Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 09, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | ATN International, Inc. | |
Entity Central Index Key | 0000879585 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 15,993,769 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 171,483 | $ 191,836 |
Restricted cash | 1,071 | 1,071 |
Short-term investments | 5,280 | 393 |
Accounts receivable, net of allowances of $16.7 million and $16.5 million, respectively | 46,161 | 38,305 |
Inventory, materials and supplies | 6,239 | 6,305 |
Prepayments and other current assets | 30,910 | 37,855 |
Total current assets | 261,144 | 275,765 |
Fixed Assets: | ||
Property, plant and equipment | 1,201,404 | 1,188,916 |
Less accumulated depreciation | (581,606) | (562,064) |
Net fixed assets | 619,798 | 626,852 |
Telecommunication licenses, net | 93,686 | 93,686 |
Goodwill | 63,970 | 63,970 |
Customer relationships, net | 8,783 | 9,323 |
Operating lease right-of-use assets | 68,185 | |
Other assets | 47,264 | 37,708 |
Total assets | 1,162,830 | 1,107,304 |
Current Liabilities: | ||
Current portion of long-term debt | 4,688 | 4,688 |
Accounts payable and accrued liabilities | 72,394 | 80,873 |
Dividends payable | 2,719 | 2,720 |
Accrued taxes | 32,099 | 31,795 |
Current portion of operating lease liabilities | 8,351 | |
Advance payments and deposits | 21,066 | 20,574 |
Total current liabilities | 141,317 | 140,650 |
Deferred income taxes | 8,362 | 10,276 |
Operating lease liabilities | 58,835 | |
Other liabilities | 48,952 | 46,760 |
Long-term debt, excluding current portion | 85,380 | 86,294 |
Total liabilities | 342,846 | 283,980 |
Commitments and contingencies (Note 15) | ||
ATN International, Inc. Stockholders’ Equity: | ||
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.01 par value per share; 50,000,000 shares authorized; 17,294,690 and 17,274,215 shares issued, respectively, 15,993,920 and 16,002,699 shares outstanding respectively | 172 | 172 |
Treasury stock, at cost; 1,300,770 and 1,271,516 shares, respectively | (50,116) | (48,547) |
Additional paid-in capital | 183,079 | 181,778 |
Retained earnings | 559,319 | 563,593 |
Accumulated other comprehensive income | (1,433) | (1,609) |
Total ATN International, Inc. stockholders’ equity | 691,021 | 695,387 |
Non-controlling interests | 128,963 | 127,937 |
Total equity | 819,984 | 823,324 |
Total liabilities and equity | $ 1,162,830 | $ 1,107,304 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 16.7 | $ 16.5 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
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) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,294,690 | 17,274,215 |
Common stock, shares outstanding | 15,993,920 | 16,002,699 |
Treasury stock, shares | 1,300,770 | 1,271,516 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUE: | ||
Total revenue | $ 103,300 | $ 104,475 |
OPERATING EXPENSES (excluding depreciation and amortization unless otherwise indicated): | ||
Termination and access fees | 27,888 | 25,914 |
Engineering and operations | 19,032 | 18,152 |
Sales, marketing and customer service | 9,390 | 8,562 |
General and administrative | 23,816 | 25,540 |
Transaction-related charges | 40 | 27 |
Depreciation and amortization | 20,718 | 21,305 |
Loss on disposition of long-lived assets | 302 | 284 |
Loss on damaged assets and other hurricane related charges, net of insurance recovery | 482 | |
Total operating expenses | 101,186 | 100,266 |
Income from operations | 2,114 | 4,209 |
OTHER INCOME (EXPENSE) | ||
Interest income | 928 | 366 |
Interest expense | (1,281) | (2,204) |
Other income (expenses) | 187 | (753) |
Other expense, net | (166) | (2,591) |
INCOME BEFORE INCOME TAXES | 1,948 | 1,618 |
Income tax provisions | 1,213 | 3,921 |
NET INCOME (LOSS) | 735 | (2,303) |
Net income attributable to non-controlling interests, net of tax expense of $0.4 million and $0.3 million, respectively. | (2,316) | (3,252) |
NET LOSS ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS | $ (1,581) | $ (5,555) |
NET LOSS PER WEIGHTED AVERAGE SHARE ATTRIBUTABLE TO ATN INTERNATIONAL, INC. STOCKHOLDERS: | ||
Basic (in dollars per share) | $ (0.10) | $ (0.35) |
Diluted (in dollars per share) | $ (0.10) | $ (0.35) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic (in shares) | 16,001 | 16,019 |
Diluted (in shares) | 16,001 | 16,019 |
DIVIDENDS PER SHARE APPLICABLE TO COMMON STOCK (in dollars per share) | $ 0.17 | $ 0.17 |
Wireless | ||
REVENUE: | ||
Total revenue | $ 41,613 | $ 50,548 |
Wireline | ||
REVENUE: | ||
Total revenue | 60,197 | 48,096 |
Renewable Energy | ||
REVENUE: | ||
Total revenue | $ 1,490 | $ 5,831 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Noncontrolling interest income tax expense | $ 0.4 | $ 0.3 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income (loss) | $ 735 | $ (2,303) |
Other comprehensive income: | ||
Foreign currency translation adjustment | 237 | (1,032) |
Unrealized gain (loss) on derivatives | (61) | 139 |
Other comprehensive income (loss), net of tax | 176 | (893) |
Comprehensive income (loss) | 911 | (3,196) |
Less: Comprehensive income attributable to non-controlling interests | (2,316) | (3,252) |
Comprehensive income attributable to ATN International, Inc. | $ (1,405) | $ (6,448) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total ATNI Stockholders' Equity | Common Stock | Treasury Stock, at cost | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Non-Controlling Interests | Total |
Balance, beginning of period at Dec. 31, 2017 | $ 688,727 | $ 170 | $ (36,110) | $ 167,973 | $ 552,948 | $ 3,746 | $ 141,496 | $ 830,223 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of 12,500 shares of common stock upon exercise of stock options for the quarter ended March 31,2018 | 498 | 498 | 498 | |||||
Purchase of common stock (28,242 and 41,827 shares) upon exercise of stock options for the quarter ended March 31, 2019 and 2018 respectively) | (2,538) | (2,538) | (2,538) | |||||
Stock-based compensation | 1,576 | 1,576 | 1,576 | |||||
Dividends declared on common stock | (2,696) | (2,696) | (12,484) | (15,180) | ||||
Repurchase of non-controlling interests | (3) | (3) | ||||||
Comprehensive income: | ||||||||
Net income (loss) | (5,555) | (5,555) | 3,252 | (2,303) | ||||
Other comprehensive loss | (893) | (893) | (893) | |||||
Comprehensive income (loss) | (6,448) | 3,252 | (3,196) | |||||
Balance, end of period at Mar. 31, 2018 | 680,607 | 170 | (38,648) | 170,047 | 546,388 | 2,650 | 133,408 | 814,015 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Cumulative effect adjustment due to adoption of new accounting | 1,488 | 1,691 | (203) | 1,147 | 2,635 | |||
Balance, beginning of period at Dec. 31, 2018 | 695,387 | 172 | (48,547) | 181,778 | 563,593 | (1,609) | 127,937 | 823,324 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Purchase of common stock (28,242 and 41,827 shares) upon exercise of stock options for the quarter ended March 31, 2019 and 2018 respectively) | (1,569) | (1,569) | (1,569) | |||||
Stock-based compensation | 1,301 | 1,301 | 1,301 | |||||
Dividends declared on common stock | (2,693) | (2,693) | (1,553) | (4,246) | ||||
Repurchase of non-controlling interests | (225) | (225) | ||||||
Investments made by minority shareholders in consolidated affiliates | 488 | 488 | ||||||
Comprehensive income: | ||||||||
Net income (loss) | (1,581) | (1,581) | 2,316 | 735 | ||||
Other comprehensive loss | 176 | 176 | 176 | |||||
Comprehensive income (loss) | (1,405) | 2,316 | 911 | |||||
Balance, end of period at Mar. 31, 2019 | $ 691,021 | $ 172 | $ (50,116) | $ 183,079 | $ 559,319 | $ (1,433) | $ 128,963 | $ 819,984 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||
Issuance of shares of common stock upon exercise of stock options | 12,500 | |
Purchase of shares of common stock | 28,242 | 41,827 |
Dividends declared on common stock (dollars per per share) | $ 0.17 | $ 0.17 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 735 | $ (2,303) |
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||
Depreciation and amortization | 20,718 | 21,305 |
Provision for doubtful accounts | 1,285 | 796 |
Amortization and write off of debt discount and debt issuance costs | 160 | 197 |
Stock-based compensation | 1,301 | 1,576 |
Deferred income taxes | (1,914) | (1,089) |
Loss on disposition of long-lived assets | 302 | 284 |
Unrealized (gain) loss on foreign currency | (64) | 364 |
Other non-cash activity | (17) | 85 |
Changes in operating assets and liabilities, excluding the effects of acquisitions and dispositions: | ||
Accounts receivable | (9,102) | (5,061) |
Materials and supplies, prepayments, and other current assets | 90 | 3,991 |
Prepaid income taxes | 5,158 | |
Accounts payable and accrued liabilities, advance payments and deposits and other current liabilities | (3,188) | (2,306) |
Accrued taxes | 1,620 | 3,292 |
Other assets | 324 | (581) |
Other liabilities | 1,362 | 1,994 |
Net cash provided by operating activities | 18,770 | 22,544 |
Cash flows from investing activities: | ||
Capital expenditures | (17,641) | (21,041) |
Hurricane rebuild capital expenditures | (123) | (30,851) |
Hurricane insurance proceeds | 34,606 | |
Receipt of government grants | 5,400 | |
Purchase of other investments | (10,000) | |
Purchase of short-term investments | (5,000) | |
Proceeds from sale of investments | 141 | 4,809 |
Net cash used in investing activities | (32,623) | (7,077) |
Cash flows from financing activities: | ||
Dividends paid on common stock | (2,720) | (2,724) |
Distribution to non-controlling interests | (1,540) | (12,424) |
Principal repayments of term loan | (949) | (938) |
Stock-based compensation share repurchases | (1,569) | (2,041) |
Repurchases of non-controlling interests | (225) | (3) |
Investments made by minority shareholders in consolidated affiliates | 488 | |
Net cash used in financing activities | (6,515) | (18,130) |
Effect of foreign currency exchange rates on cash and cash equivalents | 15 | (31) |
Net change in cash, cash equivalents, and restricted cash | (20,353) | (2,694) |
Total cash, cash equivalents, and restricted cash, beginning of period | 192,907 | 219,890 |
Total cash, cash equivalents, and restricted cash, end of period | 172,554 | 217,196 |
Noncash investing activity: | ||
Purchases of property, plant and equipment included in accounts payable and accrued expenses | $ 8,129 | $ 20,068 |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 3 Months Ended |
Mar. 31, 2019 | |
ORGANIZATION AND BUSINESS OPERATIONS | |
ORGANIZATION AND BUSINESS OPERATIONS | 1. ORGANIZATION AND BUSINESS OPERATIONS The Company is a holding company that, directly and through its subsidiaries, owns and operates telecommunications and renewable energy businesses in North America, India, Bermuda and the Caribbean. The Company was incorporated in Delaware in 1987, began trading publicly in 1991 and spun off more than a half of its operations to stockholders in 1998. Since that time, the Company has engaged in many strategic acquisitions and investments to help grow its operations, using the cash generated from its established operating units to re-invest in its existing businesses and to make strategic investments in earlier stage businesses. The Company looks for businesses that offer growth opportunities or potential strategic benefits, but that require additional capital investment in order to execute on their business plans. The Company holds controlling positions with respect to some of its investments and minority positions in others. These strategic investments frequently offer a product and service development component in addition to the prospects of generating returns on its invested capital. The Company has identified three operating segments to manage and review its operations, and to facilitate investor presentations of its results, as follows: · US Telecom. In the United States, the Company offers wireless and wireline services. The Company offers wholesale wireless voice and data roaming services to national, regional, local and selected international wireless carriers in rural markets located principally in the Southwest and Midwest United States. The Company also provides retail wireless, wireline services and wholesale long-distance voice services to telecommunications carriers in the areas in which it offers wireline services. · International Telecom. The Company’s international wireless services include voice and data services to retail customers in Bermuda, Guyana and the US Virgin Islands. The Company’s international wireline services include voice and data services in Bermuda, the Cayman Islands, Guyana and the US Virgin Islands, as well as video services in Bermuda, the Cayman Islands, and the US Virgin Islands. In addition, the Company offers wholesale long‑distance voice services to other telecommunications carriers in the countries in which it offers international wireline services. · Renewable Energy. In India, the Company provides distributed generation solar power to corporate, utility and municipal customers. Through November 6, 2018, the Company also provided distributed generation solar power in the United States in Massachusetts, California and New Jersey. The following chart summarizes the operating activities of the Company’s principal subsidiaries, the segments in which the Company reports its revenue and the markets it served as of March 31, 2019: Segment Services Markets Tradenames US Telecom Wireless United States (rural markets) Choice, Choice NTUA Wireless, Commnet, WestNet, Geoverse Wireline United States Essextel, Deploycom International Telecom Wireline Bermuda, Cayman Islands, Guyana, US Virgin Islands Fireminds, GTT+, One, Logic, Viya Wireless Bermuda, Guyana, US Virgin Islands GTT+, One, Viya Video Services Bermuda, Cayman Islands, US Virgin Islands Logic, One, Viya Renewable Energy Solar India Vibrant Energy The Company actively evaluates potential acquisitions, investment opportunities and other strategic transactions, both domestic and international, that meet its return on investment and other criteria. In addition, the Company considers non-controlling investments in earlier stage businesses that it considers strategically relevant, and which may offer long-term growth potential for the Company, either individually, or as research and development businesses that can support the Company’s operating subsidiaries in new product and service development and offerings. The Company provides management, technical, financial, regulatory, and marketing services to its subsidiaries and typically receives a management fee equal to a percentage of their revenues, which is eliminated in consolidation. For further information about the Company’s financial segments and geographical information about its operating revenues and assets, also see Note 14 to the Consolidated Financial Statements included in this Report. