Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 15, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NEW ULM TELECOM INC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 5,160,065 | ||
Entity Public Float | $ 46,795,286 | ||
Amendment Flag | false | ||
Entity Central Index Key | 71,557 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING REVENUES: | ||
Local Service | $ 5,819,471 | $ 5,863,723 |
Network Access | 6,846,324 | 7,315,208 |
Video | 9,730,361 | 9,381,142 |
Data | 12,152,732 | 11,605,733 |
A-CAM/FUSF | 7,944,902 | 3,634,555 |
Other | 4,395,391 | 4,518,785 |
Total Operating Revenues | 46,889,181 | 42,319,146 |
OPERATING EXPENSES: | ||
Plant Operations (Excluding Depreciation and Amortization) | 8,069,821 | 8,092,935 |
Cost of Video | 8,128,578 | 7,933,672 |
Cost of Data | 2,255,692 | 2,121,067 |
Cost of Other Nonregulated Services | 2,136,913 | 1,944,850 |
Depreciation and Amortization | 9,652,754 | 9,763,934 |
Selling, General, and Administrative | 7,185,340 | 7,053,795 |
Total Operating Expenses | 37,429,098 | 36,910,253 |
OPERATING INCOME | 9,460,083 | 5,408,893 |
OTHER INCOME (EXPENSE): | ||
Interest During Construction | 76,705 | 26,229 |
CoBank Patronage Dividends | 337,137 | 386,843 |
Interest Income | 97,996 | 91,942 |
Interest Expense | (1,192,241) | (1,425,527) |
Other Investment Income | 371,241 | 399,247 |
Total Other Income (Expense) | (309,162) | (521,266) |
INCOME BEFORE INCOME TAXES | 9,150,921 | 4,887,627 |
INCOME TAXES (BENEFIT) EXPENSE | (803,315) | 2,033,140 |
NET INCOME | $ 9,954,236 | $ 2,854,487 |
BASIC AND DILUTED NET INCOME PER SHARE (in Dollars per share) | $ 1.93 | $ 0.56 |
DIVIDENDS PER SHARE (in Dollars per share) | $ 0.3950 | $ 0.3575 |
WEIGHTED AVERAGE SHARES OUTSTANDING (in Shares) | 5,153,579 | 5,133,548 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
NET INCOME | $ 9,954,236 | $ 2,854,487 |
OTHER COMPREHENSIVE INCOME | ||
Unrealized Gains on Interest Rate Swaps | 50,990 | 8,578 |
Income Tax Expense Related to Unrealized Gains on Interest Rate Swaps | (17,275) | (3,471) |
OTHER COMPREHENSIVE INCOME | 33,715 | 5,107 |
COMPREHENSIVE INCOME | $ 9,987,951 | $ 2,859,594 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash | $ 1,842,092 | $ 616,114 |
Receivables, Net of Allowance for Doubtful Accounts of $83,000 and $43,200 | 1,944,501 | 2,232,571 |
Income Taxes Receivable | 27,559 | |
Materials, Supplies and Inventories | 2,075,199 | 1,860,157 |
Financial Derivative Instruments | 28,178 | |
Prepaid Expenses | 823,310 | 724,891 |
Total Current Assets | 6,713,280 | 5,461,292 |
INVESTMENTS & OTHER ASSETS: | ||
Goodwill | 39,805,349 | 39,805,349 |
Intangibles | 16,257,156 | 18,726,239 |
Other Investments | 7,521,389 | 7,345,680 |
Deferred Charges and Other Assets | 52,596 | 66,165 |
Total Investments and Other Assets | 63,636,490 | 65,943,433 |
PROPERTY, PLANT & EQUIPMENT: | ||
Telecommunications Plant | 127,634,435 | 122,571,148 |
Other Property & Equipment | 17,750,364 | 16,801,894 |
Video Plant | 10,440,379 | 10,321,263 |
Total Property, Plant and Equipment | 155,825,178 | 149,694,305 |
Less Accumulated Depreciation | 113,875,345 | 106,767,672 |
Net Property, Plant & Equipment | 41,949,833 | 42,926,633 |
TOTAL ASSETS | 112,299,603 | 114,331,358 |
CURRENT LIABILITIES: | ||
Current Portion of Long-Term Debt | 3,315,822 | 3,315,822 |
Accounts Payable | 2,079,470 | 2,378,736 |
Accrued Income Taxes | 676,508 | |
Other Accrued Taxes | 166,249 | 180,215 |
Deferred Compensation | 57,216 | 59,264 |
Accrued Compensation | 1,825,761 | 1,908,212 |
Other Accrued Liabilities | 403,964 | 446,462 |
Total Current Liabilities | 8,524,990 | 8,288,711 |
LONG-TERM DEBT, Less Current Portion | 24,022,465 | 28,298,064 |
NONCURRENT LIABILITIES: | ||
Loan Guarantees | 158,043 | 213,802 |
Deferred Income Taxes | 10,318,689 | 16,314,431 |
Other Accrued Liabilities | 194,458 | 233,147 |
Financial Derivative Instruments | 22,812 | |
Deferred Compensation | 632,225 | 701,895 |
Total Noncurrent Liabilities | 11,303,415 | 17,486,087 |
COMMITMENTS AND CONTINGENCIES: | ||
STOCKHOLDERS' EQUITY: | ||
Preferred Stock - $1.66 Par Value, 10,000,000 Shares Authorized, No Shares Issued and Outstanding | ||
Common Stock - $1.66 Par Value, 90,000,000 Shares Authorized, 5,160,065 and 5,139,375 Shares Issued and Outstanding | 8,600,108 | 8,565,625 |
Accumulated Other Comprehensive Income (Loss) | 20,135 | (13,580) |
Unearned Compensation | 13,620 | |
Retained Earnings | 59,814,870 | 51,706,451 |
Total Stockholders' Equity | 68,448,733 | 60,258,496 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 112,299,603 | $ 114,331,358 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for Doubtful Accounts (in Dollars) | $ 83,000 | $ 43,200 |
Preferred stock par value (in Dollars per share) | $ 1.66 | $ 1.66 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $ 1.66 | $ 1.66 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 5,160,065 | 5,139,375 |
Common stock, shares outstanding | 5,160,065 | 5,139,375 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 9,954,236 | $ 2,854,487 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation and Amortization | 9,711,932 | 9,823,112 |
Undistributed Earnings of Other Equity Investment | (283,322) | (413,850) |
Noncash Patronage Refund | (105,145) | (96,711) |
Stock Issued in Lieu of Cash Payment | 194,001 | 172,232 |
Distributions from Equity Investments | 400,000 | 576,954 |
Stock-based Compensation | 13,620 | |
Changes in Assets and Liabilities: | ||
Receivables | 205,263 | (1,000,739) |
Income Taxes Receivable | 27,559 | 673,552 |
Materials, Supplies, and Inventories | (215,042) | 651,475 |
Prepaid Expenses | (67,862) | 240,052 |
Deferred Charges and Other Assets | (12,247) | (5,958) |
Accounts Payable | (297,606) | 369,800 |
Accrued Income Taxes | 676,508 | |
Other Accrued Taxes | (13,966) | 4,608 |
Other Accrued Liabilities | (163,638) | (348,512) |
Deferred Income Tax | (6,013,017) | (1,238,913) |
Deferred Compensation | (71,718) | (75,162) |
Net Cash Provided by Operating Activities | 13,939,556 | 12,186,427 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to Property, Plant, and Equipment, Net | (6,267,066) | (5,725,287) |
Grants Received for Construction of Plant | 167,158 | |
Other, Net | (243,000) | (136,227) |
Net Cash Used in Investing Activities | (6,342,908) | (5,861,514) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal Payments of Long-Term Debt | (2,700,000) | (2,025,000) |
Changes in Revolving Credit Facility | (1,634,778) | (2,400,267) |
Dividends Paid | (2,035,892) | (1,835,356) |
Net Cash Used in Financing Activities | (6,370,670) | (6,260,623) |
NET INCREASE (DECREASE) IN CASH | 1,225,978 | 64,290 |
CASH at Beginning of Period | 616,114 | 551,824 |
CASH at End of Period | 1,842,092 | 616,114 |
Supplemental cash flow information: | ||
Cash paid for interest | 1,091,276 | 1,340,120 |
Net cash paid for income taxes | $ 4,505,709 | $ 2,598,500 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS` EQUITY - USD ($) | Common Stock [Member] | AOCI Attributable to Parent [Member] | Unearned Compensation [Member] | Retained Earnings [Member] | Total |
BALANCE at Dec. 31, 2015 | $ 8,528,043 | $ (18,687) | $ 50,561,016 | $ 59,070,372 | |
BALANCE (in Shares) at Dec. 31, 2015 | 5,116,826 | ||||
Directors Stock Plan | $ 20,685 | 69,295 | 89,980 | ||
Directors Stock Plan (in Shares) | 12,411 | ||||
Employee Stock Plan | $ 16,897 | 57,009 | 73,906 | ||
Employee Stock Plan (in Shares) | 10,138 | ||||
Net Income | 2,854,487 | 2,854,487 | |||
Dividends | (1,835,356) | (1,835,356) | |||
Unrealized Gain on Interest Rate Swap | 5,107 | 5,107 | |||
BALANCE at Dec. 31, 2016 | $ 8,565,625 | (13,580) | 51,706,451 | 60,258,496 | |
BALANCE (in Shares) at Dec. 31, 2016 | 5,139,375 | ||||
Directors Stock Plan | $ 21,113 | 128,840 | 149,953 | ||
Directors Stock Plan (in Shares) | 12,668 | ||||
Employee Stock Plan | $ 13,370 | 61,235 | 74,605 | ||
Employee Stock Plan (in Shares) | 8,022 | ||||
Restricted Stock Grant | $ 13,620 | 13,620 | |||
Net Income | 9,954,236 | 9,954,236 | |||
Dividends | (2,035,892) | (2,035,892) | |||
Unrealized Gain on Interest Rate Swap | 33,715 | 33,715 | |||
BALANCE at Dec. 31, 2017 | $ 8,600,108 | $ 20,135 | $ 13,620 | $ 59,814,870 | $ 68,448,733 |
BALANCE (in Shares) at Dec. 31, 2017 | 5,160,065 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business NU Telecom is a diversified communications company headquartered in New Ulm, Minnesota with more than 110 years of experience in the local telephone exchange and telecommunications business. Our principal line of business is the operation of five local telephone companies and the operation of two CLEC telephone companies. Our businesses consist of connecting customers to our state-of-the-art, fiber-rich communications network, providing managed services, switched service and dedicated private lines, connecting customers to long distance service providers and providing many other services associated with our company. Our businesses also provide IPTV, CATV, Internet access services, including high-speed broadband access, and long distance service. We also install and maintain communications systems to the areas in and around our service territories in southern Minnesota and northern Iowa. Basis of Presentation and Principles of Consolidation Our accounting policies conform with GAAP and, where applicable, to the accounting principles as prescribed by federal and state telephone utility regulatory authorities. We presently give accounting recognition to the actions of regulators where appropriate in preparing general purpose financial statements for most public utilities. In general, the type of regulation covered by this statement permits rates (prices) for some services to be set at levels intended to recover the estimated costs of providing regulated services or products, including the cost of capital (interest costs and a provision for earnings on stockholders’ investments). Our consolidated financial statements report the financial condition and results of operations for NU Telecom and its subsidiaries in one business segment: the Telecom Segment. Inter-company transactions have been eliminated from the consolidated financial statements. Classification of Costs and Expenses Cost of services includes all costs related to delivery of communication services and products. These operating costs include all costs of performing services and providing related products including engineering, network monitoring and transportation costs. Selling, general and administrative expenses include direct and indirect selling expenses, customer service, billing and collections, advertising and all other general and administrative costs associated with the operations of the business. Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities. The estimates and assumption used in the accompanying consolidated financial statements are based on our management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from those estimates and assumptions. Revenue Recognition We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery of the product has occurred or a service has been provided, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. Revenues are earned from our customers primarily through the connection to our networks, digital and commercial TV programming, Internet services (high-speed broadband), and hosted and managed services. Revenues for these services are billed based on set rates for monthly service or based on the amount of time the customer is utilizing our facilities. The revenue for these services is recognized when the service is rendered. Revenues earned from IXCs accessing our network are based on the utilization of our network by these carriers as measured by minutes of use on the network or special access to the network by the individual carriers. Revenues are billed at tariffed access rates for both interstate and intrastate calls. Revenues for these services are recognized based on the period the access is provided. Interstate access rates were established by a nationwide pooling of companies known as NECA. The FCC established NECA in 1983 to develop and administer interstate access service rates, terms and conditions. Revenues were pooled and redistributed on the basis of a company's actual or average costs. There has been a change in the composition of interstate access charges in recent years, shifting more of the charges to the end user and reducing the amount of access charges paid by the IXC’s. We believe this trend will continue. New Ulm’s and SETC’s settlements from the pools were based on their actual costs to provide service, while the settlements for NU Telecom subsidiaries – WTC, PTC and HTC were based on nationwide average schedules. Access revenues for New Ulm and SETC included an estimate of a cost study each year that was trued-up subsequent to the end of any given year. Our management believes the estimates included in our preliminary cost study were reasonable. We cannot predict the future impact that industry or regulatory changes will have on interstate access revenues. Intrastate access rates are filed with state regulatory commissions in Minnesota and Iowa. A-CAM The FUSF was established as part of the TA96 and provides subsidies to telecommunications providers as means of increasing the availability and affordability of advanced telecommunications services. In 2011, significant reform was introduced, including the creation of the CAF, to help modernize the FUSF and promote support of these telecom services in the nation’s high-cost areas. In 2016, the FCC announced additional reform to further transition the CAF from supporting the provision of voice services to the provision of broadband services. On March 30, 2016, the FCC issued the 2016 Order that adopts the following changes to the FUSF for rate-of-return carriers: ● Establishes a voluntary cost model; ● Creates specific broadband deployment obligations; ● Provides a mechanism for support of broadband-only deployment; ● Gradually reduces the authorized rate-of-return from 11.25 percent to 9.75 percent; ● Eliminates support in those local areas served by unsubsidized competitors; ● Establishes “glide-path” transition periods for all the new changes; and ● Maintains the $2 billion budget established by the 2011 Transformation Order. While the 2011 FUSF Transformation Order established CAF Phase I and CAF Phase II as high-cost support mechanisms for the price-cap carriers (i.e., the larger, national LECs such as Verizon and AT&T), it was not as specific about how subsidies would change for the rate-of-return carriers (i.e., the smaller LECs, including all rural LECs). In contrast, the 2016 Order focuses on the rate-of-return carriers, announces specific changes to existing funding mechanisms as well as a new funding mechanism, and provides rural telecommunications providers with greater certainty about future support. One of the major changes introduced by the 2016 Order is the creation of the A-CAM, a new CAF support mechanism for rate-of-return carriers. Utilization of the A-CAM is voluntary; and rate-of-return carriers may instead choose to continue relying on the legacy support mechanism known as ICLS, but now modified and renamed CAF-BLS. Each carrier must decide which support mechanism to elect, and must choose one or the other, per state. In our Form 10-Q for the quarter ended September 30, 2016, NU Telecom disclosed that we had elected the A-CAM for our Minnesota and Iowa operations, replacing our former ICLS. NU Telecom will receive A-CAM support for a period of ten years in exchange for meeting defined broadband build-out requirements. At the time of NU Telecom’s election, the FCC had not yet determined the final award numbers. Consistent with the stated disclosure in our Form 10-Q, NU Telecom notified the FCC that we would continue to elect the A-CAM program. Under the report that accompanied the FCC December 20, 2016 Public Notice, NU-Telecom would annually receive (i) $391,896 for our Iowa operations and (ii) $6,118,567 for our Minnesota operations. The Company will use the annual $6.5 million that we receive through the A-CAM program to meet our defined broadband build-out obligations. The A-CAM payments will replace the Company’s former ICLS payments. In 2016 NU Telecom received $1,965,727 under the former ICLS program. We derive revenues from the sale, installation and servicing of communication systems. In accordance with GAAP, these deliverables are accounted for separately. We recognize revenue from customer contracts for sales and installations using the completed-contract method, which recognizes income when the contract is substantially complete. We recognize rental revenues over the rental period. Receivables As of December 31, 2017 and 2016, our consolidated receivables totaled $1,944,501 and $2,232,571, net of the allowance for doubtful accounts. We believe our receivables as of December 31, 2017 and 2016 are recorded at their fair value. As there may be exposure or risk with receivables, we routinely monitor our receivables and adjust the allowance for doubtful accounts when events occur that may potentially affect the collection of our receivables. Allowance for Doubtful Accounts We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. In making the determination of the appropriate allowance for doubtful accounts, we consider specific accounts, historical write-offs, changes in customer relationships, credit worthiness and concentrations of credit risk. Specific accounts receivable are written off once a determination is made that the account is uncollectible. Additional allowances may be required if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments. The activity in our allowance for doubtful accounts includes the following: Year Ended December 31 2017 2016 Balance at beginning of year $ 43,200 $ 160,000 Additions charged to costs and expenses 226,479 63,227 Accounts written off (186,679) (180,027) Balance at end of year $ 83,000 $ 43,200 Inventories Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes (i) parts and equipment shipped directly from vendors to customer locations while in transit and (ii) parts and equipment returned from customers that are being returned to vendors for credit. Our inventory value as of December 31, 2017 and 2016 was $2,075,199 and $1,860,157. We value inventory using the lower of cost or market method. Similar to our allowance for doubtful accounts, we make estimates related to the valuation of inventory. As of December 31, 2017 and 2016, we had no inventory reserve. We adjust our inventory carrying value for estimated obsolescence or unmarketable inventory to the estimated market value based upon assumptions about future demand and market conditions. As market and other conditions change, we may establish additional inventory reserves at a time when the facts that give rise to a lower value are warranted. We use the first-in, first-out method of inventory costing for our non-retail inventory. We use the average cost method of inventory costing for our retail inventory. Fair Value Measurements We have adopted the rules prescribed under GAAP for our financial assets and liabilities. GAAP includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market–corroborated inputs that are derived principally from or corroborated by observable market data. Level 3: Inputs are derived from valuation techniques where one or more significant inputs or value drivers are unobservable. We have used financial derivative instruments to manage our overall cash flow exposure to fluctuations in interest rates. We accounted for derivative instruments in accordance with GAAP that requires derivative instruments to be recorded on the balance sheet at fair value. Changes in fair value of derivative instruments must be recognized in earnings unless specific hedge accounting criteria are met, in which case, the gains and losses are included in other comprehensive income rather than in earnings. We have entered into an IRSA with our lender CoBank to manage our cash flow exposure to fluctuations in interest rates. This instrument is designated as a cash flow hedge and is effective at mitigating the risk of fluctuations on interest rates in the market place. Any gains or losses related to changes in the fair value of this derivative is accounted for as a component of accumulated other comprehensive income (loss) for as long as the hedge remains effective. The fair value of our IRSA is discussed in Note 5 – “Interest Rate Swaps” to the Consolidated Financial Statements of this Annual Report on Form 10-K. The fair value of our swap agreement was determined based on Level 2 inputs. Property, Plant and Equipment We record impairment losses on long-lived assets used in operations when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. In assessing the recoverability of long-lived assets, we compare the carrying value to the undiscounted future cash flows the assets are expected to generate. If the total of the undiscounted future cash flows is less than the carrying amount of the assets, we would write down those assets based on the excess of the carrying amount over the fair value of the assets. Fair value is generally determined by calculating the discounted future cash flows expected from those assets. Changes in these estimates could have a material adverse effect on the assessment of long-lived assets, thereby requiring a write-down of the assets. Write-downs of long-lived assets are recorded as impairment charges and are a component of operating expenses. We have reviewed our long-lived assets and concluded that no impairment charge on our long-lived assets is necessary. We use the group life method (mass asset accounting) to depreciate the assets of our telephone companies. Telephone plant acquired in a given year is grouped into similar categories and depreciated over the remaining estimated useful life of the group. When an asset is retired, both the asset and the accumulated depreciation associated with that asset are removed from the books. Due to rapid changes in technology, selecting the estimated economic life of telecommunications plant and equipment requires a significant amount of judgment. We periodically review data on expected utilization of new equipment, asset retirement activity and net salvage values to determine adjustments to our depreciation rates. We have not made any significant changes to the lives of these assets in the two year period ended December 31, 2017. Goodwill and Intangible Assets We amortize our definite-lived intangible assets over their estimated useful lives. Customer relationships are amortized over fourteen to fifteen years, regulatory rights are amortized over fifteen years and trade names are amortized over three to five years. Intangible assets with finite lives are amortized over their respective estimated useful lives. In accordance with GAAP, goodwill and intangible assets with indefinite useful lives are not amortized, but tested for impairment at least annually. See Note 3 – “Goodwill and Intangibles” to the Consolidated Financial Statements of this Annual Report on Form 10-K for a more detailed discussion of the intangible assets and goodwill. Our goodwill balance was $39,805,349 as of December 31, 2017 and 2016. In the fourth quarter of 2017 and 2016 we completed our annual impairment tests for existing acquired goodwill. This testing resulted in no impairment charges to goodwill at December 31, 2017 and 2016. Investments and Other Assets We are a co-investor with other rural telephone companies in several partnerships and limited liability companies. These joint ventures make it possible to offer services to customers, including digital video services and fiber-optic transport services that we would have difficulty offering on our own. These joint ventures also make it possible to invest in new technologies with a lower level of financial risk. We use the equity method of accounting for these investments that reflects original cost and recognition of our share of the net income or losses from the respective operations. See Note 14 – “Segment Information” to the Consolidated Financial Statements of this Annual Report on Form 10-K for a listing of our investments. Long-term investments in other companies that are not intended for resale or are not readily marketable are valued at the lower of cost or net realizable value. Other Financial Instruments Other Investments – It is difficult to estimate a fair value for equity investments in companies carried on the equity or cost basis due to a lack of quoted market prices. We conducted an evaluation of our investments in all of our companies in connection with the preparation of our audited financial statements at December 31, 2017. We believe the carrying value of our investments is not impaired. Debt – We estimate the fair value of our long-term debt based on the discounted future cash flows we expect to pay using current rates of borrowing for similar types of debt. Fair value of the debt approximates carrying value. Other Financial Instruments – Our financial instruments also include cash equivalents, trade accounts receivable and accounts payable where the current carrying amounts approximate fair market value. Advertising Expense Advertising is expensed as incurred. Advertising expense charged to operations was $255,150 and $251,939 in 2017 and 2016. Interest During Construction We include an average cost of debt for the construction of plant in our communications plant accounts. Income Taxes We account for income taxes in accordance with GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements and operating and tax credit carryforwards. Deferred tax assets and liabilities are determined using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We recognize interest and penalties related to income tax matters as income tax expense. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period. GAAP requires us to recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. See Note 6 – “Income Taxes” to the Consolidated Financial Statements of this Annual Report on Form 10-K for additional information regarding income taxes. Collection of Taxes from Customers Sales, excise and other taxes are imposed on most of our sales to nonexempt customers. We collect these taxes from our customers and remit the entire amounts to governmental authorities. Our accounting policies dictate that we exclude these taxes collected and remitted from our revenues and expenses. Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments and receivables. We deposit some of our cash investments in high credit quality financial institutions accounts which, at times, may exceed federally insured limits. We have not experienced any losses in these accounts and do not believe we are exposed to any significant credit risk. Concentrations of credit risk with respect to trade receivables are limited due to our large number of customers. Earnings And Dividends Per Share Basic earnings per share (EPS) are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Our basic and diluted EPS are based on our weighted average number of shares outstanding of 5,153,579 and 5,133,548 for the periods ended December 31, 2017 and 2016. Dividends per share have been declared quarterly by the NU Telecom Board of Directors. Recent Accounting Developments In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2017-09 (ASU 2017-09), “Scope of Modification Accounting).” ASU 2017-09 clarifies the modification accounting guidance for stock compensation included in Topic 718, “Compensation – Stock Compensation.” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award must be accounted for as a modification under Topic 718. The new guidance is effective prospectively for annual and interim periods beginning after December 15, 2017, with early adoption permitted. We plan to adopt this update effective January 1, 2018 and will apply this guidance to applicable transactions after adoption date. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and other (Topic 350).” ASU 2017-04 simplifies the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. The amendments in this update should be applied on a prospective basis. ASU 2017-04 is effective for the Company beginning January 1, 2021. Early adoption is permitted. Management is evaluating the impact the adoption of ASU 2017-04 will have on the Company’s financial statements (if any). In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires entities to use a new forward-looking, expected loss model to estimate credit losses. It also requires additional disclosures relating to the credit quality of trade and other receivables, including information relating to management’s estimate of credit allowances. NU Telecom is required to adopt ASU 2016-13 on January 1, 2020. Early adoption as of January 1, 2019 is permitted. We are evaluating the effects that adoption of ASU 2016-13 will have on our financial position, results of operations and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. This change will result in an increase to recorded assets and liabilities on lessees’ financial statements, as well as changes in the categorization of rental costs, from rent expense to interest and depreciation expense. Other effects may occur depending on the types of leases and the specific terms of them utilized by particular lessees. The ASU is effective for the Company on January 1, 2019, and early application is permitted. Modified retrospective application is required. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606) (Accounting Standards Codification (ASC) 606),” and has since amended the standard with ASU 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” ASU 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” ASU 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients,” and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” These standards replace existing revenue recognition rules with a single comprehensive model to use in accounting for revenue arising from contracts with customers. These standards require an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. As amended, the new standard is effective for the Company on January 1, 2018, using either a retrospective basis or a modified retrospective basis with early adoption permitted. We adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective method for open contracts. Under this transition method, the accounting change is applied to the current period with a cumulative effect adjustment recorded to opening retained earnings. Previously reported results will not be restated under this transition method. The adoption of this new standard will result in additional disclosures around the nature and timing of the Company’s performance obligations, deferred revenue contract liabilities, deferred contract cost assets, as well as significant judgements and practical expedients used by the Company in applying the new five-step revenue model. The Company has implemented new processes and internal controls to enable the prepartation of financial information upon adoption. We have reviewed all other significant newly issued accounting pronouncements and determined they are either not applicable to our business or that no material effect is expected on our financial position and results of operations. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE 2 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of December 31, 2017 and 2016, include the following: 2017 2016 Telecommunications Plant: Land $ 494,082 $ 494,082 Buildings 8,983,386 8,947,763 Other Support Assets 13,963,236 12,819,431 Central Office and Circuit Equipment 48,266,084 47,429,580 Cable and Wire Facilities 52,123,759 50,845,827 Other Plant and Equipment 404,883 404,883 Plant Under Construction 3,399,005 1,629,582 127,634,435 122,571,148 Other Property 17,750,364 16,801,894 Video Plant 10,440,379 10,321,263 Total Property, Plant and Equipment $ 155,825,178 $ 149,694,305 Depreciation is computed using the straight-line method based on the estimated service or remaining useful lives of the various classes of depreciable assets. Depreciation expense was $7,183,671 and $7,294,678 in 2017 and 2016. The composite depreciation rates on communications plant and equipment for the two years ended December 31, 2017 and 2016 were 4.7% and 4.9%. Other property and video plant is depreciated over estimated useful lives of three to twenty-five years. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 3 - GOODWILL AND INTANGIBLES We account for goodwill and other intangible assets under GAAP. Under GAAP, goodwill and intangible assets with indefinite useful lives are not amortized, but are instead tested for impairment (i) on at least an annual basis and (ii) when changes in circumstances indicate that the fair value of goodwill may be below its carrying value. Our goodwill totaled $39,805,349 at December 31, 2017 and 2016. As required by GAAP, we do not amortize goodwill and other intangible assets with indefinite lives, but test for impairment on an annual basis or earlier if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying amount. These circumstances include, but are not limited to (i) a significant adverse change in the business climate, (ii) unanticipated competition or (iii) an adverse action or assessment by a regulator. Determining impairment involves estimating the fair value of a reporting unit using a combination of (i) the income or DCF approach and (ii) the market approach that utilizes comparable companies’ data. If the carrying amount of a reporting unit exceeds its fair value, the amount of the impairment loss must be measured. The impairment loss is calculated by comparing the implied fair value of the reporting unit’s goodwill to its carrying amount. In calculating the implied fair value of the reporting unit’s goodwill, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit. The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied value of goodwill. We recognize impairment loss when the carrying amount of goodwill exceeds its implied fair value. In 2017 and 2016, we engaged an independent valuation firm to complete our annual impairment testing for existing goodwill. For 2017 and 2016, the testing results indicated no impairment charge to goodwill as the determined fair value was sufficient to pass the first step of the impairment test. Our intangible assets subject to amortization consist of acquired customer relationships, regulatory rights and trade names. We amortize intangible assets with finite lives over their respective estimated useful lives. Identifiable intangible assets that are subject to amortization are evaluated for impairment. In addition, we periodically reassess the carrying value, useful lives and classifications of our identifiable intangible assets. The components of our identified intangible assets are as follows: December 31, 2017 December 31, 2016 Gross Carrying Amount Gross Carrying Amount Useful Lives Accumulated Amortization Accumulated Amortization Definite-Lived Intangible Assets Customers Relationships 14-15 yrs $ 29,278,445 $ 17,354,646 $ 29,278,445 $ 15,266,227 Regulatory Rights 15 yrs 4,000,000 2,666,643 4,000,000 2,399,979 Trade Name 3-5 yrs 570,000 570,000 570,000 456,000 Indefinitely-Lived Intangible Assets Video Franchise 3,000,000 - 3,000,000 - Total $ 36,848,445 $ 20,591,289 $ 36,848,445 $ 18,122,206 Net Identified Intangible Assets $ 16,257,156 $ 18,726,239 Amortization expense related to the definite-lived assets was $2,469,083 for 2017 and $2,469,256 for 2016. Amortization expense for the next five years is estimated to be: 2018 $ 2,355,083 2019 $ 2,355,083 2020 $ 2,355,083 2021 $ 2,355,038 2022 $ 983,688 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Long-term Debt [Text Block] | NOTE 4 - LONG-TERM DEBT We have a credit facility with CoBank. Under the credit facility, we entered into a master loan agreement (MLA) and a series of supplements to the respective MLA. NU Telecom and its respective subsidiaries also have entered into security agreements under which substantially all the assets of NU Telecom and its respective subsidiaries have been pledged to CoBank as collateral. In addition, NU Telecom and its respective subsidiaries have guaranteed all the obligations under the credit facility. The mortgage notes are required to be paid in quarterly installments covering principal and interest, beginning in the year of issue and maturing on December 31, 2021. Secured Credit Facility: MLA RX0583 ● ● RX0583-T2A and RX0583-T3A initially bear interest at a “LIBOR Margin” rate equal to 3.25 percent over the applicable LIBOR rate. The LIBOR Margin decreases as our “Leverage Ratio” decreases. Within 180 days after the closing date of December 31, 2014, NU Telecom needed to enter into interest rate protection agreements in form and substance reasonably satisfactory to CoBank so as to fix or limit interest rates payable by NU Telecom at all times to at least 40% of the outstanding principal balance of Loan RX0583-T3A for an initial average weighted life of at least three years. As described in Note 5 – “Interest Rate Swaps” to the Consolidated Financial Statements of this Annual Report on Form 10-K, we have entered into an IRSA that effectively fixed our interest rates and cover $14.0 million at a weighted average rate