Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 000-51829 | |
Entity Registrant Name | COGENT COMMUNICATIONS HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-5706863 | |
Entity Address, Address Line One | 2450 N Street N.W. | |
Entity Address, Country | US | |
Entity Address, City or Town | Washington, D.C | |
Entity Address, Postal Zip Code | 20037 | |
City Area Code | 202 | |
Local Phone Number | 295-4200 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CCOI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 48,010,042 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001158324 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 268,945 | $ 319,609 |
Restricted cash | 54,719 | 9,015 |
Accounts receivable, net of allowance for credit losses of $1,966 and $1,510, respectively | 43,433 | 41,938 |
Prepaid expenses and other current assets | 46,407 | 39,015 |
Total current assets | 413,504 | 409,577 |
Property and equipment, net | 503,763 | 457,880 |
Right-of-use leased assets | 86,047 | 101,687 |
Deposits and other assets | 17,388 | 15,413 |
Total assets | 1,020,702 | 984,557 |
Current liabilities: | ||
Accounts payable | 18,398 | 11,923 |
Accrued and other current liabilities | 67,290 | 39,057 |
Installment payment agreement, current portion, net of discount of $6 | 785 | |
Current maturities, operating lease liabilities | 11,784 | 12,197 |
Current maturities, finance lease obligations | 24,135 | 17,048 |
Total current liabilities | 121,607 | 81,010 |
Operating lease liabilities, net of current maturities | 99,438 | 111,794 |
Finance lease obligations, net of current maturities | 263,750 | 228,822 |
Other long-term liabilities | 83,728 | 44,609 |
Total liabilities | 1,512,467 | 1,357,655 |
Commitments and contingencies: | ||
Stockholders' deficit: | ||
Common stock, $0.001 par value; 75,000,000 shares authorized; 48,002,135 and 47,674,189 shares issued and outstanding, respectively | 48 | 48 |
Additional paid-in capital | 568,065 | 547,734 |
Accumulated other comprehensive loss - foreign currency translation | (28,413) | (11,003) |
Accumulated deficit | (1,031,465) | (909,877) |
Total stockholders' deficit | (491,765) | (373,098) |
Total liabilities and stockholders' deficit | 1,020,702 | 984,557 |
Senior unsecured 2024 Notes | ||
Current liabilities: | ||
Senior unsecured 2024 Euro notes, net of unamortized debt costs of $2,121 and net of discount of $772 | 394,112 | |
Senior secured 2026 Notes | ||
Current liabilities: | ||
Senior secured 2026 notes, net of unamortized debt costs of $969 and $1,156, respectively, and net of discounts of $1,287 and $1,536, respectively | 497,744 | 497,308 |
Senior unsecured 2027 Notes | ||
Current liabilities: | ||
Senior unsecured 2027 notes, net of unamortized debt costs of $1,228 and net of discount of $2,572 | $ 446,200 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Accounts receivable, allowance for credit losses (in dollars) | $ 1,966 | $ 1,510 |
Liabilities and stockholders' deficit | ||
Discount on installment payment agreement | $ 6 | $ 6 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 48,002,135 | 47,674,189 |
Common stock, shares outstanding | 48,002,135 | 47,674,189 |
Senior unsecured 2024 Notes | ||
Liabilities and stockholders' deficit | ||
Unamortized debt costs | $ 2,121 | $ 2,121 |
Unamortized debt premium noncurrent | 772 | 772 |
Senior secured 2026 Notes | ||
Liabilities and stockholders' deficit | ||
Unamortized debt costs | 969 | 1,156 |
Unamortized debt premium noncurrent | 1,287 | 1,536 |
Senior unsecured 2027 Notes | ||
Liabilities and stockholders' deficit | ||
Unamortized debt costs | 1,228 | 1,228 |
Unamortized debt premium noncurrent | $ 2,572 | $ 2,572 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Service revenue | $ 150,000 | $ 147,927 | $ 447,625 | $ 442,584 |
Operating expenses: | ||||
Network operations | 57,220 | 56,645 | 171,183 | 169,920 |
Selling, general, and administrative | 39,114 | 40,117 | 119,129 | 122,952 |
Acquisition costs - Sprint (Note 1) | 2,004 | 2,004 | ||
Depreciation and amortization | 22,897 | 22,609 | 68,659 | 66,675 |
Total operating expenses | 121,235 | 119,371 | 360,975 | 359,547 |
(Loss) gains on lease termination and equipment transactions | (210) | 18 | ||
Gains on lease transactions | (670) | |||
Operating income | 28,095 | 28,556 | 86,440 | 83,055 |
Interest expense | (17,948) | (14,273) | (45,594) | (44,345) |
Change in valuation - interest rate swap | (16,923) | (3,076) | (45,703) | (3,076) |
Foreign exchange gain - 2024 Euro Notes | 10,169 | 31,561 | 23,759 | |
Loss on debt extinguishment and redemption - 2024 Euro Notes | (11,885) | |||
Loss on debt extinguishment and redemption - 2022 Notes | (14,698) | |||
Interest income and other expenses, net | (262) | 648 | (462) | 1,460 |
Income before income taxes | (7,038) | 22,024 | 14,357 | 46,155 |
Income tax expense | (969) | (8,704) | (10,063) | (16,477) |
Net (loss) income | (8,007) | 13,320 | 4,294 | 29,678 |
Comprehensive (loss) income: | ||||
Net (loss) income | (8,007) | 13,320 | 4,294 | 29,678 |
Foreign currency translation adjustment | (7,752) | (3,818) | (17,410) | (7,252) |
Comprehensive (loss) income | $ (15,759) | $ 9,502 | $ (13,116) | $ 22,426 |
Net (loss) income per common share: | ||||
Basic net (loss) income per common share | $ (0.17) | $ 0.29 | $ 0.09 | $ 0.64 |
Diluted net (loss) income per common share | (0.17) | 0.28 | 0.09 | 0.63 |
Dividends declared per common share | $ 0.905 | $ 0.805 | $ 2.64 | $ 2.34 |
Weighted-average common shares - basic (in shares) | 46,736,742 | 46,293,524 | 46,759,632 | 46,290,452 |
Weighted-average common shares - diluted (in shares) | 46,736,742 | 46,866,929 | 47,097,580 | 46,825,948 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity-based compensation expense | $ 18,174 | $ 20,769 | ||
Network operations | ||||
Equity-based compensation expense | $ 176 | $ 163 | 465 | 2,375 |
Selling, general and administrative | ||||
Equity-based compensation expense | $ 6,035 | $ 6,425 | $ 17,709 | $ 18,394 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 4,294 | $ 29,678 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 68,659 | 66,675 |
Amortization of debt costs, discounts and premiums | 1,144 | 1,333 |
Equity-based compensation expense (net of amounts capitalized) | 18,174 | 20,769 |
Loss on debt extinguishment and redemption - 2024 Euro Notes | 11,885 | |
Loss on debt extinguishment and redemption - 2022 Notes | 14,698 | |
Gains on foreign exchange - 2024 Euro Notes | (31,561) | (23,759) |
Gains - equipment transactions and other, net | 3,531 | (347) |
Deferred income taxes | 4,682 | 11,922 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,103) | (159) |
Prepaid expenses and other current assets | (9,404) | 1,734 |
Change in valuation - interest rate swap agreement | 45,703 | 3,076 |
Accounts payable, accrued liabilities and other long-term liabilities | 23,144 | 8,676 |
Deposits and other assets | 236 | (23) |
Net cash provided by operating activities | 137,384 | 134,273 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (59,380) | (54,620) |
Net cash used in investing activities | (59,380) | (54,620) |
Cash flows from financing activities: | ||
Dividends paid | (125,882) | (110,736) |
Principal payments on installment payment agreement | (790) | (5,845) |
Principal payments of finance lease obligations | (20,958) | (16,826) |
Proceeds from exercises of stock options | 426 | 1,237 |
Net cash used in financing activities | (76,548) | (94,554) |
Effect of exchange rates changes on cash | (6,416) | (1,445) |
Net decrease in cash, cash equivalents and restricted cash | (4,960) | (16,346) |
Cash, cash equivalents and restricted cash, beginning of period | 328,624 | 371,301 |
Cash, cash equivalents and restricted cash, end of period | 323,664 | 354,955 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Fair value of equipment acquired in lease | 1,969 | |
Finance lease obligations incurred | 74,633 | 38,411 |
Senior notes | ||
Cash flows from financing activities: | ||
Redemption and extinguishment - 2024 Euro Notes | (375,354) | |
2022 Notes | ||
Cash flows from financing activities: | ||
Redemption and extinguishment - 2022 Notes | (459,317) | |
Senior secured 2026 Notes | ||
Cash flows from financing activities: | ||
Net proceeds from issuance of senior secured 2026 Notes - net of debt costs of $1,317 | 496,933 | |
Senior unsecured 2027 Notes | ||
Cash flows from financing activities: | ||
Net proceeds from issuance of senior unsecured 2027 Notes - net of debt costs of $1,290 | $ 446,010 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Senior unsecured 2027 Notes | |
Cash flows from operating activities: | |
Debt costs | $ 1,290 |
Senior secured 2026 Notes | |
Cash flows from operating activities: | |
Debt costs | $ 1,317 |
Description of the business and
Description of the business and recent developments: | 9 Months Ended |
Sep. 30, 2022 | |
Description of the business and recent developments: | |
Description of the business and recent developments: | 1. Description of the business and recent developments: Reorganization and merger On May 15, 2014, pursuant to the Agreement and Plan of Reorganization (the “Merger Agreement”) by and among Cogent Communications Group, Inc. (“Group”), a Delaware corporation, Cogent Communications Holdings, Inc., a Delaware corporation (“Holdings” or the “Company”) and Cogent Communications Merger Sub, Inc., a Delaware corporation, Group adopted a new holding company organizational structure whereby Group is now a wholly owned subsidiary of Holdings. Holdings is a “successor issuer” to Group pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Cogent Communications, Inc. is wholly owned by Group and the vast majority of Group’s assets, contractual arrangements, and operations are executed by Cogent Communications, Inc. and its subsidiaries. Description of business The Company is a facilities-based provider of low-cost, high-speed Internet access, private network services, and data center colocation space and power. The Company’s network is specifically designed and optimized to transmit packet switched data. The Company delivers its services primarily to small and medium-sized businesses, communications service providers and other bandwidth-intensive organizations in 51 countries across North America, Europe, Asia, South America, Australia and Africa. The Company is a Delaware corporation and is headquartered in Washington, DC. The Company offers on-net Internet access services exclusively through its own facilities, which run from its network to its customers’ premises. The Company offers its on-net services to customers located in buildings that are physically connected to its network. As a result, the Company is not dependent on local telephone companies or cable TV companies to serve its customers for its on-net Internet access and private network services. The Company’s on-net service consists of high-speed Internet access and private network services offered at speeds ranging from 100 megabits per second to 400 gigabits per second. The Company provides its on-net Internet access and private network services to its corporate and net-centric customers. The Company’s corporate customers are located in multi-tenant office buildings (“MTOBs”) and typically include law firms, financial services firms, advertising and marketing firms, as well as health care providers, educational institutions and other professional services businesses. The Company’s net-centric customers include bandwidth-intensive users that leverage its network to either deliver content to end users or to provide access to residential or commercial internet users. Content delivery customers include over the top (“OTT”) media service providers, content delivery networks, web hosting companies, and commercial content and application software providers. Access customers include access networks comprised of other Internet Service Providers (“ISPs”), telephone companies, mobile phone operators and cable television companies that collectively provide internet access to a substantial number of broadband subscribers and mobile phone subscribers across the world. These net-centric customers generally receive the Company’s