Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
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, City or Town | Washington, D.C | |
Entity Address, Country | US | |
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 | 48,623,846 | |
Entity Central Index Key | 0001158324 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 109,661 | $ 223,783 |
Restricted cash | 56,411 | 52,129 |
Accounts receivable, net of allowance for credit losses of $4,158 and $2,303, respectively | 87,170 | 44,123 |
Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of $29,029 | 237,637 | |
Due from T-Mobile, Transition Services Agreement | 16,831 | |
Prepaid expenses and other current assets | 73,541 | 45,878 |
Total current assets | 581,251 | 365,913 |
Property and equipment: | ||
Property and equipment | 2,946,723 | 1,714,906 |
Accumulated depreciation and amortization | (1,329,114) | (1,170,476) |
Total property and equipment, net | 1,617,609 | 544,430 |
Right-of-use leased assets | 364,397 | 81,601 |
Intangible assets, net | 54,362 | |
Deposits and other assets | 22,143 | 18,238 |
Due from T-Mobile, IP Transit Services Agreement, net of discount of $32,613 | 284,054 | |
Due from T-Mobile, Purchase Agreement, net of discount of $14,444 | 37,865 | |
Total assets | 2,961,681 | 1,010,182 |
Current liabilities: | ||
Accounts payable | 29,367 | 27,208 |
Accrued and other current liabilities | 120,031 | 63,889 |
Due to T-Mobile - Transition Services Agreement | 69,629 | |
Due to T-Mobile - Purchase Agreement | 4,981 | |
Current maturities, operating lease liabilities | 68,418 | 12,005 |
Finance lease obligations, current maturities | 63,236 | 17,182 |
Total current liabilities | 355,662 | 120,284 |
Operating lease liabilities, net of current maturities | 330,993 | 94,587 |
Finance lease obligations, net of current maturities | 419,941 | 287,044 |
Deferred income tax liabilities | 388,273 | 47,646 |
Other long-term liabilities | 79,435 | 34,990 |
Total liabilities | 2,519,553 | 1,528,814 |
Commitments and contingencies: | ||
Stockholders' equity (deficit): | ||
Common stock, $0.001 par value; 75,000,000 shares authorized; 48,612,382 and 48,013,330 shares issued and outstanding, respectively | 49 | 48 |
Additional paid-in capital | 598,494 | 575,064 |
Accumulated other comprehensive loss | (19,761) | (19,156) |
Accumulated deficit | (136,654) | (1,074,588) |
Total stockholders' equity (deficit) | 442,128 | (518,632) |
Total liabilities and stockholders' equity (deficit) | 2,961,681 | 1,010,182 |
Senior secured 2026 Notes | ||
Current liabilities: | ||
Senior secured 2026 notes, net of unamortized debt costs of $710 and $905, respectively, and discounts of $945 and $1,203, respectively | 498,345 | 497,892 |
Senior unsecured 2027 Notes | ||
Current liabilities: | ||
Senior unsecured 2027 notes, net of unamortized debt costs of $1,001 and $1,173, respectively, and discounts of $2,095 and $2,456, respectively | $ 446,904 | $ 446,371 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Accounts receivable, net of allowance for credit losses | $ 4,158 | $ 2,303 |
Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount | 29,029 | 29,029 |
Due from T-Mobile, IP Transit Services Agreement, noncurrent portion discount | 32,613 | 32,613 |
Due from T-Mobile, Purchase Agreement, net of discount | $ 14,444 | $ 14,444 |
Liabilities and stockholders' (deficit) equity | ||
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 | 48,612,382 | 48,013,330 |
Common stock, shares outstanding | 48,612,382 | 48,013,330 |
Senior secured 2026 Notes | ||
Liabilities and stockholders' (deficit) equity | ||
Unamortized debt costs | $ 710 | $ 905 |
Unamortized debt discount | 945 | 1,203 |
Senior unsecured 2027 Notes | ||
Liabilities and stockholders' (deficit) equity | ||
Unamortized debt costs | 1,001 | 1,173 |
Unamortized debt discount | $ 2,095 | $ 2,456 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Service revenue | $ 275,429 | $ 150,000 | $ 668,822 | $ 447,625 |
Operating expenses: | ||||
Network operations (including equity-based compensation expense, respectively, exclusive of depreciation and amortization shown separately below) | 173,594 | 57,220 | 369,734 | 171,183 |
Selling, general, and administrative (including equity-based compensation expense, respectively) | 65,308 | 39,114 | 194,046 | 119,129 |
Acquisition costs - Sprint Business | 351 | 2,004 | 1,490 | 2,004 |
Depreciation and amortization | 86,734 | 22,897 | 164,403 | 68,659 |
Total operating expenses | 325,987 | 121,235 | 729,673 | 360,975 |
Gain (Loss) on lease transactions | (670) | (210) | ||
Operating (loss) income | (50,558) | 28,095 | (60,851) | 86,440 |
Interest expense | (24,198) | (17,948) | (71,855) | (45,594) |
Loss on bargain purchase - Sprint Business | (3,332) | |||
Gain on bargain purchase - Sprint Business | 1,152,386 | |||
Change in valuation - interest rate swap agreement | (4,825) | (16,923) | (4,283) | (45,703) |
Foreign exchange gain on 2024 Euro Notes | 31,561 | |||
Loss on debt extinguishment and redemption- 2024 Euro Notes | (11,885) | |||
Interest income - IP Transit Services Agreement | 10,299 | 17,968 | ||
Interest income - Purchase Agreement | 664 | 1,170 | ||
Interest income and other, net | 1,604 | (262) | 5,154 | (462) |
Income before income taxes | (70,346) | (7,038) | 1,039,689 | 14,357 |
Income tax benefit (expense) | 13,623 | (969) | 33,599 | (10,063) |
Net income (loss) | (56,723) | (8,007) | 1,073,288 | 4,294 |
Comprehensive income (loss): | ||||
Net income (loss) | (56,723) | (8,007) | 1,073,288 | 4,294 |
Foreign currency translation adjustment | (4,134) | (7,752) | (605) | (17,410) |
Comprehensive income (loss) | $ (60,857) | $ (15,759) | $ 1,072,683 | $ (13,116) |
Net income (loss) per common share: | ||||
Basic net income (loss) per common share | $ (1.20) | $ (0.17) | $ 22.72 | $ 0.09 |
Diluted net income (loss) per common share | (1.20) | (0.17) | 22.54 | 0.09 |
Dividends declared per common share | $ 0.945 | $ 0.905 | $ 2.805 | $ 2.640 |
Weighted-average common shares - basic | 47,227,338 | 46,736,742 | 47,234,025 | 46,759,632 |
Weighted-average common shares - diluted | 47,227,338 | 46,736,742 | 47,624,709 | 47,097,580 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity-based compensation expense | $ 20,241 | $ 18,174 | ||
Network operations | ||||
Equity-based compensation expense | $ 370 | $ 176 | 750 | 465 |
Selling, general and administrative | ||||
Equity-based compensation expense | $ 7,041 | $ 6,035 | $ 19,491 | $ 17,709 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 1,073,288 | $ 4,294 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 164,403 | 68,659 |
Amortization of debt discount and premium | 986 | 1,144 |
Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements | (19,138) | |
Equity-based compensation expense (net of amounts capitalized) | 20,241 | 18,174 |
Gain on bargain purchase - Sprint Business | (1,152,386) | |
Gains - equipment transactions and other, net | (277) | 3,531 |
Loss on debt extinguishment and redemption - 2024 Euro Notes | 11,885 | |
Foreign currency exchange gain on 2024 Euro Notes | (31,561) | |
Deferred income taxes | (63,509) | 4,682 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,247) | (3,103) |
Prepaid expenses and other current assets | (4,763) | (9,404) |
Change in valuation - interest rate swap agreement | 4,283 | 45,703 |
Due to T-Mobile - Transition Services Agreement | 69,629 | |
Due from T-Mobile - Transition Services Agreement | (16,831) | |
Unfavorable lease liabilities | (16,174) | |
Accounts payable, accrued liabilities and other long-term liabilities | 9,715 | 23,144 |
Deposits and other assets | (177) | 236 |
Net cash provided by operating activities | 66,043 | 137,384 |
Cash flows from investing activities: | ||
Cash receipts - IP Transit Agreement - T-Mobile | 116,667 | |
Acquisition of Sprint Wireline Business, net of $47.1 million of cash acquired | (14,037) | |
Purchases of property and equipment | (86,023) | (59,380) |
Net cash provided by (used in) investing activities | 16,607 | (59,380) |
Cash flows from financing activities: | ||
Dividends paid | (135,354) | (125,882) |
Redemption and extinguishment - 2024 Euro Notes | (375,354) | |
Net proceeds from issuance of senior unsecured 2027 Notes - net of debt costs of $1,290 | 446,010 | |
Proceeds from exercises of stock options | 787 | 426 |
Principal payments on installment payment agreement | (790) | |
Principal payments of finance lease obligations | (58,549) | (20,958) |
Net cash used in financing activities | (193,116) | (76,548) |
Effect of exchange rates changes on cash | 626 | (6,416) |
Net decrease in cash, cash equivalents and restricted cash | (109,840) | (4,960) |
Cash, cash equivalents and restricted cash, beginning of period | 275,912 | 328,624 |
Cash, cash equivalents and restricted cash, end of period | 166,072 | 323,664 |
Supplemental disclosure of non-cash financing activities: | ||
Fair value of equipment acquired in leases | 1,969 | |
Finance lease obligations incurred | $ 217,782 | $ 74,633 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Cash acquired | $ 47,100 | $ 47,100 |
Senior unsecured 2027 Notes | ||
Cash flows from operating activities: | ||
Debt costs | $ 1,290 |
Description of the business_
Description of the business: | 9 Months Ended |
Sep. 30, 2023 | |
Description of the business: | |