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2019 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial information included herein is unaudited; however, the Company believes such information and the disclosures herein are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial position and results of operations for such periods. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Results of interim periods may not be indicative of results for the full year. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019. The condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and certain entities, which are consolidated in accordance with the provisions of the Financial Accounting Standards Board’s (“FASB”) authoritative guidance on the consolidation of variable interest entities, since it is determined that the Company is the primary beneficiary of these entities. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), and subsequently issued related updates, (collectively known as ASC 606), which provides a single, comprehensive revenue recognition model for all contracts with customers. The revenue standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard on January 1, 2018. Refer to Note 3 to the Consolidated Financial Statements in this Report. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this standard on January 1, 2018. Upon adoption the Company held $20.1 million of equity investments that did not have readily determinable fair values. As a result these investments are measured at cost less impairments, adjusted for observable price changes of similar investments of the same issuer. The Company has not adjusted the cost of these investments since acquisition. Upon adoption, the Company held $0.6 million of equity investments with readily determinable fair values and reclassified $0.2 million of unrealized gains on this investment to retained earnings. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” and subsequently issued related updates (“ASU 2016-02”), which provide comprehensive lease accounting guidance. The standard requires entities to recognize lease assets and liabilities on the balance sheet as well as disclosure of key information about leasing arrangements. ASU 2016-02 became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company adopted ASC 2016-02 on January 1, 2019 utilizing the optional transition method with a cumulative adjustment on the date of adoption and not adjusting prior periods. Refer to Note 4 of the Condensed Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides further clarification on eight cash flow classification issues. The Company adopted this standard on January 1, 2018. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” (“ASU 2016-18”). The amendments in ASU 2016-18 are intended to reduce diversity in practice related to the classification and presentation of changes in restricted cash or restricted cash equivalents on the statement of cash flows. The amendments in ASU 2016-18 require that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard on January 1, 2018. In October 2016 the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory”. The new standard eliminates all intra-entity sales of assets other than inventory, the exception under current standards that permits the tax effects of intra-entity asset transfers to be deferred until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new standard was effective for the Company on January 1, 2018. There was not a material impact to the Company’s Consolidated Financial Statements upon adoption. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The new guidance requires the service cost component to be presented separately from the other components of net benefit costs. Service cost will be presented with other employee compensation cost within income from operations. The other components of net benefit cost, such as interest cost, expected return on plan assets, amortization of prior service cost and gains or losses are required to be presented in other income. The Company adopted this standard on January 1, 2018. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The standard: (a) expands and refines hedge accounting for both financial and non-financial risk components, (b) aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and (c) includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted this standard on January 1, 2019. There was not a material impact to the Company’s Consolidated Financial Statements upon adoption. In February 2018, the FASB issued ASU 2018-02 “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” (“ASU 2018-02”). The standard gives entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income that were impacted by the 2017 Tax Cuts and Jobs Act. The guidance is effective for all entities for fiscal years beginning after December 31, 2018 and interim periods within those fiscal years. Early adoption is permitted. The guidance may be applied in the period of adoption or retrospectively to each impacted period. The Company adopted this standard on January 1, 2018. The impact of the adoption results in a $0.8 million reclassification from accumulated other comprehensive income to retained earnings, which is offset by an equivalent valuation allowance, the net impact is zero. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). This standard requires entities that are customers in cloud computing arrangements to defer implementation costs if they would be capitalized by the entity in software licensing arrangements under the internal-use software guidance. The guidance may be applied retrospectively or prospectively to implementation costs incurred after the date of adoption. ASU 2018-15 is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company prospectively adopted this standard in the fourth quarter of 2018. The Company capitalized $0.5 million and $0.6 million of implementation costs during the three months ended March 31, 2019 and December 31, 2018, respectively, and none of those amounts were amortized at March 31, 2019. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Revenue Recognition | 3. REVENUE RECOGNITION Impacts of adoption in the current period The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method. The Company elected the practical expedient to apply the new guidance only to contracts that were not substantially complete at the adoption date. The cumulative effect of adopting ASC 606 resulted in a contract asset of $1.6 million, of which $1.2 million was recorded in prepayments and other current assets, and $0.4 million was recorded in other assets, a contract liability of $0.2 million recorded in advance payments and deposits, contract acquisition costs of $1.5 million of which $0.9 million was recorded in prepayments and other current assets and $0.6 million was recorded in other assets, and a deferred tax liability of $0.3 million with the offset of $1.5 million recorded to retained earnings and $1.1 million recorded to minority interest. Contract Assets and Liabilities The Company recognizes contract assets and liabilities on its balance sheet. Contract assets represent unbilled amounts typically resulting from retail wireless contracts with both a multiyear service period and a promotional discount. In these contracts the revenue recognized exceeds the amount billed to the customer. The current portion of the contract asset is recorded in prepayments and other current assets and the noncurrent portion is included in other assets on the Company’s balance sheet. Contract liabilities consist of advance payments and billings in excess of revenue recognized. Retail revenue for postpaid customers is generally billed one month in advance and recognized over the period that the corresponding service is rendered to customers. To the extent the service is not provided by the reporting date the amount is recognized as a contract liability. Prepaid service, including mobile voice and data services, sold to customers is recorded as deferred revenue prior to the commencement of services. Contract liabilities are recorded in advanced payments and deposits on its balance sheets. Contract assets and liabilities consisted of the following (in thousands): March 31, 2019 December 31, 2018 $ Change % Change Contract asset – current $ 2,010 $ 1,900 $ 110 Contract asset – noncurrent 779 802 (23) -3% Contract liabilities (15,239) (13,787) (1,452) Net contract liability $ (12,450) $ (11,085) $ (1,365) The contract asset – current is included in prepayments and other current assets, the contract asset – noncurrent is included in other assets, and the contract liabilities are included in advance payments and deposits on the Company’s balance sheet. The increase in the Company’s net contract liability was due to the timing of customer prepayments and contract billings. During the three months ended March 31, 2019, the Company recognized revenue of $9.1 million related to its December 31, 2018 contract liability and amortized $0.6 million of the December 31, 2018 contract asset into revenue. The Company did not recognize any revenue in the three months ended March 31, 2019 related to performance obligations that were satisfied or partially satisfied in previous periods. Contract Acquisition Costs The March 31, 2019 balance sheet includes current contract acquisition costs of $1.5 million in prepayments and other current assets and long term contract acquisition costs of $0.9 million in other assets. During the three months ended March 31, 2019, the Company amortized $0.5 million of contract acquisition cost. Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to unsatisfied performance obligations of certain multiyear retail wireless contracts that include a promotional discount. The transaction price allocated to unsatisfied performance obligations was $11.9 million and $12.1 million at March 31, 2019 and December 31, 2018, respectively. The Company expects to satisfy the remaining performance obligations and recognize the transaction price within 24 months. The Company has certain retail, wholesale, and renewable energy contracts where transaction price is allocated to remaining performance obligations. However, the Company omits these contracts from the disclosure by applying the right to invoice, one year or less, and wholly unsatisfied performance obligation practical expedients. Disaggregation The Company's revenue is presented on a disaggregated basis in Note 14 based on an evaluation of disclosures outside the financial statements, information regularly reviewed by the chief operating decision makers for evaluating the financial performance of operating segments and other information that is used for performance evaluation and resource allocations. This includes revenue from wireline, wireless and renewable energy, as well as domestic versus international wireline and wireless services. This disaggregation of revenue depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
LEASES | |
