Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 26, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SHENANDOAH TELECOMMUNICATIONS CO/VA/ | |
Entity Central Index Key | 354,963 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 49,109,626 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 39,927 | $ 36,193 |
Accounts receivable, net | 68,709 | 69,789 |
Inventory, net | 24,855 | 39,043 |
Prepaid expenses and other | 16,989 | 16,440 |
Total current assets | 150,480 | 161,465 |
Investments, including $3,058 and $2,907 carried at fair value | 10,607 | 10,276 |
Property, plant and equipment, net | 689,948 | 698,122 |
Other Assets | ||
Intangible assets, net | 443,308 | 454,532 |
Goodwill | 144,001 | 145,256 |
Deferred charges and other assets, net | 14,645 | 14,756 |
Total assets | 1,452,989 | 1,484,407 |
Current Liabilities | ||
Current maturities of long-term debt, net of unamortized loan fees | 38,124 | 32,041 |
Accounts payable | 25,390 | 72,810 |
Advanced billings and customer deposits | 21,029 | 20,427 |
Accrued compensation | 3,678 | 9,465 |
Income taxes payable | 3,958 | 435 |
Accrued liabilities and other | 18,174 | 29,085 |
Total current liabilities | 110,353 | 164,263 |
Long-term debt, less current maturities, net of unamortized loan fees | 810,873 | 797,224 |
Other Long-Term Liabilities | ||
Deferred income taxes | 149,763 | 151,837 |
Deferred lease payable | 19,230 | 18,042 |
Asset retirement obligations | 19,386 | 15,666 |
Retirement plan obligations | 17,892 | 17,738 |
Other liabilities | 26,057 | 23,743 |
Total other long-term liabilities | 232,328 | 227,026 |
Commitments and Contingencies | ||
Shareholders’ Equity | ||
Common stock | 46,083 | 45,482 |
Retained earnings | 245,965 | 243,624 |
Accumulated other comprehensive income, net of taxes | 7,387 | 6,788 |
Total shareholders’ equity | 299,435 | 295,894 |
Total liabilities and shareholders’ equity | $ 1,452,989 | $ 1,484,407 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Investments carried at fair value | $ 3,058 | $ 2,907 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Operating revenues | $ 153,880 | $ 92,571 |
Operating expenses: | ||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | 53,761 | 31,762 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 40,153 | 21,426 |
Integration and acquisition expenses | 4,489 | 332 |
Depreciation and amortization | 44,804 | 17,739 |
Total operating expenses | 143,207 | 71,259 |
Operating income | 10,673 | 21,312 |
Other income (expense): | ||
Interest expense | (9,100) | (1,619) |
Gain on investments, net | 120 | 88 |
Non-operating income, net | 1,255 | 468 |
Income before income taxes | 2,948 | 20,249 |
Income tax expense | 607 | 6,368 |
Net income | 2,341 | 13,881 |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on interest rate hedge, net of tax | 599 | (1,048) |
Comprehensive income | $ 2,940 | $ 12,833 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.05 | $ 0.29 |
Diluted (in dollars per share) | $ 0.05 | $ 0.28 |
Weighted average shares outstanding, basic (in shares) | 49,050 | 48,563 |
Weighted average shares outstanding, diluted (in shares) | 49,834 | 49,249 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income, net of tax |
Beginning balance at Dec. 31, 2015 | $ 289,938 | $ 32,776 | $ 256,747 | $ 415 |
Beginning balance (in shares) at Dec. 31, 2015 | 48,475 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (895) | (895) | ||
Other comprehensive gain, net of tax | 6,373 | 6,373 | ||
Dividends declared ($0.25 per share) | (12,228) | (12,228) | ||
Dividends reinvested in common stock | 524 | $ 524 | ||
Dividends reinvested in common stock (in shares) | 19 | |||
Stock based compensation | 3,506 | $ 3,506 | ||
Stock options exercised (in shares) | 371 | |||
Stock options exercised | 3,359 | $ 3,359 | ||
Common stock issued for share awards | 0 | |||
Common stock issued for share awards (in shares) | 190 | |||
Common stock issued | 14 | $ 14 | ||
Common stock issued (in shares) | 2 | |||
Common stock issued to acquire non-controlling interests of nTelos | 10,400 | $ 10,400 | ||
Common stock issued to acquire non-controlling interests of nTelos (in shares) | 76 | |||
Common stock repurchased | (5,097) | $ (5,097) | ||
Common stock repurchased (in shares) | (198) | |||
Ending balance at Dec. 31, 2016 | 295,894 | $ 45,482 | 243,624 | 6,788 |
Ending balance (in shares) at Dec. 31, 2016 | 48,935 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 2,341 | 2,341 | ||
Other comprehensive gain, net of tax | 599 | 599 | ||
Stock based compensation | 1,822 | $ 1,822 | ||
Common stock issued for share awards (in shares) | 129 | |||
Common stock issued | 5 | $ 5 | ||
Common stock issued (in shares) | 1 | |||
Common stock issued to acquire non-controlling interests of nTelos | 0 | $ 0 | ||
Common stock issued to acquire non-controlling interests of nTelos (in shares) | 76 | |||
Common stock repurchased | (1,226) | $ (1,226) | ||
Common stock repurchased (in shares) | (43) | |||
Ending balance at Mar. 31, 2017 | $ 299,435 | $ 46,083 | $ 245,965 | $ 7,387 |
Ending balance (in shares) at Mar. 31, 2017 | 49,098 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Dividends declared per share (in dollars per share) | $ 0.25 |
UNAUDITED CONDENSED CONSOLIDAT7
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 2,341 | $ 13,881 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 37,878 | 17,454 |
Amortization reflected as operating expense | 6,926 | 285 |
Amortization reflected as contra revenue | 4,978 | 0 |
Amortization reflected as rent expense | 258 | 0 |
Provision for bad debt | 420 | 345 |
Straight line adjustment to management fee revenue | 4,206 | 0 |
Stock based compensation expense | 1,566 | 1,048 |
Deferred income taxes | (2,910) | (1,489) |
Net gain on disposal of equipment | (28) | (15) |
Unrealized gain on investments | (120) | (16) |
Net gains from patronage and equity investments | (200) | (210) |
Amortization of long term debt issuance costs | 1,202 | 132 |
Other | 0 | 3,039 |
(Increase) decrease in: | ||
Accounts receivable | 1,629 | 2,470 |
Inventory, net | 14,188 | (267) |
Other assets | (190) | 988 |
Increase (decrease) in: | ||
Accounts payable | (39,399) | 1,895 |
Income taxes payable | 3,523 | 6,981 |
Deferred lease payable | 1,331 | 208 |
Other deferrals and accruals | (13,101) | (3,559) |
Net cash provided by operating activities | 24,498 | 43,170 |
Cash Flows From Investing Activities | ||
Acquisition of property, plant and equipment | (38,587) | (20,537) |
Proceeds from sale of equipment | 117 | 145 |
Cash distributions from investments | 3 | 45 |
Additional contributions to investments | (14) | 0 |
Cash disbursed for acquisition | 0 | (2,480) |