services in carrier neutral colocation facilities and in the Company’s own data centers. The Company operates data centers throughout North America and Europe that allow its customers to collocate their equipment and access the Company’s network. In addition to providing on-net services, the Company provides Internet access and private network services to customers that are not located in buildings directly connected to its network. The Company provides these off-net services primarily to corporate customers using other carriers’ circuits to provide the “last mile” portion of the link from the customers’ premises to the Company’s network. The Company also provides certain non-core services that resulted from acquisitions. The Company continues to support but does not actively sell these non-core services. In connection with the Company’s Sprint acquisition (discussed below), the Company will begin to provide optical wavelength services over the Company’s fiber network. The Company will sell these wavelength services to its existing customers, Sprint customers and to new customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating network infrastructure. Acquisition of Sprint Communications On September 6, 2022, Cogent Infrastructure, Inc., a Delaware corporation (the “Buyer”) and a wholly owned subsidiary of Holdings, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Sprint Communications LLC, a Kansas limited liability company (“Sprint”) and an indirect wholly owned subsidiary of T-Mobile US, Inc., a Delaware corporation (“T-Mobile”), and Sprint LLC, a Delaware limited liability company and a direct wholly owned subsidiary of T-Mobile (the “Seller”), pursuant to which Holdings will acquire the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Wireline Business”). The Purchase Agreement provides that, upon the terms and conditions set forth therein, Holdings will purchase from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) of a Delaware limited liability company that holds Sprints’ assets and liabilities relating to the Wireline Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”). The parties have agreed to a $1 purchase price in consideration for the Purchased Interests, subject to customary adjustments set forth in the Purchase Agreement. In addition, at the consummation of the Transaction (the “Closing”), a T-Mobile affiliate will enter into an agreement for IP transit services, pursuant to which T-Mobile will pay Holdings an aggregate of $700 million, consisting of (i) $350 million in equal monthly installments during the first year after the Closing and (ii) $350 million in equal monthly installments over the subsequent 42 months. The Purchase Agreement includes customary representations, warranties, indemnities and covenants, including regarding the conduct of the Wireline Business prior to the Closing. In addition, the Closing is subject to customary closing conditions, including as to the receipt of certain required regulatory approvals and consents. Subject to the satisfaction or waiver of certain conditions and the other terms and conditions of the Purchase Agreement, the Transaction is expected to close in the second half of 2023. The Purchase Agreement contains certain termination rights for the Buyer and Seller, including that, subject to certain limitations, either the Buyer or the Seller may terminate the Purchase Agreement if the Transaction is not consummated by September 6, 2023, subject to two automatic six-month extensions if certain regulatory approvals have not been obtained. The Purchase Agreement also provides that each party may specifically enforce the other party’s obligations under the Purchase Agreement. Holdings has agreed to guarantee the obligations of the Buyer under the Purchase Agreement pursuant to the terms of a Guaranty, dated as of September 6, 2022, by and between Holdings and the Seller (the “Parent Guaranty”). The Parent Guaranty contains customary representations, warranties and covenants of Holdings and the Seller. Acquisition Related Costs In connection with the Transaction and negotiation of the Purchase Agreement the Company incurred $2.0 million of professional fees in the three months ended September 30, 2022. Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments that the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. While the Company believes that the disclosures are adequate to not make the information misleading, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in its annual report on Form 10-K for the year ended December 31, 2021. The accompanying unaudited condensed consolidated financial statements include all wholly owned subsidiaries. All inter-company accounts and activity have been eliminated. Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. Financial instruments At September 30, 2022 and December 31, 2021, the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents and restricted cash at amortized cost, which approximates fair value based upon quoted market prices (Level 1). Based upon recent trading prices (Level 2—market approach) at September 30, 2022 the fair value of the Company’s $450.0 million senior unsecured notes due 2027 was $426.4 million, the fair value of the Company’s $500.0 million senior secured notes due 2026 was $438.8 million, and the estimated liability fair value of the Company’s interest rate swap agreement was $54.7 million. Gross receipts taxes, universal service fund and other surcharges Revenue recognition standards include guidance relating to taxes or surcharges assessed by a governmental authority that are directly imposed on a revenue-producing transaction between a seller and a customer and may include, but are not limited to, gross receipts taxes, excise taxes, Universal Service Fund fees and certain state regulatory fees. Such charges may be presented gross or net based upon the Company’s accounting policy election. The Company records certain excise taxes and surcharges on a gross basis and includes them in its revenues and network operations expense. Excise taxes and surcharges billed to customers and recorded on a gross basis (as service revenue and network operations expense)were $4.1 million and $4.8 million for the three months ended September 30, 2022 and 2021, respectively, and $11.3 million and $14.2 million for the nine months ended September 30, 2022 and 2021, respectively. Basic and diluted net income per common share Basic earnings per share (“EPS”) excludes dilution for common stock equivalents and is computed by dividing net income or (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of dilutive common stock equivalents. Shares of restricted stock are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. The following details the determination of diluted weighted average shares: Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Weighted average common shares - basic 46,736,742 46,293,524 46,759,632 46,290,452 Dilutive effect of stock options — 36,406 17,668 34,191 Dilutive effect of restricted stock — 536,999 320,280 501,305 Weighted average common shares - diluted 46,736,742 46,866,929 47,097,580 46,825,948 The following details unvested shares of restricted common stock as well as anti-dilutive stock options and restricted stock awards outstanding: Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Unvested shares of restricted common stock 1,271,441 1,371,217 1,271,441 1,371,217 Anti-dilutive options for common stock 113,376 43,648 99,537 42,531 Anti-dilutive shares of restricted common stock 637,028 827 460,715 133,468 Stockholders’ Deficit The following details the changes in stockholders’ deficit for the three and nine months ended September 30, 2022 and September 30, 2021 (in thousands except share amounts): Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at June 30, 2022 48,003,724 $ 48 $ 561,161 $ (20,661) $ (980,729) $ (440,181) Forfeitures of shares granted to employees (14,492) — — — — — Equity-based compensation — — 6,812 — — 6,812 Foreign currency translation — — — (7,752) — (7,752) Issuances of common stock 10,748 — — — — — Exercises of options 2,155 — 92 — — 92 Dividends paid — — — — (42,729) (42,729) Net (loss) — — — — (8,007) (8,007) Balance at September 30, 2022 48,002,135 $ 48 $ 568,065 $ (28,413) $ (1,031,465) $ (491,765) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at June 30, 2021 47,655,131 $ 48 $ 533,049 $ (4,740) $ (864,498) $ (336,141) Forfeitures of shares granted to employees (10,933) — — — — — Equity-based compensation — — 7,164 — — 7,164 Foreign currency translation — — — (3,818) — (3,818) Issuances of common stock 11,820 — — — — — Exercises of options 7,258 — 362 — — 362 Dividends paid — — — — (37,654) (37,654) Net income — — — — 13,320 13,320 Balance at September 30, 2021 47,663,276 $ 48 $ 540,575 $ (8,558) $ (888,832) $ (356,767) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2021 47,674,189 $ 48 $ 547,734 $ (11,003) $ (909,877) $ (373,098) Forfeitures of shares granted to employees (66,857) — — — — — Equity-based compensation — — 19,905 — — 19,905 Foreign currency translation — — — (17,410) — (17,410) Issuances of common stock 384,028 — — — — — Exercises of options 10,775 — 426 — — 426 Dividends paid — — — — (125,882) (125,882) Net income — — — — 4,294 4,294 Balance at September 30, 2022 48,002,135 $ 48 $ 568,065 $ (28,413) $ (1,031,465) $ (491,765) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2020 47,214,077 $ 47 $ 515,867 $ (1,306) $ (807,774) $ (293,166) Forfeitures of shares granted to employees (36,235) — — — — — Equity-based compensation — — 23,471 — — 23,471 Foreign currency translation — — — (7,252) — (7,252) Issuances of common stock 460,580 1 — — — 1 Exercises of options 24,854 — 1,237 — — 1,237 Dividends paid — — — — (110,736) (110,736) Net income — — — — 29,678 29,678 Balance at September 30, 2021 47,663,276 $ 48 $ 540,575 $ (8,558) $ (888,832) $ (356,767) Revenue recognition The Company recognizes revenue under Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers The Company’s service offerings consist of on-net and off-net telecommunications services. Fixed fees are billed monthly in advance and usage fees are billed monthly in arrears. Amounts billed are due upon receipt and contract lengths range from one month to 60 months. The Company satisfies its performance obligations to provide services to customers over time as the services are rendered. In accordance with ASC 606, revenue is recognized when a customer obtains the promised service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. The Company has adopted the practical expedient related to certain performance obligation disclosures since it has a right to consideration from its customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. To achieve this core principle, the Company follows the following five steps: 1) Identification of the contract, or contracts with a customer 2) Identification of the performance obligations in the contract 3) Determination of the transaction price 4) Allocation of the transaction price to the performance obligations in the contract 5) Recognition of revenue when, or as, the Company satisfies a performance obligation Fees billed in connection with customer installations are deferred (as deferred revenue) and recognized as noted above. If a customer contract is terminated prior to its contractual end, the customer is subject to termination fees. The Company vigorously seeks payment of these amounts. The Company recognizes revenue for these amounts as they are collected. Service revenue recognized from amounts in deferred revenue (contract liabilities) at the beginning of the period during the three months ended September 30, 2022 was $1.8 million and during the three months ended September 30, 2021 was $1.9 million. Service revenue recognized from amounts in deferred revenue (contract liabilities) at the beginning of the period during the nine months ended September 30, 2022 was $4.4 million and during the nine months ended September 30, 2021 was $4.1 million. Amortization expense for contract costs was $4.9 million for the three months ended September 30, 2022 and $4.6 million for the three months ended September 30, 2021. Amortization expense for contract costs was $14.5 million for the nine months ended September 30, 2022 and $13.8 million for the nine months ended September 30, 2021. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Finance lease cost Amortization of right-of-use assets $ 7,188 $ 6,847 $ 21,186 $ 19,571 Interest expense on finance lease liabilities 5,382 4,977 15,579 14,888 Operating lease cost 4,547 4,572 13,948 13,660 Total lease costs $ 17,117 $ 16,396 $ 50,713 $ 48,119 Nine Months Nine Months Ended Ended September 30, 2022 September 30, 2021 Other lease information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ (13,478) $ (12,694) Operating cash flows from operating leases (14,165) (14,077) Financing cash flows from finance leases (20,958) (16,826) Right-of-use assets obtained in exchange for new finance lease liabilities 74,633 38,411 Right-of-use assets obtained in exchange for new operating lease liabilities 10,498 15,732 Weighted-average remaining lease term — finance leases (in years) 13.1 12.6 Weighted-average remaining lease term — operating leases (in years) 17.8 19.2 Weighted average discount rate — finance leases 8.6 % 9.3 % Weighted average discount rate — operating leases 5.4 % 5.5 % Finance leases—fiber lease agreements The Company has entered into lease agreements with numerous providers of dark fiber under indefeasible-right-of use agreements (“IRUs”). These IRUs typically have initial terms of 15- 20 years and include renewal options after the initial lease term. The Company establishes the number of renewal option periods used in determining the lease term based upon its assessment at the inception of the lease of the number of option periods for which failure to renew the lease imposes a penalty in such amount that renewal appears to be reasonably certain. The option to renew may be automatic, at the option of the Company or mutually agreed to between the dark fiber provider and the Company. Once the Company has accepted the related fiber route, leases that meet the criteria for treatment as finance leases are recorded as a finance lease obligation and an IRU asset. The interest rate used in determining the present value of the aggregate future minimum lease payments is the Company’s incremental borrowing rate for the reasonably certain lease term. The implicit rates within the Company’s operating leases are generally not determinable and the Company determines its incremental borrowing rate for each lease using its current borrowing rate, adjusted for various factors including level of collateralization and term to align with the term of the lease. The determination of the Company’s incremental borrowing rate requires judgment. Finance lease assets are included in property and equipment in the Company’s consolidated balance sheets. As of September 30, 2022, the Company had committed to additional dark fiber IRU lease agreements totaling $120.6 million in future payments to be paid over periods of up to 22 years. These obligations begin when the related fiber is accepted, which is generally expected to occur in the next 24 months. Operating leases The Company leases office space and data center facilities under operating leases. In certain cases the Company also enters into short-term operating leases for dark fiber. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments under the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the reasonably certain lease term. The implicit rates within the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. The Company determines its incremental borrowing rate for each lease using its current borrowing rate, adjusted for various factors including level of collateralization and term to align with the term of the lease. The determination of the Company’s incremental borrowing rate requires judgment. Certain of the Company’s leases include options to extend or terminate the lease. The Company establishes the number of renewal option periods used in determining the operating lease term based upon its assessment at the inception of the operating lease of the number of option periods for which failure to renew the lease imposes a penalty in such amount that renewal appears to be reasonably certain. The option to renew may be automatic, at the option of the Company or mutually agreed to between the landlord or dark fiber provider and the Company. Once the Company has accepted the related fiber route or the facility lease term has begun, the present value of the aggregate future minimum operating lease payments is recorded as an operating lease liability and a right-of-use leased asset. Lease incentives and deferred rent liabilities for facilities operating leases are presented with, and netted against, the right-of-use leased asset. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease. The future minimum payments under these operating lease and finance lease agreements are as follows (in thousands): Operating Finance For the Twelve Months Ending September 30, Leases Leases 2023 $ 17,167 $ 45,540 2024 16,738 39,425 2025 14,918 36,159 2026 12,821 31,383 2027 11,179 31,608 Thereafter 96,176 305,053 Total minimum lease obligations 168,999 489,168 Less—amounts representing interest (57,777) (201,283) Present value of minimum lease obligations 111,222 287,885 Current maturities (11,784) (24,135) Lease obligations, net of current maturities $ 99,438 $ 263,750 Allowance for credit losses The Company maintains an allowance for credit losses to cover its current expected credit losses on its trade receivables arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables. Based on the Company’s experience, the customer’s delinquency status is the strongest indicator of the credit quality of the underlying trade receivables, which is analyzed monthly. Current-period Provision for Write offs Beginning Expected Credit Charged Against Ending Description Balance Losses Allowance Balance Allowance for credit losses (deducted from accounts receivable) Three months ended September 30, 2022 $ 1,717 $ 1,054 $ (805) $ 1,966 Three months ended September 30, 2021 $ 1,673 $ 1,340 $ (1,600) $ 1,413 Nine months ended September 30, 2022 $ 1,510 $ 3,059 $ (2,603) $ 1,966 Nine months ended September 30, 2021 $ 1,921 $ 4,539 $ (5,047) $ 1,413 Net bad debt expense for the three and nine months ended September 30, 2022 was $0.5 million and $1.5 million, respectively, which is net of bad debt recoveries of $0.5 million and $1.5 million respectively. Net bad debt expense for the three and nine months ended September 30, 2021 was $1.0 million and $2.6 million, respectively, which is net of bad debt recoveries of $0.3 million and $1.9 million, respectively. |
Property and equipment_
Property and equipment: | 9 Months Ended |
Sep. 30, 2022 | |
Property and equipment: | |
Property and equipment: | 2. Property and equipment: Depreciation and amortization expense related to property and equipment and finance leases was $22.9 million and $22.6 million for the three months ended September 30, 2022 and 2021, respectively, and $68.7 million and $66.7 million for the nine months ended September 30, 2022 and 2021, respectively. The Company capitalized salaries and related benefits of employees working directly on the construction and build-out of its network of $3.0 million and $3.1 million for the three months ended September 30, 2022 and 2021, respectively, and $9.3 million and $10.4 million for the nine months ended September 30, 2022 and 2021, respectively. |
Long-term debt_
Long-term debt: | 9 Months Ended |
Sep. 30, 2022 | |
Long-term debt: | |
Long-term debt: | 3. Long-term debt: As of September 30, 2022, the Company had outstanding $450.0 million aggregate principal amount of Senior Unsecured Notes due 2027 (the “2027 Notes”) and $500.0 million aggregate principal amount of Senior Secured Notes due 2026 (the “2026 Notes”). The 2027 Notes were issued in June 2022, are due on June 15, 2027 and bear interest at a rate of 7.00% per year. Interest on the 2027 Notes is paid semi-annually on June 15 and December 15 of each year. The 2026 Notes were issued in May 2021, are due on May 1, 2026 and bear interest at a rate of 3.50% per year. Interest on the 2026 Notes is paid semi-annually on May 1 and November 1 of each year. In June 2022 the Company redeemed and extinguished its €350.0 million aggregate principal amount of Senior Unsecured Euro Notes due 2024 (the “2024 Notes”). The 2024 Notes were due on June 30, 2024 and bore interest at a rate of 4.375% per year. Interest on the 2024 Notes was paid semi-annually on June 30 and December 30 of each year. Issuance of 2027 Notes and redemption of 2024 Notes On June 22, 2022 (the “2027 Notes Closing Date”), Group completed its offering of $450.0 million aggregate principal amount of its 2027 Notes for issuance in a private placement not registered under the Securities Act of 1933, as amended (the “Securities Act”). The 2027 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers in an unregistered offering pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States in compliance with Regulation S under the Securities Act. The 2027 Notes were issued pursuant to, and are governed by, an indenture (the “2027 Notes Indenture”), dated the 2027 Notes Closing Date by and among Group, Holdings, the other guarantors named therein and the trustee. The 2027 Notes are jointly and severally guaranteed on a senior unsecured basis by each of the Company’s existing and future material domestic subsidiaries, subject to certain exceptions, and by the Company. Under certain circumstances, the Guarantors may be released from these Guarantees without the consent of the holders of the 2027 Notes. The net proceeds from the 2027 Notes offering were $446.0 million after deducting the $2.7 million discount and $1.3 million of offering expenses. The Company used a portion of the net proceeds from the 2027 Notes offering to redeem its 2024 Notes. The Company expects to use the remaining net proceeds from the 2027 Notes offering for general corporate purposes, and/or to repurchase the Company’s common stock or for special or recurring dividends to the Company’s stockholders. In connection with full redemption of its 2024 Notes, Group issued a conditional notice of full redemption to holders of the 2024 Notes, specifying June 30, 2022 as the redemption date (the “Redemption Date”). On the 2027 Notes Closing Date, Group satisfied and discharged its obligations under the 2024 Notes by depositing with a designee of the trustee for the 2024 Notes sufficient funds to pay the principal of the Premium (defined below) and accrued and unpaid interest on the Euro Notes to the Redemption Date. The 2024 Notes were issued in Euros and were reported in the Company’s reporting currency, US Dollars, until they were extinguished and redeemed. Prior to the redemption of the 2024 Notes, the gain on foreign exchange on the 2024 Notes from converting the 2024 Notes into US Dollars was $10.2 million for the three months ended September 30, 2021, $31.6 million for the nine months ended September 30, 2022 and $23.8 million for the nine months ended September 30, 2021. Unless earlier redeemed or repurchased, the 2027 Notes will mature on June 15, 2027. Group may redeem some or all of the 2027 Notes at any time prior to June 15, 2024 at a price equal to 100% of the principal amount of the 2027 Notes, plus a “make-whole” premium, as set forth in the 2027 Notes Indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, or may redeem up to 40.0% of the 2027 Notes using proceeds of certain equity offerings completed prior to June 15, 2024 at 107.0% of the principal amount plus accrued and unpaid interest, if any. Thereafter, Group may redeem the 2027 Notes, in whole or in part, at a redemption price ranging from 103.5% of the aggregate principal amount of the 2027 Notes redeemed to par (depending on the year), in each case, as set forth in the 2027 Notes Indenture, plus accrued and unpaid interest, if any. On the Redemption Date, Group redeemed its €350.0 million of 2024 Notes at a price of 101.094% (€353.8 million or $375.2 million) of the principal amount (the “Premium”) plus €7.7 million ($8.1 million) of interest paid through June 30, 2022, the Redemption Date where the Premium