of 3.72%, as of December 31, 2017. The remaining debt of $22.6 million ($9.0 million available under the revolving credit facilities and $13.6 million currently outstanding) remains subject to variable interest rates at an effective weighted average interest rate of 4.07%, as of December 31, 2017. Our loan agreements include restrictions on our ability to pay cash dividends to our stockholders. However, we are allowed to pay dividends (a) (i) in an amount up to $2,100,000 in any year if our “Total Leverage Ratio,” that is, the ratio of our “Indebtedness” to “EBITDA” – as defined in the loan documents, is greater than 2.50 to 1.00, and (ii) in any amount if our Total Leverage Ratio is less than 2.50 to 1.00, and (b) in either case, if we are not in default or potential default under the loan agreements. On March 31, 2016 our Total Leverage Ratio fell below 2.50, thus eliminating any restrictions on our ability to pay cash dividends to our stockholders. Our current Total Leverage Ratio at December 31, 2017 is 1.47. Our credit facility requires us to comply with specified financial ratios. These financial ratios include total leverage ratio, debt service coverage ratio, equity to total assets ratio and fixed coverage ratio. At December 31, 2017 we were in compliance with all the stipulated financial ratios in our loan agreements. There are security and loan agreements underlying our current CoBank credit facility that contain restrictions on our distributions to stockholders and investment in, or loans, to others. Also, o ur credit facility contains restrictions that, among other things, limits or restricts our ability to enter into guarantees and contingent liabilities, incur additional debt, issue stock, transact asset sales, transfers or dispositions, and engage in mergers and acquisitions, without CoBank approval. Long-term debt is as follows: 2017 2016 Secured seven-year reducing credit facility to CoBank, ACB, in $ 27,575,000 $ 30,275,000 Secured seven-year revolving credit facility of up to $9,000,000 to - 1,634,778 Less: Unamortized Loan Fees (236,713) (295,892) 27,338,287 31,613,886 Less: Amount due within one year 3,375,000 3,375,000 Less: Current Portion of Unamortized Loan Fees (59,178) (59,178) Total Long Term Debt $ 24,022,465 $ 28,298,064 Required principal payments are as follows: 2018 $ 3,375,000 2019 $ 2,700,000 2020 $ 2,700,000 2021 $ 18,800,000 |
INTEREST RATE SWAPS
INTEREST RATE SWAPS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Financial Instruments Disclosure [Text Block] | NOTE 5 – INTEREST RATE SWAPS We assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely affect expected future cash flows and by evaluating hedging opportunities. We generally use variable-rate debt to finance our operations, capital expenditures and acquisitions. These variable-rate debt obligations expose us to variability in interest payments due to changes in interest rates. The terms of our credit facility with CoBank required that we enter into interest rate agreements designed to protect us against fluctuations in interest rates, in an aggregate principal amount and for a duration determined under the credit facility. To meet this objective, on June 18, 2015 we entered into an IRSA with CoBank covering $14.0 million of our aggregate indebtedness to CoBank. This swap effectively locked in the interest rate on $14.0 million of variable-rate debt through June 2018. Under this IRSA, we have changed the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the IRSA, we pay a fixed contractual interest rate and (i) made an additional payment if the LIBOR variable rate payment is below a contractual rate or (ii) receive a payment if the LIBOR variable rate payment is above the contractual rate. Each month, we make interest payments to CoBank under its loan agreements based on the current applicable LIBOR Rate plus the contractual LIBOR margin then in effect with respect to the loan, without reflecting our IRSA. At the end of each calendar month, CoBank adjusts our aggregate interest payments based on the difference, if any, between the amounts paid by us during the month and the current effective interest rate set forth in the table below. Net interest payments are reported in our consolidated income statement as interest expense. As of December 31, 2017 we had the following IRSA in effect. Loan # Maturity Date Notional Amount Effective Interest Rate (1) RX0583-T3A 06/29/2018 $14,000,000 3.72% (LIBOR Rate of 1.22% plus 2.50% LIBOR Margin) (1) As described in Note 4 – “Long-Term Debt” to the 2017 Consolidated Financial Statements on Form 10-K, the note above initially bears interest at a LIBOR rate determined by the maturity of the note, plus a “LIBOR Margin” rate equal to 3.25% according to the individual secured credit facility. The LIBOR Margin decreases as the borrower’s “Leverage Ratio” decreases. The “Current Effective Interest Rate” in the table reflects the rate we pay giving effect to the swaps. Our IRSA under our credit facilities qualifies as a cash flow hedge for accounting purposes under GAAP. We reflect the effect of this hedging transaction in the financial statements. The unrealized gain/loss is reported in other comprehensive income. If we terminate our IRSA, the cumulative change in fair value at the date of termination would be reclassified from accumulated other comprehensive income, which is classified in stockholders’ equity, into earnings on the consolidated statements of income. The fair value of the Company’s IRSA was determined based on valuations received from CoBank and are based on the present value of expected future cash flows using discount rates appropriate with the terms of the IRSA. The fair value indicates an estimated amount we would be required to pay if the contracts were canceled or transferred to other parties. At December 31, 2017, the fair value of the swap was $28,178, which has been recorded net of deferred tax of $8,043 for the $20,135 in accumulated other comprehensive income. At December 31, 2016, the fair value liability of the swap was $22,812, which has been recorded net of deferred tax benefit of $9,232, for the $13,580 in accumulated other comprehensive loss. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 6 - INCOME TAXES Income taxes recorded in our consolidated statements of income consists of the following: 2017 2016 Taxes currently payable Federal $ 4,055,693 $ 2,582,782 State 1,136,733 685,800 Deferred Income Taxes (1,446,409) (1,235,442) Deferred Tax Adjustment due to Federal Tax Rate Change (4,549,332) - Total Income Tax Expense (Benefit) $ (803,315) $ 2,033,140 We account for income taxes in accordance with GAAP. As required by GAAP, we recognize the financial statement benefit of tax positions only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. As of December 31, 2017 we had no unrecognized tax benefits. We are primarily subject to United States, Minnesota, Nebraska and Iowa income taxes. Tax years subsequent to 2013 remain open to examination by federal and state tax authorities. Our policy is to recognize interest and penalties related to income tax matters as income tax expense. As of December 31, 2017 and 2016, we had no interest or penalty accrued that related to income tax matters. The differences between the statutory federal tax rate and the effective tax rate were as follows: 2017 2016 Statutory Tax Rate 35.00 % 35.00 % Effect of: Federal Rate Change (49.68) - Surtax Exemption (0.80) (1.00) State Income Taxes Net of Federal Tax Benefit 7.21 7.60 Permanent Differences and Other, Net (0.51) - Effective tax rate (8.78) % 41.60 % Deferred income taxes and unrecognized tax benefits reflected in our consolidated balance sheets are summarized as follows: 2017 2016 Deferred Tax (Assets) / Liabilities Accrued Expenses $ (425,040) $ (636,600) Other (47,184) (93,639) Fixed Assets 6,560,307 10,143,817 Intangible Assets 3,790,342 6,335,077 Deferred Compensation (196,826) (306,810) Partnership Basis 637,090 872,586 Total Deferred Tax Liability $ 10,318,689 $ 16,314,431 On December 22, 2017, the President of the United States signed into law, the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant changes in United States tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks and a repeal of the corporate alternative minimum tax. The legislation reduced the United States corporate tax rate from the current rate of 35% to 21%. As a result of the enacted law, the Company was required to revalue deferred tax assets and liabilities at the 21% rate. This revaluation resulted in a benefit of $4,549,332 to income tax expense in continuing operations and a corresponding reduction in the deferred tax liability. The other provisions of the Tax Cuts and Jobs Act did not have a material impact on the 2017 consolidated financial statements. |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | NOTE 7 - RETIREMENT PLAN We have a 401(k) employee savings plan in effect for employees who meet age and service requirements. Our contributions to our 401(k) employee savings plan were $505,292 and $511,751 in 2017 and 2016. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 8 – COMMITMENTS AND CONTINGENCIES We are involved in certain contractual disputes in the ordinary course of business. We do not believe the ultimate resolution of any of these existing matters will have a material adverse effect on our financial position, results of operations or cash flows. We did not experience any changes to material contractual obligations in the year ended December 31, 2017. Our capital budget for 2018 is approximately $8.5 million and will be financed through internally generated funds. |
NONCASH INVESTING ACTIVITIES
NONCASH INVESTING ACTIVITIES | 12 Months Ended |
Dec. 31, 2017 | |
Noncash Investing Activities [Abstract] | |
Noncash Investing Activities [Text Block] | NOTE 9 - NONCASH INVESTING ACTIVITIES Noncash investing activities included $453,506 and $455,166 during the years ended December 31, 2017 and 2016. These activities related to plant and equipment additions placed in service and are recorded in our accounts payable at year-end. |
OTHER INVESTMENTS
OTHER INVESTMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Other Investments [Abstract] | |
Other Investments [Text Block] | NOTE 10 – OTHER INVESTMENTS We are a co-investor with other rural telephone companies in several partnerships and limited liability companies. These joint ventures make it possible to offer services to customers, including digital video services and fiber-optic transport services that we would have difficulty offering on our own. These joint ventures also make it possible to invest in new technologies with a lower level of financial risk. We recognize income and losses from these investments on the equity method of accounting. For a listing of our investments, see Note 14 – “Segment Information” to the Consolidated Financial Statements of this Annual Report on Form 10-K. |
GUARANTEES
GUARANTEES | 12 Months Ended |
Dec. 31, 2017 | |
Guarantees [Abstract] | |
Guarantees [Text Block] | NOTE 11 - GUARANTEES NU Telecom has guaranteed a ten-year loan owed by Fibercomm, LC maturing on September 30, 2021. As of December 31, 2017, we have recorded a liability of $158,043 in connection with the guarantee on this loan. This guarantee may be exercised if FiberComm, LC does not make its required payments on this note. |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | NOTE 12 – DEFERRED COMPENSATION As of December 31, 2017 and 2016, we have recorded other deferred compensation relating to executive compensation payable to certain former executives of past acquisitions. |
RESTRICTED STOCK UNITS
RESTRICTED STOCK UNITS | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Stock Unit [Abstract] | |