Net cash used in investing activities | (38,481) | (22,827) |
Cash Flows From Financing Activities | ||
Principal payments on long-term debt | (6,062) | (5,750) |
Amounts borrowed under debt agreements | 25,000 | 0 |
Cash paid for debt issuance costs | 0 | (1,528) |
Repurchases of common stock | (1,226) | (3,526) |
Proceeds from issuances of common stock | 5 | 2,809 |
Net cash provided by/(used in) financing activities | 17,717 | (7,995) |
Net increase in cash and cash equivalents | 3,734 | 12,348 |
Cash and cash equivalents: | ||
Beginning | 36,193 | 76,812 |
Ending | 39,927 | 89,160 |
Cash payments for: | ||
Interest, net of capitalized interest of $577 and $146, respectively | 8,380 | 1,632 |
Income taxes paid, net of refunds received | $ 0 | $ 876 |
UNAUDITED CONDENSED CONSOLIDAT8
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other cash flow information: | ||
Capital expenditures | $ 6,400 | $ 1,200 |
Increase in interest rate swaps | 972 | |
Increase in deferred tax liability | 373 | |
Increase in accumulated other comprehensive income | 599 | (1,048) |
Interest paid, capitalized | $ 577 | $ 146 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim condensed consolidated financial statements of Shenandoah Telecommunications Company and Subsidiaries (collectively, the “Company”) are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the interim results have been reflected therein. All such adjustments were of a normal and recurring nature. Prior year amounts have been reclassified in some cases to conform to the current year presentation. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The accompanying balance sheet information at December 31, 2016 was derived from the audited December 31, 2016 consolidated balance sheet. Operating revenues and income (loss) from operations for any interim period are not necessarily indicative of results that may be expected for the entire year. |
Acquisition of NTELOS Holdings
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint | Acquisition of NTELOS Holdings Corp. and Exchange with Sprint On May 6, 2016, the Company completed its previously announced acquisition of NTELOS Holdings Corp. (“nTelos”) for $667.8 million , net of cash acquired. The acquisition was entered into to improve shareholder value through the expansion of the Company's Wireless service area and customer base while strengthening our relationship with Sprint Corporation ("Sprint"). The purchase price was financed by a credit facility arranged by CoBank, ACB, Royal Bank of Canada, Fifth Third Bank, Bank of America, N.A., Capital One, National Association, Citizens Bank N.A., and Toronto Dominion (Texas) LLC. The Company has accounted for the acquisition of nTelos under the acquisition method of accounting, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations”, and has accounted for measurement period adjustments under Accounting Standards Update (“ASU”) 2015-16, “Simplifying the Accounting for Measurement Period Adjustments”. Under the acquisition method of accounting, the total purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed in connection with the acquisition based on their estimated fair values. The preliminary allocation of the purchase price was based upon management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed of nTelos, with the excess recorded as goodwill. During the first quarter of 2017, the Company made adjustments to the preliminary estimates of fair value resulting in immaterial changes to previously estimated fair values of fixed assets, asset retirement obligation liabilities, accounts receivable and deferred taxes. These adjustments resulted in a $1.3 million reduction to goodwill as shown in the table below. The Company continues to review certain tax positions acquired in the nTelos acquisition. Changes in the carrying amount of goodwill during the three months ended March 31, 2017 are shown below (in thousands): December 31, Purchase Accounting Adjustments March 31, Goodwill - Wireline segment $ 10 $ — $ 10 Goodwill - Cable segment 104 — 104 Goodwill - Wireless segment 145,142 (1,255 ) 143,887 Goodwill as of March 31, 2017 $ 145,256 $ (1,255 ) $ 144,001 Following are the unaudited pro forma results of the Company for the period ended March 31, 2016, as if the acquisition of nTelos had occurred at the beginning of the period. (in thousands) March 31, Operating revenues $ 173,248 Income before income taxes $ 16,905 In connection with these transactions, the Company incurs costs which include the nTelos back office staff and support functions until the nTelos legacy customers are migrated to the Sprint billing platform; costs of the handsets to be provided to nTelos legacy customers as they migrate to the Sprint billing platform; severance costs for back office and other former nTelos employees who will not be retained permanently; and costs to shut down certain cell sites and related backhaul contracts. We have incurred $7.1 million of these costs in the three months ended March 31, 2017, including $0.1 million reflected in cost of goods and services and $2.5 million reflected in selling, general and administrative costs in the three months ended March 31, 2017. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands): March 31, December 31, Plant in service $ 1,124,446 $ 1,085,318 Plant under construction 61,980 73,759 1,186,426 1,159,077 Less accumulated amortization and depreciation 496,478 460,955 Net property, plant and equipment $ 689,948 $ 698,122 |
Earnings per share
Earnings per share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Basic net income per share was computed on the weighted average number of shares outstanding. Diluted net income per share was computed under the treasury stock method, assuming the conversion as of the beginning of the period, for all dilutive stock options. Of 913 thousand and 991 thousand shares and options outstanding at March 31, 2017 and 2016, respectively, 125 thousand and 136 thousand were anti-dilutive, respectively. These shares and options have been excluded from the computations of diluted earnings per share for their respective period. There were no adjustments to net income for either period. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Investments | Investments Investments include $3.1 million and $2.9 million of investments carried at fair value as of March 31, 2017 and December 31, 2016 , respectively, consisting of equity, bond and money market mutual funds. Investments carried at fair value were acquired under a rabbi trust arrangement related to the Company’s nonqualified Supplemental Executive Retirement Plan (the “SERP”). The Company purchases investments in the trust to mirror the investment elections of participants in the SERP; gains and losses on the investments in the trust are reflected as increases or decreases in the liability owed to the participants. During the three months ended March 31, 2017 , the Company recognized $32 thousand in dividend and interest income from investments, and recorded net unrealized gains of $120 thousand on these investments. Fair values for these investments held under the rabbi trust were determined by Level 1 quoted market prices for the underlying mutual funds. At March 31, 2017 and December 31, 2016 , other investments, comprised of equity securities which do not have readily determinable fair values, consist of the following: 3/31/2017 12/31/2016 Cost method: (in thousands) CoBank $ 6,296 $ 6,177 Other – Equity in other telecommunications partners 740 742 7,036 6,919 Equity method: Other 513 450 Total other investments $ 7,549 $ 7,369 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Financial Instruments Financial instruments on the condensed consolidated balance sheets that approximate fair value include: cash and cash equivalents, receivables, investments carried at fair value, payables, accrued liabilities, interest rate swaps and variable rate long-term debt. |
Derivative Instruments, Hedging
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Loss) | Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income The Company’s objectives in using interest rate derivatives are to add stability to cash flows and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps (both those designated as cash flow hedges as well as those not designated as cash flow hedges) involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company entered into a pay-fixed, receive-variable interest rate swap of $174.6 million of notional principal in September 2012. This interest rate swap was designated as a cash flow hedge. The outstanding notional amount of this cash flow hedge was $131.0 million as of March 31, 2017 . The outstanding notional amount decreases based upon scheduled principal payments on the 2012 debt. In May 2016, the Company entered into a pay-fixed, receive-variable interest rate swap of $256.6 million of notional principal with three counterparties. This interest rate swap was designated as a cash flow hedge. The outstanding notional amount of this cash flow hedge was $302.4 million as of March 31, 2017 . The outstanding notional amount increases based upon draws expected to be made under a portion of the Company's Term Loan A-2 debt and as the 2012 interest rate swap's notional principal decreases, and will decrease as the Company makes scheduled principal payments on the 2016 debt. In combination with the swap entered into in 2012 described above, the Company is hedging approximately 50% of the expected outstanding debt. The effective portion of changes in the fair value of interest rate swaps designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company uses its derivatives to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivative is recognized directly in earnings through interest expense. No hedge ineffectiveness was recognized during any of the periods presented. Amounts reported in accumulated other comprehensive income related to the interest rate swaps designated and qualified as a cash flow hedge, are reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of March 31, 2017 , the Company estimates that $237 thousand will be reclassified as a reduction of interest expense during the next twelve months. The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the condensed consolidated balance sheet as of March 31, 2017 and December 31, 2016 (in thousands): Derivatives Fair Value as of Balance Sheet Location March 31, December 31, Derivatives designated as hedging instruments: Interest rate swap Prepaid expenses and other $ 237 $ — Deferred charges and other assets, net 11,958 12,118 Accrued liabilities and other — (895 ) Total derivatives designated as hedging instruments $ 12,195 $ 11,223 The fair value of interest rate swaps is determined using a pricing model with inputs that are observable in the market (level 2 fair value inputs). The table below presents change in accumulated other comprehensive income by component for the three months ended March 31, 2017 (in thousands): Gains on Cash Flow Hedges Income Tax Expense Accumulated Other Comprehensive Income Balance as of December 31, 2016 $ 11,223 $ (4,435 ) $ 6,788 Other comprehensive income before reclassifications 541 (208 ) 333 Amounts reclassified from accumulated other comprehensive income (to interest expense) 431 (165 ) 266 Net current period other comprehensive income 972 (373 ) 599 Balance as of March 31, 2017 $ 12,195 $ (4,808 ) $ 7,387 |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net Intangible assets consist of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizing intangibles: Cable franchise rights $ 64,334 $ — $ 64,334 $ 64,334 $ — $ 64,334 Railroad crossing rights 97 — 97 97 — 97 64,431 — 64,431 64,431 — 64,431 Finite-lived intangibles: Affiliate contract expansion 284,102 (19,008 ) 265,094 284,102 (14,030 ) 270,072 Acquired subscribers – wireless 120,855 (25,387 ) 95,468 120,855 (18,738 ) 102,117 Favorable leases - wireless 16,950 (1,531 ) 15,419 16,950 (1,130 ) 15,820 Acquired subscribers – cable 25,265 (24,802 ) 463 25,265 (24,631 ) 634 Other intangibles 3,230 (797 ) 2,433 2,212 (754 ) 1,458 Total finite-lived intangibles 450,402 (71,525 ) 378,877 449,384 (59,283 ) 390,101 Total intangible assets $ 514,833 $ (71,525 ) $ 443,308 $ 513,815 $ (59,283 ) $ 454,532 |
Accrued and Other Liabilities
Accrued and Other Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Accrued and Other Liabilities | Accrued and Other liabilities Accrued liabilities and other includes the following (in thousands): March 31, 2017 December 31, 2016 Sales and property taxes payable $ 4,742 $ 6,628 Severance accrual, current portion 3,553 4,267 Asset retirement obligations, current portion 884 5,841 Other current liabilities 8,995 12,349 Accrued liabilities and other $ 18,174 $ 29,085 Other liabilities include the following (in thousands): March 31, December 31, Non-current portion of deferred revenues $ 7,735 $ 8,933 Straight-line management fee waiver 16,180 11,974 Other 2,142 2,836 Other liabilities $ 26,057 $ 23,743 |
Long-Term Debt and Revolving Li