reduced to 101.094%, for a total payment of €361.5 million ($383.4 million). Group entered into a short-term USD to Euro forward purchase agreement to mitigate the risk of foreign currency fluctuations. As a result of these transactions, the Company incurred a loss on debt extinguishment and redemption of $11.9 million. Issuance of the 2026 Notes and redemption of 2022 Notes On May 7, 2021 (the “2026 Notes Closing Date”), Group completed an offering of $500.0 million aggregate principal amount of its 2026 Notes for issuance in a private placement exempt from registration under the Securities Act. The 2026 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States in compliance with Regulation S under the Securities Act. The 2026 Notes were issued pursuant to, and are governed by, an indenture (the “2026 Notes Indenture”), dated the 2026 Notes Closing Date by and among Group, Holdings, the other guarantors named therein, the trustee and the collateral agent. The 2026 Notes are guaranteed on a senior secured basis, jointly and severally, by Group’s material domestic subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”). In addition, the 2026 Notes are guaranteed on a senior unsecured basis by Holdings (together with the Subsidiary Guarantors, the “Guarantors”). Under certain circumstances, the Guarantors may be released from these guarantees without the consent of the holders of the 2026 Notes. The net proceeds from the 2026 Notes offering were $496.9 million after deducting the $1.8 million discount and $1.3 million of offering expenses. Unless earlier redeemed or repurchased, the 2026 Notes will mature on May 1, 2026. Group may redeem some or all of the 2026 Notes at any time prior to February 1, 2026 at a price equal to 100% of the principal amount of the 2026 Notes, plus a “make-whole” premium as set forth in the 2026 Notes Indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. Thereafter, Group may redeem the 2026 Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2026 Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. In March 2021, Group redeemed $115.9 million aggregate principal amount of its 5.375% Senior Secured Notes due 2022 (the “2022 Notes”) at an average price of 103.2% of the principal amount plus $0.4 million of accrued and unpaid interest. As a result of this transaction, the Company incurred a loss on debt extinguishment and redemption of $3.9 million from the premium payment above par value, the amortization of the remaining unamortized notes cost and certain transaction expenses. In May 2021, Group redeemed $45.0 million aggregate principal amount of its 2022 Notes at par plus the “make-whole amount” as defined in the 2022 Notes indenture of $1.9 million ($41.41533 per $1,000 aggregate principal amount) plus accrued interest to, but excluding, the redemption date of $0.4 million ($9.70486 per aggregate principal amount). Following the $115.9 million and the $45.0 million redemptions there was $284.1 million aggregate principal amount of 2022 Notes remaining. On the 2026 Notes Closing Date, Group used the net proceeds from the offering of its 2026 Notes to fully satisfy and discharge its remaining obligations under its 2022 Notes. As a result of these transactions, the Company incurred an additional loss on debt extinguishment and redemption of $10.8 million from the payment of $11.5 million of interest on the 2022 Notes through December 1, 2021 and the amortization of the remaining unamortized notes costs and debt premium. Limitations under the Indentures The 2027 Notes Indenture and the 2026 Notes Indenture (the “Indentures”), among other things, limit the Company’s ability to incur indebtedness; to pay dividends or make other distributions; to make certain investments and other restricted payments; to create liens; to consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; to incur restrictions on the ability of a subsidiary to pay dividends or make other payments; and to enter into certain transactions with its affiliates. There are certain exceptions to the limitations on the Company’s ability to incur indebtedness under the Indentures, including IRU agreements incurred in the normal course of business and any additional indebtedness if the Company’s consolidated leverage ratio, as defined in the Indentures, is less than 6.0 to 1.0 or the Company’s fixed charge coverage ratio, as defined in the Indentures, is 2.0 to 1.0 or greater. The Company can also incur unlimited liens (which can be used, together with capacity under the debt covenant, to incur additional secured indebtedness) if the Company’s consolidated secured leverage ratio, as defined in the Indentures, is less than 4.0 to 1.0. Under the Indentures, the Company can pay dividends, make other distributions, make certain investments and make other restricted payments under certain circumstances, including if, after giving pro forma effect to such restricted payment, the Company could still incur $1 of indebtedness, as defined (i.e., either its consolidated leverage ratio is less than 6.0 to 1.0 or its fixed charge coverage ratio is 2.0 to 1.0 or greater). The Company’s consolidated leverage ratio was below 6.0, the Company’s consolidated secured leverage ratio was below 4.0 and the Company’s fixed charge coverage ratio was above 2.0 as of September 30, 2022. As of September 30, 2022, a total of $207.4 million was unrestricted and permitted for restricted payments including dividends and stock purchases. Interest rate swap agreement As of September 30, 2022, the Company was party to an interest rate swap agreement (the “Swap Agreement”) that has the economic effect of modifying the fixed interest rate obligation associated with its 2026 Notes to a variable interest rate obligation based on the Secured Overnight Financing Rate (“SOFR”) so that the interest payable on the 2026 Notes effectively became variable based on overnight SOFR. The critical terms of the Swap Agreement match the terms of the 2026 Notes, including the notional amount and the optional redemption date on February 1, 2026. The Company did not elect hedge accounting for the Swap Agreement. The Swap Agreement is recorded at its fair value at each reporting period, and the Company incurs gains and losses due to changes in market interest rates. By entering into the Swap Agreement, the Company has assumed the risk associated with variable interest rates. Changes in interest rates affect the valuation of the Swap Agreement that the Company recognizes in its consolidated statements of comprehensive income. The values that the Company reports for the Swap Agreement as of each reporting date are recognized as “change in valuation – interest rate swap” with the corresponding amounts included in assets or liabilities in the Company’s consolidated balance sheets. As of September 30, 2022 the fair value of the Swap Agreement was a net liability of $54.7 million of which $12.1 million is presented with accrued and other current liabilities and $42.6 million is presented with other long-term liabilities. The Company recorded an unrealized loss related to the Swap Agreement of $16.9 million and $45.7 million in the three and nine months ended September 30, 2022, respectively. The Company recorded an unrealized loss related to the Swap Agreement of $3.1 million and $3.1 million in the three and nine months ended September 30, 2021, respectively. The Company has made a $57.2 million deposit with the counterparty to the Swap Agreement. If the fair value of the Swap Agreement exceeds a net liability of $57.2 million the Company will be required to deposit additional funds with the counterparty equal to the net liability fair value. As of September 30, 2022, $54.7 million of the deposit was restricted and $2.4 million was unrestricted. Under the Swap Agreement, the Company pays the counterparty a semi-annual payment based upon overnight SOFR plus a contractual interest rate spread, and the counterparty pays the Company a semi-annual fixed 3.50% interest payment. The settlement payment is made each November and May until the Swap Agreement expires in February 2026. Under the first Swap Agreement settlement in November 2021, the Company received a payment of $0.6 million from the counterparty for a net cash savings of $0.6 million for the period from August 9, 2021 (the Swap Agreement inception date) to October 31, 2021. Under the settlement payment made in May 2022, the Company received a payment of $1.2 million from the counterparty for a net cash savings of $1.2 million for the period from November 1, 2021 to April 30, 2022. Under the settlement payment made in November 2022, the Company made a payment of $3.4 million to the counterparty for a net cash interest cost of $3.4 million for the period from May 1, 2022 to October 31, 2022. |
Commitments and contingencies_
Commitments and contingencies: | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and contingencies: | |
Commitments and contingencies: | 4. Commitments and contingencies Current and potential litigation In accordance with the accounting guidance for contingencies, the Company accrues its estimate of a contingent liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Where it is probable that a liability has been incurred and there is a range of expected loss for which no amount in the range is more likely than any other amount, the Company accrues at the low end of the range. The Company reviews its accruals at least quarterly and adjusts them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. The Company has taken certain positions related to its obligations for leased circuits for which it is reasonably possible to result in a loss of up to $3.8 million in excess of the amount accrued at September 30, 2022. The Company was engaged in litigation in Virginia in which a former provider of transoceanic capacity to the Company was seeking approximately $0.6 million for alleged unpaid fees and the Company’s early termination of the arrangement. The complaint was filed in December 2021 in the Circuit Court of Fairfax County, Virginia. The trial took place in July 2022, and in August 2022, the Circuit Court issued an order requiring the Company to pay approximately $0.4 million in damages, inclusive of attorneys’ fees. The Company paid a final payment of approximately $0.4 million, reflecting accumulated interest and additional attorneys’ fees, in October 2022. In the ordinary course of business the Company is involved in other legal activities and claims. Because such matters are subject to many uncertainties and the outcomes are not predictable with assurance, the liability related to these legal actions and claims cannot be determined with certainty. Management does not believe that such claims and actions will have a material impact on the Company’s financial condition or results of operations. Judgment is required in estimating the ultimate outcome of any dispute resolution process, as well as any other amounts that may be incurred to conclude the negotiations or settle any litigation. Actual results may differ from these estimates under different assumptions or conditions and such differences could be material. |
Income taxes_
Income taxes: | 9 Months Ended |
Sep. 30, 2022 | |
Income taxes: | |
Income taxes: | 5. Income taxes: The components of (loss) income before income taxes consist of the following (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Domestic $ (3,382) $ 24,849 $ 22,953 $ 54,179 Foreign (3,656) (2,825) (8,596) (8,024) Total $ (7,038) $ 22,024 $ 14,357 $ 46,155 |
Common stock buyback program_
Common stock buyback program: | 9 Months Ended |
Sep. 30, 2022 | |
Common stock buyback program: | |
Common stock buyback program: | 6. Common stock buyback program: The Company’s Board of Directors has approved purchases of the Company’s common stock under a buyback program (the “Buyback Program”) through December 31, 2023. At September 30, 2022, there was approximately $30.4 million remaining for purchases under the Buyback Program. There were no purchases of common stock during the three or nine months ended September 30, 2022 and the three or nine months ended September 30, 2021. |
Dividends on common stock_
Dividends on common stock: | 9 Months Ended |