LEASES | 4. LEASES The Company’s significant accounting policies are detailed in “Note 2 – Summary of Significant Accounting Policies” within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2018. The Company’s accounting policies are updated as a result of adopting ASU 2016-02 “Leases (Topic 842)” (“ASC 842”) on January 1, 2019. The adoption of ASC 842 impacted the accounting for leases as further described below. The Company adopted ASC 842 on January 1, 2019, utilizing the optional transition method with a cumulative adjustment on the date of adoption. Under this approach, the guidance was applied to leases that had commenced as of January 1, 2019 with a cumulative effect adjustment as of that date and prior periods were not adjusted. Upon adoption, the Company recognized an operating lease right-of-use (“ROU”) asset of $70.8 million, a short-term lease liability of $8.2 million, and a long-term lease liability of $61.2 million. The adoption had no impact on retained earnings or other components of equity. The Company elected the package of practical expedients. Under the package of practical expedients, for existing leases, the Company does not reassess: i) whether the arrangement contains a lease; ii) lease classification and; iii) initial direct costs. The Company determines if an agreement is a lease at inception. Operating leases are included in ROU assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets. Finance leases are included in property and equipment in the Company’s consolidated balance sheets. To date the Company has prepaid its financing leases. As a result, there is no interest cost, lease liability, or discount rate applicable to financing leases. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The present value is calculated using the Company’s incremental borrowing rate based on the information available at the commencement date, as our leases do not contain an implicit rate. The Company utilized assumptions based on its existing borrowing facilities and other market specific data to determine its incremental borrowing rate. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include renewal options to extend the lease. The Company includes renewal options that are reasonably certain to be exercised in the initial lease term. When determining whether a lease term is reasonably certain to be exercised, the Company considers several factors, including the present and anticipated future needs of its customers being serviced by the asset. Lease expense is recognized on a straight-line basis over the lease term. The Company does not separate non-lease components from lease components. The Company has operating and financing leases for towers, land, corporate offices, retail facilities, and data transport capacity. The lease terms are generally between three and ten years, some of which include additional renewal options. Supplemental lease information The components of lease expense were as follows (in thousands): Three months ended March 31,2019 Operating lease cost: Operating lease cost $ 3,516 Short-term lease cost 713 Variable lease cost Total operating lease cost $ 5,190 Finance lease cost: Amortization of right-of-use asset $ Variable costs 296 Total finance lease cost $ 889 During the three months ended March 31, 2019, the Company paid $3.2 million of operating cash flows, which were included in the measurement of lease liabilities. Also during the three months ended March 31, 2019, the Company recorded $0.2 million of lease liabilities arising from right-of-use assets. At March 31, 2019, finance leases with a cost of $27.4 million and accumulated amortization of $7.9 million were included in property, plant and equipment. The weighted average remaining lease terms and discount rates as of March 31, 2019 are noted in the table below: Weighted average remaining lease term Operating leases 7.3 years Financing leases 12.1 years Weighted average discount rate Operating leases Financing leases n/a Maturities of lease liabilities as of March 31, 2019 were as follows (in thousands): Operating Leases 2019 (excluding the three months ended March 31, 2019) $ 8,356 2020 12,746 2021 11,591 2022 10,816 2023 10,097 Thereafter 27,319 Total lease payments 80,925 Less imputed interest (13,739) Total $ 67,186 Maturities of lease liabilities as of December 31, 2018 were as follows (in thousands): Operating Leases 2019 $ 11,801 2020 12,650 2021 11,491 2022 10,713 2023 9,990 Thereafter 27,325 Total lease payments $ 83,970 As of March 31, 2019, the Company did not have any material operating or finance leases that have not yet commenced. |
USE OF ESTIMATES
USE OF ESTIMATES | 3 Months Ended |
Mar. 31, 2019 | |
USE OF ESTIMATES | |
USE OF ESTIMATES | 5. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates relate to the allowance for doubtful accounts, useful lives of the Company’s fixed and finite-lived intangible assets, allocation of purchase price to assets acquired and liabilities assumed in business combinations, fair value of indefinite-lived intangible assets, goodwill, assessing the impairment of assets, revenue, and income taxes. Actual results could differ significantly from those estimates. |
IMPACT OF HURRICANES IRMA AND M
IMPACT OF HURRICANES IRMA AND MARIA | 3 Months Ended |
Mar. 31, 2019 | |
IMPACT OF HURRICANES IRMA AND MARIA | |
IMPACT OF HURRICANES IRMA AND MARIA | 6. IMPACT OF HURRICANES IRMA AND MARIA During September 2017, the US Virgin Islands economy, the Company’s customer base and its operations in the US Virgin Islands were severely impacted by Hurricanes Irma and Maria (collectively, the “Hurricanes”). Both the Company’s wireless and wireline networks and commercial operations were severely damaged by these storms and as a result of the significant damage to the wireline network and the lack of consistent commercial power in the territory, the Company was unable to provide most of its wireline services, which comprise the majority of its revenue in this business, from mid-September 2017 through a majority of 2018. The Company received insurance recoveries of $34.6 million in February 2018 to aid its recovery from the impact of the Hurricanes. During the three months ended March 31, 2018 and March 31, 2019, the Company spent $30.9 million and $0.1 million, respectively, for network restoration and resiliency enhancements that allowed the reconnection of a significant majority of affected households and businesses as of the period end. The Company expects that its wireline network restoration work is substantially complete, however, returning the Company’s revenue to pre-Hurricane levels may take significant time as a result of population movements, the negative economic impact the Hurricanes had on the local economy, and the Company’s subscriber base’s future appetite for continued wireline services. |
DISPOSITIONS, PLATFORM AND MINO
DISPOSITIONS, PLATFORM AND MINORITY INVESTMENTS | 3 Months Ended |
Mar. 31, 2019 | |
DISPOSITIONS PLATFORM AND MINORITY INVESTMENTS | |
DISPOSITIONS, PLATFORM AND MINORITY INVESTMENTS | 7. DISPOSITIONS, PLATFORM AND MINORITY INVESTMENTS Dispositions Renewable Energy On November 6, 2018, the Company completed the sale of its US solar business that owned and managed distributed generation solar power projects operated under the Ahana name in Massachusetts, California and New Jersey (the “US Solar Operations”) to CleanCapital Holdco 4, LLC. The transaction had a total value of approximately $122.6 million, which included a cash purchase price of $65.3 million and the assumption of approximately $ 57.3 million in debt, and is subject to certain other post-closing adjustments (the “US Solar Transaction”). The Company is finalizing working capital adjustments. Approximately $6.5 million of the purchase price will be held in escrow for a period of twelve months after the closing to secure the Company’s indemnification obligation. The table below identifies the assets and liabilities transferred (in thousands): Consideration Received $ 65,286 Assets and liabilities disposed Cash 3,049 Accounts receivable 1,248 Prepayments and other current assets 801 Property, plant and equipment 94,678 Restricted cash 8,407 Other assets 38 Current portion of long-term debt (6,992) Accounts payable and accrued liabilities (938) Accrued taxes 586 Long-term debt, excluding current portion (48,038) Net assets disposed 52,839 Consideration less net assets disposed 12,447 Transaction costs (2,133) Gain $ 10,314 The Company allocated $1.1 million of the gain to non-controlling interests within the consolidated income statement. During the year ended December 31, 2018, the Company incurred $2.1 million of transaction related charges pertaining to legal, accounting and consulting services associated with the transaction. The US Solar Operations do not qualify as a discontinued operation because the disposition did not represent a strategic shift that would have a major effect on the Company’s operations and financial results. As a result, the historical results are included in continuing operations. Platform Investments US Telecom During the second quarter of 2018, the Company invested in a new platform, based in the United States, to develop in-building wireless network technology that enables building owners to capitalize on the growing demand for better indoor wireless solutions. Also during the second quarter of 2018, the Company provided funding for another new platform, based in the United States, seeking to “build to suit” large scale fiber networks to serve the telecommunications and content provider industries in need of lower latency long haul fiber transit services. Both of these investments are consolidated in the Company’s results. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 8. FAIR VALUE MEASUREMENTS In accordance with the provisions of fair value accounting, a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model. The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds, debt and equity securities and derivative contracts that are traded in an active exchange market. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange‑traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes corporate obligations and non‑exchange traded derivative contracts. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments and intangible assets that have been impaired whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Assets and liabilities of the Company measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 are summarized as follows (in thousands): March 31, 2019 Significant Other Quoted Prices in Observable Unobservable Active Markets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Certificates of deposit $ — $ 380 $ — $ 380 Money market funds 2,615 — — 2,615 Short term investments 5,280 — — 5,280 Other investments — — 10,000 10,000 Commercial paper — 13,975 — 13,975 Interest rate swap — 70 — 70 Total assets and liabilities measured at fair value $ 7,895 $ 14,425 $ 10,000 $ 32,320 December 31, 2018 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 380 $ 380 Money market funds 2,266 — 2,266 Short term investments 393 — 393 Commercial paper — 13,972 13,972 Interest rate swap — 140 140 Total assets and liabilities measured at fair value $ 2,659 $ 14,492 $ 17,151 Certificate of Deposit As of March 31, 2019 and December 31, 2018, this asset class consisted of a time deposit at a financial institution denominated in US dollars. The asset class is classified within Level 2 of the fair value hierarchy because the fair value was based on observable market data. Money Market Funds As of March 31, 2019 and December 31, 2018, this asset class consisted of a money market portfolio that comprises Federal government and US Treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets. Short Term Investments and Commercial Paper As of March 31, 2019 and December 31, 2018, these asset classes consisted of short term foreign and US corporate bonds, equity securities, and commercial paper. Corporate bonds and commercial paper are classified within Level 2 of the fair value hierarchy because the fair value is based on observable market data. Equity securities are classified within Level 1 because fair value is based on quoted market prices in active markets for identical assets. The Company held equity securities with a fair value of $0.3 million at March 31, 2019, unchanged from December 31, 2018. Other Investments In the first quarter of 2019, the Company made a significant investment in an early stage venture and acquired a convertible debt instrument for $10 million. The Company elected to fair value the investment upon acquisition. Other Fair Value Disclosures The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values because of the relatively short-term maturities of these financial instruments. The fair value of the interest rate swap is measured using Level 2 inputs. At March 31, 2019 , the Company holds $ 33.1 million of equity and convertible debt securities consisting of non-controlling investments in privately held companies. These investments, over which the Company does not have the ability to exercise significant influence, are without readily determinable fair values. The investments are measured at cost, less any impairment, adjusted for observable price changes of similar investments of the same issuer. Fair value is not estimated for these investments if there are no identified events or changes in circumstances that may have an effect on the fair value of the investment. The carrying value of the strategic investments was $ 23.1 million at December 31, 2018. As of March 31, 2019 no impairments or price adjustments were recorded on the investments. These investments are included with other assets on the consolidated balance sheets. The fair value of long-term debt is estimated using Level 2 inputs. At March 31, 2019 , the fair value of long-term debt, including the current portion, was $ 90.6 million and its book value was $ 90.1 million. At December 31, 2018, the fair value of long-term debt, including the current portion, was $ 91.6 million and its book value was $ 91.0 million. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2019 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 9. LONG-TERM DEBT At March 31, 2019, the Company had a credit facility with CoBank, ACB and a syndicate of other lenders that provided for a $225 million revolving credit facility (the “Credit Facility”) that included (i) up to $10 million under the Credit Facility for standby or trade letters of credit, (ii) up to $25 million under the Credit Facility for letters of credit that were necessary or desirable to qualify for disbursements from the FCC’s mobility fund and (iii) up to $10 million under a swingline sub-facility. The Credit Facility had a maturity date of December 31, 2019. The Credit Facility also provided for the incurrence by the Company of incremental term loan facilities, when combined with increases to revolving loan commitments, in an aggregate amount not to exceed $200 million (the “Accordion”). Amounts borrowed under the Credit Facility bore interest at a rate equal to, at the Company’s option, either (i) the London Interbank Offered Rate (LIBOR) plus an applicable margin ranging between 1.50% to 1.75% or (ii) a base rate plus an applicable margin ranging from 0.50% to 0.75%. Swingline loans bore interest at the base rate plus the applicable margin for base rate loans. The base rate was equal to the higher of (i) 1.00% plus the higher of (x) the one-week LIBOR and (y) the one-month LIBOR; (ii) the federal funds effective rate (as defined in the Credit Facility) plus 0.50% per annum; and (iii) the prime rate (as defined in the Credit Facility). The applicable margin was determined based on the ratio (as further defined in the Credit Facility) of the Company’s indebtedness to EBITDA. Under the terms of the Credit Facility, the Company also paid a fee ranging from 0.175% to 0.250% of the average daily-unused portion of the Credit Facility over each calendar quarter. The Credit Facility contained customary representations, warranties and covenants, including a financial covenant that imposed a maximum ratio of indebtedness to EBITDA as well as covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. The Company’s investment in “unrestricted” subsidiaries was limited to $400 Million less the aggregate amount of certain dividend payments to its stockholders. Amounts borrowed under the Accordion were also subject to proforma compliance with a net leverage ratio financial covenant. As of March 31, 2019, the Company was in compliance with all of the financial covenant s and had no borrowings under the Credit Facility. On April 10, 2019, the Company entered into a Third Amendment and Confirmation Agreement, with CoBank, ACB and the same syndicate of lenders to modify the terms of the Credit Facility (the “New Credit Facility”), which provide for a $200 million revolving credit facility that includes (i) up to $75 million under the New Credit Facility for standby or trade letters of credit and (ii) up to $10 million under a swingline sub-facility. Upon the closing of the New Credit Facility, approximately $8.0 million of performance letters of credit were issued, outstanding and undrawn. The New Credit Facility continues to provide for the Accordion. The New Credit Facility matures on April 10, 2024. Amounts borrowed under the New Credit Facility bear interest at a rate equal to, at the Company’s option, either (i) the LIBOR plus an applicable margin ranging between 1.25% to 2.25% or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.25%. Swingline loans will bear interest at the base rate plus the applicable margin for base rate loans. The base rate is equal to the higher of (i) 1.00% plus the higher of (x) the LIBOR (as defined in the Credit Agreement) for an interest period of one month and (y) the LIBOR for an interest period of one week; (ii) the Federal Funds Effective Rate (as defined in the New Credit Facility) plus 0.50% per annum; and (iii) the Prime Rate (as defined in the New Credit Facility). The applicable margin is determined based on the Company’s Total Net Leverage Ratio (as defined in the New Credit Facility). Under the terms of the New Credit Facility, the Company must also pay a fee ranging from 0.150% to 0.375% of the average daily unused portion of the New Credit Facility over each calendar quarter. The New Credit Facility contains customary representations, warranties and covenants, including a financial covenant that imposes a maximum ratio of indebtedness to EBITDA as well as covenants limiting additional indebtedness, liens, guaranties, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes. The Company’s investments in “unrestricted” subsidiaries and certain dividend payments to its stockholders are not limited unless the Company’s Total Net Leverage Ratio is equal to or greater than 1.75:1.0. The Total Net Leverage Ratio provides limited relief in the event of a Qualifying Acquisition (as defined in the New Credit Facility). Amounts borrowed under the Accordion are also subject to proforma compliance with a net leverage ratio financial covenant. Viya Debt The Company, and certain of its subsidiaries, have entered into a $60.0 million loan agreement (the “Viya Debt”) with Rural Telephone Finance Cooperative (“RTFC”). The Viya Debt agreement contains customary representations, warranties and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and a financial covenant that limits the maximum ratio of indebtedness to annual operating cash flow to 3.5 to 1.0 (the “Net Leverage Ratio”). This covenant is tested on an annual basis at the end of each fiscal year. Interest is paid quarterly at a fixed rate of 4.0% and principal repayment is not required until maturity on July 1, 2026. Prepayment of the Viya Debt may be subject to a fee under certain circumstances. The debt is secured by certain assets of the Viya subsidiaries and is guaranteed by the Company. With RTFC’s consent, the Company funded the restoration of Viya’s network, following the Hurricanes, through an intercompany loan arrangement with a $75.0 million limit. The Company was not in compliance with the Net Leverage Ratio covenant for the year ending December 31, 2018 and received a waiver from the RTFC on February 25, 2019. The Company paid a fee of $0.9 million in 2016 to lock the interest rate at 4% per annum over the term of the Viya debt. The fee was recorded as a reduction to the Viya debt carrying amount and will be amortized over the life of the loan. As of March 31, 2019, $60.0 million of the Viya Debt remained outstanding and $0.7 million of the rate lock fee was unamortized. One Communications Debt The Company has an outstanding loan from HSBC Bank Bermuda Limited (the “One Communications Debt”) which is scheduled to mature on May 22, 2022 and bears interest at the one-month LIBOR plus a margin ranging between 2.5% to 2.75% paid quarterly. The One Communications Debt contains customary representations, warranties and affirmative and negative covenants (including limitations on additional debt, guaranties, sale of assets and liens) and financial covenants that limit the ratio of tangible net worth to long term debt and total net debt to EBITDA and require a minimum debt service coverage ratio (net cash generated from operating activities plus interest expense less net capital expenditures to debt repayments plus interest expense). The Company was in compliance with its covenants as of March 31, 2019. As a condition of the One Communications Debt, the Company was required to enter into a hedging arrangement with a notional amount equal to at least 30% of the outstanding loan balance and a term corresponding to the term of the One Communications Debt. As such, the Company entered into an amortizing interest rate swap that has been designated as a cash flow hedge, had an original notional amount of $11.0 million, an interest rate of 1.874%, and expires in March 2022. As of March 31, 2019, the swap has an unamortized notional amount of $9.3 million. The Company capitalized $0.3 million of fees associated with the One Communications Debt which are amortized over the life of the debt and are recorded as a reduction to the debt carrying amount. As of March 31, 2019, $30.9 million of the One Communications Debt was outstanding, there were no borrowings under the overdraft facility, and $0.2 million of the capitalized fees remain unamortized. Ahana Debt The Company’s US solar operations were issued $20.6 million in aggregate principal amount of 4.427% senior notes due in 2029 (the “Series A Notes”) and $45.2 million in aggregate principal amount of 5.327% senior notes due in 2031 (the “Series B Notes”). These operations were also issued a loan from Public Service Electric & Gas (the “PSE&G Loan” and collectively with the Series A Notes and Series B notes, the “Ahana Debt”) which bore interest at 11.3% due in 2027. For the Series A Notes and Series B Notes, interest and principal were payable semi-annually, until their respective maturity dates, and were secured by certain US solar assets and guaranteed by certain subsidiaries. Repayment of the PSE&G Loan Debt could have been made in either cash or Solar Renewable Energy Credits (“SRECs”), at the Company’s discretion, with the value of the SRECs being fixed at the time of the loan’s closing. Historically, the Company made all repayments of the PSE&G Loan using SRECs. The Company capitalized $2.8 million of fees associated with the Ahana Debt which were recorded as a reduction to the debt carrying amount and amortized over the life of the notes. On November 6, 2018, the Company consummated the US Solar Transaction which included the transfer of the Ahana Debt to the purchaser. |
GOVERNMENT GRANTS
GOVERNMENT GRANTS | 3 Months Ended |
Mar. 31, 2019 | |
GOVERNMENT GRANTS | |
GOVERNMENT GRANTS | 10. GOVERNMENT GRANTS Universal Service Fund The USF is a subsidy program managed by the FCC. USF funds are disbursed to telecommunication providers through four programs: the High Cost Program; Low Income Program; Schools and Libraries Program (“E-Rate”); and Rural Health Care Program. The Company participates in each of these programs as further described below. All of the funding programs are subject to certain operational and reporting compliance requirements. The Company believes it is in compliance will all applicable requirements. The FCC’s Mobility Funds and Connect America Funds are administered through the High Cost Program. The High-Cost Support program subsidizes telecommunications services in rural and remote areas. The FCC created the Phase I Mobility Fund (“Phase I Mobility Fund”), a one-time award meant to support wireless coverage in underserved geographic areas in the United States. The Company received $21.1 million of Phase I Mobility Fund support to its wholesale wireless business (the “Mobility Funds”) to be used to expand voice and broadband networks in certain geographic areas in order to offer either 3G or 4G service. Of these funds, $7.2 million was recorded as an offset to the cost of the property, plant, and equipment associated with these projects and, consequentially, a reduction of future depreciation expense. The remaining $13.9 million received offset operating expenses from inception of the program through part of the third quarter of 2018. The Mobility Funds projects and their operating results are included within the Company’s US Telecom segment. As part of the receipt of the Mobility Funds, the Company committed to comply with certain additional FCC construction and other requirements. If the requirements are not met, the funds may be subject to claw back provisions. The Company currently expects to comply with all applicable requirements related to these funds. During each of the three month periods ended March 31, 2019 and 2018, the Company recorded $4.1 million of revenue from High Cost Support in its International Telecom segment. Also, during each of the three month periods ended March 31, 2019 and 2018, the Company recorded $0.3 million of High Cost Support revenue in its US Telecom segment. The Company is subject to certain operational, reporting and construction requirements as a result of this funding and the Company believes that it is in compliance with all of these requirements. In August 2018, the Company was awarded $79.9 million over 10 years under the Connect America Fund Phase II Auction. The funding requires the Company to provide fixed broadband and voice services to certain eligible areas in the United States. The Company is subject to operational and reporting requirements under the program. The Company determined the award is a revenue grant, and as a result will record the funding as revenue upon receipt. The Company expects to begin receiving funds under the Connect America Fund Phase II program during mid-2019. The E-Rate program provides discounted telecommunication access to eligible schools and libraries. The E-Rate program (i) awards special construction funding to build