Long-Term Debt and Revolving Lines of Credit | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Revolving Lines of Credit | Long-Term Debt and Revolving Lines of Credit Total debt at March 31, 2017 and December 31, 2016 consists of the following: (In thousands) March 31, 2017 December 31, 2016 Term loan A-1 $ 466,813 $ 472,875 Term loan A-2 400,000 375,000 866,813 847,875 Less: unamortized loan fees 17,816 18,610 Total debt, net of unamortized loan fees $ 848,997 $ 829,265 Current maturities of long term debt, net of unamortized loan fees $ 38,124 $ 32,041 Long-term debt, less current maturities, net of unamortized loan fees $ 810,873 $ 797,224 As of March 31, 2017, our indebtedness totaled $866.8 million in term loans with an annualized effective interest rate of approximately 3.91% after considering the impact of the interest rate swap contract and unamortized loan costs. The balance consists of the $466.8 million Term Loan A-1 at a variable rate ( 3.73% as of March 31, 2017) that resets monthly based on one month LIBOR plus a margin of 2.75% , and the $400 million Term Loan A-2 at a variable rate ( 3.98% as of March 31, 2017) that resets monthly based on one month LIBOR plus a margin of 3.00% . The Term Loan A-1 requires quarterly principal repayments of $6.1 million through June 30, 2017, then increasing to $12.1 million quarterly through June 30, 2020, with further increases at that time through maturity in June 30, 2021. The Term Loan A-2 requires quarterly principal repayments of $10.0 million beginning on September 30, 2018 through March 31, 2023, with the remaining balance due June 30, 2023. The Company is subject to certain financial covenants to be measured on a trailing twelve month basis each calendar quarter unless otherwise specified. These covenants include: • a limitation on the Company’s total leverage ratio, defined as indebtedness divided by earnings before interest, taxes, depreciation and amortization, or EBITDA, of less than or equal to 3.75 to 1.00 from the closing date through December 30, 2018, then 3.25 to 1.00 through December 30, 2019, and 3.00 to 1.00 thereafter; • a minimum debt service coverage ratio, defined as EBITDA minus certain cash taxes divided by the sum of all scheduled principal payments on the Term Loans and scheduled principal payments on other indebtedness plus cash interest expense, greater than 2.00 to 1.00; • the Company must maintain a minimum liquidity balance, defined as availability under the revolver facility plus unrestricted cash and cash equivalents on deposit in a deposit account for which a control agreement has been delivered to the administrative agent under the 2016 credit agreement, of greater than $25 million at all times. These ratios are generally less restrictive than the covenant ratios the Company had been required to comply with under its previously existing debt arrangements. As shown below, as of March 31, 2017, the Company was in compliance with the financial covenants in its credit agreements. Actual Covenant Requirement Total Leverage Ratio 2.88 3.75 or Lower Debt Service Coverage Ratio 4.56 2.00 or Higher Minimum Liquidity Balance $113 million $25 million or Higher |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker. The Company has three reportable segments, which the Company operates and manages as strategic business units organized by lines of business: (1) Wireless, (2) Cable, and (3) Wireline. A fourth segment, Other, primarily includes Shenandoah Telecommunications Company, the parent holding company. Prior to the recent acquisition of nTelos, the Wireless segment had provided digital wireless service to a portion of a four -state area covering the region from Harrisburg, York and Altoona, Pennsylvania, to Harrisonburg, Virginia, as a Sprint PCS Affiliate. With the recent acquisition, the Company's wireless service has expanded to include south-central and western Virginia, West Virginia, and small portions of Kentucky and Ohio. This segment also owns cell site towers built on leased land, and leases space on these towers to both affiliates and non-affiliated service providers. The Cable segment provides video, internet and voice services in Virginia, West Virginia and Maryland, and leases fiber optic facilities throughout southern Virginia and West Virginia. It does not include video, internet and voice services provided to customers in Shenandoah County, Virginia. The Wireline segment provides regulated and unregulated voice services, DSL internet access, and long distance access services throughout Shenandoah County and portions of Rockingham, Frederick, Warren and Augusta counties, Virginia. The segment also provides video and cable modem services in portions of Shenandoah County, and leases fiber optic facilities throughout the northern Shenandoah Valley of Virginia, northern Virginia and adjacent areas along the Interstate 81 corridor through West Virginia, Maryland and portions of central and southern Pennsylvania. Three months ended March 31, 2017 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 108,186 $ 26,411 $ 5,048 $ — $ — $ 139,645 Other 6,042 2,035 6,158 — — 14,235 Total external revenues 114,228 28,446 11,206 — — 153,880 Internal revenues 1,235 567 7,948 — (9,750 ) — Total operating revenues 115,463 29,013 19,154 — (9,750 ) 153,880 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 38,318 15,228 9,273 — (9,058 ) 53,761 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 28,464 4,858 1,676 5,847 (692 ) 40,153 Integration and acquisition expenses 3,792 — — 697 — 4,489 Depreciation and amortization 35,752 5,788 3,132 132 — 44,804 Total operating expenses 106,326 25,874 14,081 6,676 (9,750 ) 143,207 Operating income (loss) $ 9,137 $ 3,139 $ 5,073 $ (6,676 ) $ — $ 10,673 Three months ended March 31, 2016 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 52,179 $ 24,340 $ 4,960 $ — $ — $ 81,479 Other 3,203 1,846 6,043 — 11,092 Total external revenues 55,382 26,186 11,003 — — 92,571 Internal revenues 1,136 260 7,376 (8,772 ) — Total operating revenues 56,518 26,446 18,379 — (8,772 ) 92,571 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 16,578 14,647 8,643 — (8,106 ) 31,762 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 11,514 5,108 1,605 3,865 (666 ) 21,426 Integration and acquisition expenses — — — 332 — 332 Depreciation and amortization 8,494 6,095 3,033 117 — 17,739 Total operating expenses 36,586 25,850 13,281 4,314 (8,772 ) 71,259 Operating income (loss) $ 19,932 $ 596 $ 5,098 $ (4,314 ) $ — $ 21,312 A reconciliation of the total of the reportable segments’ operating income (loss) to consolidated income (loss) before taxes is as follows: Three Months Ended (in thousands) 2017 2016 Total consolidated operating income $ 10,673 $ 21,312 Interest expense (9,100 ) (1,619 ) Non-operating income, net 1,375 556 Income before income taxes $ 2,948 $ 20,249 The Company’s assets by segment are as follows: (in thousands) March 31, December 31, Wireless $ 1,039,211 $ 1,101,716 Cable 220,519 218,471 Wireline 116,390 115,282 Other 1,070,204 1,059,898 Combined totals 2,446,324 2,495,367 Inter-segment eliminations (993,335 ) (1,010,960 ) Consolidated totals $ 1,452,989 $ 1,484,407 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files U.S. federal income tax returns and various state and local income tax returns. With few exceptions, years prior to 2013 are no longer subject to examination; net operating losses acquired in the nTelos acquisition are open to examination from 2002 forward. The Company is not subject to any state or federal income tax audits as of March 31, 2017 . |