Sep. 30, 2022 | |
Dividends on common stock: | |
Dividends on common stock: | 7. Dividends on common stock: On November 2, 2022, the Company’s Board of Directors approved the payment of a quarterly dividend of $0.915 per common share. This estimated $42.8 million dividend payment is expected to be made on December 2, 2022. The payment of any future dividends and any other returns of capital, including stock buybacks will be at the discretion of the Company’s Board of Directors and may be reduced, eliminated or increased and will be dependent upon the Company’s financial position, results of operations, available cash, cash flow, capital requirements, limitations under the Company’s debt indentures and other factors deemed relevant by the Company’s Board of Directors. The Company is a Delaware corporation and under the General Corporation Law of the State of Delaware distributions may be restricted including a restriction that distributions, including stock purchases and dividends, do not result in an impairment of a corporation’s capital, as defined under Delaware law. The indentures governing the Company’s notes limit the Company’s ability to return cash to its stockholders. |
Related party transactions_
Related party transactions: | 9 Months Ended |
Sep. 30, 2022 | |
Related party transactions: | |
Related party transactions: | 8. Related party transactions: Office lease The Company’s headquarters is located in an office building owned by Sodium LLC whose owner is the Company’s Chief Executive Officer. The fixed annual rent for the headquarters building is $1.0 million per year plus an allocation of taxes and utilities. The lease began in May 2015 and the lease term was for five years. In February 2020 the lease term was extended to May 2025 and is cancellable by the Company upon 60 days’ notice. The Company’s audit committee reviews and approves all transactions with related parties. The Company paid $0.5 million and $0.5 million in the three months ended September 30, 2022 and 2021, respectively, and $1.4 million and $1.3 million in the nine months ended September 30, 2022 and 2021, respectively, for rent and related costs (including taxes and utilities) to Sodium LLC for this lease. |
Segment information_
Segment information: | 9 Months Ended |
Sep. 30, 2022 | |
Segment information: | |
Segment information: | 9. Segment information: The Company operates as one operating segment. The Company’s service revenue by geographic region and product class and long lived assets by geographic region are as follows (in thousands): Three Months Ended September 30, 2022 Revenues On-net Off-net Non-core Total North America $ 88,298 $ 32,325 $ 162 $ 120,785 Europe 19,853 3,929 8 23,790 Latin America 1,358 34 — 1,392 Asia Pacific 3,530 299 — 3,829 Africa 180 24 — 204 Total $ 113,219 $ 36,611 $ 170 $ 150,000 Three Months Ended September 30, 2021 Revenues On-net Off-net Non-core Total North America $ 85,569 $ 31,945 $ 147 $ 117,661 Europe 21,658 4,379 25 26,062 Latin America 1,042 54 — 1,096 Asia Pacific 2,657 277 — 2,934 Africa 173 1 — 174 Total $ 111,099 $ 36,656 $ 172 $ 147,927 Nine Months Ended September 30, 2022 Revenues On-net Off-net Non-core Total North America $ 261,427 $ 95,873 $ 475 $ 357,775 Europe 61,807 12,249 39 74,095 Latin America 4,080 150 2 4,232 Asia Pacific 9,992 956 1 10,949 Africa 523 51 — 574 Total $ 337,829 $ 109,279 $ 517 $ 447,625 Nine Months Ended September 30, 2021 Revenues On-net Off-net Non-core Total North America $ 255,157 $ 95,680 $ 361 $ 351,198 Europe 66,450 13,465 57 79,972 Latin America 2,859 119 — 2,978 Asia Pacific 7,279 812 — 8,091 Africa 342 3 — 345 Total $ 332,087 $ 110,079 $ 418 $ 442,584 September 30, December 31, 2022 2021 Long lived assets, net North America $ 373,879 $ 331,537 Europe and other 129,892 126,355 Total $ 503,771 $ 457,892 The majority of North American revenue consists of services delivered within the United States. |
Description of the business a_2
Description of the business and recent developments: (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Description of the business and recent developments: | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments that the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. While the Company believes that the disclosures are adequate to not make the information misleading, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in its annual report on Form 10-K for the year ended December 31, 2021. The accompanying unaudited condensed consolidated financial statements include all wholly owned subsidiaries. All inter-company accounts and activity have been eliminated. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. |
Financial instruments | Financial instruments At September 30, 2022 and December 31, 2021, the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other current assets, accounts payable, and accrued expenses approximated fair value because of the short-term nature of these instruments. The Company measures its cash equivalents and restricted cash at amortized cost, which approximates fair value based upon quoted market prices (Level 1). Based upon recent trading prices (Level 2—market approach) at September 30, 2022 the fair value of the Company’s $450.0 million senior unsecured notes due 2027 was $426.4 million, the fair value of the Company’s $500.0 million senior secured notes due 2026 was $438.8 million, and the estimated liability fair value of the Company’s interest rate swap agreement was $54.7 million. |
Gross receipts taxes, universal service fund and other surcharges | Gross receipts taxes, universal service fund and other surcharges Revenue recognition standards include guidance relating to taxes or surcharges assessed by a governmental authority that are directly imposed on a revenue-producing transaction between a seller and a customer and may include, but are not limited to, gross receipts taxes, excise taxes, Universal Service Fund fees and certain state regulatory fees. Such charges may be presented gross or net based upon the Company’s accounting policy election. The Company records certain excise taxes and surcharges on a gross basis and includes them in its revenues and network operations expense. Excise taxes and surcharges billed to customers and recorded on a gross basis (as service revenue and network operations expense)were $4.1 million and $4.8 million for the three months ended September 30, 2022 and 2021, respectively, and $11.3 million and $14.2 million for the nine months ended September 30, 2022 and 2021, respectively. |
Basic and diluted net income per common share | Basic and diluted net income per common share Basic earnings per share (“EPS”) excludes dilution for common stock equivalents and is computed by dividing net income or (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock outstanding during each period, adjusted for the effect of dilutive common stock equivalents. Shares of restricted stock are included in the computation of basic EPS as they vest and are included in diluted EPS, to the extent they are dilutive, determined using the treasury stock method. The following details the determination of diluted weighted average shares: Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Weighted average common shares - basic 46,736,742 46,293,524 46,759,632 46,290,452 Dilutive effect of stock options — 36,406 17,668 34,191 Dilutive effect of restricted stock — 536,999 320,280 501,305 Weighted average common shares - diluted 46,736,742 46,866,929 47,097,580 46,825,948 The following details unvested shares of restricted common stock as well as anti-dilutive stock options and restricted stock awards outstanding: Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Unvested shares of restricted common stock 1,271,441 1,371,217 1,271,441 1,371,217 Anti-dilutive options for common stock 113,376 43,648 99,537 42,531 Anti-dilutive shares of restricted common stock 637,028 827 460,715 133,468 |
Stockholder's Deficit | Stockholders’ Deficit The following details the changes in stockholders’ deficit for the three and nine months ended September 30, 2022 and September 30, 2021 (in thousands except share amounts): Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at June 30, 2022 48,003,724 $ 48 $ 561,161 $ (20,661) $ (980,729) $ (440,181) Forfeitures of shares granted to employees (14,492) — — — — — Equity-based compensation — — 6,812 — — 6,812 Foreign currency translation — — — (7,752) — (7,752) Issuances of common stock 10,748 — — — — — Exercises of options 2,155 — 92 — — 92 Dividends paid — — — — (42,729) (42,729) Net (loss) — — — — (8,007) (8,007) Balance at September 30, 2022 48,002,135 $ 48 $ 568,065 $ (28,413) $ (1,031,465) $ (491,765) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at June 30, 2021 47,655,131 $ 48 $ 533,049 $ (4,740) $ (864,498) $ (336,141) Forfeitures of shares granted to employees (10,933) — — — — — Equity-based compensation — — 7,164 — — 7,164 Foreign currency translation — — — (3,818) — (3,818) Issuances of common stock 11,820 — — — — — Exercises of options 7,258 — 362 — — 362 Dividends paid — — — — (37,654) (37,654) Net income — — — — 13,320 13,320 Balance at September 30, 2021 47,663,276 $ 48 $ 540,575 $ (8,558) $ (888,832) $ (356,767) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2021 47,674,189 $ 48 $ 547,734 $ (11,003) $ (909,877) $ (373,098) Forfeitures of shares granted to employees (66,857) — — — — — Equity-based compensation — — 19,905 — — 19,905 Foreign currency translation — — — (17,410) — (17,410) Issuances of common stock 384,028 — — — — — Exercises of options 10,775 — 426 — — 426 Dividends paid — — — — (125,882) (125,882) Net income — — — — 4,294 4,294 Balance at September 30, 2022 48,002,135 $ 48 $ 568,065 $ (28,413) $ (1,031,465) $ (491,765) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2020 47,214,077 $ 47 $ 515,867 $ (1,306) $ (807,774) $ (293,166) Forfeitures of shares granted to employees (36,235) — — — — — Equity-based compensation — — 23,471 — — 23,471 Foreign currency translation — — — (7,252) — (7,252) Issuances of common stock 460,580 1 — — — 1 Exercises of options 24,854 — 1,237 — — 1,237 Dividends paid — — — — (110,736) (110,736) Net income — — — — 29,678 29,678 Balance at September 30, 2021 47,663,276 $ 48 $ 540,575 $ (8,558) $ (888,832) $ (356,767) |
Revenue recognition | Revenue recognition The Company recognizes revenue under Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers The Company’s service offerings consist of on-net and off-net telecommunications services. Fixed fees are billed monthly in advance and usage fees are billed monthly in arrears. Amounts billed are due upon receipt and contract lengths range from one month to 60 months. The Company satisfies its performance obligations to provide services to customers over time as the services are rendered. In accordance with ASC 606, revenue is recognized when a customer obtains the promised service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. The Company has adopted the practical expedient related to certain performance obligation disclosures since it has a right to consideration from its customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. To achieve this core principle, the Company follows the following five steps: 1) Identification of the contract, or contracts with a customer 2) Identification of the performance obligations in the contract 3) Determination of the transaction price 4) Allocation of the transaction price to the performance obligations in the contract 5) Recognition of revenue when, or as, the Company satisfies a performance obligation Fees billed in connection with customer installations are deferred (as deferred revenue) and recognized as noted above. If a customer contract is terminated prior to its contractual end, the customer is subject to termination fees. The Company vigorously seeks payment of these amounts. The Company recognizes revenue for these amounts as they are collected. Service revenue recognized from amounts in deferred revenue (contract liabilities) at the beginning of the period during the three months ended September 30, 2022 was $1.8 million and during the three months ended September 30, 2021 was $1.9 million. Service revenue recognized from amounts in deferred revenue (contract liabilities) at the beginning of the period during the nine months ended September 30, 2022 was $4.4 million and during the nine months ended September 30, 2021 was $4.1 million. Amortization expense for contract costs was $4.9 million for the three months ended September 30, 2022 and $4.6 million for the three months ended September 30, 2021. Amortization expense for contract costs was $14.5 million for the nine months ended September 30, 2022 and $13.8 million for the nine months ended September 30, 2021. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Finance lease cost Amortization of right-of-use assets $ 7,188 $ 6,847 $ 21,186 $ 19,571 Interest expense on finance lease liabilities 5,382 4,977 15,579 14,888 Operating lease cost 4,547 4,572 13,948 13,660 Total lease costs $ 17,117 $ 16,396 $ 50,713 $ 48,119 Nine Months Nine Months Ended Ended September 30, 2022 September 30, 2021 Other lease information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ (13,478) $ (12,694) Operating cash flows from operating leases (14,165) (14,077) Financing cash flows from finance leases (20,958) (16,826) Right-of-use assets obtained in exchange for new finance lease liabilities 74,633 38,411 Right-of-use assets obtained in exchange for new operating lease liabilities 10,498 15,732 Weighted-average remaining lease term — finance leases (in years) 13.1 12.6 Weighted-average remaining lease term — operating leases (in years) 17.8 19.2 Weighted average discount rate — finance leases 8.6 % 9.3 % Weighted average discount rate — operating leases 5.4 % 5.5 % Finance leases—fiber lease agreements The Company has entered into lease agreements with numerous providers of dark fiber under indefeasible-right-of use agreements (“IRUs”). These IRUs typically have initial terms of 15- 20 years and include renewal options after the initial lease term. The Company establishes the number of renewal option periods used in determining the lease term based upon its assessment at the inception of the lease of the number of option periods for which failure to renew the lease imposes a penalty in such amount that renewal appears to be reasonably certain. The option to renew may be automatic, at the option of the Company or mutually agreed to between the dark fiber provider and the Company. Once the Company has accepted the related fiber route, leases that meet the criteria for treatment as finance leases are recorded as a finance lease obligation and an IRU asset. The interest rate used in determining the present value of the aggregate future minimum lease payments is the Company’s incremental borrowing rate for the reasonably certain lease term. The implicit rates within the Company’s operating leases are generally not determinable and the Company determines its incremental borrowing rate for each lease using its current borrowing rate, adjusted for various factors including level of collateralization and term to align with the term of the lease. The determination of the Company’s incremental borrowing rate requires judgment. Finance lease assets are included in property and equipment in the Company’s consolidated balance sheets. As of September 30, 2022, the Company had committed to additional dark fiber IRU lease agreements totaling $120.6 million in future payments to be paid over periods of up to 22 years. These obligations begin when the related fiber is accepted, which is generally expected to occur in the next 24 months. Operating leases The Company leases office space and data center facilities under operating leases. In certain cases the Company also enters into short-term operating leases for dark fiber. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments under the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the reasonably certain lease term. The implicit rates within the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. The Company determines its incremental borrowing rate for each lease using its current borrowing rate, adjusted for various factors including level of collateralization and term to align with the term of the lease. The determination of the Company’s incremental borrowing rate requires judgment. Certain of the Company’s leases include options to extend or terminate the lease. The Company establishes the number of renewal option periods used in determining the operating lease term based upon its assessment at the inception of the operating lease of the number of option periods for which failure to renew the lease imposes a penalty in such amount that renewal appears to be reasonably certain. The option to renew may be automatic, at the option of the Company or mutually agreed to between the landlord or dark fiber provider and the Company. Once the Company has accepted the related fiber route or the facility lease term has begun, the present value of the aggregate future minimum operating lease payments is recorded as an operating lease liability and a right-of-use leased asset. Lease incentives and deferred rent liabilities for facilities operating leases are presented with, and netted against, the right-of-use leased asset. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease. The future minimum payments under these operating lease and finance lease agreements are as follows (in thousands): Operating Finance For the Twelve Months Ending September 30, Leases Leases 2023 $ 17,167 $ 45,540 2024 16,738 39,425 2025 14,918 36,159 2026 12,821 31,383 2027 11,179 31,608 Thereafter 96,176 305,053 Total minimum lease obligations 168,999 489,168 Less—amounts representing interest (57,777) (201,283) Present value of minimum lease obligations 111,222 287,885 Current maturities (11,784) (24,135) Lease obligations, net of current maturities $ 99,438 $ 263,750 |
Allowance for credit losses | Allowance for credit losses The Company maintains an allowance for credit losses to cover its current expected credit losses on its trade receivables arising from the failure of customers to make contractual payments. The Company estimates credit losses expected over the life of its trade receivables based on historical information combined with current conditions that may affect a customer’s ability to pay and reasonable and supportable forecasts. While the Company uses various credit quality metrics, it primarily monitors collectability by reviewing the duration of collection pursuits on its delinquent trade receivables. Based on the Company’s experience, the customer’s delinquency status is the strongest indicator of the credit quality of the underlying trade receivables, which is analyzed monthly. Current-period Provision for Write offs Beginning Expected Credit Charged Against Ending Description Balance Losses Allowance Balance Allowance for credit losses (deducted from accounts receivable) Three months ended September 30, 2022 $ 1,717 $ 1,054 $ (805) $ 1,966 Three months ended September 30, 2021 $ 1,673 $ 1,340 $ (1,600) $ 1,413 Nine months ended September 30, 2022 $ 1,510 $ 3,059 $ (2,603) $ 1,966 Nine months ended September 30, 2021 $ 1,921 $ 4,539 $ (5,047) $ 1,413 Net bad debt expense for the three and nine months ended September 30, 2022 was $0.5 million and $1.5 million, respectively, which is net of bad debt recoveries of $0.5 million and $1.5 million respectively. Net bad debt expense for the three and nine months ended September 30, 2021 was $1.0 million and $2.6 million, respectively, which is net of bad debt recoveries of $0.3 million and $1.9 million, respectively. |
Description of the business a_3
Description of the business and recent developments: (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Description of the business and recent developments: | |
Schedule of diluted weighted average shares | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Weighted average common shares - basic 46,736,742 46,293,524 46,759,632 46,290,452 Dilutive effect of stock options — 36,406 17,668 34,191 Dilutive effect of restricted stock — 536,999 320,280 501,305 Weighted average common shares - diluted 46,736,742 46,866,929 47,097,580 46,825,948 |
Schedule of unvested and anti-dilutive shares | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Unvested shares of restricted common stock 1,271,441 1,371,217 1,271,441 1,371,217 Anti-dilutive options for common stock 113,376 43,648 99,537 42,531 Anti-dilutive shares of restricted common stock 637,028 827 460,715 133,468 |
Schedule of Stockholders' Deficit | The following details the changes in stockholders’ deficit for the three and nine months ended September 30, 2022 and September 30, 2021 (in thousands except share amounts): Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at June 30, 2022 48,003,724 $ 48 $ 561,161 $ (20,661) $ (980,729) $ (440,181) Forfeitures of shares granted to employees (14,492) — — — — — Equity-based compensation — — 6,812 — — 6,812 Foreign currency translation — — — (7,752) — (7,752) Issuances of common stock 10,748 — — — — — Exercises of options 2,155 — 92 — — 92 Dividends paid — — — — (42,729) (42,729) Net (loss) — — — — (8,007) (8,007) Balance at September 30, 2022 48,002,135 $ 48 $ 568,065 $ (28,413) $ (1,031,465) $ (491,765) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at June 30, 2021 47,655,131 $ 48 $ 533,049 $ (4,740) $ (864,498) $ (336,141) Forfeitures of shares granted to employees (10,933) — — — — — Equity-based compensation — — 7,164 — — 7,164 Foreign currency translation — — — (3,818) — (3,818) Issuances of common stock 11,820 — — — — — Exercises of options 7,258 — 362 — — 362 Dividends paid — — — — (37,654) (37,654) Net income — — — — 13,320 13,320 Balance at September 30, 2021 47,663,276 $ 48 $ 540,575 $ (8,558) $ (888,832) $ (356,767) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2021 47,674,189 $ 48 $ 547,734 $ (11,003) $ (909,877) $ (373,098) Forfeitures of shares granted to employees (66,857) — — — — — Equity-based compensation — — 19,905 — — 19,905 Foreign currency translation — — — (17,410) — (17,410) Issuances of common stock 384,028 — — — — — Exercises of options 10,775 — 426 — — 426 Dividends paid — — — — (125,882) (125,882) Net income — — — — 4,294 4,294 Balance at September 30, 2022 48,002,135 $ 48 $ 568,065 $ (28,413) $ (1,031,465) $ (491,765) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2020 47,214,077 $ 47 $ 515,867 $ (1,306) $ (807,774) $ (293,166) Forfeitures of shares granted to employees (36,235) — — — — — Equity-based compensation — — 23,471 — — 23,471 Foreign currency translation — — — (7,252) — (7,252) Issuances of common stock 460,580 1 — — — 1 Exercises of options 24,854 — 1,237 — — 1,237 Dividends paid — — — — (110,736) (110,736) Net income — — — — 29,678 29,678 Balance at September 30, 2021 47,663,276 $ 48 $ 540,575 $ (8,558) $ (888,832) $ (356,767) |
Schedule of lease cost | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Finance lease cost Amortization of right-of-use assets $ 7,188 $ 6,847 $ 21,186 $ 19,571 Interest expense on finance lease liabilities 5,382 4,977 15,579 14,888 Operating lease cost 4,547 4,572 13,948 13,660 Total lease costs $ 17,117 $ 16,396 $ 50,713 $ 48,119 Nine Months Nine Months Ended Ended September 30, 2022 September 30, 2021 Other lease information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ (13,478) $ (12,694) Operating cash flows from operating leases (14,165) (14,077) Financing cash flows from finance leases (20,958) (16,826) Right-of-use assets obtained in exchange for new finance lease liabilities 74,633 38,411 Right-of-use assets obtained in exchange for new operating lease liabilities 10,498 15,732 Weighted-average remaining lease term — finance leases (in years) 13.1 12.6 Weighted-average remaining lease term — operating leases (in years) 17.8 19.2 Weighted average discount rate — finance leases 8.6 % 9.3 % Weighted average discount rate — operating leases 5.4 % 5.5 % |
Schedule of future minimum payments under these operating lease and finance lease agreements | The future minimum payments under these operating lease and finance lease agreements are as follows (in thousands): Operating Finance For the Twelve Months Ending September 30, Leases Leases 2023 $ 17,167 $ 45,540 2024 16,738 39,425 2025 14,918 36,159 2026 12,821 31,383 2027 11,179 31,608 Thereafter 96,176 305,053 Total minimum lease obligations 168,999 489,168 Less—amounts representing interest (57,777) (201,283) Present value of minimum lease obligations 111,222 287,885 Current maturities (11,784) (24,135) Lease obligations, net of current maturities $ 99,438 $ 263,750 |