Description of the business: | 1. Description of the business: 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”) 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”). References to the “Company” for events that occurred prior to May 15, 2014 refer to Cogent Communications Group, Inc. and its subsidiaries and on and after May 15, 2014 the “Company” refers to Cogent Communications Holdings, Inc. and its subsidiaries. Cogent Communications, Inc. is wholly owned by Group and the vast majority of the Company’s assets, contractual arrangements, and operations are executed by Sprint Communications Company LP and Cogent Communications, Inc. 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 54 countries across North America, Europe, South America, Oceania 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, net-centric and enterprise customers. The Company’s corporate customers are located in multi-tenant office buildings that 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 either to deliver content to end users or to provide access to residential or commercial internet users. Content delivery customers include over the top 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, 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, including the acquisition of Sprint Communications (as discussed below). The Company continues to support but does not actively sell these non-core services. In connection with the Company’s acquisition of Sprint Communications (as discussed below), the Company began to provide optical wavelength services and optical transport services over its fiber network. The Company is selling these wavelength services to its existing customers, customers of Sprint Communications and to new customers who require dedicated optical transport connectivity without the capital and ongoing expenses associated with owning and operating network infrastructure. Additionally, the Sprint Business customers include a number of companies larger than the Company’s historical customer base. In connection with the acquisition of Sprint Communications, the Company expanded selling services to these larger “Enterprise” customers. Recently Adopted Accounting Standards In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Revenue from Contracts with Customers (Topic 606), as if the acquirer had originated the contracts at the date of the business combination. ASU 2021-08 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2021-08 in connection with its acquisition of Sprint Communications (as discussed below), at which time it became applicable to the Company and was applied in the accounting for the acquisition. The adoption did not have a material impact on the provisional opening balance sheet recorded and there was no retrospective impact to our consolidated financial statements as a result of the adoption. Acquisition of Sprint Communications On September 6, 2022, Cogent Infrastructure, Inc., a Delaware corporation (the “Buyer”) and a direct wholly owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Sprint Communications LLC, a Kansas limited liability company (“Sprint Communications”) 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 an indirect wholly owned subsidiary of T-Mobile (the “Seller”), pursuant to which the Company acquired the U.S. long-haul fiber network (including the non-U.S. extensions thereof) of Sprint Communications and its subsidiaries (the “Sprint Business”). The Purchase Agreement provides that, upon the terms and conditions set forth therein, the Company purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) of Wireline Network Holdings LLC, a Delaware limited liability company that, following an internal restructuring and divisive merger, holds Sprint Communications’ assets and liabilities relating to the Sprint Business (such transactions contemplated by the Purchase Agreement, collectively, the “Transaction”). The Purchase Agreement includes customary representations, warranties, indemnities and covenants, including regarding the conduct of the Sprint Business prior to the closing of the Transaction (the “Closing”). In addition, the Closing was subject to customary closing conditions, including as to the receipt of certain required regulatory approvals and consents, all of which have been received. The Company 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 the Company and the Seller (the “Parent Guaranty”). The Parent Guaranty contains customary representations, warranties and covenants of the Company and the Seller. The Company believes it is in a unique position to monetize the Sprint Business and its network and management expects to achieve significant cost reduction synergies and revenue synergies from the Transaction. Revenue and pre-tax loss for the Sprint Business included in the Company’s condensed consolidated statements of comprehensive loss for the three-month period ended September 30, 2023 were $113.0 million and $82.1 million, respectively. Revenue and pre-tax loss for the Sprint Business included in the Company's condensed consolidated statements of comprehensive income for the nine-month period ended September 30, 2023 were $191.0 million and $141.6 million, respectively. Purchase Price The Transaction closed on May 1, 2023 (the “Closing Date”). On the Closing Date, the Buyer consummated the Transaction pursuant to the terms of the Purchase Agreement, providing a purchase price of $1 payable to the Seller for the Purchased Interests, subject to customary adjustments, including working capital (the “Working Capital Adjustment”), as set forth in the Purchase Agreement. As consideration for the Purchased Interests, the Working Capital Adjustment (primarily related to acquired cash and cash equivalents of an estimated $43.4 million at the Closing Date in order to fund the international operations of the Sprint Business) resulted in the Buyer making a payment to the Seller of $61.1 million on the Closing Date. The Purchase Agreement also includes an estimated payment of $52.3 million from Seller to Buyer related to acquired short-term lease obligations (the “Short-term Lease Payment”). The Short-term Lease Payment will be paid from the Seller to the Company in four equal payments in months 55 to 58 after the Closing Date. The Short-term Lease Payment was recorded at its present value resulting in a discount of $15.6 million. The interest rate used in determining the present value was derived considering rates on similar issued debt instruments with comparable durations, amongst other market factors. The determination of the discount rate requires some judgment. The amortization of the discount resulted in interest income of $0.7 million and $1.2 million for the three and nine months ended September 30, 2023, respectively. The Seller is disputing approximately $24.2 million of the Short-term Lease Payment amount that was accounted for by the Seller as a service agreement and not as a finance lease. As of September 30, 2023, the Company reclassified IP Transit Services Agreement On the Closing Date, Cogent Communications, Inc. and T-Mobile USA, Inc., a Delaware corporation and direct subsidiary of T-Mobile (“TMUSA”), entered into an agreement for IP transit services (“IP Transit Services Agreement”), pursuant to which TMUSA will pay an affiliate of the Company an aggregate of $700.0 million, consisting of (i) $350.0 million in equal monthly installments of $29.2 million per month during the first year after the Closing Date and (ii) $350.0 million in equal monthly installments of $8.3 million per month over the subsequent 42 months. During the three and nine months ended TMUSA paid the Company The Company accounted for the Transaction as a business combination under ASC Topic 805 Business Combinations Revenue from Contracts with Customers Transition Services Agreement On the Closing Date, the Buyer entered into a transition services agreement (the “TSA”) with the Seller, pursuant to which the Seller will provide to the Buyer, and the Buyer will provide to the Seller on an interim basis following the Closing Date, certain specified services (the “Transition Services”) to ensure an orderly transition following the separation of the Sprint Business from Sprint Communications. The services to be provided by the Seller to the Buyer include, among others, information technology support, back office and finance, real estate and facilities, vendor and supply chain management, the payment and processing of vendor invoices for the Company and human resources. The services to be provided by the Buyer to the Seller include, among others, information technology and network support, finance and back office and other wireless business support. The Transition Services are generally intended to be provided for a period of up to two years following the Closing Date, although such period may be extended for an additional one-year term by either party upon 30 days’ prior written notice. The fees for the Transition Services are calculated using either a per service monthly fee or an hourly rate for the employees allocated to provide such services. Any third-party costs incurred in providing the Transition Services are passed on to the party receiving such services at cost for the two-year period and at cost plus 20 percent, if the TSA is extended. Amounts paid for the Sprint Business by T-Mobile are reimbursed at cost. Either party to the TSA may terminate the agreement (i) with respect to any individual service in full for convenience upon 30 days’ prior written notice for certain services and reduced for other services after a 90-day period. The TSA may be terminated in its entirety if the other party has failed to perform any of its material obligations and such failure is not cured within 30 days. The TSA provides for customary indemnification and limits on liability. Amounts billed under the TSA are due 30 days from receipt of the related invoice. During the three and nine months ended September 30, 2023 the Company was billed $101.2 million and $218.0 million as due to the Seller under the TSA, respectively, primarily for reimbursement at cost of payments to vendors of the Sprint Business. During the three and nine months ended September 30, 2023 the Company paid $153.1 million to the Seller under the TSA. As of September 30, 2023, the Company owed $ Seller for the Company until these vendors are fully transitioned to the Company. The amounts due from the Seller are primarily reimbursements for severance costs related to Sprint Business employees and services provided by the Company for the Seller. Other Services Provided to Seller In addition, on the Closing Date, the Buyer and TMUSA entered into a commercial agreement (“Commercial Agreement”) for colocation and connectivity services, pursuant to which the Company will provide such services to TMUSA for a per service monthly fee plus certain third-party costs incurred in providing the services. During the three and nine months ended September 30, 2023 the Company recorded $8.0 million and $15.3 million, respectively from TMUSA as service revenue under the Commercial Agreement. As of September 30, 2023, TMUSA owed $3.2 million to the Company under the Commercial Agreement. These amounts are included in accounts receivable. Acquisition-Related Costs In connection with the Transaction and negotiation of the Purchase Agreement, the Company has incurred a total of $3.7 million in professional fees, including $0.4 million and $1.5 million incurred in the three and nine months ended September 30, 2023, respectively. Consideration During the three months ended September 30, 2023, the Company updated its Working Capital Adjustment resulting in an additional $1.5 million due to the Seller and updated its Short-term Lease Payment resulting in a decrease of $5.0 million due from the Seller. The revised acquisition-date fair value of consideration to be received from the Transaction totaled $591.0 million and comprised of the following: (In thousands) May 1, 2023 Estimated working capital payments made to the Seller (a) $ 66,093 Estimated Purchase Agreement payment to be received from the Seller, net of discount of $15,614 (b) 36,696 Amounts due from the Seller – IP Transit Services Agreement, net of discount of $79,610 (c) 620,390 Total to be received from the Seller 657,086 Total net consideration to be received from the Seller (d) 590,993 Fair Value of Assets Acquired and Liabilities