Adoption of New Accounting Prin
Adoption of New Accounting Principles | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Adoption of New Accounting Principles | Adoption of New Accounting Principles During the first quarter of 2017, the Company adopted one new accounting principle: Accounting Standards Update ("ASU") No. 2015-11, "Inventory: Simplifying the Measurement of Inventory". This ASU changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. The ASU also eliminates the requirement for entities to consider replacement cost or net realizable value less an approximately normal profit margin when measuring inventory. The adoption of this ASU did not have a significant impact on our financial statements. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 9, 2017, the Company and Sprint entered into Addendum XX to the Sprint PCS Management Agreement. Addendum XX provides for (i) an expansion of the Company’s “Service Area” (as defined in the Sprint PCS Management Agreement) to include certain areas in Kentucky, Maryland, Ohio and West Virginia (the “ Expansion Area ”), (ii) certain network build out requirements in the Expansion Area over the next three years, (iii) the Company’s provision of prepaid field sales support to Sprint and its affiliates in the Service Area, (iv) Sprint’s provision of spectrum use to the Company in the Expansion Area, (v) the addition of Horizon Personal Communications, LLC, as a party to the Sprint PCS Management Agreement and the Sprint PCS Services Agreement (collectively, the “ Affiliate Agreements ”) and (vi) certain other amendments to the Affiliate Agreements. In connection with the execution of Addendum XX, on March 9, 2017, the Company and certain affiliates of Sprint entered into an agreement to, among other things, transfer to Sprint certain customers in the Expansion Area and the underlying customer agreements, and to transition the provision of network coverage in the Expansion Area from Sprint to the Company. The expanded territory includes approximately 500 thousand market POPs and approximately 21 thousand Sprint customers. The Company and Sprint closed on this transaction on April 6, 2017. |
Acquisition of NTELOS Holding23
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill during the three months ended March 31, 2017 are shown below (in thousands): December 31, Purchase Accounting Adjustments March 31, Goodwill - Wireline segment $ 10 $ — $ 10 Goodwill - Cable segment 104 — 104 Goodwill - Wireless segment 145,142 (1,255 ) 143,887 Goodwill as of March 31, 2017 $ 145,256 $ (1,255 ) $ 144,001 |
Business Acquisition, Pro Forma Information | Following are the unaudited pro forma results of the Company for the period ended March 31, 2016, as if the acquisition of nTelos had occurred at the beginning of the period. (in thousands) March 31, Operating revenues $ 173,248 Income before income taxes $ 16,905 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): March 31, December 31, Plant in service $ 1,124,446 $ 1,085,318 Plant under construction 61,980 73,759 1,186,426 1,159,077 Less accumulated amortization and depreciation 496,478 460,955 Net property, plant and equipment $ 689,948 $ 698,122 |
Investments Investments (Tables
Investments Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of other investments which do not have readily determinable fair values | At March 31, 2017 and December 31, 2016 , other investments, comprised of equity securities which do not have readily determinable fair values, consist of the following: 3/31/2017 12/31/2016 Cost method: (in thousands) CoBank $ 6,296 $ 6,177 Other – Equity in other telecommunications partners 740 742 7,036 6,919 Equity method: Other 513 450 Total other investments $ 7,549 $ 7,369 |
Derivative Instruments, Hedgi26
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Financial Instrument as Well as its Classification on the Consolidated Balance Sheet | The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the condensed consolidated balance sheet as of March 31, 2017 and December 31, 2016 (in thousands): Derivatives Fair Value as of Balance Sheet Location March 31, December 31, Derivatives designated as hedging instruments: Interest rate swap Prepaid expenses and other $ 237 $ — Deferred charges and other assets, net 11,958 12,118 Accrued liabilities and other — (895 ) Total derivatives designated as hedging instruments $ 12,195 $ 11,223 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents change in accumulated other comprehensive income by component for the three months ended March 31, 2017 (in thousands): Gains on Cash Flow Hedges Income Tax Expense Accumulated Other Comprehensive Income Balance as of December 31, 2016 $ 11,223 $ (4,435 ) $ 6,788 Other comprehensive income before reclassifications 541 (208 ) 333 Amounts reclassified from accumulated other comprehensive income (to interest expense) 431 (165 ) 266 Net current period other comprehensive income 972 (373 ) 599 Balance as of March 31, 2017 $ 12,195 $ (4,808 ) $ 7,387 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following at March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizing intangibles: Cable franchise rights $ 64,334 $ — $ 64,334 $ 64,334 $ — $ 64,334 Railroad crossing rights 97 — 97 97 — 97 64,431 — 64,431 64,431 — 64,431 Finite-lived intangibles: Affiliate contract expansion 284,102 (19,008 ) 265,094 284,102 (14,030 ) 270,072 Acquired subscribers – wireless 120,855 (25,387 ) 95,468 120,855 (18,738 ) 102,117 Favorable leases - wireless 16,950 (1,531 ) 15,419 16,950 (1,130 ) 15,820 Acquired subscribers – cable 25,265 (24,802 ) 463 25,265 (24,631 ) 634 Other intangibles 3,230 (797 ) 2,433 2,212 (754 ) 1,458 Total finite-lived intangibles 450,402 (71,525 ) 378,877 449,384 (59,283 ) 390,101 Total intangible assets $ 514,833 $ (71,525 ) $ 443,308 $ 513,815 $ (59,283 ) $ 454,532 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Accrued Liabilities and Other | Accrued liabilities and other includes the following (in thousands): March 31, 2017 December 31, 2016 Sales and property taxes payable $ 4,742 $ 6,628 Severance accrual, current portion 3,553 4,267 Asset retirement obligations, current portion 884 5,841 Other current liabilities 8,995 12,349 Accrued liabilities and other $ 18,174 $ 29,085 |