network connectivity for eligible participants, and (ii) pays for discounted recurring charges for eligible broadband services. The special construction funding is used to reimburse construction costs and is distributed upon completion of a project. As of March 31, 2019, the Company was awarded approximately $15.4 million of E-Rate grants with construction completion obligations between June 2019 and June 2020. Once these projects are constructed the Company is obligated to provide service to the E-Rate program participants. The Company is in various stages of constructing the networks and has not received any of the funds. The Company expects to meet all requirements associated with these grants. The Company also receives funding to provide discounted telecommunication services to eligible customers under the E-Rate, Lifeline, and Rural Health Care Support Programs. During the three months ended March 31, 2019 and 2018, the Company recorded revenue of $1.5 million, and $2.2 million, respectively, in the aggregate from these programs. The Company is subject to certain operational and reporting requirements under the above mentioned programs and it believes that it is in compliance with all of these requirements. Tribal Bidding Credit As part of the broadcast television spectrum incentive auction, the FCC implemented a tribal lands bidding credit to encourage deployment of wireless services utilizing 600 MHz spectrum on the lands of federally recognized tribes. The Company received a bidding credit of $7.4 million under this program in 2018. A portion of these funds will be used to offset network capital costs and a portion will be used to offset the costs of supporting the networks. The Company’s current estimate is that it will use $5.4 million to offset capital costs and, consequently, reduce future depreciation expense and $2.0 million to offset the cost of supporting the network which will reduce future operating expense. The credits are subject to certain requirements, including deploying service by January 2021 and meeting minimum coverage metrics. If the requirements are not met the funds may be subject to claw back provisions. The Company currently expects to comply with all applicable requirements related to these funds. |
RETIREMENT PLANS
RETIREMENT PLANS | 3 Months Ended |
Mar. 31, 2019 | |
RETIREMENT PLANS | |
RETIREMENT PLANS | 11. RETIREMENT PLANS The Company has noncontributory defined benefit pension plans for eligible employees in its International Telecom segment who meet certain eligibility criteria. The Company also has a noncontributory defined medical, dental, vision, and life benefit plan for eligible employees in its International Telecom segment who meet certain eligibility criteria. The Company recorded the net periodic benefit cost identified below (in thousands): Three months ended March 31, 2019 March 31, 2018 Pension benefits Postretirement benefits Pension benefits Postretirement benefits Operating expense Service cost $ 447 $ 37 $ 448 $ 37 Non-operating expense Interest cost 841 40 Expected return on plan assets (1,263) — — Actuarial gain/ loss 7 (17) Net periodic pension expense $ 32 $ 60 $ $ 60 The Company is not required to contributions to its pension and postretirement benefit plans. However, the Company periodically evaluates whether to make discretionary contributions. No contributions were made during the three months ended March 31, 2019 and 2018. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The Company’s effective tax rate for the three months ended March 31, 2019 and 2018 was 62.3% and 242.3%, respectively. The effective tax rate for the three months ended March 31, 2019 was primarily impacted by the following items: (i) a $0.5 million net increase of unrecognized tax positions recognized discretely, (ii) a $0.1 million provision for stock compensation recognized discretely, and (iii) the mix of income generated among the jurisdictions in which the Company operates along with the exclusion of losses in jurisdictions where the Company cannot benefit from those losses as required by ASC 740-270-30-36(a), in the US Virgin Islands. The effective tax rate for the three months ended March 31, 2018 was primarily impacted by the following items: (i) a $0.7 million provision for the intercompany sale of assets from the United States to the US Virgin Islands, (ii) a $0.3 million net increase in unrecognized tax benefits recognized discretely, and (iii) the mix of income generated among the jurisdictions in which the Company operates along with the exclusion of losses in jurisdictions where we cannot benefit from those losses as required by ASC 740-270-30-36(a), primarily in the US Virgin Islands and India . The Company’s effective tax rate is based upon estimated income before provision for income taxes for the year, composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for potential tax consequences, benefits and/or resolutions of tax contingencies. The Company’s consolidated tax rate will continue to be impacted by any transactional or one-time items in the future and the mix of income in any given year generated among the jurisdictions in which it operates. While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from its accrued positions as a result of uncertain and complex application of tax law and regulations. Additionally, the recognition and measurement of certain tax benefits include estimates and judgment by management. Accordingly, the Company could record additional provisions or benefits for US federal, state, and foreign tax matters in future periods as new information becomes available. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
NET INCOME (LOSS) PER SHARE | |
NET INCOME (LOSS) PER SHARE | 13. NET INCOME (LOSS) PER SHARE For the three months ended March 31, 2019 and 2018, the calculation of basic and diluted weighted average shares of common stock outstanding do not include 42,000 shares and 189,000 shares, respectively, relating to stock options as the effects of those options were anti-dilutive. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2019 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 14. SEGMENT REPORTING The Company has the following three reportable and operating segments: i) US Telecom, ii) International Telecom, and iii) Renewable Energy. The following tables provide information for each operating segment (in thousands): For the Three Months Ended March 31, 2019 US International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 20,437 $ 21,176 $ — $ — $ 41,613 Wireline 1,056 59,141 — — 60,197 Renewable Energy — — 1,490 — 1,490 Total Revenue 21,493 80,317 1,490 — 103,300 Depreciation and amortization 5,598 13,015 616 1,489 20,718 Non-cash stock-based compensation — 11 — 1,290 1,301 Operating income (loss) (3,506) 13,878 (203) (8,055) 2,114 For the Three Months Ended March 31, 2018 US International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 27,401 $ 23,147 $ — $ — $ 50,548 Wireline 1,098 46,998 — — 48,096 Renewable Energy — — 5,831 — 5,831 Total Revenue 28,499 70,145 5,831 — 104,475 Depreciation and amortization 6,513 11,671 1,774 1,347 21,305 Non-cash stock-based compensation — 29 29 1,518 1,576 Operating income (loss) 5,224 5,640 1,936 (8,591) 4,209 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments Selected balance sheet data for each of the Company’s segments as of March 31, 2019 and December 31, 2018 consists of the following (in thousands): US International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated March 31, 2019 Cash, Cash equivalents, and Investments $ 14,858 $ $ $ $ 176,763 Total current assets 38,580 261,144 Fixed assets, net 75,004 619,798 Goodwill 35,269 — 63,970 Total assets 217,756 1,162,830 Total current liabilities 25,517 141,317 Total debt — — — 90,068 December 31, 2018 Cash, Cash equivalents, and Investments $ 19,118 $ 32,390 $ 62,678 $ 78,043 $ 192,229 Total current assets 36,801 75,304 80,553 83,107 275,765 Fixed assets, net 78,102 482,770 45,599 20,381 626,852 Goodwill 35,269 25,421 3,280 — 63,970 Total assets 172,634 622,454 130,427 181,789 1,107,304 Total current liabilities 15,783 82,575 3,465 38,827 140,650 Total debt — 90,970 12 — 90,982 Capital Expenditures US International Renewable Corporate and Three months ended March 31, Telecom Telecom (2) Energy Other (1) Consolidated 2019 $ 3,075 $ 11,356 $ 609 $ 2,724 $ 17,764 2018 4,751 43,996 854 2,291 51,892 (1) Corporate and other items refer to corporate overhead costs and consolidating adjustments (2) Includes $0.1 million and $30.9 million of expenditures in the first quarter of 2019 and 2018, respectively, used to rebuild the Company’s damaged networks in the US Virgin Islands which was impacted by the Hurricanes. These expenditures were financed, in part, by the $34.6 million of insurance proceeds the Company received during the first quarter of 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Regulatory and Litigation Matters The Company and its subsidiaries are subject to certain regulatory and legal proceedings and other claims arising in the ordinary course of business, some of which involve claims for damages and taxes that are substantial in amount. The Company believes that, except for the items discussed below, for which the Company is currently unable to predict the final outcome, the disposition of proceedings currently pending will not have a material adverse effect on the Company’s financial position or results of operations. The Company’s Guyana subsidiary, GTT, holds a license to provide domestic fixed services and international voice and data services in Guyana on an exclusive basis until December 2030. Since 2001, the Government of Guyana has stated its intention to introduce additional competition into Guyana’s telecommunications sector. In connection therewith, the Company and GTT have met on several occasions with officials of the Government of Guyana to discuss potential modifications of GTT’s exclusivity and other rights under the existing agreement and license. On July 18, 2016, the Guyana Parliament passed telecommunications legislation, and on August 5, 2016, the legislation was signed into law that introduces material changes to many features of Guyana’s existing telecommunications regulatory regime with the intention of creating a more competitive market. The legislation does not have the effect of terminating the Company’s exclusive license. Instead the legislation as passed requires the Minister of Telecommunications to conduct further proceedings and issue implementing orders to enact the various provisions of the legislation, including the issuance of competing licenses. The Company cannot predict the manner in which or when the legislation will be implemented by the Minister of Telecommunications. In January 2018 the Government of Guyana and the Company met to discuss modifications of the Company’s exclusivity rights and other rights under its existing agreement and license. Those discussions are on-going, however, there can be no assurance that those discussions will be concluded before the Government issues new licenses contemplated by the legislation or at all, or that such discussions will satisfactorily address the Company’s contractual exclusivity rights. Although the Company believes that it would be entitled to damages or other compensation for any involuntary termination of its contractual exclusivity rights, it cannot guarantee that the Company would prevail in a proceeding to enforce its rights or that its actions would effectively halt any unilateral action by the Government. Historically, GTT has been subject to other litigation proceedings and disputes in Guyana that, while not conclusively resolved, to the Company’s knowledge have not been the subject of discussions or other significant activity in the last five years. It is possible, but the Company believes unlikely, that these disputes, as discussed below, may be revived. The Company believes that none of these additional proceedings would, in the event of an adverse outcome, have a material impact on the Company’s consolidated financial position, results of operation or liquidity. In a letter dated September 8, 2006, the National Frequency Management Unit (“NFMU”) agreed that total spectrum fees in Guyana should not increase for the years 2006 and 2007. However, that letter implied that spectrum fees in 2008 and onward may be increased beyond the amount GTT agreed to with the Government. GTT has objected to the NFMU’s proposed action and reiterated its position that an increase in fees prior to development of an acceptable methodology would violate the Government’s prior agreement. In 2011, GTT paid the NFMU $2.6 million representing payments in full for 2008, 2009 and 2010. However, by letter dated November 23, 2011, the NFMU stated that it did not concur with GTT’s inference that the amount was payment in full for the specified years as it was NFMU’s continued opinion that the final calculation for spectrum fees was not agreed upon and was still an outstanding issue. By further letter dated November 24, 2011, the NFMU further rejected a proposal that was previously submitted jointly by GTT and another communications provider that outlined a recommended methodology