 15, 2013 | Dec. 12, 2012 | Sep. 12, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 20, 2013 | Feb. 19, 2014 | Mar. 07, 2014 | Mar. 27, 2014 | |
Voting_Right_Per_Share | Minimum | Minimum | Subsequent Event | Subsequent Event | Subsequent Event | |||||||||||||||
Expected | Expected | |||||||||||||||||||
Stockholders' equity: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | ' | ' | ' | ' | 75,000,000 | ' | ' | ' | 75,000,000 | ' | 75,000,000 | 75,000,000 | ' | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | $0.00 | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' |
Preferred stock, authorized but unissued shares (in shares) | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, par value (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' |
Voting rights per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' |
Common stock buybacks | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized amount of common stock repurchases under the Buyback Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | ' | ' | ' | ' | ' | ' | ' |
Remaining authorized amount of common stock repurchases under the Buyback Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45,800,000 | ' | ' | ' | ' | ' | ' | ' |
Repurchase of common stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 100,000 | 200,000 | ' | ' | ' | ' | ' |
Repurchase of common stock, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,265,000 | 2,969,000 | ' | ' | ' | ' | ' |
Dividends on common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Approved quarterly payments under Capital Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,500,000 | 10,000,000 | ' | ' | ' |
Quarterly payment under return of capital program | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend per common share under Capital Program (in dollars per share) | $0.22 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.23 | ' | ' |
Dividends paid | 17,206,000 | 6,512,000 | 6,145,000 | 5,489,000 | 5,012,000 | 4,537,000 | ' | ' | ' | ' | ' | ' | 35,352,000 | 9,549,000 | ' | ' | ' | ' | ' | ' |
Amount per Common Share (in dollars per share) | $0.37 | ' | ' | ' | ' | ' | $0.37 | $0.14 | $0.13 | $0.12 | $0.11 | $0.10 | $0.76 | $0.21 | ' | ' | ' | ' | $0.39 | ' |
Regular quarterly dividend (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.16 | ' | ' |
Dividend payable under Capital Program | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,500,000 | ' | ' |
Expected value of dividend to be paid on March 27, 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $17,900,000 |
Stock_option_and_award_plan_De
Stock option and award plan: (Details) (USD $) | 6 Months Ended | 12 Months Ended | |||||||||
In Millions, except Share data, unless otherwise specified | Jun. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock options | Stock options | Stock options | Restricted stock | Restricted stock | Restricted stock | Restricted stock | 2004 Incentive Award Plan | 2004 Incentive Award Plan | 2004 Incentive Award Plan | ||
Minimum | Maximum | 2011 Restricted stock grant performance based | 2012 Restricted stock grant performance based | ||||||||
Incentive award plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting period | ' | '4 years | ' | ' | '3 years | '4 years | ' | ' | ' | ' | ' |
Expiration period | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise period of options vested, when an employee is terminated prior to full vesting | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total number of shares available for grant | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' |
Equity-based compensation expense | ' | ' | ' | ' | ' | ' | $1.10 | $0.10 | $8.70 | $8.30 | $7.70 |
Weighted-average per share grant date fair value (in dollars per share) | ' | $9.44 | $9 | $7.90 | ' | ' | ' | ' | ' | ' | ' |
Assumptions used for determining the fair value of options granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | 0.00% | 2.00% | 1.30% | 0.00% | ' | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | 58.50% | 61.60% | 63.20% | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | 0.80% | 0.70% | 1.60% | ' | ' | ' | ' | ' | ' | ' |
Expected life of the option term | ' | '4 years 9 months 18 days | '4 years 9 months 18 days | '4 years 10 months 24 days | ' | ' | ' | ' | ' | ' | ' |