Restricted Stock Unit [Text Block] | NOTE 13 – RESTRICTED STOCK UNITS On February 24, 2017, our Board of Directors adopted the New Ulm Telecom, Inc. 2017 Omnibus Stock Plan (2017 Plan) effective May 25, 2017. The shareholders of the Company approved the plan at the May 25, 2017 Annual Meeting of Shareholders. The purpose of the 2017 Plan was to enable NU Telecom and its subsidiaries to attract and retain talented and experienced people, closely link employee compensation with performance realized by shareholders, and reward long-term results with long-term compensation. The plan enables us to grant stock incentive awards to current and new employees, including officers, and to Board members and service providers. The 2017 Plan permits stock incentive awards in the form of options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other awards in stock or cash. The 2017 Plan permits the issuance of up to 625,000 shares of our Common Stock in any of the above stock awards. On July 25, 2017, our Board of Directors granted 6,077 shares of restricted stock units in the Common Stock of the Company to its executive officers. We recognize share-based compensation expense for these restricted stock units over the vesting period of the restricted stock units, which was determined by our Board of Directors. The 2017 restricted stock units will vest on December 31, 2019, at which point, the executives will be able to receive Common Stock in the Company for the restricted stock units. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | NOTE 14 – SEGMENT INFORMATION We operate in the Telecom Segment and have no other significant business segments. The Telecom Segment consists of voice, data and video communication services delivered to the customer over our local communications network. No single customer accounted for a material portion of our consolidated revenues in any of the last two years. The Telecom Segment operates the following ILECs and CLECs and has investment ownership interests as follows: Telecom Segment ● ILECs: ▪ New Ulm Telecom, Inc., the parent company; ▪ Hutchinson Telephone Company, a wholly-owned subsidiary of NU Telecom; ▪ Peoples Telephone Company, a wholly-owned subsidiary of NU Telecom; ▪ Sleepy Eye Telephone Company, a wholly-owned subsidiary of NU Telecom; ▪ Western Telephone Company, a wholly-owned subsidiary of NU Telecom; ● CLECs: ▪ NU Telecom, located in Redwood Falls, Minnesota; ▪ Hutchinson Telecommunications, Inc., a wholly-owned subsidiary of HTC, located in Litchfield and Glencoe, Minnesota; ● Our investments and interests in the following entities include some management responsibilities: ▪ FiberComm, LC – 20.00% subsidiary equity ownership interest. FiberComm, LC is located in Sioux City, Iowa; ▪ Broadband Visions, LLC – 24.30% subsidiary equity ownership interest. BBV provides video headend and Internet services; ▪ Independent Emergency Services, LLC – 14.29% subsidiary equity ownership interest. IES is a provider of E-911 services to the State of Minnesota as well as a number of counties located in Minnesota; and ▪ SM Broadband, LLC – 12.50% subsidiary equity ownership interest. SMB provides network connectivity for regional businesses. |
TRANSACTIONS WITH EQUITY METHOD
TRANSACTIONS WITH EQUITY METHOD INVESTMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 15 – Transactions with equity method investments We receive and provide services to various partnerships and limited liability companies where we are an investor. Services received include digital video, special access and communications circuits. Services provided include Board of Director meeting attendance, labor, Internet help desk services and management services. Cost of services we receive from affiliated parties may not be the same as the costs of such services had they been obtained from different parties. Total revenues from transactions with affiliates were $1,145,557 and $1,105,201 for 2017 and 2016. Total expenses from transactions with affiliates were $482,916 and $505,572 for 2017 and 2016. |
BROADBAND GRANTS
BROADBAND GRANTS | 12 Months Ended |
Dec. 31, 2017 | |
Broadband Grants [Abstract] | |
Broadband Grants [Text Block] | NOTE 16 – BROADBAND GRANTS In December 2015, the Company was awarded a $244,125 broadband grant from the Minnesota Department of Employment and Economic Development. The grant provided up to 47.5% of the cost of building fiber connections to homes and businesses for improved high-speed internet in unserved or underserved communities and businesses in the Company’s service area. The Company will provide the remaining 52.5% matching funds. At December 31, 2017, the Company had received the full grant amount. In January 2017, the Company was awarded $1,889,968 in broadband grants from the Minnesota Department of Employment and Economic Development. The grants provided up to 45% of the cost of building fiber connections to homes and businesses for improved high-speed internet in unserved or underserved communities and businesses in the Company’s service area. The Company will provide the remaining 55% matching funds. At December 31, 2017, the Company has received $51,224. These projects will be completed in 2018. In November 2017, the Company was awarded $1,727,998 in broadband grants from the Minnesota Department of Employment and Economic Development. The grants provided up to 42.6% of the cost of building fiber connections to homes and businesses for improved high-speed internet in unserved or underserved communities and businesses in the Company’s service area. The Company will provide the remaining 57.4% matching funds. Construction and expenditures for these projects will begin in 2018. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 17 -- SUBSEQUENT EVENTS NU Telecom’s Board of Directors has declared a regular quarterly dividend on our common stock of $.10 per share, payable on March 15, 2018 to stockholders of record at the close of business on March 5, 2018. On February 23, 2018, NU Telecom announced that it had entered into a Stock Purchase Agreement dated February 22, 2018 to purchase Scott-Rice Telephone Company (Scott-Rice) from Allstream Business U.S., LLC, an affiliate of Zayo Group Holdings, Inc. (Zayo) for approximately $42 million in cash. NU Telecom intends to finance the acquisition from existing capital resources and proceeds from a credit facility with its principal lender CoBank. Scott-Rice provides phone, video and internet services with over 18,000 connections, serving the communities of Prior Lake, Savage, Elko and New Market, Minnesota. The transaction is subject to customary closing conditions and regulatory approvals, but is not subject to New Ulm shareholder approval. The transaction has been unanimously approved by the Boards of Directors of New Ulm and Zayo. New Ulm expects the transaction to close during the second quarter of 2018. We have evaluated and disclosed subsequent events through the filing date of this Annual Report on Form 10-K. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description Of Business [Policy Text Block] | Description of Business NU Telecom is a diversified communications company headquartered in New Ulm, Minnesota with more than 110 years of experience in the local telephone exchange and telecommunications business. Our principal line of business is the operation of five local telephone companies and the operation of two CLEC telephone companies. Our businesses consist of connecting customers to our state-of-the-art, fiber-rich communications network, providing managed services, switched service and dedicated private lines, connecting customers to long distance service providers and providing many other services associated with our company. Our businesses also provide IPTV, CATV, Internet access services, including high-speed broadband access, and long distance service. We also install and maintain communications systems to the areas in and around our service territories in southern Minnesota and northern Iowa. |
Basis Of Presentation And Principles Of Consolidation [Policy Text Block] | Basis of Presentation and Principles of Consolidation Our accounting policies conform with GAAP and, where applicable, to the accounting principles as prescribed by federal and state telephone utility regulatory authorities. We presently give accounting recognition to the actions of regulators where appropriate in preparing general purpose financial statements for most public utilities. In general, the type of regulation covered by this statement permits rates (prices) for some services to be set at levels intended to recover the estimated costs of providing regulated services or products, including the cost of capital (interest costs and a provision for earnings on stockholders’ investments). Our consolidated financial statements report the financial condition and results of operations for NU Telecom and its subsidiaries in one business segment: the Telecom Segment. Inter-company transactions have been eliminated from the consolidated financial statements. |
Classification Of Costs And Expenses [Policy Text Block] | Classification of Costs and Expenses Cost of services includes all costs related to delivery of communication services and products. These operating costs include all costs of performing services and providing related products including engineering, network monitoring and transportation costs. Selling, general and administrative expenses include direct and indirect selling expenses, customer service, billing and collections, advertising and all other general and administrative costs associated with the operations of the business. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of our consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities. The estimates and assumption used in the accompanying consolidated financial statements are based on our management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from those estimates and assumptions. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery of the product has occurred or a service has been provided, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. Revenues are earned from our customers primarily through the connection to our networks, digital and commercial TV programming, Internet services (high-speed broadband), and hosted and managed services. Revenues for these services are billed based on set rates for monthly service or based on the amount of time the customer is utilizing our facilities. The revenue for these services is recognized when the service is rendered. Revenues earned from IXCs accessing our network are based on the utilization of our network by these carriers as measured by minutes of use on the network or special access to the network by the individual carriers. Revenues are billed at tariffed access rates for both interstate and intrastate calls. Revenues for these services are recognized based on the period the access is provided. Interstate access rates were established by a nationwide pooling of companies known as NECA. The FCC established NECA in 1983 to develop and administer interstate access service rates, terms and conditions. Revenues were pooled and redistributed on the basis of a company's actual or average costs. There has been a change in the composition of interstate access charges in recent years, shifting more of the charges to the end user and reducing the amount of access charges paid by the IXC’s. We believe this trend will continue. New Ulm’s and SETC’s settlements from the pools were based on their actual costs to provide service, while the settlements for NU Telecom subsidiaries – WTC, PTC and HTC were based on nationwide average schedules. Access revenues for New Ulm and SETC included an estimate of a cost study each year that was trued-up subsequent to the end of any given year. Our management believes the estimates included in our preliminary cost study were reasonable. We cannot predict the future impact that industry or regulatory changes will have on interstate access revenues. Intrastate access rates are filed with state regulatory commissions in Minnesota and Iowa. A-CAM The FUSF was established as part of the TA96 and provides subsidies to telecommunications providers as means of increasing the availability and affordability of advanced telecommunications services. In 2011, significant reform was introduced, including the creation of the CAF, to help modernize the FUSF and promote support of these telecom services in the nation’s high-cost areas. In 2016, the FCC announced additional reform to further transition the CAF from supporting the provision of voice services to the provision of broadband services. On March 30, 2016, the FCC issued the 2016 Order that adopts the following changes to the FUSF for rate-of-return carriers: ● Establishes a voluntary cost model; ● Creates specific broadband deployment obligations; ● Provides a mechanism for support of broadband-only deployment; ● Gradually reduces the authorized rate-of-return from 11.25 percent to 9.75 percent; ● Eliminates support in those local areas served by unsubsidized competitors; ● Establishes “glide-path” transition periods for all the new changes; and ● Maintains