Schedule of impact on financial statement line items from adopting ASC 326 | Current-period Provision for Write offs Beginning Expected Credit Charged Against Ending Description Balance Losses Allowance Balance Allowance for credit losses (deducted from accounts receivable) Three months ended September 30, 2022 $ 1,717 $ 1,054 $ (805) $ 1,966 Three months ended September 30, 2021 $ 1,673 $ 1,340 $ (1,600) $ 1,413 Nine months ended September 30, 2022 $ 1,510 $ 3,059 $ (2,603) $ 1,966 Nine months ended September 30, 2021 $ 1,921 $ 4,539 $ (5,047) $ 1,413 |
Income taxes_ (Tables)
Income taxes: (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income taxes: | |
Schedule of components of income (loss) before income taxes | The components of (loss) income before income taxes consist of the following (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Domestic $ (3,382) $ 24,849 $ 22,953 $ 54,179 Foreign (3,656) (2,825) (8,596) (8,024) Total $ (7,038) $ 22,024 $ 14,357 $ 46,155 |
Segment information_ (Tables)
Segment information: (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment information: | |
Schedule of service revenue by geographic region and product class and long lived assets by geographic region | The Company operates as one operating segment. The Company’s service revenue by geographic region and product class and long lived assets by geographic region are as follows (in thousands): Three Months Ended September 30, 2022 Revenues On-net Off-net Non-core Total North America $ 88,298 $ 32,325 $ 162 $ 120,785 Europe 19,853 3,929 8 23,790 Latin America 1,358 34 — 1,392 Asia Pacific 3,530 299 — 3,829 Africa 180 24 — 204 Total $ 113,219 $ 36,611 $ 170 $ 150,000 Three Months Ended September 30, 2021 Revenues On-net Off-net Non-core Total North America $ 85,569 $ 31,945 $ 147 $ 117,661 Europe 21,658 4,379 25 26,062 Latin America 1,042 54 — 1,096 Asia Pacific 2,657 277 — 2,934 Africa 173 1 — 174 Total $ 111,099 $ 36,656 $ 172 $ 147,927 Nine Months Ended September 30, 2022 Revenues On-net Off-net Non-core Total North America $ 261,427 $ 95,873 $ 475 $ 357,775 Europe 61,807 12,249 39 74,095 Latin America 4,080 150 2 4,232 Asia Pacific 9,992 956 1 10,949 Africa 523 51 — 574 Total $ 337,829 $ 109,279 $ 517 $ 447,625 Nine Months Ended September 30, 2021 Revenues On-net Off-net Non-core Total North America $ 255,157 $ 95,680 $ 361 $ 351,198 Europe 66,450 13,465 57 79,972 Latin America 2,859 119 — 2,978 Asia Pacific 7,279 812 — 8,091 Africa 342 3 — 345 Total $ 332,087 $ 110,079 $ 418 $ 442,584 September 30, December 31, 2022 2021 Long lived assets, net North America $ 373,879 $ 331,537 Europe and other 129,892 126,355 Total $ 503,771 $ 457,892 |
Description of the business a_4
Description of the business and recent developments: (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 06, 2022 USD ($) item | Sep. 30, 2022 USD ($) country | Sep. 30, 2022 USD ($) country GB MB | |
Description of the business and recent developments | |||
Number of countries entity operates | country | 51 | 51 | |
Acquisition related costs | $ 2,004,000 | $ 2,004,000 | |
T-Mobile affiliate | |||
Description of the business and recent developments | |||
Aggregate amount for providing IP transit services | $ 700,000,000 | ||
T-Mobile affiliate | Equal monthly installments during the first year after the Closing | |||
Description of the business and recent developments | |||
Aggregate amount for providing IP transit services | 350,000,000 | ||
T-Mobile affiliate | Equal monthly installments over the subsequent 42 months | |||
Description of the business and recent developments | |||
Aggregate amount for providing IP transit services | 350,000,000 | ||
Sprint Communications | |||
Description of the business and recent developments | |||
Acquisition related costs | $ 2,000,000 | ||
Sprint Communications | Purchase Agreement | |||
Description of the business and recent developments | |||
Purchase price for the Purchased Interests | $ 1 | ||
Number of automatic six month extension | item | 2 | ||
Minimum | |||
Description of the business and recent developments | |||
On-net service speed range | MB | 100 | ||
Maximum | |||
Description of the business and recent developments | |||
On-net service speed range | GB | 400 |
Description of the business a_5
Description of the business and recent developments: Financial instruments (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Level 2 | Interest Rate Swap | |
Financial instruments | |
long-term liability | $ 54.7 |
Senior secured 2026 Notes | |
Financial instruments | |
Senior notes | 500 |
Senior secured 2026 Notes | Level 2 | |
Financial instruments | |
Senior notes, fair value | 438.8 |
Senior unsecured 2027 Notes | |
Financial instruments | |
Senior notes | 450 |
Senior unsecured 2027 Notes | Level 2 | |
Financial instruments | |
Senior notes, fair value | $ 426.4 |
Description of the business a_6
Description of the business and recent developments: Gross receipts taxes, universal service fund and other surcharges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Description of the business and recent developments: | ||||
Excise taxes and surcharge | $ 4.1 | $ 4.8 | $ 11.3 | $ 14.2 |
Description of the business a_7
Description of the business and recent developments: Basic and diluted net income per common share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Diluted weighted average shares | ||||
Weighted average common shares - basic | 46,736,742 | 46,293,524 | 46,759,632 | 46,290,452 |
Weighted average common shares - diluted | 46,736,742 | 46,866,929 | 47,097,580 | 46,825,948 |
Stock options | ||||
Diluted weighted average shares | ||||
Dilutive effect | 36,406 | 17,668 | 34,191 | |
Anti-dilutive effects | ||||
Anti-dilutive | 113,376 | 43,648 | 99,537 | 42,531 |
Restricted stock | ||||
Diluted weighted average shares | ||||
Dilutive effect | 536,999 | 320,280 | 501,305 | |
Anti-dilutive effects | ||||
Unvested shares of restricted common stock | 1,271,441 | 1,371,217 | 1,271,441 | 1,371,217 |
Anti-dilutive | 637,028 | 827 | 460,715 | 133,468 |
Description of the business a_8
Description of the business and recent developments: Stockholders' deficit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stockholders' deficit | ||||
Balance | $ (440,181) | $ (336,141) | $ (373,098) | $ (293,166) |
Balance (in shares) | 47,674,189 | |||
Equity-based compensation | 6,812 | 7,164 | $ 19,905 | 23,471 |
Foreign currency translation | (7,752) | (3,818) | (17,410) | (7,252) |
Issuances of common stock | 1 | |||
Exercises of options | 92 | 362 | 426 | 1,237 |
Dividends paid | (42,729) | (37,654) | (125,882) | (110,736) |
Net (loss) income | (8,007) | 13,320 | 4,294 | 29,678 |
Balance | $ (491,765) | (356,767) | $ (491,765) | (356,767) |
Balance (in shares) | 48,002,135 | 48,002,135 | ||
Common Stock | ||||
Stockholders' deficit | ||||
Balance | $ 48 | $ 48 | $ 48 | $ 47 |
Balance (in shares) | 48,003,724 | 47,655,131 | 47,674,189 | 47,214,077 |
Forfeitures of shares granted to employees (in shares) | (14,492) | (10,933) | (66,857) | (36,235) |
Issuances of common stock | $ 1 | |||
Issuances of common stock (in shares) | 10,748 | 11,820 | 384,028 | 460,580 |
Exercises of options (in shares) | 2,155 | 7,258 | 10,775 | 24,854 |
Balance | $ 48 | $ 48 | $ 48 | $ 48 |
Balance (in shares) | 48,002,135 | 47,663,276 | 48,002,135 | 47,663,276 |
Additional Paid-in Capital | ||||
Stockholders' deficit | ||||
Balance | $ 561,161 | $ 533,049 | $ 547,734 | $ 515,867 |
Equity-based compensation | 6,812 | 7,164 | 19,905 | 23,471 |
Exercises of options | 92 | 362 | 426 | 1,237 |
Balance | 568,065 | 540,575 | 568,065 | 540,575 |
Accumulated Other Comprehensive Income | ||||
Stockholders' deficit | ||||
Balance | (20,661) | (4,740) | (11,003) | (1,306) |
Foreign currency translation | (7,752) | (3,818) | (17,410) | (7,252) |
Balance | (28,413) | (8,558) | (28,413) | (8,558) |
Accumulated Deficit | ||||
Stockholders' deficit | ||||
Balance | (980,729) | (864,498) | (909,877) | (807,774) |
Dividends paid | (42,729) | (37,654) | (125,882) | (110,736) |
Net (loss) income | (8,007) | 13,320 | 4,294 | 29,678 |
Balance | $ (1,031,465) | $ (888,832) | $ (1,031,465) | $ (888,832) |
Description of the business a_9
Description of the business and recent developments: Revenue recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue recognition | ||||
Service revenue recognized | $ 1.8 | $ 1.9 | $ 4.4 | $ 4.1 |
Amortization expense for contract costs | $ 4.9 | $ 4.6 | $ 14.5 | $ 13.8 |
Minimum | ASU 2014-09 | ||||
Revenue recognition | ||||
Maximum contract lengths for billing due upon receipts (in months) | 1 month | |||
Maximum | ASU 2014-09 | ||||
Revenue recognition | ||||
Maximum contract lengths for billing due upon receipts (in months) | 60 months |
Description of the business _10
Description of the business and recent developments: Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finance leases-fiber lease agreements | |||||
Initial terms | 22 years | 22 years | |||
Additional finance lease future payments due | $ 120,600 | $ 120,600 | |||
Cash paid for amounts included in the measurement of lease liabilities | |||||
Amortization of right-of-use assets | 7,188 | $ 6,847 | 21,186 | $ 19,571 | |
Interest expense on finance lease liabilities | 5,382 | 4,977 | 15,579 | 14,888 | |
Operating lease cost | 4,547 | 4,572 | 13,948 | 13,660 | |
Total lease costs | $ 17,117 | $ 16,396 | 50,713 | 48,119 | |
Operating cash flows from finance leases | (13,478) | (12,694) | |||
Operating cash flows from operating leases | (14,165) | (14,077) | |||
Financing cash flows from finance leases | (20,958) | (16,826) | |||
Right-of-use assets obtained in exchange for new finance lease liabilities | 74,633 | 38,411 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 10,498 | $ 15,732 | |||
Weighted-average remaining lease term - finance leases (in years) | 13 years 1 month 6 days | 12 years 7 months 6 days | 13 years 1 month 6 days | 12 years 7 months 6 days | |
Weighted-average remaining lease term - operating leases (in years) | 17 years 9 months 18 days | 19 years 2 months 12 days | 17 years 9 months 18 days | 19 years 2 months 12 days | |
Weighted average discount rate - finance leases | 8.60% | 9.30% | 8.60% | 9.30% | |
Weighted average discount rate - operating leases | 5.40% | 5.50% | 5.40% | 5.50% | |
Future minimum payments (principal and interest) under these finance leases | |||||
2022 | $ 45,540 | $ 45,540 | |||
2023 | 39,425 | 39,425 | |||
2024 | 36,159 | 36,159 | |||
2025 | 31,383 | 31,383 | |||
2026 | 31,608 | 31,608 | |||
Thereafter | 305,053 | 305,053 | |||
Total minimum lease obligations | 489,168 | 489,168 | |||
Less-amounts representing interest | (201,283) | (201,283) | |||
Present value of minimum lease obligations | 287,885 | 287,885 | |||
Current maturities | (24,135) | (24,135) | $ (17,048) | ||
Finance lease obligations, net of current maturities | 263,750 | 263,750 | 228,822 | ||
Future minimum payments under these operating lease agreements | |||||
2022 | 17,167 | 17,167 | |||
2023 | 16,738 | 16,738 | |||
2024 | 14,918 | 14,918 | |||
2025 | 12,821 | 12,821 | |||
2026 | 11,179 | 11,179 | |||
Thereafter | 96,176 | 96,176 | |||
Total minimum lease obligations | 168,999 | 168,999 | |||
Less-amounts representing interest | (57,777) | (57,777) | |||
Present value of minimum lease obligations | 111,222 | 111,222 | |||
Current maturities | (11,784) | (11,784) | (12,197) | ||
Lease obligations, net of current maturities | $ 99,438 | $ 99,438 | $ 111,794 | ||
Minimum | |||||
Finance leases-fiber lease agreements | |||||
Initial terms | 15 years | 15 years | |||
Maximum | |||||
Finance leases-fiber lease agreements | |||||
Initial terms | 20 years | 20 years |
Description of the business _11
Description of the business and recent developments: Allowance for credit losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Description of the business and recent developments: | ||||