Assumed and Gain on Bargain Purchase The Company accounted for the Transaction as a business combination under ASC 805. Under ASC 805, the identifiable assets acquired and liabilities assumed were recorded at their fair values as of the Closing Date. Assigning fair market values to the assets acquired and liabilities assumed at the date of an acquisition requires the use of significant judgment regarding estimates and assumptions. For the fair values of the assets acquired and liabilities assumed, the Company used the cost, income and market approaches, including market participant assumptions. The fair value of the identifiable assets acquired (including amounts due under the IP Transit Services Agreement) were in excess of the liabilities assumed and the net consideration to be paid resulting in a gain on bargain purchase of $1.2 billion. During the third quarter, the Company recorded a measurement period adjustment to reclassify $24.9 million from right-of-use leased assets (net of related unfavorable lease liability amount) to finance lease assets (presented within property and equipment) and a measurement period adjustment to reclassify $160.9 million from operating lease liabilities to finance lease liability. The corresponding adjustment to the condensed consolidated statement of comprehensive loss for the three-month and nine-month periods ended September 30, 2023 was not material. The Transaction is considered an asset purchase for income tax purposes. The tax basis of the acquired business is the consideration paid ($1) plus the tax basis of certain liabilities assumed, with adjustments for cash acquired in excess of the purchase price. Deferred income taxes are recorded based upon the difference between the book and tax basis of the acquired assets and assumed liabilities at the Company’s marginal effective income tax rate on the Closing Date. The following table summarizes the fair values for each major class of assets acquired and liabilities assumed at the Closing Date. The Company retained the services of certified valuation specialists to assist with assigning values to certain acquired assets and assumed liabilities. The amounts presented are provisional and are subject to change as the Company refines the estimates and inputs used in the calculations of the assets acquired and liabilities assumed. May 1, 2023 Assets Current assets: Cash and cash equivalents $ 47,074 Accounts receivable 39,948 Prepaid expenses and other current assets 22,777 Total current assets 109,799 Total property and equipment 1,055,101 Right-of-use leased assets 314,632 Intangible assets 57,000 Deposits and other assets 7,191 Total assets $ 1,543,723 Liabilities Current liabilities: Accounts payable $ 13,313 Accrued and other current liabilities 36,629 Current maturities, operating lease liabilities 74,562 Current maturities, finance lease liabilities 39,559 Total current liabilities 164,063 Operating lease liabilities, net of current maturities 251,573 Finance lease liabilities, net of current maturities 121,342 Deferred income tax liabilities 407,000 Other long-term liabilities 38,352 Total liabilities 982,330 Fair value of net assets acquired $ 561,393 Gain on bargain purchase Fair value of net assets acquired $ 561,393 Total net consideration to be received from the Seller, net of discounts (b) (c) (d) 590,993 Gain on bargain purchase $ 1,152,386 (a) Includes $61.1 million paid to the Seller on the Closing Date and an accrual of $5.0 million due to the Seller. During the third quarter of 2023, the Working Capital Adjustment was increased by $1.5 million. A final determination of the Working Capital Adjustment is expected by the end of 2023. IP Transit Services Agreement (b) Under the Purchase Agreement, 50% of the assumed short-term operating lease liabilities totaling $52.3 million is to be paid to the Company from the Seller in from the Closing Date and is recorded at its present value resulting in a discount of (c) The IP Transit Services Agreement payments totaling $700.0 million are recorded at their present value resulting in a discount of $79.6 million. The $700.0 million is to be paid to the Company from the Seller in equal monthly payments of $29.2 million in months 1-12 and $8.3 million in months 13-54. (d) Cash consideration was $1 Intangible Assets Intangible assets include $57.0 million of acquired customer relationships with an estimated useful life of nine years and were determined using the income approach. This fair value measurement is based on significant inputs not observable in the market and, therefore, represents a Level 3 measurement as defined in ASC 820: Fair Value Measurement Asset Retirement Obligations In connection with the Transaction, the Company assumed $35.0 million of asset retirement obligations related to restoration obligations for acquired leases. The obligations and corresponding asset retirement assets are being accreted and amortized over approximately four years. Accretion of the asset retirement obligations (recorded as an increase to network operations expenses) and amortization of the asset retirement assets (recorded as depreciation and amortization expenses) for the three months ended September 30, 2023 were $0.7 million and $2.1 million, respectively. Accretion of the asset retirement obligations and amortization of the asset retirement assets for the nine months ended September 30, 2023 were $1.1 million and $3.5 million, respectively. Pro Forma Information The following unaudited pro forma financial information gives effect to the Transaction as if it had been completed on January 1, 2022. The pro forma adjustments are based on historically reported transactions by the respective companies. The pro forma results do not include anticipated synergies or other expected benefits of the acquisition. The pro forma results for the nine months ended September 30, 2023 include the historical results of the Sprint Business through April 30, 2023 and the combined results of the Company and the Sprint Business for the five months ended September 30, 2023. The unaudited pro forma information is based upon available information and certain assumptions that the Company believes are reasonable under the circumstances. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma financial information. The purchase adjustments are preliminary and subject to change as additional analyses are performed and finalized. The selected unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations would have been had the Transaction actually occurred on January 1, 2022, nor do they purport to project the future consolidated results of operations. Nine Months Nine Months Ended Ended (In thousands) September 30, 2023 September 30, 2022 Service revenue $ 849,580 $ 881,546 Operating loss from continuing operations (227,065) (623,519) Net income 915,730 452,150 The pro forma results for the nine months ended September 30, 2022 include estimates for the gain on bargain purchase related to the Transaction of $1.2 billion, interest income from the amortization of the discount recorded under the IP Transit Services Agreement of $29.4 million, a net increase to historical depreciation expense based on the fair value of property and equipment and the impact of the finance lease adjustment discussed above, of $35.4 million, amortization expense related to the customer relationship intangible assets of $4.8 million, the elimination of amounts charged from the parent company to the Sprint Business as autonomous entity expense adjustments of $24.9 million, amortization of unfavorable lease liabilities of $29.1 million, a reduction to network operations expense of $37.8 million and an increase to interest expense of $8.4 million from the impact of the finance lease adjustment discussed above, and the impact to income tax expense from the pro-forma and autonomous entity adjustments of $19.0 million. The historical results of the Sprint Business for the nine months ended September 30, 2022 include a loss on impairment of $477.3 million and a gain on the sale of IP addresses of $120.8 million. The pro forma results for the nine months ended September 30, 2023 include the gain on bargain purchase related to the Transaction of $1.2 billion, interest income from the amortization of the discount recorded under the IP Transit Services Agreement of $14.7 million, a net increase to historical depreciation expense based on the fair value of property and equipment and the impact of the finance lease adjustment discussed above of million and an increase to interest expense of $3.9 million from the impact of the finance lease adjustment discussed above, and the impact to income tax expense from the pro-forma adjustments of $2.3 million. 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, 2022. 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 US 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, 2023 and December 31, 2022, 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, 2023, the fair value of the Company’s $450.0 million aggregate principal amount of 7.00% Senior Unsecured Notes due 2027 (the “2027 Notes”) was $427.5 million, the fair value of the Company’s $500.0 million aggregate principal amount of 3.50% Senior Secured Notes due 2026 (the “2026 Notes”) was $460.0 million and the estimated liability fair value of the Company’s interest rate swap agreement was $56.4 million. Restricted cash and interest rate swap agreement Restricted cash represents amounts held in segregated bank accounts by our clearing broker as margin in support of our Swap Agreement as discussed in Note 3 and was $57.6 million as of September 30, 2023. Additional cash may be further restricted to maintain our swap agreement as interest rates fluctuate and margin requirements change. The Company does not use derivative financial instruments for trading purposes. 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 revenue and network operations expense. Excise taxes and surcharges billed to customers and recorded on a gross basis (as service revenue and costs of network operations) were $14.6 million and $4.1 million for the three months ended September 30, 2023 and September 30, 2022, respectively, and $29.8 million and $11.3 million for the nine months ended September 30, 2023 and September 30, 2022, 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, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Weighted-average common shares - basic 47,227,338 46,736,742 47,234,025 46,759,632 Dilutive effect of stock options — — 15,713 17,668 Dilutive effect of restricted stock — — 374,971 320,280 Weighted-average common shares - diluted 47,227,338 46,736,742 47,624,709 47,097,580 The following details unvested shares of restricted common stock as well as the anti-dilutive effects of stock options and restricted stock awards outstanding: Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Unvested shares of restricted common stock 1,395,258 1,271,441 1,395,258 1,271,441 Anti-dilutive options for common stock 125,643 113,376 112,048 43,648 Anti-dilutive shares of restricted common stock 106,125 637,028 90,768 827 Stockholders’ (Deficit) Equity The following details the changes in stockholders’ (deficit) equity for the three and nine months ended September 30, 2023 and September 30, 2022, respectively (in thousands except share data): 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’ |