Stock option activity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | 238,490 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | 58,472 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cancelled (in shares) | ' | -32,976 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised (in shares) | ' | -88,409 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in shares) | ' | 175,577 | 238,490 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in shares) | ' | 114,361 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest (in shares) | ' | 160,798 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | $14.87 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | $30.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cancelled (in dollars per share) | ' | $21.55 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised (in dollars per share) | ' | $13.78 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | $19.36 | $14.87 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period (in dollars per share) | ' | $15.56 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest (in dollars per share) | ' | $18.42 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised | ' | 1.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | 3.7 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period | ' | 2.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest | ' | 3.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-Average Remaining Contractual Life (in years) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | '5 years 10 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at the end of the period | ' | '4 years 3 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest | ' | '5 years 7 months 6 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option and award plan, additional information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash received from exercise of stock option | ' | $1.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_option_and_award_plan_De1
Stock option and award plan: (Details 2) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restricted stock | ' | ' | ' |
Number of shares | ' | ' | ' |
Non-vested at the beginning of the period (in shares) | 1,683,588 | ' | ' |
Granted (in shares) | 175,500 | 1,300,000 | 200,000 |
Vested (in shares) | -773,430 | ' | ' |
Forfeited (in shares) | -46,335 | ' | ' |
Non-vested at the end of the period (in shares) | 1,039,323 | 1,683,588 | ' |
Weighted-Average Grant Date Fair Value | ' | ' | ' |
Non-vested at the beginning of the period (in dollars per share) | $16.12 | ' | ' |
Granted (in dollars per share) | $27.82 | $17.74 | $14.09 |
Vested (in dollars per share) | $15.20 | ' | ' |
Forfeited (in dollars per share) | $18.06 | ' | ' |
Non-vested at the end of the period (in dollars per share) | $18.69 | $16.12 | ' |
Incentive Award Plan, additional information | ' | ' | ' |
Fair value of shares vested | $21.70 | $8.80 | $7.70 |
2004 Incentive Award Plan | ' | ' | ' |
Incentive Award Plan, additional information | ' | ' | ' |
Equity-based compensation expense | 8.7 | 8.3 | 7.7 |
Capitalized compensation expense | 0.8 | 0.8 | 0.9 |
Total unrecognized compensation cost | $14.70 | ' | ' |
Weighted-average period to recognize unrecognized compensation cost | '2 years 1 month 6 days | ' | ' |
Related_party_transactions_Det
Related party transactions: (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Nov. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Lease | ' | ' | ' | ' |
Office lease | ' | ' | ' | ' |
Payment for rent and related costs (in dollars) | ' | $0.60 | $0.60 | $0.60 |
Additional lease term | '2 years | ' | ' | ' |
Notice period for cancellation of lease | ' | '60 days | ' | ' |
Headquarters building | ' | ' | ' | ' |
Office lease | ' | ' | ' | ' |
Number of owners of the LLC | ' | 2 | ' | ' |
Chief Executive Officer | Headquarters building | ' | ' | ' | ' |
Office lease | ' | ' | ' | ' |
Ownership interest of related parties held in the partnership (as a percent) | ' | 51.00% | ' | ' |
Chief Executive Officer's wife | Headquarters building | ' | ' | ' | ' |
Office lease | ' | ' | ' | ' |
Ownership interest of related parties held in the partnership (as a percent) | ' | 49.00% | ' | ' |
Geographic_information_Details