Summary of Other Liabilities | Other liabilities include the following (in thousands): March 31, December 31, Non-current portion of deferred revenues $ 7,735 $ 8,933 Straight-line management fee waiver 16,180 11,974 Other 2,142 2,836 Other liabilities $ 26,057 $ 23,743 |
Long-Term Debt and Revolving 29
Long-Term Debt and Revolving Lines of Credit (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | Total debt at March 31, 2017 and December 31, 2016 consists of the following: (In thousands) March 31, 2017 December 31, 2016 Term loan A-1 $ 466,813 $ 472,875 Term loan A-2 400,000 375,000 866,813 847,875 Less: unamortized loan fees 17,816 18,610 Total debt, net of unamortized loan fees $ 848,997 $ 829,265 Current maturities of long term debt, net of unamortized loan fees $ 38,124 $ 32,041 Long-term debt, less current maturities, net of unamortized loan fees $ 810,873 $ 797,224 |
Financial covenants in credit agreements | As shown below, as of March 31, 2017, the Company was in compliance with the financial covenants in its credit agreements. Actual Covenant Requirement Total Leverage Ratio 2.88 3.75 or Lower Debt Service Coverage Ratio 4.56 2.00 or Higher Minimum Liquidity Balance $113 million $25 million or Higher As shown below, as of March 31, 2017, the Company was in compliance with the financial covenants in its credit agreements. Actual Covenant Requirement Total Leverage Ratio 2.88 3.75 or Lower Debt Service Coverage Ratio 4.56 2.00 or Higher Minimum Liquidity Balance $113 million $25 million or Higher |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Selected Financial Data for Segments | Three months ended March 31, 2017 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 108,186 $ 26,411 $ 5,048 $ — $ — $ 139,645 Other 6,042 2,035 6,158 — — 14,235 Total external revenues 114,228 28,446 11,206 — — 153,880 Internal revenues 1,235 567 7,948 — (9,750 ) — Total operating revenues 115,463 29,013 19,154 — (9,750 ) 153,880 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 38,318 15,228 9,273 — (9,058 ) 53,761 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 28,464 4,858 1,676 5,847 (692 ) 40,153 Integration and acquisition expenses 3,792 — — 697 — 4,489 Depreciation and amortization 35,752 5,788 3,132 132 — 44,804 Total operating expenses 106,326 25,874 14,081 6,676 (9,750 ) 143,207 Operating income (loss) $ 9,137 $ 3,139 $ 5,073 $ (6,676 ) $ — $ 10,673 Three months ended March 31, 2016 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 52,179 $ 24,340 $ 4,960 $ — $ — $ 81,479 Other 3,203 1,846 6,043 — 11,092 Total external revenues 55,382 26,186 11,003 — — 92,571 Internal revenues 1,136 260 7,376 (8,772 ) — Total operating revenues 56,518 26,446 18,379 — (8,772 ) 92,571 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 16,578 14,647 8,643 — (8,106 ) 31,762 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 11,514 5,108 1,605 3,865 (666 ) 21,426 Integration and acquisition expenses — — — 332 — 332 Depreciation and amortization 8,494 6,095 3,033 117 — 17,739 Total operating expenses 36,586 25,850 13,281 4,314 (8,772 ) 71,259 Operating income (loss) $ 19,932 $ 596 $ 5,098 $ (4,314 ) $ — $ 21,312 |
Reconciliation of Income (Loss) from Continuing Operations from Segments to Consolidated | A reconciliation of the total of the reportable segments’ operating income (loss) to consolidated income (loss) before taxes is as follows: Three Months Ended (in thousands) 2017 2016 Total consolidated operating income $ 10,673 $ 21,312 Interest expense (9,100 ) (1,619 ) Non-operating income, net 1,375 556 Income before income taxes $ 2,948 $ 20,249 |
Assets by Segment | The Company’s assets by segment are as follows: (in thousands) March 31, December 31, Wireless $ 1,039,211 $ 1,101,716 Cable 220,519 218,471 Wireline 116,390 115,282 Other 1,070,204 1,059,898 Combined totals 2,446,324 2,495,367 Inter-segment eliminations (993,335 ) (1,010,960 ) Consolidated totals $ 1,452,989 $ 1,484,407 |
Acquisition of NTELOS Holding31
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint - Narrative (Details) - Ntelos Holding, Corp - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | May 06, 2016 | |
Business Acquisition [Line Items] | ||
Consideration transferred, net of cash | $ 667,800 | |
Purchase Accounting Adjustments | $ (1,255) | |
Integration related costs | 7,100 | |
Cost of Sales | ||
Business Acquisition [Line Items] | ||
Integration related costs | 100 | |
Selling, General and Administrative Expenses | ||
Business Acquisition [Line Items] | ||
Integration related costs | $ 2,500 |
Acquisition of NTELOS Holding32
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint - Schedule of Goodwill Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 144,001 |
Ending balance | 145,256 |
Ntelos Holding, Corp | |
Goodwill [Roll Forward] | |
Beginning balance | 144,001 |
Purchase Accounting Adjustments | (1,255) |
Ending balance | 145,256 |
Wireline | Ntelos Holding, Corp | |
Goodwill [Roll Forward] | |
Beginning balance | 10 |
Purchase Accounting Adjustments | 0 |
Ending balance | 10 |
Cable | Ntelos Holding, Corp | |
Goodwill [Roll Forward] | |
Beginning balance | 104 |
Purchase Accounting Adjustments | 0 |
Ending balance | 104 |
Wireless | Ntelos Holding, Corp | |
Goodwill [Roll Forward] | |
Beginning balance | 143,887 |
Purchase Accounting Adjustments | (1,255) |
Ending balance | $ 145,142 |
Acquisition of NTELOS Holding33
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint - Schedule of Pro Froma Results (Details) - Ntelos Holding, Corp $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Business Acquisition [Line Items] | |
Operating revenues | $ 173,248 |
Income before income taxes | $ 16,905 |
Property, Plant and Equipment34
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 1,186,426 | $ 1,159,077 |
Less accumulated amortization and depreciation | 496,478 | 460,955 |
Net property, plant and equipment | 689,948 | 698,122 |
Plant in service | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | 1,124,446 | 1,085,318 |
Plant under construction | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 61,980 | $ 73,759 |
Earnings per share (Details)
Earnings per share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares and options outstanding (in shares) | 913 | 991 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 125 | 136 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |||
Investments carried at fair value | $ 3,058 | $ 2,907 | |