Property and equipment_
Property and equipment: | 9 Months Ended |
Sep. 30, 2023 | |
Property and equipment: | |
Property and equipment: | 2. Property and equipment: Depreciation and amortization expense related to property and equipment and finance leases and capitalized compensation costs of employees directly involved with construction activities were as follows (in thousands): Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Depreciation and amortization expense $ 86,718 $ 22,891 $ 164,371 $ 68,640 Capitalized compensation cost 11,675 3,002 24,115 9,290 |
Long-term debt
Long-term debt | 9 Months Ended |
Sep. 30, 2023 | |
Long-term debt: | |
Long-term debt: | 3. Long-term debt: As of September 30, 2023, the Company had outstanding $450.0 million aggregate principal amount of 2027 Notes and $500.0 million aggregate principal amount of 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. Limitations under the indentures The indentures governing the 2027 Notes and the 2026 Notes (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). As of September 30, 2023, 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, 2023, a total of $461.8 million (inclusive of a $250.0 million general basket) was unrestricted and permitted for restricted payments, including dividends and stock purchases. Interest rate swap agreement As of September 30, 2023, 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, 2023, the fair value of the Swap Agreement was a net liability of $56.4 million, of which $23.9 million is presented with accrued and other current liabilities and $32.5 million is presented with other long-term liabilities. As of December 31, 2022, the fair value of the Swap Agreement was a net liability of $52.1 million, of which $20.3 million is presented with accrued and other current liabilities and $31.9 million is presented with other long-term liabilities. In the three months ended September 30, 2023 and 2022, the Company recorded unrealized losses related to the Swap Agreement of $4.8 million and $16.9 million, respectively, and in the nine months ended September 30, 2023 and 2022, the Company recorded unrealized losses related to the Swap Agreement of $4.3 million and $45.7 million, respectively. The Company has made a $57.6 million deposit with the counterparty to the Swap Agreement. If the fair value of the Swap Agreement exceeds a net liability of $57.6 million, the Company will be required to deposit additional funds with the counterparty equal to the net liability fair value. As of September 30, 2023, $56.4 million of the deposit was restricted and $1.2 million was unrestricted. As of November 6, 2023, the fair value of the Swap Agreement was reduced to $43.8 million. 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 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. Under the settlement payment made in May 2023, the Company made a payment of $9.5 million to the counterparty for a net cash interest cost of $9.5 million for the period from November 1, 2022 to April 30, 2023. Under the settlement payment made in November 2023, the Company made a payment of $12.0 million to the counterparty for a net cash interest cost of $12.0 million for the period from May 1, 2023 to October 31, 2023. |
Commitments and contingencies_
Commitments and contingencies: | 9 Months Ended |
Sep. 30, 2023 | |
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 could result in a loss of up to $4.0 million in excess of the amount accrued at September 30, 2023. 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, 2023 | |
Income taxes: | |
Income taxes: | 5. Income taxes: The components of income (loss) before income taxes consist of the following (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Domestic $ (58,402) $ (3,382) $ 1,057,523 $ 22,953 Foreign (11,944) (3,656) (17,834) (8,596) Total $ (70,346) $ (7,038) $ 1,039,689 $ 14,357 |
Common stock buyback program an
Common stock buyback program and stock options and award plan: | 9 Months Ended |
Sep. 30, 2023 | |
Common stock buyback program and stock options and award plan: | |
Common stock buyback program and stock options and award plan: | 6. Common stock buyback program and stock options and award plan: The Company’s Board of Directors has approved purchases of shares of the Company’s common stock under a buyback program (the “Buyback Program”) through December 31, 2024. As of September 30, 2024, there was $30.4 million remaining for purchases under the Buyback Program. There were no purchases of common stock in the three months or the nine months ended September 30, 2023 and 2022. During the three months ended March 31, 2023, the Company granted 258,762 shares of restricted stock primarily to its executive employees valued at $16.0 million that primarily vest over periods ending in December 2026. The vesting of 104,850 of these shares is subject to certain performance conditions. Of the total performance shares granted, the vesting of up to 29,334 performance shares granted to the Company’s CEO is subject to the total shareholder return of the Company’s common stock compared to the total shareholder return of the Nasdaq Telecommunications Index. In connection with the Transaction, the Company granted 308,782 shares of restricted stock to former employees of the Sprint Business and to its employees valued at $19.5 million and that generally vest over a 2 - In May 2023, the Company’s stockholders approved an increase of available shares for issuance under its 2017 Incentive Award Plan of 1.2 million shares. |
Dividends on common stock_
Dividends on common stock: | 9 Months Ended |
Sep. 30, 2023 | |
Dividends on common stock: | |
Dividends on common stock: | 7. Dividends on common stock: On November 1, 2023, the Company’s Board of Directors approved the payment of a quarterly dividend of $0.955 per common share. This estimated $45.1 million dividend payment is expected to be made on December 8, 2023. 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 limit the Company’s ability to return cash to its stockholders. |
Related party transactions_
Related party transactions: | 9 Months Ended |
Sep. 30, 2023 | |
Related party transactions: | |
Related party transactions: | 8. Related party transactions: Office leases The Audit Committee of the Company's Board of Directors (the "Audit Committee") reviews and approves all transactions with related parties. The Company’s headquarters is located in an office building owned by Sodium LLC whose owner is the Company’s Chief Executive Officer, David Schaeffer. 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.The lease is cancellable at no cost by the Company upon 60 days’ notice. On January 6, 2023, the Company entered into two lease agreements (the “New Leases”), one with Thorium LLC ('Thorium") and one with Germanium LLC (“Germanium”), entities owned by the Company’s Chief Executive Officer, David Schaeffer. The first of the New Leases is with Thorium for 54,803 square feet of office space, which serves as office space for the Company replacing a portion of its office space in the Northern Virginia area (“Office Lease”). The second of the New Leases is with Germanium LLC for 1,587 square feet of technical space which serves as network operations space for the Company (“Network Operations Lease”). The term for each of the New Leases is five Lease is On July 25, 2023 the Company entered into a Second Amendment to the lease agreement (the “Amendment”), with Germanium which amends the Network Operations Lease to lease an additional 7,369 square feet on the first floor of the building, beginning on August 1, 2023, in connection with the planned expansion of the technical space. This includes 4,987 square feet for an auditorium suitable for training and 2,382 square feet for the data center in the building. The amended Network Operations Lease remains cancellable by the Company without penalty upon 60 days written notice. The Amendment provides for $162,118 of additional fixed annual rent during the term of the Network Operations Lease, plus a proportionate share of real estate taxes and operating expenses and separately metered utilities expense. The Company paid $0.9 million and $0.5 million in the three months ended September 30, 2023 and 2022, respectively, and $2.1 million and $1.4 million in the three and nine months ended September 30, 2023 and 2022, respectively, for rent and related costs (including taxes and utilities) for these leases. |
Segment information_
Segment information: | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 Revenues On-net Off-net Wavelength Non-core Total North America $ 102,103 $ 123,164 2,992 $ 11,400 $ 239,659 Europe 21,913 5,550 — 12 27,475 South America 1,862 287 — 1 2,150 Oceania 4,011 1,945 — 4 5,960 Africa 161 24 — — 185 Total $ 130,050 $ 130,970 2,992 $ 11,417 $ 275,429 Three Months Ended September 30, 2022 Revenues On-net Off-net Wavelength Non-core Total North America $ 88,298 $ 32,325 — $ 162 $ 120,785 Europe 19,853 3,929 — 8 23,790 South America 1,358 34 — — 1,392 Oceania 3,530 299 — — 3,829 Africa 180 24 — — 204 Total $ 113,219 $ 36,611 — $ 170 $ 150,000 Nine Months Ended September 30, 2023 Revenues On-net Off-net Wavelength Non-core Total North America $ 290,622 $ 251,278 4,578 $ 20,069 $ 566,547 Europe 65,880 14,640 — 51 80,571 South America 5,159 522 — 2 5,683 Oceania 11,659 3,719 — 32 15,410 Africa 536 75 — — 611 Total $ 373,856 $ 270,234 4,578 $ 20,154 $ 668,822 Nine Months Ended September 30, 2022 Revenues On-net Off-net Wavelength Non-core Total North America $ 261,427 $ 95,873 — $ 475 $ 357,775 Europe 61,807 12,249 — 39 74,095 South America 4,080 150 — 2 4,232 Oceania 9,992 956 — 1 10,949 Africa 523 51 — — 574 Total $ 337,829 $ 109,279 — $ 517 $ 447,625 September 30, December 31, 2023 2022 Long-lived assets, net North America $ 1,637,855 $ 397,434 Europe and other 154,764 147,005 Total $ 1,792,619 $ 544,439 The majority of North American revenue consists of services delivered within the United States. |
Description of the business_ (P