for the calculation of these fees. The NFMU stated that it would prepare its own recommendation for consideration by the Minister of Telecommunications, who would decide the matter. GTT has paid undisputed spectrum fees according to the methodology used for its 2011 payments, and has reserved amounts payable according to this methodology. GTT has not had the opportunity to have significant discussions with the NFMU on the matter and is not aware whether the NFMU has made any recommendation to the Minister. On May 8, 2009, a GTT competitor, Digicel, filed a lawsuit in Guyana challenging the legality of GTT’s exclusive license rights under Guyana’s constitution. Digicel initially filed this lawsuit against the Attorney General of Guyana. On May 13, 2009, GTT petitioned to intervene in the suit in order to oppose Digicel’s claims and GTT’s petition was granted on May 18, 2009. GTT filed an answer to the charge on June 22, 2009. The case remains pending. The Company believes that any legal challenge to GTT’s exclusive license rights granted in 1990 is without merit and the Company intends to defend vigorously against such legal challenge. GTT has filed several lawsuits in the High Court of Guyana asserting that, despite its denials, Digicel is engaged in international bypass in violation of GTT’s exclusive license rights, the interconnection agreement between the parties, and the laws of Guyana. GTT is seeking injunctive relief to stop the illegal bypass activity and money damages. Digicel filed counterclaims alleging that GTT has violated the terms of the interconnection agreement and Guyana laws. These suits, filed in 2010 and 2012, have been consolidated with Digicel’s constitutional challenge described above and is scheduled to proceed to trial in the second quarter of 2019. GTT intends to prosecute these matters vigorously. GTT is also involved in several legal claims regarding its tax filings with the Guyana Revenue Authority dating back to 1991 regarding the deductibility of intercompany advisory fees as well as other tax assessments. The Company maintains that any liability GTT might be found to have with respect to the disputed tax assessments, totaling $44.1 million, would be offset in part by the amounts necessary to ensure that GTT’s return on investment was no less than 15% per annum for the relevant periods. The Company believes that some adverse outcome is probable and has accordingly accrued $5.0 million as of March 31, 2019 for these matters. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 16. SUBSEQUENT EVENTS On April 10, 2019, the Company amended its outstanding credit facility. See Note 9. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The accompanying condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial information included herein is unaudited; however, the Company believes such information and the disclosures herein are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial position and results of operations for such periods. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Results of interim periods may not be indicative of results for the full year. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019. The condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiaries and certain entities, which are consolidated in accordance with the provisions of the Financial Accounting Standards Board’s (“FASB”) authoritative guidance on the consolidation of variable interest entities, since it is determined that the Company is the primary beneficiary of these entities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), and subsequently issued related updates, (collectively known as ASC 606), which provides a single, comprehensive revenue recognition model for all contracts with customers. The revenue standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard on January 1, 2018. Refer to Note 3 to the Consolidated Financial Statements in this Report. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this standard on January 1, 2018. Upon adoption the Company held $20.1 million of equity investments that did not have readily determinable fair values. As a result these investments are measured at cost less impairments, adjusted for observable price changes of similar investments of the same issuer. The Company has not adjusted the cost of these investments since acquisition. Upon adoption, the Company held $0.6 million of equity investments with readily determinable fair values and reclassified $0.2 million of unrealized gains on this investment to retained earnings. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” and subsequently issued related updates (“ASU 2016-02”), which provide comprehensive lease accounting guidance. The standard requires entities to recognize lease assets and liabilities on the balance sheet as well as disclosure of key information about leasing arrangements. ASU 2016-02 became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company adopted ASC 2016-02 on January 1, 2019 utilizing the optional transition method with a cumulative adjustment on the date of adoption and not adjusting prior periods. Refer to Note 4 of the Condensed Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides further clarification on eight cash flow classification issues. The Company adopted this standard on January 1, 2018. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” (“ASU 2016-18”). The amendments in ASU 2016-18 are intended to reduce diversity in practice related to the classification and presentation of changes in restricted cash or restricted cash equivalents on the statement of cash flows. The amendments in ASU 2016-18 require that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted this standard on January 1, 2018. In October 2016 the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory”. The new standard eliminates all intra-entity sales of assets other than inventory, the exception under current standards that permits the tax effects of intra-entity asset transfers to be deferred until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new standard was effective for the Company on January 1, 2018. There was not a material impact to the Company’s Consolidated Financial Statements upon adoption. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. The new guidance requires the service cost component to be presented separately from the other components of net benefit costs. Service cost will be presented with other employee compensation cost within income from operations. The other components of net benefit cost, such as interest cost, expected return on plan assets, amortization of prior service cost and gains or losses are required to be presented in other income. The Company adopted this standard on January 1, 2018. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815) – Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). The standard: (a) expands and refines hedge accounting for both financial and non-financial risk components, (b) aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and (c) includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted this standard on January 1, 2019. There was not a material impact to the Company’s Consolidated Financial Statements upon adoption. In February 2018, the FASB issued ASU 2018-02 “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” (“ASU 2018-02”). The standard gives entities the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income that were impacted by the 2017 Tax Cuts and Jobs Act. The guidance is effective for all entities for fiscal years beginning after December 31, 2018 and interim periods within those fiscal years. Early adoption is permitted. The guidance may be applied in the period of adoption or retrospectively to each impacted period. The Company adopted this standard on January 1, 2018. The impact of the adoption results in a $0.8 million reclassification from accumulated other comprehensive income to retained earnings, which is offset by an equivalent valuation allowance, the net impact is zero. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). This standard requires entities that are customers in cloud computing arrangements to defer implementation costs if they would be capitalized by the entity in software licensing arrangements under the internal-use software guidance. The guidance may be applied retrospectively or prospectively to implementation costs incurred after the date of adoption. ASU 2018-15 is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. The Company prospectively adopted this standard in the fourth quarter of 2018. The Company capitalized $0.5 million and $0.6 million of implementation costs during the three months ended March 31, 2019 and December 31, 2018, respectively, and none of those amounts were amortized at March 31, 2019. |
ORGANIZATION AND BUSINESS OPE_2
ORGANIZATION AND BUSINESS OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
ORGANIZATION AND BUSINESS OPERATIONS | |
Schedule of the operating activities of the Company's principal subsidiaries, the segments in which the Company reports its revenue and markets served | Segment Services Markets Tradenames US Telecom Wireless United States (rural markets) Choice, Choice NTUA Wireless, Commnet, WestNet, Geoverse Wireline United States Essextel, Deploycom International Telecom Wireline Bermuda, Cayman Islands, Guyana, US Virgin Islands Fireminds, GTT+, One, Logic, Viya Wireless Bermuda, Guyana, US Virgin Islands GTT+, One, Viya Video Services Bermuda, Cayman Islands, US Virgin Islands Logic, One, Viya Renewable Energy Solar India Vibrant Energy |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Summary of contracts asset and liabilities | Contract assets and liabilities consisted of the following (in thousands): March 31, 2019 December 31, 2018 $ Change % Change Contract asset – current $ 2,010 $ 1,900 $ 110 Contract asset – noncurrent 779 802 (23) -3% Contract liabilities (15,239) (13,787) (1,452) Net contract liability $ (12,450) $ (11,085) $ (1,365) |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
LEASES | |
Summary of components of lease expense | The components of lease expense were as follows (in thousands): Three months ended March 31,2019 Operating lease cost: Operating lease cost $ 3,516 Short-term lease cost 713 Variable lease cost Total operating lease cost $ 5,190 Finance lease cost: Amortization of right-of-use asset $ Variable costs 296 Total finance lease cost $ 889 |
Summary of weighted-average remaining lease term and discount rate | The weighted average remaining lease terms and discount rates as of March 31, 2019 are noted in the table below: Weighted average remaining lease term Operating leases 7.3 years Financing leases 12.1 years Weighted average discount rate Operating leases Financing leases n/a |
Summary of maturities of lease liabilities | Maturities of lease liabilities as of March 31, 2019 were as follows (in thousands): Operating Leases 2019 (excluding the three months ended March 31, 2019) $ 8,356 2020 12,746 2021 11,591 2022 10,816 2023 10,097 Thereafter 27,319 Total lease payments 80,925 Less imputed interest (13,739) Total $ 67,186 |
Summary of maturities of lease liabilities as of December 31, 2018 | Maturities of lease liabilities as of December 31, 2018 were as follows (in thousands): Operating Leases 2019 $ 11,801 2020 12,650 2021 11,491 2022 10,713 2023 9,990 Thereafter 27,325 Total lease payments $ 83,970 |
DISPOSITIONS, PLATFORM AND MI_2
DISPOSITIONS, PLATFORM AND MINORITY INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
DISPOSITIONS PLATFORM AND MINORITY INVESTMENTS | |
Schedule of assets and liabilities transferred | The table below identifies the assets and liabilities transferred (in thousands): Consideration Received $ 65,286 Assets and liabilities disposed Cash 3,049 Accounts receivable 1,248 Prepayments and other current assets 801 Property, plant and equipment 94,678 Restricted cash 8,407 Other assets 38 Current portion of long-term debt (6,992) Accounts payable and accrued liabilities (938) Accrued taxes 586 Long-term debt, excluding current portion (48,038) Net assets disposed 52,839 Consideration less net assets disposed 12,447 Transaction costs (2,133) Gain $ 10,314 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities of the entity measured at fair value on a recurring basis | Assets and liabilities of the Company measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 are summarized as follows (in thousands): March 31, 2019 Significant Other Quoted Prices in Observable Unobservable Active Markets Inputs Inputs Description (Level 1) (Level 2) (Level 3) Total Certificates of deposit $ — $ 380 $ — $ 380 Money market funds 2,615 — — 2,615 Short term investments 5,280 — — 5,280 Other investments — — 10,000 10,000 Commercial paper — 13,975 — 13,975 Interest rate swap — 70 — 70 Total assets and liabilities measured at fair value $ 7,895 $ 14,425 $ 10,000 $ 32,320 December 31, 2018 Significant Other Quoted Prices in Observable Active Markets Inputs Description (Level 1) (Level 2) Total Certificates of deposit $ — $ 380 $ 380 Money market funds 2,266 — 2,266 Short term investments 393 — 393 Commercial paper — 13,972 13,972 Interest rate swap — 140 140 Total assets and liabilities measured at fair value $ 2,659 $ 14,492 $ 17,151 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