the $2 billion budget established by the 2011 Transformation Order. While the 2011 FUSF Transformation Order established CAF Phase I and CAF Phase II as high-cost support mechanisms for the price-cap carriers (i.e., the larger, national LECs such as Verizon and AT&T), it was not as specific about how subsidies would change for the rate-of-return carriers (i.e., the smaller LECs, including all rural LECs). In contrast, the 2016 Order focuses on the rate-of-return carriers, announces specific changes to existing funding mechanisms as well as a new funding mechanism, and provides rural telecommunications providers with greater certainty about future support. One of the major changes introduced by the 2016 Order is the creation of the A-CAM, a new CAF support mechanism for rate-of-return carriers. Utilization of the A-CAM is voluntary; and rate-of-return carriers may instead choose to continue relying on the legacy support mechanism known as ICLS, but now modified and renamed CAF-BLS. Each carrier must decide which support mechanism to elect, and must choose one or the other, per state. In our Form 10-Q for the quarter ended September 30, 2016, NU Telecom disclosed that we had elected the A-CAM for our Minnesota and Iowa operations, replacing our former ICLS. NU Telecom will receive A-CAM support for a period of ten years in exchange for meeting defined broadband build-out requirements. At the time of NU Telecom’s election, the FCC had not yet determined the final award numbers. Consistent with the stated disclosure in our Form 10-Q, NU Telecom notified the FCC that we would continue to elect the A-CAM program. Under the report that accompanied the FCC December 20, 2016 Public Notice, NU-Telecom would annually receive (i) $391,896 for our Iowa operations and (ii) $6,118,567 for our Minnesota operations. The Company will use the annual $6.5 million that we receive through the A-CAM program to meet our defined broadband build-out obligations. The A-CAM payments will replace the Company’s former ICLS payments. In 2016 NU Telecom received $1,965,727 under the former ICLS program. We derive revenues from the sale, installation and servicing of communication systems. In accordance with GAAP, these deliverables are accounted for separately. We recognize revenue from customer contracts for sales and installations using the completed-contract method, which recognizes income when the contract is substantially complete. We recognize rental revenues over the rental period. |
Receivables, Policy [Policy Text Block] | Receivables As of December 31, 2017 and 2016, our consolidated receivables totaled $1,944,501 and $2,232,571, net of the allowance for doubtful accounts. We believe our receivables as of December 31, 2017 and 2016 are recorded at their fair value. As there may be exposure or risk with receivables, we routinely monitor our receivables and adjust the allowance for doubtful accounts when events occur that may potentially affect the collection of our receivables. |
Allowance For Doubtful Accounts [Policy Text Block] | Allowance for Doubtful Accounts We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. In making the determination of the appropriate allowance for doubtful accounts, we consider specific accounts, historical write-offs, changes in customer relationships, credit worthiness and concentrations of credit risk. Specific accounts receivable are written off once a determination is made that the account is uncollectible. Additional allowances may be required if the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments. The activity in our allowance for doubtful accounts includes the following: Year Ended December 31 2017 2016 Balance at beginning of year $ 43,200 $ 160,000 Additions charged to costs and expenses 226,479 63,227 Accounts written off (186,679) (180,027) Balance at end of year $ 83,000 $ 43,200 |
Inventory, Policy [Policy Text Block] | Inventories Inventory includes parts, materials and supplies stored in our warehouses to support basic levels of service and maintenance as well as scheduled capital projects and equipment awaiting configuration for customers. Inventory also includes (i) parts and equipment shipped directly from vendors to customer locations while in transit and (ii) parts and equipment returned from customers that are being returned to vendors for credit. Our inventory value as of December 31, 2017 and 2016 was $2,075,199 and $1,860,157. We value inventory using the lower of cost or market method. Similar to our allowance for doubtful accounts, we make estimates related to the valuation of inventory. As of December 31, 2017 and 2016, we had no inventory reserve. We adjust our inventory carrying value for estimated obsolescence or unmarketable inventory to the estimated market value based upon assumptions about future demand and market conditions. As market and other conditions change, we may establish additional inventory reserves at a time when the facts that give rise to a lower value are warranted. We use the first-in, first-out method of inventory costing for our non-retail inventory. We use the average cost method of inventory costing for our retail inventory. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements We have adopted the rules prescribed under GAAP for our financial assets and liabilities. GAAP includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market–corroborated inputs that are derived principally from or corroborated by observable market data. Level 3: Inputs are derived from valuation techniques where one or more significant inputs or value drivers are unobservable. We have used financial derivative instruments to manage our overall cash flow exposure to fluctuations in interest rates. We accounted for derivative instruments in accordance with GAAP that requires derivative instruments to be recorded on the balance sheet at fair value. Changes in fair value of derivative instruments must be recognized in earnings unless specific hedge accounting criteria are met, in which case, the gains and losses are included in other comprehensive income rather than in earnings. We have entered into an IRSA with our lender CoBank to manage our cash flow exposure to fluctuations in interest rates. This instrument is designated as a cash flow hedge and is effective at mitigating the risk of fluctuations on interest rates in the market place. Any gains or losses related to changes in the fair value of this derivative is accounted for as a component of accumulated other comprehensive income (loss) for as long as the hedge remains effective. The fair value of our IRSA is discussed in Note 5 – “Interest Rate Swaps” to the Consolidated Financial Statements of this Annual Report on Form 10-K. The fair value of our swap agreement was determined based on Level 2 inputs. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant and Equipment We record impairment losses on long-lived assets used in operations when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. In assessing the recoverability of long-lived assets, we compare the carrying value to the undiscounted future cash flows the assets are expected to generate. If the total of the undiscounted future cash flows is less than the carrying amount of the assets, we would write down those assets based on the excess of the carrying amount over the fair value of the assets. Fair value is generally determined by calculating the discounted future cash flows expected from those assets. Changes in these estimates could have a material adverse effect on the assessment of long-lived assets, thereby requiring a write-down of the assets. Write-downs of long-lived assets are recorded as impairment charges and are a component of operating expenses. We have reviewed our long-lived assets and concluded that no impairment charge on our long-lived assets is necessary. We use the group life method (mass asset accounting) to depreciate the assets of our telephone companies. Telephone plant acquired in a given year is grouped into similar categories and depreciated over the remaining estimated useful life of the group. When an asset is retired, both the asset and the accumulated depreciation associated with that asset are removed from the books. Due to rapid changes in technology, selecting the estimated economic life of telecommunications plant and equipment requires a significant amount of judgment. We periodically review data on expected utilization of new equipment, asset retirement activity and net salvage values to determine adjustments to our depreciation rates. We have not made any significant changes to the lives of these assets in the two year period ended December 31, 2017. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Goodwill and Intangible Assets We amortize our definite-lived intangible assets over their estimated useful lives. Customer relationships are amortized over fourteen to fifteen years, regulatory rights are amortized over fifteen years and trade names are amortized over three to five years. Intangible assets with finite lives are amortized over their respective estimated useful lives. In accordance with GAAP, goodwill and intangible assets with indefinite useful lives are not amortized, but tested for impairment at least annually. See Note 3 – “Goodwill and Intangibles” to the Consolidated Financial Statements of this Annual Report on Form 10-K for a more detailed discussion of the intangible assets and goodwill. Our goodwill balance was $39,805,349 as of December 31, 2017 and 2016. In the fourth quarter of 2017 and 2016 we completed our annual impairment tests for existing acquired goodwill. This testing resulted in no impairment charges to goodwill at December 31, 2017 and 2016. |
Investments And Other Assets [Policy Text Block] | Investments and Other Assets We are a co-investor with other rural telephone companies in several partnerships and limited liability companies. These joint ventures make it possible to offer services to customers, including digital video services and fiber-optic transport services that we would have difficulty offering on our own. These joint ventures also make it possible to invest in new technologies with a lower level of financial risk. We use the equity method of accounting for these investments that reflects original cost and recognition of our share of the net income or losses from the respective operations. See Note 14 – “Segment Information” to the Consolidated Financial Statements of this Annual Report on Form 10-K for a listing of our investments. Long-term investments in other companies that are not intended for resale or are not readily marketable are valued at the lower of cost or net realizable value. |
Other Financial Instruments [Policy Text Block] | Other Financial Instruments Other Investments – It is difficult to estimate a fair value for equity investments in companies carried on the equity or cost basis due to a lack of quoted market prices. We conducted an evaluation of our investments in all of our companies in connection with the preparation of our audited financial statements at December 31, 2017. We believe the carrying value of our investments is not impaired. Debt – We estimate the fair value of our long-term debt based on the discounted future cash flows we expect to pay using current rates of borrowing for similar types of debt. Fair value of the debt approximates carrying value. Other Financial Instruments – Our financial instruments also include cash equivalents, trade accounts receivable and accounts payable where the current carrying amounts approximate fair market value. |
Advertising Costs, Policy [Policy Text Block] | Advertising Expense Advertising is expensed as incurred. Advertising expense charged to operations was $255,150 and $251,939 in 2017 and 2016. |
Interest During Construction [Policy Text Block] | Interest During Construction We include an average cost of debt for the construction of plant in our communications plant accounts. |
Income Tax, Policy [Policy Text Block] | Income Taxes We account for income taxes in accordance with GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements and operating and tax credit carryforwards. Deferred tax assets and liabilities are determined using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We recognize interest and penalties related to income tax matters as income tax expense. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period. GAAP requires us to recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. See Note 6 – “Income Taxes” to the Consolidated Financial Statements of this Annual Report on Form 10-K for additional information regarding income taxes. |