Description of the business: (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Description of the business: | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Revenue from Contracts with Customers (Topic 606), as if the acquirer had originated the contracts at the date of the business combination. ASU 2021-08 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2021-08 in connection with its acquisition of Sprint Communications (as discussed below), at which time it became applicable to the Company and was applied in the accounting for the acquisition. The adoption did not have a material impact on the provisional opening balance sheet recorded and there was no retrospective impact to our consolidated financial statements as a result of the adoption. |
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, 2022. 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 US 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, 2023 and December 31, 2022, 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, 2023, the fair value of the Company’s $450.0 million aggregate principal amount of 7.00% Senior Unsecured Notes due 2027 (the “2027 Notes”) was $427.5 million, the fair value of the Company’s $500.0 million aggregate principal amount of 3.50% Senior Secured Notes due 2026 (the “2026 Notes”) was $460.0 million and the estimated liability fair value of the Company’s interest rate swap agreement was $56.4 million. |
Restricted cash and interest rate swap agreement | Restricted cash and interest rate swap agreement Restricted cash represents amounts held in segregated bank accounts by our clearing broker as margin in support of our Swap Agreement as discussed in Note 3 and was $57.6 million as of September 30, 2023. Additional cash may be further restricted to maintain our swap agreement as interest rates fluctuate and margin requirements change. The Company does not use derivative financial instruments for trading purposes. |
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 revenue and network operations expense. Excise taxes and surcharges billed to customers and recorded on a gross basis (as service revenue and costs of network operations) were $14.6 million and $4.1 million for the three months ended September 30, 2023 and September 30, 2022, respectively, and $29.8 million and $11.3 million for the nine months ended September 30, 2023 and September 30, 2022, 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, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Weighted-average common shares - basic 47,227,338 46,736,742 47,234,025 46,759,632 Dilutive effect of stock options — — 15,713 17,668 Dilutive effect of restricted stock — — 374,971 320,280 Weighted-average common shares - diluted 47,227,338 46,736,742 47,624,709 47,097,580 The following details unvested shares of restricted common stock as well as the anti-dilutive effects of stock options and restricted stock awards outstanding: Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Unvested shares of restricted common stock 1,395,258 1,271,441 1,395,258 1,271,441 Anti-dilutive options for common stock 125,643 113,376 112,048 43,648 Anti-dilutive shares of restricted common stock 106,125 637,028 90,768 827 |
Stockholders' (Deficit) Equity | Stockholders’ (Deficit) Equity The following details the changes in stockholders’ (deficit) equity for the three and nine months ended September 30, 2023 and September 30, 2022, respectively (in thousands except share data): 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, 2023 48,617,162 $ 49 $ 589,573 $ (15,627) $ (34,795) $ 539,200 Forfeitures of shares granted to employees (27,061) — — — — — Equity-based compensation — — 8,519 — — 8,519 Foreign currency translation — — — (4,134) — (4,134) Issuances of common stock 14,400 — — — — — Exercises of options 7,881 — 402 — — 402 Dividends paid — — — — (45,136) (45,136) Net (loss) — — — — (56,723) (56,723) Balance at September 30, 2023 48,612,382 $ 49 $ 598,494 $ (19,761) $ (136,654) $ 442,128 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) Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2022 48,013,330 $ 48 $ 575,064 $ (19,156) $ (1,074,588) $ (518,632) Forfeitures of shares granted to employees (38,891) — — — — — Equity-based compensation — — 22,643 — — 22,643 Foreign currency translation — — — (605) — (605) Issuances of common stock 621,592 1 — — — 1 Exercises of options 16,351 — 787 — — 787 Dividends paid — — — — (135,354) (135,354) Net income — — — — 1,073,288 1,073,288 Balance at September 30, 2023 48,612,382 $ 49 $ 598,494 $ (19,761) $ (136,654) $ 442,128 |
Revenue recognition | Revenue recognition The Company recognizes revenue under ASU No. 2014-09, Revenue from Contracts with Customers The Company’s service offerings consist primarily 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 month to 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 customers 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 its performance obligations Fees billed in connection with customer installations are deferred (as deferred revenue) and recognized as noted above. To the extent a customer contract is terminated prior to its contractual end the customer is subject to termination fees. The Company vigorously seeks payment of these termination fees. The Company recognizes revenue for termination fees as they are collected. Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Service revenue recognized from balance at beginning of period $ 4,162 $ 1,829 $ 6,603 $ 4,408 Amortization expense for contract costs 4,884 4,864 14,435 14,520 |
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 (Amounts in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Finance lease cost Amortization of right-of-use assets $ 27,172 $ 7,188 $ 44,598 $ 21,186 Interest expense on finance lease liabilities 11,609 5,382 24,604 15,579 Operating lease cost 20,784 4,547 53,096 13,948 Total lease costs $ 59,565 $ 17,117 $ 122,298 $ 50,713 Nine Months Nine Months Ended Ended September 30, 2023 September 30, 2022 Other lease information (amounts in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ (23,081) $ (13,478) Operating cash flows from operating leases (54,628) (14,165) Financing cash flows from finance leases (58,549) (20,958) Right-of-use assets obtained in exchange for new finance lease liabilities 217,782 74,633 Right-of-use assets obtained in exchange for new operating lease liabilities 9,632 10,498 Weighted-average remaining lease term — finance leases (in years) 11.7 13.1 Weighted-average remaining lease term — operating leases (in years) 11.5 17.8 Weighted-average discount rate — finance leases 7.6 % 8.6 % Weighted-average discount rate — operating leases 8.0 % 5.4 % 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 the level of collateralization and term to align with the term of the lease. The determination of the Company’s incremental borrowing rate requires some judgment. Finance lease assets are included in property and equipment in the Company’s consolidated balance sheets. As of September 30, 2023, the Company had committed to additional dark fiber IRU lease agreements totaling $167.0 million in future payments to be paid over periods of up to 20 years. These obligations begin when the related fiber is accepted, which is generally expected to occur in the next 12 months. Operating leases The Company leases office space and certain 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 determination of the Company’s incremental borrowing rate requires some judgment. The Company determines its incremental borrowing rate for each lease using its current borrowing rate, adjusted for various factors, including the level of collateralization and term, to align with the term of the lease. 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, deferred rent liabilities and unfavorable lease 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 2024 $ 79,748 $ 98,781 2025 65,233 95,718 2026 57,698 90,501 2027 52,672 51,445 2028 48,076 39,629 Thereafter 309,365 369,232 Total minimum lease obligations 612,792 745,306 Less—amounts representing interest (213,381) (262,129) Present value of minimum lease obligations 399,411 483,177 Current maturities (68,418) (63,236) Lease obligations, net of current maturities $ 330,993 $ 419,941 Unfavorable lease liabilities In connection with the Transaction, the Company recorded $147.5 million of unfavorable lease liabilities for leases with terms greater than current market rates. The liability is classified with the corresponding right-of-use lease assets and is being amortized into the condensed consolidated statement of comprehensive income in the same line items as the activity for the corresponding right-of-use lease assets. For the three and nine months ended September 30, 2023 the Company amortized $9.7 million and $16.2 million, respectively, as a reduction to network operations expenses. |
Allowance for credit losses | Allowance for credit losses As of January 1, 2020, the Company maintained 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 (a) Allowance Balance Allowance for credit losses (deducted from accounts receivable) (in thousands) Three months ended September 30, 2023 $ 4,882 $ 1,271 $ (1,995) $ 4,158 Three months ended September 30, 2022 1,717 1,054 (805) 1,966 Nine months ended September 30, 2023 2,303 7,833 (5,978) 4,158 Nine months ended September 30, 2022 1,510 3,059 (2,603) 1,966 Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net bad debt expense (a) $ 784 $ 500 $ 6,718 $ 1,513 Bad debt recoveries 459 500 1,200 1,506 (a) Net bad debt expense related to the Wireless Business to reestablish an allowance for credit losses was $3.0 million for both the three and nine months ended September 30, 2023. Under ASC 805, accounts receivable are recorded at their book value representing the fair value of accounts receivable at the acquisition date. |
Description of the business_ (T
Description of the business: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Description of the business: | |
Schedule of acquisition-date fair value of consideration to be received from the transaction | (In thousands) May 1, 2023 Estimated working capital payments made to the Seller (a) $ 66,093 Estimated Purchase Agreement payment to be received from the Seller, net of discount of $15,614 (b) 36,696 Amounts due from the Seller – IP Transit Services Agreement, net of discount of $79,610 (c) 620,390 Total to be received from the Seller 657,086 Total net consideration to be received from the Seller (d) 590,993 |