Balance at Beginning of Period | $ 1,717 | $ 1,673 | $ 1,510 | $ 1,921 |
Current-period Provision for Expected Credit Losses | 1,054 | 1,340 | 3,059 | 4,539 |
Write offs Charged Against Allowance | (805) | (1,600) | (2,603) | (5,047) |
Balance at End of Period | 1,966 | 1,413 | 1,966 | 1,413 |
Bad debt recoveries | $ 500 | $ 300 | $ 1,500 | $ 1,900 |
Description of the business _12
Description of the business and recent developments: Allowance for doubtful accounts (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Description of the business and recent developments: | ||||
Bad debt expense, net of recoveries | $ 0.5 | $ 1 | $ 1.5 | $ 2.6 |
Bad debt recoveries | $ 0.5 | $ 0.3 | $ 1.5 | $ 1.9 |
Property and equipment_ (Detail
Property and equipment: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property and equipment: | ||||
Depreciation and amortization | $ 22,897 | $ 22,609 | $ 68,659 | $ 66,675 |
Capitalized salaries and related benefits of employees | $ 3,000 | $ 3,100 | $ 9,300 | $ 10,400 |
Long-term debt_ Limitations und
Long-term debt: Limitations under the Indentures (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Long-term debt | |
Consolidated leverage ratio | 6 |
Consolidated secured leverage ratio | 4 |
Amount unrestricted and permitted for investment payments | $ 207.4 |
Fixed charge coverage ratio | 2 |
Restriction on incurring additional indebtedness | Senior notes | Minimum | |
Long-term debt | |
Consolidated secured leverage ratio | 1 |
Restriction on incurring additional indebtedness | Senior unsecured 2024 Notes | Minimum | |
Long-term debt | |
Consolidated leverage ratio | 1 |
Restriction on incurring additional indebtedness | Senior unsecured 2024 Notes | Maximum | |
Long-term debt | |
Consolidated leverage ratio | 6 |
Consolidated secured leverage ratio | 4 |
Restriction on incurring additional indebtedness | Senior secured 2026 Notes | Minimum | |
Long-term debt | |
Fixed charge coverage ratio | 2 |
Restriction on incurring additional indebtedness | Senior secured 2026 Notes | Maximum | |
Long-term debt | |
Fixed charge coverage ratio | 1 |
Restriction on dividends and stock purchases | Senior secured 2026 Notes | |
Long-term debt | |
Fixed charge coverage ratio | 1 |
Restriction on dividends and stock purchases | Senior secured 2026 Notes | Minimum | |
Long-term debt | |
Consolidated leverage ratio | 1 |
Fixed charge coverage ratio | 1 |
Restriction on dividends and stock purchases | Senior secured 2026 Notes | Maximum | |
Long-term debt | |
Consolidated leverage ratio | 6 |
Fixed charge coverage ratio | 2 |
Long-term debt_ (Details)
Long-term debt: (Details) € in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||
Jun. 22, 2022 USD ($) | Jun. 22, 2022 EUR (€) | Dec. 01, 2021 USD ($) | May 07, 2021 USD ($) | May 31, 2022 USD ($) | May 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | Oct. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Oct. 31, 2022 USD ($) | Apr. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2022 EUR (€) | |
Long-term debt | |||||||||||||||
Gain on foreign exchange | $ 31,600,000 | $ 23,800,000 | |||||||||||||
Redemption price percentage | 101.094% | 101.094% | 103.20% | ||||||||||||
Loss on debt extinguishment and redemption | 14,698,000 | ||||||||||||||
Margin deposits | $ 54,700,000 | 54,700,000 | |||||||||||||
Interest Rate Swap | |||||||||||||||
Long-term debt | |||||||||||||||
Interest expense | 16,900,000 | $ 3,100,000 | 45,700,000 | 3,100,000 | |||||||||||
Interest Rate Swap | Cash | |||||||||||||||
Long-term debt | |||||||||||||||
Margin deposits | 57,200,000 | 57,200,000 | |||||||||||||
Interest Rate Swap | Unrestricted Cash | |||||||||||||||
Long-term debt | |||||||||||||||
Margin deposits | 2,400,000 | $ 2,400,000 | |||||||||||||
SOFR | |||||||||||||||
Long-term debt | |||||||||||||||
Interest rate | 3.50% | ||||||||||||||
Senior secured 2026 Notes | |||||||||||||||
Long-term debt | |||||||||||||||
Face amount | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||||||||||||
Interest rate (as a percent) | 3.50% | 3.50% | |||||||||||||
Proceeds from Issuance of secured debt | $ 496,933,000 | ||||||||||||||
Discount on issuance of debt | 1,800,000 | ||||||||||||||
Debt costs | 1,300,000 | $ 1,317,000 | |||||||||||||
Redemption price percentage of principal amount redeemed | 100% | ||||||||||||||
Net proceeds | $ 496,900,000 | ||||||||||||||
Senior notes outstanding | $ 500,000,000 | $ 500,000,000 | |||||||||||||
2027 Notes | |||||||||||||||
Long-term debt | |||||||||||||||
Face amount | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | ||||||||||||
Interest rate (as a percent) | 7% | 7% | |||||||||||||
Proceeds from Issuance of secured debt | $ 446,000,000 | ||||||||||||||
Discount on issuance of debt | 2,700,000 | ||||||||||||||
Debt costs | 1,300,000 | ||||||||||||||
Redemption price percentage of principal amount redeemed | 100% | 100% | |||||||||||||
Redemption price percentage | 40% | 40% | |||||||||||||
2027 Notes | Prior to June 15, 2024 | |||||||||||||||
Long-term debt | |||||||||||||||
Redemption price percentage of principal amount redeemed | 107% | 107% | |||||||||||||
2027 Notes | June 15, 2024 to June 14, 2025 | |||||||||||||||
Long-term debt | |||||||||||||||
Redemption price percentage of principal amount redeemed | 103.50% | 103.50% | |||||||||||||
Senior secured notes due 2022 | |||||||||||||||
Long-term debt | |||||||||||||||
Face amount | $ 115,900,000 | $ 115,900,000 | |||||||||||||
Redemption price percentage | 5.375% | ||||||||||||||
Redemption value | 1,900,000 | ||||||||||||||
Accrued and unpaid interest | $ 11,500,000 | $ 400,000 | |||||||||||||
Loss on extinguishment debt purchases | $ 10,800,000 | $ 3,900,000 | |||||||||||||
Notice issued for redemption of debt | $ 45,000,000 | ||||||||||||||
Redemption price per $1,000 aggregate principal amount | 41.41533 | ||||||||||||||
Accrued interest value | $ 400,000 | ||||||||||||||
Accrued interest per $1,000 aggregate principal amount | 9.70486 | ||||||||||||||
Amount of debt redeemed | $ 45,000,000 | ||||||||||||||
Senior notes outstanding | $ 284,100,000 | ||||||||||||||
Senior secured notes due 2022 | Interest Rate Swap | |||||||||||||||
Long-term debt | |||||||||||||||
Face amount | $ 54,700,000 | 54,700,000 | |||||||||||||
Net liability, prepaid expenses | 12,100,000 | 12,100,000 | |||||||||||||
Net liability, other long term | $ 42,600,000 | $ 42,600,000 | |||||||||||||
Senior unsecured 2024 Notes | |||||||||||||||
Long-term debt | |||||||||||||||
Face amount | € | € 350 | ||||||||||||||
Redemption price percentage | 101.094% | 101.094% | |||||||||||||
Aggregate principal amount of redemption | € | 350 | ||||||||||||||
Redemption value | $ 375,200,000 | € 353.8 | |||||||||||||
Repayments of interest | 8,100,000 | 7.7 | |||||||||||||
Total repayment | 383,400,000 | € 361.5 | |||||||||||||
Loss on debt extinguishment and redemption | $ 11,900,000 | ||||||||||||||
2024 Notes | |||||||||||||||
Long-term debt | |||||||||||||||
Interest rate (as a percent) | 4.375% | ||||||||||||||
Gain and loss on foreign exchange | $ 10,200,000 | ||||||||||||||
Installment One | SOFR | |||||||||||||||
Long-term debt | |||||||||||||||
Net proceeds | $ 600,000 | ||||||||||||||
Payment of debt in Installments | $ 600,000 | ||||||||||||||
Installment One | SOFR | Interest Rate Swap | |||||||||||||||
Long-term debt | |||||||||||||||
Payment made to counter party | $ 3,400,000 | ||||||||||||||
Installment Two | SOFR | |||||||||||||||
Long-term debt | |||||||||||||||
Net proceeds | $ 1,200,000 | ||||||||||||||
Payment of debt in Installments | $ 1,200,000 | ||||||||||||||
Installment Two | SOFR | Interest Rate Swap | |||||||||||||||
Long-term debt | |||||||||||||||
Net proceeds | $ 3,400,000 |
Commitments and contingencies_
Commitments and contingencies: Current and potential litigation (Details) - USD ($) $ in Millions | 2 Months Ended | 9 Months Ended |
Aug. 31, 2022 | Sep. 30, 2022 | |
Commitments and contingencies | ||
Estimate of possible loss in excess of accrual | $ 3.8 | |
Loss contingency, damages awarded, value | $ 0.4 | |
Final payment to accumulated interest and additional attorneys | $ 0.4 | |
CIMA | ||
Commitments and contingencies | ||
Loss contingency, damages awarded, value | $ 0.6 |
Income taxes_ Components of inc
Income taxes: Components of income (loss) before income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Components of income (loss) before income taxes | ||||
Domestic | $ (3,382) | $ 24,849 | $ 22,953 | $ 54,179 |
Foreign | (3,656) | (2,825) | (8,596) | (8,024) |
Total income before income taxes | $ (7,038) | $ 22,024 | $ 14,357 | $ 46,155 |
Common stock buyback program_ (
Common stock buyback program: (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Common stock buyback program: | ||||
Remaining authorized amount for common stock repurchases | $ 30.4 | $ 30.4 | ||
Repurchase of common stock (in shares) | 0 | 0 | 0 | 0 |
Dividends on common stock_ (Det
Dividends on common stock: (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Dec. 02, 2022 | Nov. 02, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Dividends on common stock and return of capital program | ||||
Quarterly dividend payment approved (per share) | $ 0.915 | |||
Dividends paid | $ 42,800 | $ 125,882 | $ 110,736 |
Related party transactions_ (De
Related party transactions: (Details) - CEO - Lease - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 31, 2015 | |
Related party transactions | ||||||
Fixed annual rent | $ 1 | |||||
Lease term (in years) | 5 years | |||||
Notice period for cancellation of lease | 60 days | |||||
Payment for rent and related costs (in dollars) | $ 0.5 | $ 0.5 | $ 1.4 | $ 1.3 |
Segment information (Details)
Segment information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Segment information | |||||
Number of operating segments | segment | 1 | ||||
Revenues | $ 150,000 | $ 147,927 | $ 447,625 | $ 442,584 | |
Long-lived assets, net | 503,771 | 503,771 | $ 457,892 | ||
On-net | |||||
Segment information | |||||
Revenues | 113,219 | 111,099 | 337,829 | 332,087 | |
Off-net | |||||
Segment information | |||||
Revenues | 36,611 | 36,656 | 109,279 | 110,079 | |
Non-core | |||||
Segment information | |||||
Revenues | 170 | 172 | 517 | 418 | |
North America | |||||
Segment information | |||||
Revenues | 120,785 | 117,661 | 357,775 | 351,198 | |
Long-lived assets, net | 373,879 | 373,879 | 331,537 | ||
North America | On-net | |||||
Segment information | |||||
Revenues | 88,298 | 85,569 | 261,427 | 255,157 | |
North America | Off-net | |||||
Segment information | |||||
Revenues | 32,325 | 31,945 | 95,873 | 95,680 | |
North America | Non-core | |||||
Segment information | |||||
Revenues | 162 | 147 | 475 | 361 | |
Europe and other | |||||
Segment information | |||||
Long-lived assets, net | 129,892 | 129,892 | $ 126,355 | ||
Europe | |||||
Segment information | |||||
Revenues | 23,790 | 26,062 | 74,095 | 79,972 | |
Europe | On-net | |||||
Segment information | |||||
Revenues | 19,853 | 21,658 | 61,807 | 66,450 | |
Europe | Off-net | |||||
Segment information | |||||
Revenues | 3,929 | 4,379 | 12,249 | 13,465 | |
Europe | Non-core | |||||
Segment information | |||||
Revenues | 8 | 25 | 39 | 57 | |
Latin America | |||||
Segment information | |||||
Revenues | 1,392 | 1,096 | 4,232 | 2,978 | |
Latin America | On-net | |||||
Segment information | |||||
Revenues | 1,358 | 1,042 | 4,080 | 2,859 | |
Latin America | Off-net | |||||
Segment information | |||||
Revenues | 34 | 54 | 150 | 119 | |
Latin America | Non-core | |||||
Segment information | |||||
Revenues | 2 | ||||
Asia Pacific | |||||
Segment information | |||||
Revenues | 3,829 | 2,934 | 10,949 | 8,091 | |
Asia Pacific | On-net | |||||
Segment information | |||||
Revenues | 3,530 | 2,657 | 9,992 | 7,279 | |
Asia Pacific | Off-net | |||||
Segment information | |||||
Revenues | 299 | 277 | 956 | 812 | |
Asia Pacific | Non-core | |||||
Segment information | |||||
Revenues | 1 | ||||
Africa | |||||
Segment information | |||||
Revenues | 204 | 174 | 574 | 345 | |
Africa | On-net | |||||
Segment information | |||||
Revenues | 180 | 173 | 523 | 342 | |
Africa | Off-net | |||||
Segment information | |||||
Revenues | $ 24 | $ 1 | $ 51 | $ 3 |