Collection Of Taxes From Customers [Policy Text Block] | Collection of Taxes from Customers Sales, excise and other taxes are imposed on most of our sales to nonexempt customers. We collect these taxes from our customers and remit the entire amounts to governmental authorities. Our accounting policies dictate that we exclude these taxes collected and remitted from our revenues and expenses. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash investments and receivables. We deposit some of our cash investments in high credit quality financial institutions accounts which, at times, may exceed federally insured limits. We have not experienced any losses in these accounts and do not believe we are exposed to any significant credit risk. Concentrations of credit risk with respect to trade receivables are limited due to our large number of customers. |
Earnings And Dividends Per Share [Policy Text Block] | Earnings And Dividends Per Share Basic earnings per share (EPS) are computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Our basic and diluted EPS are based on our weighted average number of shares outstanding of 5,153,579 and 5,133,548 for the periods ended December 31, 2017 and 2016. Dividends per share have been declared quarterly by the NU Telecom Board of Directors. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Developments In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2017-09 (ASU 2017-09), “Scope of Modification Accounting).” ASU 2017-09 clarifies the modification accounting guidance for stock compensation included in Topic 718, “Compensation – Stock Compensation.” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award must be accounted for as a modification under Topic 718. The new guidance is effective prospectively for annual and interim periods beginning after December 15, 2017, with early adoption permitted. We plan to adopt this update effective January 1, 2018 and will apply this guidance to applicable transactions after adoption date. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and other (Topic 350).” ASU 2017-04 simplifies the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. The amendments in this update should be applied on a prospective basis. ASU 2017-04 is effective for the Company beginning January 1, 2021. Early adoption is permitted. Management is evaluating the impact the adoption of ASU 2017-04 will have on the Company’s financial statements (if any). In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires entities to use a new forward-looking, expected loss model to estimate credit losses. It also requires additional disclosures relating to the credit quality of trade and other receivables, including information relating to management’s estimate of credit allowances. NU Telecom is required to adopt ASU 2016-13 on January 1, 2020. Early adoption as of January 1, 2019 is permitted. We are evaluating the effects that adoption of ASU 2016-13 will have on our financial position, results of operations and disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. This change will result in an increase to recorded assets and liabilities on lessees’ financial statements, as well as changes in the categorization of rental costs, from rent expense to interest and depreciation expense. Other effects may occur depending on the types of leases and the specific terms of them utilized by particular lessees. The ASU is effective for the Company on January 1, 2019, and early application is permitted. Modified retrospective application is required. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606) (Accounting Standards Codification (ASC) 606),” and has since amended the standard with ASU 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” ASU 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” ASU 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients,” and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” These standards replace existing revenue recognition rules with a single comprehensive model to use in accounting for revenue arising from contracts with customers. These standards require an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. As amended, the new standard is effective for the Company on January 1, 2018, using either a retrospective basis or a modified retrospective basis with early adoption permitted. We adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective method for open contracts. Under this transition method, the accounting change is applied to the current period with a cumulative effect adjustment recorded to opening retained earnings. Previously reported results will not be restated under this transition method. The adoption of this new standard will result in additional disclosures around the nature and timing of the Company’s performance obligations, deferred revenue contract liabilities, deferred contract cost assets, as well as significant judgements and practical expedients used by the Company in applying the new five-step revenue model. The Company has implemented new processes and internal controls to enable the prepartation of financial information upon adoption. We have reviewed all other significant newly issued accounting pronouncements and determined they are either not applicable to our business or that no material effect is expected on our financial position and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Allowance for Credit Losses on Financing Receivables [Table Text Block] | Year Ended December 31 2017 2016 Balance at beginning of year $ 43,200 $ 160,000 Additions charged to costs and expenses 226,479 63,227 Accounts written off (186,679) (180,027) Balance at end of year $ 83,000 $ 43,200 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | 2017 2016 Telecommunications Plant: Land $ 494,082 $ 494,082 Buildings 8,983,386 8,947,763 Other Support Assets 13,963,236 12,819,431 Central Office and Circuit Equipment 48,266,084 47,429,580 Cable and Wire Facilities 52,123,759 50,845,827 Other Plant and Equipment 404,883 404,883 Plant Under Construction 3,399,005 1,629,582 127,634,435 122,571,148 Other Property 17,750,364 16,801,894 Video Plant 10,440,379 10,321,263 Total Property, Plant and Equipment $ 155,825,178 $ 149,694,305 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | December 31, 2017 December 31, 2016 Gross Carrying Amount Gross Carrying Amount Useful Lives Accumulated Amortization Accumulated Amortization Definite-Lived Intangible Assets Customers Relationships 14-15 yrs $ 29,278,445 $ 17,354,646 $ 29,278,445 $ 15,266,227 Regulatory Rights 15 yrs 4,000,000 2,666,643 4,000,000 2,399,979 Trade Name 3-5 yrs 570,000 570,000 570,000 456,000 Indefinitely-Lived Intangible Assets Video Franchise 3,000,000 - 3,000,000 - Total $ 36,848,445 $ 20,591,289 $ 36,848,445 $ 18,122,206 Net Identified Intangible Assets $ 16,257,156 $ 18,726,239 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2018 $ 2,355,083 2019 $ 2,355,083 2020 $ 2,355,083 2021 $ 2,355,038 2022 $ 983,688 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | 2017 2016 Secured seven-year reducing credit facility to CoBank, ACB, in $ 27,575,000 $ 30,275,000 Secured seven-year revolving credit facility of up to $9,000,000 to - 1,634,778 Less: Unamortized Loan Fees (236,713) (295,892) 27,338,287 31,613,886 Less: Amount due within one year 3,375,000 3,375,000 Less: Current Portion of Unamortized Loan Fees (59,178) (59,178) Total Long Term Debt $ 24,022,465 $ 28,298,064 |
Schedule of Maturities of Long-term Debt [Table Text Block] | 2018 $ 3,375,000 2019 $ 2,700,000 2020 $ 2,700,000 2021 $ 18,800,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | 2017 2016 Taxes currently payable Federal $ 4,055,693 $ 2,582,782 State 1,136,733 685,800 Deferred Income Taxes (1,446,409) (1,235,442) Deferred Tax Adjustment due to Federal Tax Rate Change (4,549,332) - Total Income Tax Expense (Benefit) $ (803,315) $ 2,033,140 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 2017 2016 Statutory Tax Rate 35.00 % 35.00 % Effect of: Federal Rate Change (49.68) - Surtax Exemption (0.80) (1.00) State Income Taxes Net of Federal Tax Benefit 7.21 7.60 Permanent Differences and Other, Net (0.51) - Effective tax rate (8.78) % 41.60 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 2017 2016 Deferred Tax (Assets) / Liabilities Accrued Expenses $ (425,040) $ (636,600) Other (47,184) (93,639) Fixed Assets 6,560,307 10,143,817 Intangible Assets 3,790,342 6,335,077 Deferred Compensation (196,826) (306,810) Partnership Basis 637,090 872,586 Total Deferred Tax Liability $ 10,318,689 $ 16,314,431 |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Number of Reportable Segments | 1 | |
Proceeds From A-CAM Program | $ 6,500,000 | |
Proceeds From ICLS Program | $ 1,965,727 | |
Receivables, Net, Current | 1,944,501 | 2,232,571 |
Inventory, Net | 2,075,199 | 1,860,157 |
Goodwill | 39,805,349 | 39,805,349 |
Advertising Expense | $ 255,150 | $ 251,939 |
Weighted Average Number of Shares Outstanding, Basic and Diluted (in Shares) | shares | 5,153,579 | 5,133,548 |
lowa Operations [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Receivable From A-CAM Program | $ 391,896 | |
Minnesota Operation [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Receivable From A-CAM Program | $ 6,118,567 | |
Customer Relationships [Member] | Minimum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 14 years | |
Customer Relationships [Member] | Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Regulatory Rights [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Trade Names [Member] | Minimum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Trade Names [Member] | Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Allowance for doubtful accounts - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts [Abstract] | ||
Balance at beginning of year | $ 43,200 | $ 160,000 |
Additions charged to costs and expenses | 226,479 | 63,227 |
Accounts written off | (186,679) | (180,027) |
Balance at end of year | $ 83,000 | $ 43,200 |
PROPERTY, PLANT AND EQUIPMENT33
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
PROPERTY, PLANT AND EQUIPMENT (Details) [Line Items] | ||
Depreciation (in Dollars) | $ 7,183,671 | $ 7,294,678 |
Public Utilities, Property, Plant and Equipment, Disclosure of Composite Depreciation Rate for Plants in Service | 4.70% | 4.90% |
Property, Plant and Equipment, Other Types [Member] | Minimum [Member] | ||
PROPERTY, PLANT AND EQUIPMENT (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Property, Plant and Equipment, Other Types [Member] | Maximum [Member] | ||
PROPERTY, PLANT AND EQUIPMENT (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 25 years | |
Video Plant [Member] | Minimum [Member] | ||
PROPERTY, PLANT AND EQUIPMENT (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Video Plant [Member] | Maximum [Member] | ||
PROPERTY, PLANT AND EQUIPMENT (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 25 years |
PROPERTY, PLANT AND EQUIPMENT34
PROPERTY, PLANT AND EQUIPMENT (Details) - Property, plant and equipment - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Telecommunications Plant: | ||
Telecommunications Plant | $ 127,634,435 | $ 122,571,148 |
Other Property | 17,750,364 | 16,801,894 |
Video Plant | 10,440,379 | 10,321,263 |
Total Property, Plant and Equipment | 155,825,178 | 149,694,305 |
Land [Member] | ||
Telecommunications Plant: | ||
Telecommunications Plant | 494,082 | 494,082 |
Building [Member] | ||
Telecommunications Plant: | ||
Telecommunications Plant | 8,983,386 | 8,947,763 |
Other Support Assets [Member] | ||
Telecommunications Plant: | ||
Telecommunications Plant | 13,963,236 | 12,819,431 |
Central Office and Circuit Equipment [Member] | ||
Telecommunications Plant: | ||
Telecommunications Plant | 48,266,084 | 47,429,580 |
Cable and Wire Facilities [Member] | ||
Telecommunications Plant: | ||
Telecommunications Plant | 52,123,759 | 50,845,827 |
Other Plant and Equipment [Member] | ||
Telecommunications Plant: | ||
Telecommunications Plant | 404,883 | 404,883 |
Plant Under Construction [Member] | ||
Telecommunications Plant: | ||
Telecommunications Plant | $ 3,399,005 | $ 1,629,582 |
GOODWILL AND INTANGIBLES (Detai
GOODWILL AND INTANGIBLES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 39,805,349 | $ 39,805,349 |