Schedule of fair values for each major class of assets acquired and liabilities assumed at the acquisition date | May 1, 2023 Assets Current assets: Cash and cash equivalents $ 47,074 Accounts receivable 39,948 Prepaid expenses and other current assets 22,777 Total current assets 109,799 Total property and equipment 1,055,101 Right-of-use leased assets 314,632 Intangible assets 57,000 Deposits and other assets 7,191 Total assets $ 1,543,723 Liabilities Current liabilities: Accounts payable $ 13,313 Accrued and other current liabilities 36,629 Current maturities, operating lease liabilities 74,562 Current maturities, finance lease liabilities 39,559 Total current liabilities 164,063 Operating lease liabilities, net of current maturities 251,573 Finance lease liabilities, net of current maturities 121,342 Deferred income tax liabilities 407,000 Other long-term liabilities 38,352 Total liabilities 982,330 Fair value of net assets acquired $ 561,393 Gain on bargain purchase Fair value of net assets acquired $ 561,393 Total net consideration to be received from the Seller, net of discounts (b) (c) (d) 590,993 Gain on bargain purchase $ 1,152,386 (a) Includes $61.1 million paid to the Seller on the Closing Date and an accrual of $5.0 million due to the Seller. During the third quarter of 2023, the Working Capital Adjustment was increased by $1.5 million. A final determination of the Working Capital Adjustment is expected by the end of 2023. IP Transit Services Agreement (b) Under the Purchase Agreement, 50% of the assumed short-term operating lease liabilities totaling $52.3 million is to be paid to the Company from the Seller in from the Closing Date and is recorded at its present value resulting in a discount of (c) The IP Transit Services Agreement payments totaling $700.0 million are recorded at their present value resulting in a discount of $79.6 million. The $700.0 million is to be paid to the Company from the Seller in equal monthly payments of $29.2 million in months 1-12 and $8.3 million in months 13-54. (d) Cash consideration was $1 |
Schedule of proforma information | Nine Months Nine Months Ended Ended (In thousands) September 30, 2023 September 30, 2022 Service revenue $ 849,580 $ 881,546 Operating loss from continuing operations (227,065) (623,519) Net income 915,730 452,150 |
Schedule of diluted weighted average shares | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Weighted-average common shares - basic 47,227,338 46,736,742 47,234,025 46,759,632 Dilutive effect of stock options — — 15,713 17,668 Dilutive effect of restricted stock — — 374,971 320,280 Weighted-average common shares - diluted 47,227,338 46,736,742 47,624,709 47,097,580 |
Schedule of details unvested shares of restricted common stock as well as the anti-dilutive effects of stock options and restricted stock awards outstanding | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Unvested shares of restricted common stock 1,395,258 1,271,441 1,395,258 1,271,441 Anti-dilutive options for common stock 125,643 113,376 112,048 43,648 Anti-dilutive shares of restricted common stock 106,125 637,028 90,768 827 |
Schedule of stockholders' (deficit) equity | The following details the changes in stockholders’ (deficit) equity for the three and nine months ended September 30, 2023 and September 30, 2022, respectively (in thousands except share data): 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, 2023 48,617,162 $ 49 $ 589,573 $ (15,627) $ (34,795) $ 539,200 Forfeitures of shares granted to employees (27,061) — — — — — Equity-based compensation — — 8,519 — — 8,519 Foreign currency translation — — — (4,134) — (4,134) Issuances of common stock 14,400 — — — — — Exercises of options 7,881 — 402 — — 402 Dividends paid — — — — (45,136) (45,136) Net (loss) — — — — (56,723) (56,723) Balance at September 30, 2023 48,612,382 $ 49 $ 598,494 $ (19,761) $ (136,654) $ 442,128 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) Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity (Deficit) Balance at December 31, 2022 48,013,330 $ 48 $ 575,064 $ (19,156) $ (1,074,588) $ (518,632) Forfeitures of shares granted to employees (38,891) — — — — — Equity-based compensation — — 22,643 — — 22,643 Foreign currency translation — — — (605) — (605) Issuances of common stock 621,592 1 — — — 1 Exercises of options 16,351 — 787 — — 787 Dividends paid — — — — (135,354) (135,354) Net income — — — — 1,073,288 1,073,288 Balance at September 30, 2023 48,612,382 $ 49 $ 598,494 $ (19,761) $ (136,654) $ 442,128 |
Schedule of revenue for termination fees | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Service revenue recognized from balance at beginning of period $ 4,162 $ 1,829 $ 6,603 $ 4,408 Amortization expense for contract costs 4,884 4,864 14,435 14,520 |
Schedule of lease cost | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (Amounts in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Finance lease cost Amortization of right-of-use assets $ 27,172 $ 7,188 $ 44,598 $ 21,186 Interest expense on finance lease liabilities 11,609 5,382 24,604 15,579 Operating lease cost 20,784 4,547 53,096 13,948 Total lease costs $ 59,565 $ 17,117 $ 122,298 $ 50,713 Nine Months Nine Months Ended Ended September 30, 2023 September 30, 2022 Other lease information (amounts in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ (23,081) $ (13,478) Operating cash flows from operating leases (54,628) (14,165) Financing cash flows from finance leases (58,549) (20,958) Right-of-use assets obtained in exchange for new finance lease liabilities 217,782 74,633 Right-of-use assets obtained in exchange for new operating lease liabilities 9,632 10,498 Weighted-average remaining lease term — finance leases (in years) 11.7 13.1 Weighted-average remaining lease term — operating leases (in years) 11.5 17.8 Weighted-average discount rate — finance leases 7.6 % 8.6 % Weighted-average discount rate — operating leases 8.0 % 5.4 % |
Schedule of future minimum payments under 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 2024 $ 79,748 $ 98,781 2025 65,233 95,718 2026 57,698 90,501 2027 52,672 51,445 2028 48,076 39,629 Thereafter 309,365 369,232 Total minimum lease obligations 612,792 745,306 Less—amounts representing interest (213,381) (262,129) Present value of minimum lease obligations 399,411 483,177 Current maturities (68,418) (63,236) Lease obligations, net of current maturities $ 330,993 $ 419,941 |
Schedule of allowance for credit losses | Current-period Provision for Write-offs Beginning Expected Credit Charged Against Ending Description Balance Losses (a) Allowance Balance Allowance for credit losses (deducted from accounts receivable) (in thousands) Three months ended September 30, 2023 $ 4,882 $ 1,271 $ (1,995) $ 4,158 Three months ended September 30, 2022 1,717 1,054 (805) 1,966 Nine months ended September 30, 2023 2,303 7,833 (5,978) 4,158 Nine months ended September 30, 2022 1,510 3,059 (2,603) 1,966 |
Schedule of fair value of accounts receivable at the acquisition date | Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net bad debt expense (a) $ 784 $ 500 $ 6,718 $ 1,513 Bad debt recoveries 459 500 1,200 1,506 |
Property and equipment_ (Tables
Property and equipment: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property and equipment: | |
Schedule of property and equipment | Depreciation and amortization expense related to property and equipment and finance leases and capitalized compensation costs of employees directly involved with construction activities were as follows (in thousands): Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Depreciation and amortization expense $ 86,718 $ 22,891 $ 164,371 $ 68,640 Capitalized compensation cost 11,675 3,002 24,115 9,290 |
Income taxes_ (Tables)
Income taxes: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income taxes: | |
Schedule of the components of income (loss) before income taxes | The components of income (loss) before income taxes consist of the following (in thousands): Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Domestic $ (58,402) $ (3,382) $ 1,057,523 $ 22,953 Foreign (11,944) (3,656) (17,834) (8,596) Total $ (70,346) $ (7,038) $ 1,039,689 $ 14,357 |
Segment information_ (Tables)
Segment information: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment information: | |
Schedule of service revenue by geographic region and product class and long lived assets by geographic region | Three Months Ended September 30, 2023 Revenues On-net Off-net Wavelength Non-core Total North America $ 102,103 $ 123,164 2,992 $ 11,400 $ 239,659 Europe 21,913 5,550 — 12 27,475 South America 1,862 287 — 1 2,150 Oceania 4,011 1,945 — 4 5,960 Africa 161 24 — — 185 Total $ 130,050 $ 130,970 2,992 $ 11,417 $ 275,429 Three Months Ended September 30, 2022 Revenues On-net Off-net Wavelength Non-core Total North America $ 88,298 $ 32,325 — $ 162 $ 120,785 Europe 19,853 3,929 — 8 23,790 South America 1,358 34 — — 1,392 Oceania 3,530 299 — — 3,829 Africa 180 24 — — 204 Total $ 113,219 $ 36,611 — $ 170 $ 150,000 Nine Months Ended September 30, 2023 Revenues On-net Off-net Wavelength Non-core Total North America $ 290,622 $ 251,278 4,578 $ 20,069 $ 566,547 Europe 65,880 14,640 — 51 80,571 South America 5,159 522 — 2 5,683 Oceania 11,659 3,719 — 32 15,410 Africa 536 75 — — 611 Total $ 373,856 $ 270,234 4,578 $ 20,154 $ 668,822 Nine Months Ended September 30, 2022 Revenues On-net Off-net Wavelength Non-core Total North America $ 261,427 $ 95,873 — $ 475 $ 357,775 Europe 61,807 12,249 — 39 74,095 South America 4,080 150 — 2 4,232 Oceania 9,992 956 — 1 10,949 Africa 523 51 — — 574 Total $ 337,829 $ 109,279 — $ 517 $ 447,625 September 30, December 31, 2023 2022 Long-lived assets, net North America $ 1,637,855 $ 397,434 Europe and other 154,764 147,005 Total $ 1,792,619 $ 544,439 |
Description of the business_ (D
Description of the business: (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Nov. 02, 2023 USD ($) | Oct. 03, 2023 USD ($) | May 01, 2023 USD ($) installment | Sep. 30, 2023 USD ($) country | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) country MB GB | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Description of the business: | ||||||||
Number of countries entity operates | country | 54 | 54 | ||||||
Pre-tax loss | $ 70,346 | $ 7,038 | $ (1,039,689) | $ (14,357) | ||||
Working capital adjustment | 1,500 | 1,500 | ||||||
Estimated Purchase Agreement payment to be received, amount of discount | 14,444 | 14,444 | $ 14,444 | |||||
Lease liability | 399,411 | 399,411 | ||||||
Amount due from the seller | 5,000 | |||||||
Acquisition related costs | 351 | $ 2,004 | 1,490 | 2,004 | ||||
Total to be received from the transaction | $ 657,086 | |||||||
Gain on bargain purchase | 1,152,386 | |||||||
Adjustment to reclassify, right-of-use leased assets | 24,900 | |||||||
Adjustment to reclassify operating lease liabilities to finance lease liability | 160,900 | |||||||
Amortization of unfavorable lease liabilities increase interest expense | 8,400 | |||||||
Commercial Agreement | ||||||||
Description of the business: | ||||||||
Amount due from the seller recorded during the period | 8,000 | 8,000 | ||||||
Amount due to the seller | 3,200 | |||||||
Amount due from the seller | 15,300 | |||||||
IP Transit Services Agreement | T-Mobile USA, Inc., | ||||||||
Description of the business: | ||||||||
Amount payable | 700,000 | |||||||
Amortization of discount resulted in interest income | 10,300 | 18,000 | ||||||
Amounts due from Seller - IP Transit Services Agreement, amount of discount | 79,600 | |||||||
Consideration paid | 87,500 | $ 116,700 | ||||||