RETIREMENT PLANS | |
Schedule of components of the plan's net periodic pension cost | The Company recorded the net periodic benefit cost identified below (in thousands): Three months ended March 31, 2019 March 31, 2018 Pension benefits Postretirement benefits Pension benefits Postretirement benefits Operating expense Service cost $ 447 $ 37 $ 448 $ 37 Non-operating expense Interest cost 841 40 Expected return on plan assets (1,263) — — Actuarial gain/ loss 7 (17) Net periodic pension expense $ 32 $ 60 $ $ 60 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
SEGMENT REPORTING | |
Schedule of information for each operating segment | The following tables provide information for each operating segment (in thousands): For the Three Months Ended March 31, 2019 US International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 20,437 $ 21,176 $ — $ — $ 41,613 Wireline 1,056 59,141 — — 60,197 Renewable Energy — — 1,490 — 1,490 Total Revenue 21,493 80,317 1,490 — 103,300 Depreciation and amortization 5,598 13,015 616 1,489 20,718 Non-cash stock-based compensation — 11 — 1,290 1,301 Operating income (loss) (3,506) 13,878 (203) (8,055) 2,114 For the Three Months Ended March 31, 2018 US International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated Revenue Wireless $ 27,401 $ 23,147 $ — $ — $ 50,548 Wireline 1,098 46,998 — — 48,096 Renewable Energy — — 5,831 — 5,831 Total Revenue 28,499 70,145 5,831 — 104,475 Depreciation and amortization 6,513 11,671 1,774 1,347 21,305 Non-cash stock-based compensation — 29 29 1,518 1,576 Operating income (loss) 5,224 5,640 1,936 (8,591) 4,209 (1) Corporate and Other items refer to corporate overhead costs and consolidating adjustments |
Schedule of selected balance sheet data for each segment | Selected balance sheet data for each of the Company’s segments as of March 31, 2019 and December 31, 2018 consists of the following (in thousands): US International Renewable Corporate and Telecom Telecom Energy Other (1) Consolidated March 31, 2019 Cash, Cash equivalents, and Investments $ 14,858 $ $ $ $ 176,763 Total current assets 38,580 261,144 Fixed assets, net 75,004 619,798 Goodwill 35,269 — 63,970 Total assets 217,756 1,162,830 Total current liabilities 25,517 141,317 Total debt — — — 90,068 December 31, 2018 Cash, Cash equivalents, and Investments $ 19,118 $ 32,390 $ 62,678 $ 78,043 $ 192,229 Total current assets 36,801 75,304 80,553 83,107 275,765 Fixed assets, net 78,102 482,770 45,599 20,381 626,852 Goodwill 35,269 25,421 3,280 — 63,970 Total assets 172,634 622,454 130,427 181,789 1,107,304 Total current liabilities 15,783 82,575 3,465 38,827 140,650 Total debt — 90,970 12 — 90,982 |
Schedule of segment capital expenditures | Capital Expenditures US International Renewable Corporate and Three months ended March 31, Telecom Telecom (2) Energy Other (1) Consolidated 2019 $ 3,075 $ 11,356 $ 609 $ 2,724 $ 17,764 2018 4,751 43,996 854 2,291 51,892 (1) Corporate and other items refer to corporate overhead costs and consolidating adjustments (2) Includes $0.1 million and $30.9 million of expenditures in the first quarter of 2019 and 2018, respectively, used to rebuild the Company’s damaged networks in the US Virgin Islands which was impacted by the Hurricanes. These expenditures were financed, in part, by the $34.6 million of insurance proceeds the Company received during the first quarter of 2018. |
ORGANIZATION AND BUSINESS OPE_3
ORGANIZATION AND BUSINESS OPERATIONS (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
ORGANIZATION AND BUSINESS OPERATIONS | |
Number of Operating Segments | 3 |
BASIS OF PRESENTATION - Recent
BASIS OF PRESENTATION - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | Jan. 01, 2016 | |
Recent accounting pronouncements | ||||
Equity investments with readily determinable fair values | $ 300 | $ 300 | ||
Accumulated other comprehensive income | (1,433) | (1,609) | ||
Retained earnings | 559,319 | 563,593 | ||
ASU 2016-01 | ||||
Recent accounting pronouncements | ||||
Equity investments that do not have readily determinable fair values | $ 20,100 | |||
Equity investments with readily determinable fair values | 600 | |||
ASU 2018-15 | Early Adoption | ||||
Recent accounting pronouncements | ||||
Capitalized implementation costs | 500 | $ 600 | ||
Amortization of implementation costs | $ 0 | |||
Adjustment | ASU 2016-01 | ||||
Recent accounting pronouncements | ||||
Accumulated other comprehensive income | (200) | |||
Retained earnings | $ 200 | |||
Adjustment | ASU 2018-02 | Early Adoption | ||||
Recent accounting pronouncements | ||||
Accumulated other comprehensive income | $ (800) | |||
Retained earnings | 800 | |||
Valuation allowance | $ 800 |
REVENUE RECOGNITION - IMPACTS O
REVENUE RECOGNITION - IMPACTS OF ADOPTION IN THE CURRENT PERIOD - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
Contracts | |||
Contract liability | $ 15,239 | $ 13,787 | |
Deferred income taxes | 8,362 | 10,276 | |
Retained earnings | 559,319 | 563,593 | |
Minority interest | $ 128,963 | $ 127,937 | |
Change | ASU 2014-09 | |||
Contracts | |||
Contract asset | $ 1,600 | ||
Contract liability | 200 | ||
Contract acquisition costs | 1,500 | ||
Deferred income taxes | 300 | ||
Retained earnings | 1,500 | ||
Minority interest | 1,100 | ||
Change | ASU 2014-09 | Prepayments and other current assets | |||
Contracts | |||
Contract asset | 1,200 | ||
Contract acquisition costs | 900 | ||
Change | ASU 2014-09 | Other assets | |||
Contracts | |||
Contract asset | 400 | ||
Contract acquisition costs | $ 600 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Contract Assets and Liabilities | ||
Contract asset, current | $ 2,010 | $ 1,900 |
Change in contract asset - current | $ 110 | |
% of change in contract asset - current | 6.00% | |
Contract asset, noncurrent | $ 779 | 802 |
Change in contract Asset – noncurrent | $ (23) | |
% of change in contract Asset – noncurrent | (3.00%) | |
Contract liabilities | $ (15,239) | (13,787) |
Change in contract liabilities | $ (1,452) | |
% of change in contract liabilities | 11.00% | |
Net contract liability | $ (12,450) | $ (11,085) |
Change in net contract liability | $ (1,365) | |
% of change in net contract liability | 12.00% | |
Revenue recognized related to contract liability | $ 9,100 | |
Amortization of contract assets | $ 600 |
REVENUE RECOGNITION - Contrac_2
REVENUE RECOGNITION - Contract Acquisition Costs (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Contract Acquisition Costs | |
Amortization of contract acquisition cost | $ 0.5 |
Prepayments and other current assets | |
Contract Acquisition Costs | |
Short-term contract acquisition costs | 1.5 |
Other assets | |
Contract Acquisition Costs | |
Long-term contract acquisition costs | $ 0.9 |
REVENUE RECOGNITION - Remaining
REVENUE RECOGNITION - Remaining Performance Obligations - (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Revenue Recognition | ||
Transaction price allocated to unsatisfied performance obligations | $ 12.1 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-03-31 | ||
Revenue Recognition | ||
Transaction price allocated to unsatisfied performance obligations | $ 11.9 | |
Period to satisfy the remaining performance obligations and recognize the transaction price | 24 months | |
Right to invoice and wholly unsatisfied performance obligation practical expedients | true |
LEASES (Details)
LEASES (Details) - USD ($) Unit12 in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Jan. 01, 2019 | Mar. 31, 2018 | |
LEASES | |||
Operating lease right-of-use asset | $ 68,185 | ||
Short-term lease liability | 8,351 | ||
Long-term lease liability | $ 58,835 | ||
Cumulative effect adjustment due to adoption of new accounting | $ 2,635 | ||
Package of practical expedients | true | ||
Hindsight practical expedient | true | ||
Interest cost applicable to financing leases | $ 0 | ||
Lease liability applicable to financing leases | $ 0 | ||
Discount rate applicable to financing leases | 0.00% | ||
Operating lease, existence of option to extend | true | ||
Finance lease, existence of option to extend | true | ||
Minimum | |||
LEASES | |||
Operating lease, lease term | 3 years | ||
Finance lease, lease term | 3 years | ||
Maximum | |||
LEASES | |||
Operating lease, lease term | 10 years | ||
Finance lease, lease term | 10 years | ||
Restatement Adjustment | ASC 842 | |||
LEASES | |||
Operating lease right-of-use asset | $ 70,800 | ||
Short-term lease liability | 8,200 | ||
Long-term lease liability | 61,200 | ||
Cumulative effect adjustment due to adoption of new accounting | $ 0 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense and Payments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
LEASES | |
Operating lease cost | $ 3,516 |
Short-term lease cost | 713 |
Variable lease cost | 961 |
Total operating lease cost | 5,190 |
Operating cash flows, which were included in the measurement of lease liabilities | 3,200 |
Lease liabilities arising from right-of-use assets | 200 |
Finance lease cost: | |
Amortization of right-of-use asset | 593 |
Variable costs | 296 |
Total finance lease cost | 889 |
Finance leases cost included in property, plant and equipment | $ 27,400 |
Property, plant and equipment | us-gaap:PropertyPlantAndEquipmentGross |
Accumulated depreciation related to finance leases | $ 7,900 |
LEASES - Weighted average remai
LEASES - Weighted average remaining lease terms and discount rates (Details) | Mar. 31, 2019 |
LEASES | |
Operating leases, weighted average remaining lease term | 7 years 3 months 18 days |
Financing leases, weighted average remaining lease term | 12 years 1 month 6 days |
Operating leases, weighted average discount rate | 4.90% |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
LEASES | ||
2019 (excluding the three months ended March 31, 2019) | $ 8,356 | |
2020 | 12,746 | |
2021 | 11,591 | |
2022 | 10,816 | |
2023 | 10,097 | |
Thereafter | 27,319 | |
Total lease payments | 80,925 | |
Less imputed interest | (13,739) | |
Total | $ 67,186 | |
Maturities of lease liabilities as of December 31, 2018 | ||
2019 | $ 11,801 | |
2020 | 12,650 | |
2021 | 11,491 | |
2022 | 10,713 | |
2023 | 9,990 | |
Thereafter | 27,325 | |
Total lease payments | $ 83,970 |
IMPACT OF HURRICANES IRMA AND_2
IMPACT OF HURRICANES IRMA AND MARIA (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
IMPACT OF THE HURRICANES IRMA AND MARIA | |||
Insurance proceeds | $ 34,606 | ||
Payment for network repairs and resiliency enhancements | $ 123 | 30,851 | |
HURRICANES IRMA AND MARIA | |||
IMPACT OF THE HURRICANES IRMA AND MARIA | |||
Insurance proceeds | $ 34,600 | ||
Payment for network repairs and resiliency enhancements | $ 100 | $ 30,900 |
DISPOSITIONS, PLATFORM AND MI_3
DISPOSITIONS, PLATFORM AND MINORITY INVESTMENTS (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - U.S. Solar Operations - USD ($) $ in Thousands | Nov. 06, 2018 | Dec. 31, 2018 |
Disposition | ||
Cash proceeds | $ 65,286 | |
Debt assumption | 57,300 | |
Receivables, escrowed | 6,500 | |
Total value of disposal consideration | 122,600 | |
Assets and liabilities disposed | ||
Cash | 3,049 | |
Accounts receivable | 1,248 | |
Prepayments and other current assets | 801 | |
Property, plant and equipment | 94,678 | |
Restricted cash | 8,407 | |
Other assets | 38 | |
Current portion of long-term debt | (6,992) | |
Accounts payable and accrued liabilities | (938) | |
Accrued taxes | 586 | |
Long-term debt, excluding current portion | (48,038) | |
Net assets disposed | 52,839 | |
Consideration less net assets disposed | 12,447 | |
Transaction costs: | (2,133) | |
Gain | 10,314 | |
Gain to non-controlling interests | $ 1,100 | |
Transaction-related charges | $ 2,100 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Fair value measurements | ||
Equity investments with readily determinable fair values | $ 300 | $ 300 |
Purchase of other investments | 10,000 | |
Impairment or price adjustments for strategic investments | 0 | |
Carrying Value | ||
Fair value measurements | ||
Long-term debt | 90,100 | 91,000 |
Carrying Value | Other Assets | ||
Fair value measurements | ||
Strategic investments | 33,100 | 23,100 |
Level 2 | Estimated Fair Value | ||
Fair value measurements | ||
Long-term debt | 90,600 | 91,600 |
Recurring basis | ||
Fair value measurements | ||
Total assets and liabilities measured at fair value | 32,320 | 17,151 |
Recurring basis | Interest rate swap | ||
Fair value measurements | ||
Derivative liabilities | 70 | 140 |
Recurring basis | Certificate of deposit | ||
Fair value measurements | ||
Cash and cash equivalents | 380 | 380 |
Recurring basis | Money market funds | ||
Fair value measurements | ||
Cash and cash equivalents | 2,615 | 2,266 |
Recurring basis | Short Term Investments | ||
Fair value measurements | ||
Investments | 5,280 | 393 |
Recurring basis | Other investments | ||
Fair value measurements | ||
Investments | 10,000 | |
Recurring basis | Commercial paper | ||
Fair value measurements | ||
Investments | 13,975 | 13,972 |
Recurring basis | Level 1 | ||
Fair value measurements | ||
Total assets and liabilities measured at fair value | 7,895 | 2,659 |
Recurring basis | Level 1 | Money market funds | ||