Geographic information: (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment | |||||||||||
Geographic information: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of operating segments | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Geographic information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $89,859 | $87,761 | $85,803 | $84,553 | $82,612 | $79,656 | $77,817 | $76,888 | $347,979 | $316,973 | $305,500 |
Long lived assets, net | 341,231 | ' | ' | ' | 311,222 | ' | ' | ' | 341,231 | 311,222 | ' |
North America | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Geographic information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 274,320 | 253,396 | 240,116 |
Long lived assets, net | 251,352 | ' | ' | ' | 225,060 | ' | ' | ' | 251,352 | 225,060 | ' |
Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Geographic information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 73,659 | 63,577 | 65,384 |
Long lived assets, net | $89,879 | ' | ' | ' | $86,162 | ' | ' | ' | $89,879 | $86,162 | ' |
Quarterly_financial_informatio2
Quarterly financial information (unaudited): (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly financial information (unaudited): | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service revenue | $89,859 | $87,761 | $85,803 | $84,553 | $82,612 | $79,656 | $77,817 | $76,888 | $347,979 | $316,973 | $305,500 |
Network operations, including equity-based compensation expense | 38,400 | 37,441 | 37,076 | 37,309 | 37,651 | 36,541 | 35,112 | 34,338 | 150,225 | 143,642 | 132,160 |
Operating income | 12,065 | 12,577 | 11,601 | 9,905 | 9,169 | 8,032 | 7,801 | 5,968 | 46,154 | 30,968 | 36,506 |
Net income (loss) | 52,599 | 2,122 | 1,607 | 361 | -276 | -94 | -1,791 | -2,090 | 56,689 | -4,251 | 7,542 |
Net (loss) per common share - basic and diluted (in dollars per share) | ' | ' | ' | ' | ($0.01) | $0 | ($0.04) | ($0.05) | ' | ' | ' |
Net income (loss) per common share-basic (in dollars per share) | $1.14 | $0.05 | $0.03 | $0.01 | ' | ' | ' | ' | $1.22 | ($0.09) | $0.17 |
Net income (loss) per common share-diluted (in dollars per share) | $1.10 | $0.05 | $0.03 | $0.01 | ' | ' | ' | ' | $1.21 | ($0.09) | $0.17 |
Weighted-average number of common shares-basic | 46,302,926 | 46,171,194 | 46,040,692 | 45,537,607 | 45,492,847 | 45,377,732 | 45,313,804 | 45,241,418 | 46,286,735 | 45,514,844 | 45,180,485 |
Weighted-average number of common shares-diluted | 48,800,560 | 46,823,167 | 46,769,184 | 46,435,677 | 45,492,847 | 45,377,732 | 45,313,804 | 45,241,418 | 46,996,904 | 45,514,844 | 45,704,052 |
Convertible senior notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly financial information (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | $1,200 | ' | ' | ' | ' | ' | ' | ' | $7,329 | $6,806 | $6,325 |
Shares assumed from conversion of the Convertible Notes (in shares) | 1,900,000 | ' | ' | ' | ' | ' | ' | ' | 1,900,000 | ' | ' |
Schedule_II_VALUATION_AND_QUAL1
Schedule II VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Movement in valuation and qualifying accounts | ' | ' | ' |
Bad debt expense, net of recoveries | ($3,500,000) | ($5,100,000) | ($4,300,000) |
Allowance for doubtful accounts (deducted from accounts receivable) | ' | ' | ' |
Movement in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | 3,083,000 | 3,345,000 | 2,464,000 |
Charged to Costs and Expenses(a) | 4,731,000 | 6,058,000 | 6,299,000 |
Deductions | -5,943,000 | -6,320,000 | -5,418,000 |
Balance at End of Period | 1,871,000 | 3,083,000 | 3,345,000 |
Allowance for Unfulfilled Customer Purchase Obligations (deducted from accounts receivable) | ' | ' | ' |
Movement in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | 1,682,000 | 1,859,000 | 1,576,000 |
Charged to Costs and Expenses(a) | 4,690,000 | 6,888,000 | 4,870,000 |
Deductions | -4,228,000 | -7,065,000 | -4,587,000 |
Balance at End of Period | 2,144,000 | 1,682,000 | 1,859,000 |
Deferred tax valuation allowance | ' | ' | ' |
Movement in valuation and qualifying accounts | ' | ' | ' |
Balance at Beginning of Period | 388,460,000 | 370,293,000 | 357,915,000 |
Charged to Costs and Expenses(a) | 5,542,000 | 18,200,000 | 20,837,000 |
Deductions | -39,465,000 | -33,000 | -8,459,000 |
Balance at End of Period | $354,537,000 | $388,460,000 | $370,293,000 |