IP Transit Services Agreement | T-Mobile USA, Inc., | Subsequent Events | ||||||||
Description of the business: | ||||||||
Additional payment received | $ 29,200 | $ 29,200 | ||||||
IP Transit Services Agreement | Equal monthly installments during the first year after the Closing | T-Mobile USA, Inc., | ||||||||
Description of the business: | ||||||||
Amount payable | 350,000 | |||||||
IP Transit Services Agreement | Equal monthly installments over the subsequent 42 months | T-Mobile USA, Inc., | ||||||||
Description of the business: | ||||||||
Amount payable | 350,000 | |||||||
IP Transit Services Agreement | Per Month During First Year After Closing Date | T-Mobile USA, Inc., | ||||||||
Description of the business: | ||||||||
Amount payable | 29,200 | |||||||
IP Transit Services Agreement | Per Month Over Subsequent Forty Two Months | T-Mobile USA, Inc., | ||||||||
Description of the business: | ||||||||
Amount payable | $ 8,300 | |||||||
Transition Services Agreement | ||||||||
Description of the business: | ||||||||
Agreement term (in years) | 2 years | |||||||
Extension period | 1 year | |||||||
Period of prior written notice | 30 days | |||||||
Percentage of TSA cost | 20% | |||||||
Number of days' written notice to terminate the agreement | 30 days | |||||||
Period after which a notice for termination of agreement can be sent | 90 days | |||||||
Amount due to the seller recorded during the period | 101,200 | $ 218,000 | ||||||
Amount paid to the seller | 153,100 | 153,100 | ||||||
Amount due to the seller | 69,600 | |||||||
Amount due from the seller | $ 16,800 | |||||||
Maturity period from receipt of the related invoice for amount billed under the agreement | 30 days | |||||||
Sprint Communications | Purchase Agreement | ||||||||
Description of the business: | ||||||||
Amount payable | $ 1 | |||||||
Sprint Business | ||||||||
Description of the business: | ||||||||
Revenue | 113,000 | $ 191,000 | ||||||
Pre-tax loss | 82,100 | 141,600 | ||||||
Net increase (reduction) to historical depreciation expense based on fair value of property and equipment finance lease adjustment | 35,400 | |||||||
Amortization of unfavorable lease liabilities operation expenses | 16,800 | $ 37,800 | ||||||
Sprint Business | Purchase Agreement | Buyer | ||||||||
Description of the business: | ||||||||
Cash and cash equivalents | 43,400 | |||||||
Working capital adjustment | 61,100 | |||||||
Purchased Interests of Wireline Network Holdings LLC | ||||||||
Description of the business: | ||||||||
Cash and cash equivalents | 47,074 | |||||||
Estimated payment related to acquired short-term lease obligations | 57,000 | |||||||
Estimated Purchase Agreement payment to be received, amount of discount | 15,614 | |||||||
Amounts due from Seller - IP Transit Services Agreement, amount of discount | 79,610 | |||||||
Acquisition related costs | 400 | 1,500 | ||||||
Total to be received from the transaction | 591,000 | |||||||
Gain on bargain purchase | 1,152,386 | 1,200,000 | ||||||
Consideration paid | 1 | 1 | ||||||
Current maturities, finance lease liabilities | 39,559 | |||||||
Finance lease liabilities, net of current maturities | 121,342 | |||||||
Amortization of unfavorable lease liabilities increase interest expense | 3,900 | |||||||
Purchased Interests of Wireline Network Holdings LLC | Buyer | ||||||||
Description of the business: | ||||||||
Lease liability | 160,900 | 160,900 | ||||||
Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | ||||||||
Description of the business: | ||||||||
Acquisition related costs | 3,700 | |||||||
Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | Buyer | ||||||||
Description of the business: | ||||||||
Working capital adjustment | 61,100 | |||||||
Additional consideration due to the seller | 5,000 | 1,500 | ||||||
Estimated payment related to acquired short-term lease obligations | $ 52,300 | |||||||
Estimated payment related to acquired short-term lease obligations, number of equal payments | installment | 4 | |||||||
Estimated Purchase Agreement payment to be received, amount of discount | $ 15,600 | |||||||
Amortization of discount resulted in interest income | 700 | 1,200 | ||||||
Short-term lease payments | $ 24,200 | |||||||
Purchased Interests of Wireline Network Holdings LLC | IP Transit Services Agreement | Buyer | ||||||||
Description of the business: | ||||||||
Estimated payment related to acquired short-term lease obligations | $ 52,300 | $ 4,800 | ||||||
Estimated payment related to acquired short-term lease obligations, number of equal payments | installment | 4 | |||||||
Estimated Purchase Agreement payment to be received, amount of discount | $ 15,600 | |||||||
Minimum | ||||||||
Description of the business: | ||||||||
On-net service speed range | MB | 100 | |||||||
Minimum | Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | Buyer | ||||||||
Description of the business: | ||||||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 55 months | |||||||
Minimum | Purchased Interests of Wireline Network Holdings LLC | IP Transit Services Agreement | Buyer | ||||||||
Description of the business: | ||||||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 55 months | |||||||
Maximum | ||||||||
Description of the business: | ||||||||
On-net service speed range | GB | 400 | |||||||
Maximum | Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | Buyer | ||||||||
Description of the business: | ||||||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 58 months | |||||||
Maximum | Purchased Interests of Wireline Network Holdings LLC | IP Transit Services Agreement | Buyer | ||||||||
Description of the business: | ||||||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 58 months |
Description of the business_ -
Description of the business: - Acquisition of Sprint Communications - Consideration (Details) - USD ($) $ in Thousands | May 01, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Description of the business: | |||
Estimated working capital payments made to the Seller | $ 66,093 | ||
Estimated Purchase Agreement payment to be received from the Seller, net of discount of $15,614 | 36,696 | $ 37,865 | |
Amounts due from the Seller - IP Transit Services Agreement, net of discount of $79,610 | 620,390 | ||
Total to be received from the Seller | 657,086 | ||
Total net consideration to be received from the Seller | 590,993 | ||
Estimated Purchase Agreement payment to be received, amount of discount | $ 14,444 | $ 14,444 | |
Wireline Network Holdings LLC | |||
Description of the business: | |||
Total to be received from the Seller | 591,000 | ||
Total net consideration to be received from the Seller | 590,993 | ||
Estimated Purchase Agreement payment to be received, amount of discount | 15,614 | ||
Amounts due from Seller - IP Transit Services Agreement, amount of discount | $ 79,610 |
Description of the business_ _2
Description of the business: - Acquisition of Sprint Communications - Net Consideration to be received from seller and Fair Value of Assets Acquired and Liabilities Assumed and Gain on Bargain Purchase (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 01, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Gain on bargain purchase | ||||
Total net consideration to be received from the Seller, net of discounts | $ 590,993 | |||
Gain on bargain purchase | $ 1,152,386 | |||
Working capital adjustment | $ 1,500 | 1,500 | ||
Estimated Purchase Agreement payment to be received, amount of discount | 14,444 | 14,444 | $ 14,444 | |
Wireline Network Holdings LLC | ||||
Current assets: | ||||
Cash and cash equivalents | 47,074 | |||
Accounts receivable | 39,948 | |||
Prepaid expenses and other current assets | 22,777 | |||
Total current assets | 109,799 | |||
Total property and equipment | 1,055,101 | |||
Right-of-use leased assets | 314,632 | |||
Intangible assets | $ 57,000 | |||
Deposits and other assets | 7,191 | |||
Total assets | $ 1,543,723 | |||
Current liabilities: | ||||
Accounts payable | 13,313 | |||
Accrued and other current liabilities | $ 36,629 | |||
Current maturities, operating lease liabilities | 74,562 | |||
Current maturities, finance lease liabilities | $ 39,559 | |||
Total current liabilities | 164,063 | |||
Operating lease liabilities, net of current maturities | 251,573 | |||
Finance lease liabilities, net of current maturities | 121,342 | |||
Deferred income tax liabilities | 407,000 | |||
Other long-term liabilities | 38,352 | |||
Total liabilities | 982,330 | |||
Fair value of net assets acquired | 561,393 | |||
Gain on bargain purchase | ||||
Fair value of net assets acquired | 561,393 | |||
Total net consideration to be received from the Seller, net of discounts | 590,993 | |||
Gain on bargain purchase | 1,152,386 | 1,200,000 | ||
Estimated payment related to acquired short-term lease obligations | 57,000 | |||
Estimated Purchase Agreement payment to be received, amount of discount | 15,614 | |||
Amounts due from Seller - IP Transit Services Agreement, amount of discount | 79,610 | |||
Equal monthly payments to be made in months 1-12 | 29,200 | |||
Equal monthly payments to be made in months 13-54 | 8,300 | |||
Cash consideration | $ 1 | 1 | ||
Acquired customer relationships, future amortization expense, amortization period | 9 years | |||
Acquired customer relationships, estimated useful life | 9 years | |||
Acquired customer relationships, future amortization expense per year | $ 6,300 | |||
Intangible Assets | $ 1,600 | $ 2,600 |
Description of the business_ _3
Description of the business: - Asset Retirement Obligations (Details) - Asset retirement obligations $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Description of the business | ||
Obligations related to restoration obligations for acquired leases | $ 35 | $ 35 |
Assets amortization period | 4 years | 4 years |
Accretion of asset retirement obligations (recorded as an increase to network operations expenses) | $ 0.7 | $ 1.1 |
Amortization of asset retirement assets (recorded a depreciation and amortization expenses) | $ 2.1 | $ 3.5 |
Description of the business_ _4
Description of the business: - Acquisition of Sprint Communications - Pro Forma Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Sprint Wireline Business | ||
Description of the business: | ||
Loss on impairment | $ 477,300 | |
Gain on sale of IP addresses | 120,800 | |
Wireline Network Holdings LLC | ||
Description of the business: | ||
Service revenue | $ 849,580 | 881,546 |
Operating loss from continuing operations | (227,065) | (623,519) |
Net income | 915,730 | 452,150 |
Impact to income tax expense from pro-forma and autonomous entity adjustments | 2,300 | |
Sprint Business | ||
Description of the business: | ||
Gain on bargain purchase | 1,200,000 | 1,200 |
Net increase (reduction) to historical depreciation expense based on fair value of property and equipment | 29,500 | |
Amortization expense related to customer relationship intangible assets | 2,100 | 4,800 |