Dividend and interest income from investments | 32 | ||
Net unrealized gains recognized | $ 120 | $ 16 |
Investments - Other Investments
Investments - Other Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investment [Line Items] | ||
Cost method investments | $ 7,036 | $ 6,919 |
Total other investments | 7,549 | 7,369 |
Other Equity Investments | ||
Investment [Line Items] | ||
Other | 513 | 450 |
CoBank | ||
Investment [Line Items] | ||
Cost method investments | 6,296 | 6,177 |
Other Equity Investments | ||
Investment [Line Items] | ||
Cost method investments | $ 740 | $ 742 |
Derivative Instruments, Hedgi38
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2017USD ($) | May 31, 2016USD ($)counterparty | Sep. 30, 2012USD ($) | |
Derivative [Line Items] | |||
Percentage of expected outstanding debt | 50.00% | ||
Interest rate swap | Cash Flow Hedge | |||
Derivative [Line Items] | |||
Amount of notional principal interest rate swap | $ 174,600,000 | ||
Notional amount of cash flow hedges | $ 131,000,000 | ||
Interest rate swap | Cash Flow Hedge | Three Counterparties | |||
Derivative [Line Items] | |||
Amount of notional principal interest rate swap | $ 256,600,000 | ||
Notional amount of cash flow hedges | 302,400,000 | ||
Number of counterparties | counterparty | 3 | ||
Interest Expense | |||
Derivative [Line Items] | |||
Amount reclassified as a reduction to interest expense during next twelve months | $ 237,000 |
Derivative Instruments, Hedgi39
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income - Schedule of Derivative Financial Instrument as Well as its Classification on the Consolidated Balance Sheet (Details) - Interest rate swap - Derivatives designated as hedging instruments - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Total derivatives designated as hedging instruments | $ 12,195 | $ 11,223 |
Prepaid expenses and other | ||
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Derivative assets, fair value | 237 | 0 |
Deferred charges and other assets, net | ||
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Derivative assets, fair value | 11,958 | 12,118 |
Accrued liabilities and other | ||
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Derivatives liabilities, fair value | $ 0 | $ (895) |
Derivative Instruments, Hedgi40
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
AOCI Attributable to Parent, Before Tax [Roll Forward] | |
December 31, 2016 | $ 11,223 |
March 31, 2017 | 12,195 |
AOCI Attributable to Parent, Tax [Roll Forward] | |
December 31, 2016 | (4,435) |
March 31, 2017 | (4,808) |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
December 31, 2016 | 6,788 |
March 31, 2017 | 7,387 |
Gains on Cash Flow Hedges | |
AOCI Attributable to Parent, Before Tax [Roll Forward] | |
Other comprehensive income before reclassifications | 541 |
Amounts reclassified from accumulated other comprehensive income (to interest expense) | 431 |
Net current period other comprehensive income | 972 |
AOCI Attributable to Parent, Tax [Roll Forward] | |
Other comprehensive income before reclassifications | (208) |
Amounts reclassified from accumulated other comprehensive income (to interest expense) | (165) |
Net current period other comprehensive income | (373) |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Other comprehensive income before reclassifications | 333 |
Amounts reclassified from accumulated other comprehensive income (to interest expense) | 266 |
Net current period other comprehensive income | $ 599 |
Intangible Assets, Net - Intang
Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizing intangibles: | $ 64,431 | $ 64,431 |
Gross Carrying Amount | 450,402 | 449,384 |
Accumulated Amortization | (71,525) | (59,283) |
Net | 378,877 | 390,101 |
Total intangible assets, gross | 514,833 | 513,815 |
Intangible assets, net | 443,308 | 454,532 |
Affiliate contract expansion | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 284,102 | 284,102 |
Accumulated Amortization | (19,008) | (14,030) |
Net | 265,094 | 270,072 |
Acquired subscribers – wireless | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 120,855 | 120,855 |
Accumulated Amortization | (25,387) | (18,738) |
Net | 95,468 | 102,117 |
Favorable leases - wireless | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,950 | 16,950 |
Accumulated Amortization | (1,531) | (1,130) |
Net | 15,419 | 15,820 |
Acquired subscribers – cable | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 25,265 | 25,265 |
Accumulated Amortization | (24,802) | (24,631) |
Net | 463 | 634 |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,230 | 2,212 |
Accumulated Amortization | (797) | (754) |
Net | 2,433 | 1,458 |
Cable franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizing intangibles: | 64,334 | 64,334 |
Railroad crossing rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizing intangibles: | $ 97 | $ 97 |
Accrued and Other Liabilities -
Accrued and Other Liabilities - Accrued Liabilities and Other (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Sales and property taxes payable | $ 4,742 | $ 6,628 |
Severance accrual, current portion | 3,553 | 4,267 |
Asset retirement obligations, current portion | 884 | 5,841 |
Other current liabilities | 8,995 | 12,349 |
Accrued liabilities and other | $ 18,174 | $ 29,085 |
- Other Liabilities (Details)
- Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Non-current portion of deferred revenues | $ 7,735 | $ 8,933 |
Straight-line management fee waiver | 16,180 | 11,974 |
Other | 2,142 | 2,836 |
Other liabilities | $ 26,057 | $ 23,743 |
Long-Term Debt and Revolving 44
Long-Term Debt and Revolving Lines of Credit - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 866,813 | $ 847,875 |
Less: unamortized loan fees | 17,816 | 18,610 |
Total debt, net of unamortized loan fees | 848,997 | 829,265 |
Current maturities of long term debt, net of unamortized loan fees | 38,124 | 32,041 |
Long-term debt, less current maturities, net of unamortized loan fees | 810,873 | 797,224 |
Term loan A-1 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 466,813 | 472,875 |
Term loan A-2 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 400,000 | $ 375,000 |
Long-Term Debt and Revolving 45
Long-Term Debt and Revolving Lines of Credit - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||
Total indebtedness | $ 866,800,000 | |
Effective interest rate | 3.91% | |
Long-term debt | $ 866,813,000 | $ 847,875,000 |
Leverage ratio two | 3.25 | |
Leverage ratio three | 3 | |
Debt service coverage ratio, actual | 4.56 | |
Debt instrument covenants minimum liquidity amount | $ 25,000,000 | |
Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio one | 3.75 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Debt service coverage ratio, actual | 2 | |
Term loan A-1 | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 3.73% | |
Long-term debt | $ 466,813,000 | 472,875,000 |
Periodic payment of principal | 6,100,000 | |
Periodic payment principal, period two | $ 12,100,000 | |
Term loan A-1 | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 2.75% | |
Term loan A-2 | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 3.98% | |
Long-term debt | $ 400,000,000 | $ 375,000,000 |
Periodic payment of principal | $ 10,000,000 | |
Term loan A-2 | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Variable interest rate | 3.00% |
Long-Term Debt and Revolving 46
Long-Term Debt and Revolving Lines of Credit - Schedule of Financial Covenants (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Debt Disclosure [Abstract] | |
Covenant requirement, total leverage ratio | 3.75 |
Leverage ratio, actual | 2.88 |
Debt service coverage ratio, actual | 4.56 |
Minimum debt service coverage ratio | 2 |
Debt instrument covenants minimum liquidity amount | $ 25,000,000 |
Covenant, liquidity balance, actual | $ 113,000,000 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2017statesegment | |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 3 |
Non Sprint operations, number of states | state | 4 |
Segment Information - Selected
Segment Information - Selected Financial Data for Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
External revenues [Abstract] | ||
Service revenues | $ 139,645 | $ 81,479 |
Other | 14,235 | 11,092 |
Total external revenues | 153,880 | 92,571 |
Internal revenues | 0 | 0 |
Total operating revenues | 153,880 | 92,571 |
Operating expenses: | ||
Costs of goods and services, exclusive of depreciation and amortization shown separately below | 53,761 | 31,762 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 40,153 | 21,426 |
Integration and acquisition expenses | 4,489 | 332 |
Depreciation and amortization | 44,804 | 17,739 |
Total operating expenses | 143,207 | 71,259 |
Operating income | 10,673 | 21,312 |
Operating Segments | Wireless | ||
External revenues [Abstract] | ||
Service revenues | 108,186 | 52,179 |
Other | 6,042 | 3,203 |
Total external revenues | 114,228 | 55,382 |
Internal revenues | 1,235 | 1,136 |
Total operating revenues | 115,463 | 56,518 |
Operating expenses: | ||
Costs of goods and services, exclusive of depreciation and amortization shown separately below | 38,318 | 16,578 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 28,464 | 11,514 |
Integration and acquisition expenses | 3,792 | 0 |
Depreciation and amortization | 35,752 | 8,494 |
Total operating expenses | 106,326 | 36,586 |
Operating income | 9,137 | 19,932 |
Operating Segments | Cable | ||
External revenues [Abstract] | ||
Service revenues | 26,411 | 24,340 |
Other | 2,035 | 1,846 |
Total external revenues | 28,446 | 26,186 |
Internal revenues | 567 | 260 |
Total operating revenues | 29,013 | 26,446 |
Operating expenses: | ||
Costs of goods and services, exclusive of depreciation and amortization shown separately below | 15,228 | 14,647 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 4,858 | 5,108 |
Integration and acquisition expenses | 0 | 0 |
Depreciation and amortization | 5,788 | 6,095 |
Total operating expenses | 25,874 | 25,850 |
Operating income | 3,139 | 596 |
Operating Segments | Wireline | ||
External revenues [Abstract] | ||
Service revenues | 5,048 | 4,960 |
Other | 6,158 | 6,043 |
Total external revenues | 11,206 | 11,003 |
Internal revenues | 7,948 | 7,376 |
Total operating revenues | 19,154 | 18,379 |
Operating expenses: | ||
Costs of goods and services, exclusive of depreciation and amortization shown separately below | 9,273 | 8,643 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 1,676 | 1,605 |
Integration and acquisition expenses | 0 | 0 |
Depreciation and amortization | 3,132 | 3,033 |
Total operating expenses | 14,081 | 13,281 |
Operating income | 5,073 | 5,098 |
Operating Segments | Other Segments | ||
External revenues [Abstract] | ||
Service revenues | 0 | 0 |
Other | 0 | 0 |
Total external revenues | 0 | 0 |
Internal revenues | 0 | |
Total operating revenues | 0 | 0 |
Operating expenses: | ||
Costs of goods and services, exclusive of depreciation and amortization shown separately below | 0 | 0 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 5,847 | 3,865 |
Integration and acquisition expenses | 697 | 332 |
Depreciation and amortization | 132 | 117 |
Total operating expenses | 6,676 | 4,314 |
Operating income | (6,676) | (4,314) |
Intersegment Eliminations | ||
External revenues [Abstract] | ||
Service revenues | 0 | 0 |
Other | 0 | |
Total external revenues | 0 | 0 |
Internal revenues | (9,750) | (8,772) |
Total operating revenues | (9,750) | (8,772) |
Operating expenses: | ||
Costs of goods and services, exclusive of depreciation and amortization shown separately below | (9,058) | (8,106) |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | (692) | (666) |
Integration and acquisition expenses | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Total operating expenses | (9,750) | (8,772) |
Operating income | $ 0 | $ 0 |
Segment Information - Reconcili
Segment Information - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Reconciliation of income from continuing operations from segments to consolidated [Abstract] | ||
Total consolidated operating income | $ 10,673 | $ 21,312 |
Interest expense | (9,100) | (1,619) |
Non-operating income, net | 1,375 | 556 |
Income before income taxes | $ 2,948 | $ 20,249 |
Segment Information - Assets by
Segment Information - Assets by Segment (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 1,452,989 | $ 1,484,407 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 2,446,324 | 2,495,367 |
Operating Segments | Wireless | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 1,039,211 | 1,101,716 |
Operating Segments | Cable | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 220,519 | 218,471 |
Operating Segments | Wireline | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 116,390 | 115,282 |
Operating Segments | Other Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 1,070,204 | 1,059,898 |
Intersegment Eliminations | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ (993,335) | $ (1,010,960) |
Subsequent Events (Details)
Subsequent Events (Details) - Sprint and Affiliates - Addendum XX to Sprint PCS Management Agreement - Subsequent Event individual_people in Thousands, customer in Thousands | Apr. 06, 2017customerindividual_people |
Subsequent Event [Line Items] | |
Market population | individual_people | 500 |
Number of customers | customer | 21 |