Amortization of Intangible Assets | $ 2,469,083 | $ 2,469,256 |
GOODWILL AND INTANGIBLES (Det36
GOODWILL AND INTANGIBLES (Details) - Components of Identified Intangible Assets - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 36,848,445 | $ 36,848,445 |
Accumulated Amortization | 20,591,289 | 18,122,206 |
Net Identified Intangible Assets | 16,257,156 | 18,726,239 |
Customer Relationships [Member] | ||
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | 29,278,445 | 29,278,445 |
Accumulated Amortization | $ 17,354,646 | 15,266,227 |
Regulatory Rights [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 15 years | |
Gross Carrying Amount | $ 4,000,000 | 4,000,000 |
Accumulated Amortization | 2,666,643 | 2,399,979 |
Trade Names [Member] | ||
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | 570,000 | 570,000 |
Accumulated Amortization | 570,000 | 456,000 |
Franchise Rights [Member] | ||
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | 3,000,000 | 3,000,000 |
Accumulated Amortization | ||
Minimum [Member] | Customer Relationships [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 14 years | |
Minimum [Member] | Trade Names [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 3 years | |
Maximum [Member] | Customer Relationships [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 15 years | |
Maximum [Member] | Trade Names [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 5 years |
GOODWILL AND INTANGIBLES (Det37
GOODWILL AND INTANGIBLES (Details) - Summary of Future Amortization Expense | Dec. 31, 2017USD ($) |
Summary of Future Amortization Expense [Abstract] | |
2,018 | $ 2,355,083 |
2,019 | 2,355,083 |
2,020 | 2,355,083 |
2,021 | 2,355,038 |
2,022 | $ 983,688 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($) | Mar. 31, 2016 | |
London Interbank Offered Rate (LIBOR) [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | |
Interest Rate Swap [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Aggregate Indebtedness | $ 14,000,000 | |
Secured Debt [Member] | RX0583-T2A [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 9,000,000 | |
Debt Instrument, Frequency of Periodic Payment | monthly | |
Debt Instrument, Maturity Date | Dec. 31, 2021 | |
Long-term Line of Credit | $ 0 | |
Secured Debt [Member] | RX0583-T3A [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Debt Instrument, Frequency of Periodic Payment | monthly | |
Debt Instrument, Maturity Date | Dec. 31, 2021 | |
Debt Instrument, Face Amount | $ 35,000,000 | |
Debt Instrument, Periodic Payment, Principal | 675,000 | |
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 16,100,000 | |
Secured Debt [Member] | Interest Rate Swap [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Debt, Weighted Average Interest Rate | 4.07% | |
Long-term Debt, Gross | $ 22,600,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | 9,000,000 | |
Secured Long-term Debt, Noncurrent | $ 13,600,000 | |
Secured Credit Facility [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Debt Instrument, Covenant Description | Our loan agreements include restrictions on our ability to pay cash dividends to our stockholders. However, we are allowed to pay dividends (a) (i) in an amount up to $2,100,000 in any year if our “Total Leverage Ratio,” that is, the ratio of our “Indebtedness” to “EBITDA” – as defined in the loan documents, is greater than 2.50 to 1.00, and (ii) in any amount if our Total Leverage Ratio is less than 2.50 to 1.00, and (b) in either case, if we are not in default or potential default under the loan agreements | |
Debt Instrument, Threshold Amount, Dividends | $ 2,100,000 | |
Ratio of Indebtedness to Net Capital | 1.47 | |
Debt Instrument, Covenant Compliance | Our credit facility requires us to comply with specified financial ratios. These financial ratios include total leverage ratio, debt service coverage ratio, equity to total assets ratio and fixed coverage ratio | |
Secured Credit Facility [Member] | Maximum [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Ratio of Indebtedness to Net Capital | 2.50 | |
Secured Credit Facility [Member] | Interest Rate Swap [Member] | ||
LONG-TERM DEBT (Details) [Line Items] | ||
Debt, Weighted Average Interest Rate | 3.72% |
LONG-TERM DEBT (Details) - Long
LONG-TERM DEBT (Details) - Long-term debt - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Less: Unamortized Loan Fees | $ (236,713) | $ (295,892) |
Total Long Term Debt | 27,338,287 | 31,613,886 |
Less: Amount due within one year | 3,375,000 | 3,375,000 |
Less: Current Portion of Unamortized Loan Fees | (59,178) | (59,178) |
Total Long Term Debt | 24,022,465 | 28,298,064 |
Seven-Year, Quarterly Installments $675,000 Through December 31, 2021 [Member] | Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long Term Debt | 27,575,000 | 30,275,000 |
Seven-Year, Revolving Credit Facility Of Up To $9,000,000 Through December 31, 2021 [Member] | Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long Term Debt | $ 1,634,778 |
LONG-TERM DEBT (Details) - Lo40
LONG-TERM DEBT (Details) - Long-term debt (Parentheticals) - Secured Debt [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Seven-Year, Quarterly Installments $675,000 Through December 31, 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Maturity period | 7 years | 7 years |
Quarterly Installments | $ 675,000 | $ 675,000 |
Seven-Year, Revolving Credit Facility Of Up To $9,000,000 Through December 31, 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Maturity period | 7 years | 7 years |
Revolving Credit Facility | $ 9,000,000 | $ 9,000,000 |
LONG-TERM DEBT (Details) - Requ
LONG-TERM DEBT (Details) - Required principal payments | Dec. 31, 2017USD ($) |
Required principal payments [Abstract] | |
2,018 | $ 3,375,000 |
2,019 | 2,700,000 |
2,020 | 2,700,000 |
2,021 | $ 18,800,000 |
INTEREST RATE SWAPS (Details)
INTEREST RATE SWAPS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
INTEREST RATE SWAPS (Details) [Line Items] | ||
Derivative Liability, Noncurrent | $ 22,812 | |
Deferred Income Tax Expense (Benefit) | (1,446,409) | (1,235,442) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 20,135 | (13,580) |
Base Rate [Member] | ||
INTEREST RATE SWAPS (Details) [Line Items] | ||
Derivative, Variable Interest Rate | 1.22% | |
London Interbank Offered Rate (LIBOR) [Member] | ||
INTEREST RATE SWAPS (Details) [Line Items] | ||
Derivative, Variable Interest Rate | 2.50% | |
Secured Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
INTEREST RATE SWAPS (Details) [Line Items] | ||
Derivative, Variable Interest Rate | 3.25% | |
Interest Rate Swap [Member] | ||
INTEREST RATE SWAPS (Details) [Line Items] | ||
Aggregate Indebtedness | $ 14,000,000 | |
Derivative Liability, Noncurrent | 28,178 | 22,812 |
Deferred Income Tax Expense (Benefit) | 8,043 | 9,232 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 20,135 | $ 13,580 |
Interest Rate Swap [Member] | Secured Credit Facility [Member] | ||
INTEREST RATE SWAPS (Details) [Line Items] | ||
Debt, Weighted Average Interest Rate | 3.72% | |
Interest Rate Swap [Member] | Variable-rate Debt Through June 2018 [Member] | ||
INTEREST RATE SWAPS (Details) [Line Items] | ||
Long-term Debt, Gross | $ 14,000,000 | |
Interest Rate Swap Loan RX0583T3A [Member] | ||
INTEREST RATE SWAPS (Details) [Line Items] | ||
Derivative Instrument Maturity Date | Jun. 29, 2018 | |
Derivative, Notional Amount | $ 14,000,000 | |
Derivative Instrument Interest Rate Effective Percentage Description | 3.72% (LIBOR Rate of 1.22% plus 2.50% LIBOR Margin) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
INCOME TAXES (Details) [Line Items] | ||
Income Tax Examination Tax Positions Recognition Likelihood Threshold Percentage | 50.00% | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount (in Dollars) | $ (4,549,332) | |
Before December 22, 2017 [Member] | Internal Revenue Service (IRS) [Member] | ||
INCOME TAXES (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |
After December 22, 2017 [Member] | Internal Revenue Service (IRS) [Member] | ||
INCOME TAXES (Details) [Line Items] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
INCOME TAXES (Details) - Income
INCOME TAXES (Details) - Income taxes recorded - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Taxes currently payable | ||
Federal | $ 4,055,693 | $ 2,582,782 |
State | 1,136,733 | 685,800 |
Deferred Income Taxes | (1,446,409) | (1,235,442) |
Deferred Tax Adjustment due to Federal Tax Rate Change | (4,549,332) | |
Total Income Tax Expense (Benefit) | $ (803,315) | $ 2,033,140 |
INCOME TAXES (Details) - The di
INCOME TAXES (Details) - The differences between the statutory federal tax rate and the effective tax rate | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
The differences between the statutory federal tax rate and the effective tax rate [Abstract] | ||
Statutory Tax Rate | 35.00% | 35.00% |
Effect of: | ||
Federal Rate Change | (49.68%) | |
Surtax Exemption | (0.80%) | (1.00%) |
State Income Taxes Net of Federal Tax Benefit | 7.21% | 7.60% |
Permanent Differences and Other, Net | (0.51%) | |
Effective tax rate | (8.78%) | 41.60% |
INCOME TAXES (Details) - Deferr
INCOME TAXES (Details) - Deferred income taxes and unrecognized tax benefits - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Tax (Assets) / Liabilities | ||
Accrued Expenses | $ (425,040) | $ (636,600) |
Other | (47,184) | (93,639) |
Fixed Assets | 6,560,307 | 10,143,817 |
Intangible Assets | 3,790,342 | 6,335,077 |
Deferred Compensation | (196,826) | (306,810) |
Partnership Basis | 637,090 | 872,586 |
Total Deferred Tax Liability | $ 10,318,689 | $ 16,314,431 |
RETIREMENT PLAN (Details)
RETIREMENT PLAN (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 505,292 | $ 511,751 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Scenario, Forecast [Member] | |
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |
Capital Budget | $ 8.5 |
NONCASH INVESTING ACTIVITIES (D
NONCASH INVESTING ACTIVITIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Noncash Investing Activities [Abstract] | ||
Contribution of Property | $ 453,506 | $ 455,166 |
GUARANTEES (Details)
GUARANTEES (Details) | Dec. 31, 2017USD ($) |
Guarantees [Abstract] | |
Guaranty Liabilities | $ 158,043 |
RESTRICTED STOCK UNITS (Details
RESTRICTED STOCK UNITS (Details) - shares | Jul. 25, 2017 | Feb. 24, 2017 |
Restricted Stock Units (RSUs) [Member] | ||
RESTRICTED STOCK UNITS (Details) [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 6,077 | |
Share-based Compensation Arrangement by Share-based Payment Award, Vesting Date | Dec. 31, 2019 | |
2017 Plan [Member] | ||
RESTRICTED STOCK UNITS (Details) [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 625,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | Dec. 31, 2017 |
Fiber Comm LC [Member] | |
SEGMENT INFORMATION (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 20.00% |
Broadband Visions LLC [Member] | |
SEGMENT INFORMATION (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 24.30% |
Independent Emergency Services LLC [Member] | |
SEGMENT INFORMATION (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 14.29% |
SM Broadband LLC [Member] | |
SEGMENT INFORMATION (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 12.50% |
TRANSACTIONS WITH EQUITY METH53
TRANSACTIONS WITH EQUITY METHOD INVESTMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Revenue from Related Parties | $ 1,145,557 | $ 1,105,201 |
Related Party Transaction, Expenses from Transactions with Related Party | $ 482,916 | $ 505,572 |
BROADBAND GRANTS (Details)
BROADBAND GRANTS (Details) - USD ($) | Dec. 31, 2017 | Nov. 30, 2017 | Jan. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Broadband Grants [Abstract] | ||||||
Revenue from Grants (in Dollars) | $ 51,224 | $ 1,727,998 | $ 1,889,968 | $ 244,125 | $ 7,944,902 | $ 3,634,555 |
Grants, Percentage | 42.60% | 45.00% | 47.50% | |||
Grants, Percentage, Remaining Portion | 57.40% | 55.00% | 52.50% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 05, 2018 | Feb. 23, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SUBSEQUENT EVENTS (Details) [Line Items] | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.3950 | $ 0.3575 | ||
Subsequent Event [Member] | ||||
SUBSEQUENT EVENTS (Details) [Line Items] | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.10 | |||
Dividends Payable, Date to be Paid | Mar. 15, 2018 | |||
Subsequent Event [Member] | Scott-Rice [Member] | ||||
SUBSEQUENT EVENTS (Details) [Line Items] | ||||
Stock Purchased During Period, Value | $ 42 |