Fair value measurements | ||
Cash and cash equivalents | 2,615 | 2,266 |
Recurring basis | Level 1 | Short Term Investments | ||
Fair value measurements | ||
Investments | 5,280 | 393 |
Recurring basis | Level 2 | ||
Fair value measurements | ||
Total assets and liabilities measured at fair value | 14,425 | 14,492 |
Recurring basis | Level 2 | Interest rate swap | ||
Fair value measurements | ||
Derivative liabilities | 70 | 140 |
Recurring basis | Level 2 | Certificate of deposit | ||
Fair value measurements | ||
Cash and cash equivalents | 380 | 380 |
Recurring basis | Level 2 | Commercial paper | ||
Fair value measurements | ||
Investments | 13,975 | $ 13,972 |
Recurring basis | Level 3 | ||
Fair value measurements | ||
Total assets and liabilities measured at fair value | 10,000 | |
Recurring basis | Level 3 | Other investments | ||
Fair value measurements | ||
Investments | $ 10,000 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ in Millions | Apr. 10, 2019USD ($) | May 22, 2017USD ($) | Mar. 31, 2019USD ($) | Jul. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 19, 2016USD ($) | Jul. 01, 2016USD ($) | Dec. 24, 2014 |
PSE&G | ||||||||
Long-term debt | ||||||||
Stated interest rate | 11.30% | |||||||
One Communications Debt | ||||||||
Long-term debt | ||||||||
Financing costs | $ 0.3 | |||||||
Outstanding debt | $ 30.9 | |||||||
Unamortized financing costs | 0.2 | |||||||
One Communications Debt | Minimum | ||||||||
Long-term debt | ||||||||
Percentage of notional amount required for hedging arrangement | 30.00% | |||||||
One Communications Debt | Minimum | Three month LIBOR | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 2.50% | |||||||
One Communications Debt | Maximum | Three month LIBOR | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 2.75% | |||||||
Viya Debt | ||||||||
Long-term debt | ||||||||
Term loan assumed | $ 60 | |||||||
Net leverage ratio | 3.5 | |||||||
Stated interest rate | 4.00% | 4.00% | ||||||
Financing costs | $ 0.9 | |||||||
Intercompany debt limit | 75 | |||||||
Outstanding debt | 60 | |||||||
Unamortized financing costs | 0.7 | |||||||
Revolver loan | Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | 225 | |||||||
Maximum investment in unrestricted subsidiaries | 400 | |||||||
Borrowings outstanding | $ 0 | |||||||
Revolver loan | Credit facility | Minimum | ||||||||
Long-term debt | ||||||||
Commitment fee (as a percent) | 0.175% | |||||||
Revolver loan | Credit facility | Minimum | LIBOR | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 1.50% | |||||||
Revolver loan | Credit facility | Minimum | Base rate | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||
Revolver loan | Credit facility | Maximum | ||||||||
Long-term debt | ||||||||
Commitment fee (as a percent) | 0.25% | |||||||
Revolver loan | Credit facility | Maximum | LIBOR | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 1.75% | |||||||
Revolver loan | Credit facility | Maximum | Base rate | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 0.75% | |||||||
Letter of credit sub-facility | Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | $ 10 | |||||||
Swingline sub-facility | Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | $ 10 | |||||||
Base rate before one-week or one-month LIBOR (as a percent) | 1.00% | |||||||
Swingline sub-facility | Credit facility | Federal Funds Effective Rate | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 0.50% | |||||||
Term loans | Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | $ 200 | |||||||
Mobility Funds | Letter of credit sub-facility | Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | 25 | |||||||
Ahana Operations | Series A Notes | ||||||||
Long-term debt | ||||||||
Secured debt principal amount | $ 20.6 | |||||||
Stated interest rate | 4.427% | |||||||
Ahana Operations | Series B Notes | ||||||||
Long-term debt | ||||||||
Secured debt principal amount | $ 45.2 | |||||||
Stated interest rate | 5.327% | |||||||
Ahana Operations | Series A and Series B Notes | ||||||||
Long-term debt | ||||||||
Financing costs | $ 2.8 | |||||||
Overdraft Facility | One Communications Debt | ||||||||
Long-term debt | ||||||||
Borrowings outstanding | 0 | |||||||
Cash flow hedge | Interest rate swap | ||||||||
Long-term debt | ||||||||
Notional amount | $ 9.3 | $ 11 | ||||||
Interest rate (as a percent) | 1.874% | |||||||
Subsequent event | Revolver loan | New Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | $ 200 | |||||||
Net leverage ratio | 1.75 | |||||||
Subsequent event | Revolver loan | New Credit facility | Minimum | ||||||||
Long-term debt | ||||||||
Commitment fee (as a percent) | 0.15% | |||||||
Subsequent event | Revolver loan | New Credit facility | Minimum | LIBOR | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 1.25% | |||||||
Subsequent event | Revolver loan | New Credit facility | Minimum | Base rate | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 0.25% | |||||||
Subsequent event | Revolver loan | New Credit facility | Maximum | ||||||||
Long-term debt | ||||||||
Commitment fee (as a percent) | 0.375% | |||||||
Subsequent event | Revolver loan | New Credit facility | Maximum | LIBOR | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 2.25% | |||||||
Subsequent event | Revolver loan | New Credit facility | Maximum | Base rate | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 1.25% | |||||||
Subsequent event | Letter of credit sub-facility | New Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | $ 75 | |||||||
Performance letters of credit issued and outstanding | 8 | |||||||
Subsequent event | Swingline sub-facility | New Credit facility | ||||||||
Long-term debt | ||||||||
Maximum borrowing capacity | $ 10 | |||||||
Base rate before one-week or one-month LIBOR (as a percent) | 1.00% | |||||||
Subsequent event | Swingline sub-facility | New Credit facility | Federal Funds Effective Rate | ||||||||
Long-term debt | ||||||||
Basis spread on variable rate (as a percent) | 0.50% |
GOVERNMENT GRANTS (Details)
GOVERNMENT GRANTS (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2018USD ($) | Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Universal Service Fund programs | ||||
Government Grants | ||||
Number of fund disbursement programs | item | 4 | |||
Mobility Funds | ||||
Government Grants | ||||
Mobility Funds received | $ 21.1 | |||
Mobility Funds | U.S. Telecom | ||||
Government Grants | ||||
Grant funds used to offset fixed asset related costs | 7.2 | |||
Grant funds used to offset operating expenses | 13.9 | |||
High-Cost Support Program | U.S. Telecom | ||||
Government Grants | ||||
Revenue | 0.3 | $ 0.3 | ||
High-Cost Support Program | International Telecom | ||||
Government Grants | ||||
Revenue | 4.1 | 4.1 | ||
E-Rate, Lifeline and Rural Health Care Support Programs | ||||
Government Grants | ||||
Revenue | 1.5 | $ 2.2 | ||
E-Rate | ||||
Government Grants | ||||
Grant Funds Awarded | $ 15.4 | |||
Tribal Bidding Credit | ||||
Government Grants | ||||
Wireless service spectrum (in Mhz) | 600 | |||
Revenue | $ 7.4 | |||
Grant funds used to offset fixed asset related costs | $ 5.4 | |||
Grant funds used to offset operating expenses | $ 2 | |||
Connect America Fund Phase II Auction | ||||
Government Grants | ||||
Grant Funds Awarded | $ 79.9 | |||
Grant fund term | 10 years |
RETIREMENT PLANS - Net Periodic
RETIREMENT PLANS - Net Periodic Pension Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Components of the plan's net periodic pension cost | ||
Company contributions | $ 0 | $ 0 |
Pension Plans | ||
Components of the plan's net periodic pension cost | ||
Service cost | 447 | 448 |
Interest cost | 841 | 820 |
Expected return on plan assets | (1,263) | (1,209) |
Actuarial gain/ loss | 7 | 30 |
Net periodic pension cost | 32 | 89 |
Postretirement Benefits | ||
Components of the plan's net periodic pension cost | ||
Service cost | 37 | 37 |
Interest cost | 40 | 40 |
Actuarial gain/ loss | (17) | (17) |
Net periodic pension cost | $ 60 | $ 60 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
INCOME TAXES | ||
Effective tax rate (as a percent) | 62.30% | 242.30% |
Increase (net) in unrecognized tax benefits recognized discretely | $ 0.5 | $ 0.3 |
Provision for the intercompany sale of assets | $ 0.7 | |
Provision for stock compensation recognized | $ 0.1 |
NET INCOME (LOSS) PER SHARE (De
NET INCOME (LOSS) PER SHARE (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
NET INCOME (LOSS) PER SHARE | ||
Anti-dilutive potential shares excluded from the computation of diluted weighted average shares outstanding (in shares) | 42,000 | 189,000 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment reporting | |||
Number of reportable segments | segment | 3 | ||
Revenue | |||
Revenue | $ 103,300 | $ 104,475 | |
Depreciation and amortization | 20,718 | 21,305 | |
Non-cash stock-based compensation | 1,301 | 1,576 | |
Operating income (loss) | 2,114 | 4,209 | |
Segment Assets | |||
Cash, Cash equivalents, and Investments | 176,763 | $ 192,229 | |
Total current assets | 261,144 | 275,765 | |
Fixed assets, net | 619,798 | 626,852 | |
Goodwill | 63,970 | 63,970 | |
Total assets | 1,162,830 | 1,107,304 | |
Total current liabilities | 141,317 | 140,650 | |
Total debt | 90,068 | 90,982 | |
Capital Expenditures | |||
Capital expenditures | 17,764 | 51,892 | |
Hurricane rebuild capital expenditures | 123 | 30,851 | |
Hurricane insurance proceeds | 34,606 | ||
Wireless | |||
Revenue | |||
Revenue | 41,613 | 50,548 | |
Wireline | |||
Revenue | |||
Revenue | 60,197 | 48,096 | |
Renewable Energy | |||
Revenue | |||
Revenue | 1,490 | 5,831 | |
Corporate and Other | |||
Revenue | |||
Depreciation and amortization | 1,489 | 1,347 | |
Non-cash stock-based compensation | 1,290 | 1,518 | |
Operating income (loss) | (8,055) | (8,591) | |
Segment Assets | |||
Cash, Cash equivalents, and Investments | 64,300 | 78,043 | |
Total current assets | 58,246 | 83,107 | |
Fixed assets, net | 22,781 | 20,381 | |
Total assets | 172,714 | 181,789 | |
Total current liabilities | 35,002 | 38,827 | |
Capital Expenditures | |||
Capital expenditures | 2,724 | 2,291 | |
U.S. Telecom | Operating segments | |||
Revenue | |||
Revenue | 21,493 | 28,499 | |
Depreciation and amortization | 5,598 | 6,513 | |
Operating income (loss) | (3,506) | 5,224 | |
Segment Assets | |||
Cash, Cash equivalents, and Investments | 14,858 | 19,118 | |
Total current assets | 38,580 | 36,801 | |
Fixed assets, net | 75,004 | 78,102 | |
Goodwill | 35,269 | 35,269 | |
Total assets | 217,756 | 172,634 | |
Total current liabilities | 25,517 | 15,783 | |
Capital Expenditures | |||
Capital expenditures | 3,075 | 4,751 | |
U.S. Telecom | Operating segments | Wireless | |||
Revenue | |||
Revenue | 20,437 | 27,401 | |
U.S. Telecom | Operating segments | Wireline | |||
Revenue | |||
Revenue | 1,056 | 1,098 | |
International Telecom | Operating segments | |||
Revenue | |||
Revenue | 80,317 | 70,145 | |
Depreciation and amortization | 13,015 | 11,671 | |
Non-cash stock-based compensation | 11 | 29 | |
Operating income (loss) | 13,878 | 5,640 | |
Segment Assets | |||
Cash, Cash equivalents, and Investments | 40,731 | 32,390 | |
Total current assets | 89,785 | 75,304 | |
Fixed assets, net | 477,147 | 482,770 | |
Goodwill | 25,421 | 25,421 | |
Total assets | 648,736 | 622,454 | |
Total current liabilities | 78,649 | 82,575 | |
Total debt | 90,068 | 90,970 | |
Capital Expenditures | |||
Capital expenditures | 11,356 | 43,996 | |
Hurricane rebuild capital expenditures | 100 | 30,900 | |
Hurricane insurance proceeds | 34,600 | ||
International Telecom | Operating segments | Wireless | |||
Revenue | |||
Revenue | 21,176 | 23,147 | |
International Telecom | Operating segments | Wireline | |||
Revenue | |||
Revenue | 59,141 | 46,998 | |
Renewable Energy | Operating segments | |||
Revenue | |||
Revenue | 1,490 | 5,831 | |
Depreciation and amortization | 616 | 1,774 | |
Non-cash stock-based compensation | 29 | ||
Operating income (loss) | (203) | 1,936 | |
Segment Assets | |||
Cash, Cash equivalents, and Investments | 56,874 | 62,678 | |
Total current assets | 74,533 | 80,553 | |
Fixed assets, net | 44,866 | 45,599 | |
Goodwill | 3,280 | 3,280 | |
Total assets | 123,624 | 130,427 | |
Total current liabilities | 2,149 | 3,465 | |
Total debt | $ 12 | ||
Capital Expenditures | |||
Capital expenditures | 609 | 854 | |
Renewable Energy | Operating segments | Renewable Energy | |||
Revenue | |||
Revenue | $ 1,490 | $ 5,831 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2011 | |
Contingency related to spectrum fees | ||
Commitments and contingencies | ||
Spectrum fees paid | $ 2.6 | |
Litigation proceedings and disputes in Guyana | ||
Commitments and contingencies | ||
Period for which litigation proceedings and other disputes have not been the subject of discussions or other significant activity | 5 years | |
Legal claims regarding tax filings with the Guyana Revenue Authority | ||
Commitments and contingencies | ||
Future payments related to disputed tax assessments | $ 44.1 | |
Accrued contingent liability | $ 5 | |
Legal claims regarding tax filings with the Guyana Revenue Authority | Minimum | ||
Commitments and contingencies | ||
Percentage of return on investment ensured by the government of Guyana | 15.00% |