Autonomous entity expense adjustments | 24,900 | |
Amortization of unfavorable lease liabilities | 12,900 | 29,100 |
Impact to income tax expense from pro-forma and autonomous entity adjustments | 19,000 | |
Sprint Business | IP Transit Services Agreement | ||
Description of the business: | ||
Interest income from amortization of discount recorded | $ 14,700 | $ 29,400 |
Description of the business_ _5
Description of the business: - Financial instruments (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Level 2 | Interest rate swap | |
Description of the business: | |
long-term liability | $ 56.4 |
Senior secured 2026 Notes | |
Description of the business: | |
Senior notes | $ 500 |
Interest rate (as a percent) | 3.50% |
Senior secured 2026 Notes | Level 2 | |
Description of the business: | |
Senior notes, fair value | $ 460 |
Senior unsecured 2027 Notes | |
Description of the business: | |
Senior notes | 450 |
Senior unsecured 2027 Notes | Level 2 | |
Description of the business: | |
Senior notes, fair value | $ 427.5 |
2027 Notes | |
Description of the business: | |
Interest rate (as a percent) | 7% |
Description of the business_ _6
Description of the business: - Restricted cash and interest rate swap agreement (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Interest rate swap | Level 2 | |
Description of the business: | |
Fair value of interest rate swaps | $ 57.6 |
Description of the business_ _7
Description of the business: - Gross receipts taxes, universal service fund and other surcharges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Description of the business: | ||||
Excise taxes and surcharge | $ 14.6 | $ 4.1 | $ 29.8 | $ 11.3 |
Description of the business_ _8
Description of the business: - Basic and diluted net income per common share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Diluted weighted average shares | ||||
Weighted-average common shares - basic | 47,227,338 | 46,736,742 | 47,234,025 | 46,759,632 |
Weighted-average common shares - diluted | 47,227,338 | 46,736,742 | 47,624,709 | 47,097,580 |
Anti-dilutive effects | ||||
Unvested shares of restricted common stock | 1,395,258 | 1,271,441 | 1,395,258 | 1,271,441 |
Employee Stock Option | ||||
Diluted weighted average shares | ||||
Dilutive effect | 15,713 | 17,668 | ||
Anti-dilutive effects | ||||
Anti-dilutive | 125,643 | 113,376 | 112,048 | 43,648 |
Restricted stock | ||||
Diluted weighted average shares | ||||
Dilutive effect | 374,971 | 320,280 | ||
Anti-dilutive effects | ||||
Anti-dilutive | 106,125 | 637,028 | 90,768 | 827 |
Description of the business_ _9
Description of the business: - Stockholders' deficit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) | ||||
Balance | $ 539,200 | $ (440,181) | $ (518,632) | $ (373,098) |
Balance (in shares) | 48,013,330 | |||
Equity-based compensation | 8,519 | 6,812 | $ 22,643 | 19,905 |
Foreign currency translation | (4,134) | (7,752) | (605) | (17,410) |
Issuances of common stock | 1 | |||
Exercises of options | 402 | 92 | 787 | 426 |
Dividends paid | (45,136) | (42,729) | (135,354) | (125,882) |
Net income (loss) | (56,723) | (8,007) | 1,073,288 | 4,294 |
Balance | $ 442,128 | (491,765) | $ 442,128 | (491,765) |
Balance (in shares) | 48,612,382 | 48,612,382 | ||
Common Stock | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) | ||||
Balance | $ 49 | $ 48 | $ 48 | $ 48 |
Balance (in shares) | 48,617,162 | 48,003,724 | 48,013,330 | 47,674,189 |
Forfeitures of shares granted to employees (in shares) | (27,061) | (14,492) | (38,891) | (66,857) |
Issuances of common stock | $ 1 | |||
Issuances of common stock (in shares) | 14,400 | 10,748 | 621,592 | 384,028 |
Exercises of options (in shares) | 7,881 | 2,155 | 16,351 | 10,775 |
Balance | $ 49 | $ 48 | $ 49 | $ 48 |
Balance (in shares) | 48,612,382 | 48,002,135 | 48,612,382 | 48,002,135 |
Additional Paid-in Capital | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) | ||||
Balance | $ 589,573 | $ 561,161 | $ 575,064 | $ 547,734 |
Equity-based compensation | 8,519 | 6,812 | 22,643 | 19,905 |
Exercises of options | 402 | 92 | 787 | 426 |
Balance | 598,494 | 568,065 | 598,494 | 568,065 |
Accumulated Other Comprehensive Income (Loss) | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) | ||||
Balance | (15,627) | (20,661) | (19,156) | (11,003) |
Foreign currency translation | (4,134) | (7,752) | (605) | (17,410) |
Balance | (19,761) | (28,413) | (19,761) | (28,413) |
Accumulated Deficit | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) | ||||
Balance | (34,795) | (980,729) | (1,074,588) | (909,877) |
Dividends paid | (45,136) | (42,729) | (135,354) | (125,882) |
Net income (loss) | (56,723) | (8,007) | 1,073,288 | 4,294 |
Balance | $ (136,654) | $ (1,031,465) | $ (136,654) | $ (1,031,465) |
Description of the business__10
Description of the business: - Revenue recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Description of the business: | ||||||||
Maximum contract lengths for billing due upon receipts (in months) | 60 months | |||||||
Service revenue recognized from balance at beginning of period | $ 4,162 | $ 1,829 | $ 6,603 | $ 4,408 | ||||
Amortization expense for contract costs | $ 4,884 | $ 4,864 | $ 14,435 | $ 14,520 |
Description of the business__11
Description of the business: - Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Finance leases-fiber lease agreements | |||||
Initial terms | 20 years | 20 years | |||
Additional finance lease future payments due | $ 167,000 | $ 167,000 | |||
Cash paid for amounts included in the measurement of lease liabilities | |||||
Finance lease cost amortization of right-of-use assets | 27,172 | $ 7,188 | 44,598 | $ 21,186 | |
Interest expense on finance lease liabilities | 11,609 | 5,382 | 24,604 | 15,579 | |
Operating lease cost | 20,784 | 4,547 | 53,096 | 13,948 | |
Total lease costs | $ 59,565 | $ 17,117 | 122,298 | 50,713 | |
Operating cash flows from finance leases | (23,081) | (13,478) | |||
Operating cash flows from operating leases | (54,628) | (14,165) | |||
Financing cash flows from finance leases | (58,549) | (20,958) | |||
Right-of-use assets obtained in exchange for new finance lease liabilities | 217,782 | 74,633 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 9,632 | $ 10,498 | |||
Weighted-average remaining lease term - finance leases (in years) | 11 years 8 months 12 days | 13 years 1 month 6 days | 11 years 8 months 12 days | 13 years 1 month 6 days | |
Weighted-average remaining lease term - operating leases (in years) | 11 years 6 months | 17 years 9 months 18 days | 11 years 6 months | 17 years 9 months 18 days | |
Weighted-average discount rate - finance leases | 7.60% | 8.60% | 7.60% | 8.60% | |
Weighted-average discount rate - operating leases | 8% | 5.40% | 8% | 5.40% | |
Future minimum payments (principal and interest) under these finance leases | |||||
2024 | $ 98,781 | $ 98,781 | |||
2025 | 95,718 | 95,718 | |||
2026 | 90,501 | 90,501 | |||
2027 | 51,445 | 51,445 | |||
2028 | 39,629 | 39,629 | |||
Thereafter | 369,232 | 369,232 | |||
Total minimum lease obligations | 745,306 | 745,306 | |||
Less-amounts representing interest | (262,129) | (262,129) | |||
Present value of minimum lease obligations | 483,177 | 483,177 | |||
Current maturities | (63,236) | (63,236) | $ (17,182) | ||
Finance lease obligations, net of current maturities | 419,941 | 419,941 | 287,044 | ||
Future minimum payments under these operating lease agreements | |||||
2024 | 79,748 | 79,748 | |||
2025 | 65,233 | 65,233 | |||
2026 | 57,698 | 57,698 | |||
2027 | 52,672 | 52,672 | |||
2028 | 48,076 | 48,076 | |||
Thereafter | 309,365 | 309,365 | |||
Total minimum lease obligations | 612,792 | 612,792 | |||
Less-amounts representing interest | (213,381) | (213,381) | |||
Present value of minimum lease obligations | 399,411 | 399,411 | |||
Current maturities | (68,418) | (68,418) | (12,005) | ||
Lease obligations, net of current maturities | 330,993 | 330,993 | $ 94,587 | ||
Unfavorable lease liabilities | |||||
Unfavorable lease liabilities | 147,500 | 147,500 | |||
Amortization of unfavorable lease liabilities | $ 9,700 | $ 16,200 | |||
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__12
Description of the business: - Allowance for credit losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Description of the business: | ||||
Balance at Beginning of Period | $ 4,882 | $ 1,717 | $ 2,303 | $ 1,510 |
Current-period Provision for Expected Credit Losses | 1,271 | 1,054 | 7,833 | 3,059 |
Write offs Charged Against Allowance | (1,995) | (805) | (5,978) | (2,603) |
Balance at End of Period | $ 4,158 | $ 1,966 | $ 4,158 | $ 1,966 |
Description of the business__13
Description of the business: - Allowance for credit losses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Description of the business: | ||||
Net bad debt expense | $ 784 | $ 500 | $ 6,718 | $ 1,513 |
Bad debt recoveries | (459) | $ (500) | (1,200) | $ (1,506) |
Transition Services Agreement | ||||
Description of the business: | ||||
Net bad debt expense | $ 3,000 | $ 3,000 |
Property and equipment_ (Detail
Property and equipment: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property and equipment: | ||||
Depreciation and amortization expense | $ 86,718 | $ 22,891 | $ 164,371 | $ 68,640 |
Capitalized compensation cost | $ 11,675 | $ 3,002 | $ 24,115 | $ 9,290 |
Long-term debt_ (Details)
Long-term debt: (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Nov. 30, 2023 USD ($) | May 31, 2023 USD ($) | Nov. 30, 2022 USD ($) | May 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Nov. 06, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 EUR (€) | |
Interest rate swap | ||||||||||||
Long-term debt: | ||||||||||||
Face amount | $ 56.4 | $ 56.4 | $ 52.1 | |||||||||
Net liability, prepaid expenses | 23.9 | 23.9 | 20.3 | |||||||||
Net liability, other long term | 32.5 | 32.5 | $ 31.9 | |||||||||
Interest expense | (4.8) | $ (16.9) | 4.3 | $ 45.7 | $ 57.6 | |||||||
Interest rate swap | Subsequent event | ||||||||||||
Long-term debt: | ||||||||||||
Fair value of swap agreement | $ 43.8 | |||||||||||
Interest rate swap | Cash | ||||||||||||
Long-term debt: | ||||||||||||
Margin deposits | 57.6 | 57.6 | ||||||||||
Interest rate swap | Restricted cash | ||||||||||||
Long-term debt: | ||||||||||||
Margin deposits | 56.4 | 56.4 | ||||||||||
Interest rate swap | Unrestricted cash | ||||||||||||
Long-term debt: | ||||||||||||
Margin deposits | 1.2 | $ 1.2 | ||||||||||
SOFR | Interest rate swap | ||||||||||||
Long-term debt: | ||||||||||||
Interest rate (as a percent) | 3.50% | |||||||||||
Senior secured 2026 Notes | ||||||||||||
Long-term debt: | ||||||||||||
Face amount | $ 500 | $ 500 | ||||||||||
Interest rate (as a percent) | 3.50% | 3.50% | ||||||||||
Senior notes outstanding | $ 500 | $ 500 | ||||||||||
2027 Notes | ||||||||||||
Long-term debt: | ||||||||||||
Face amount | $ 450 | $ 450 | ||||||||||
Interest rate (as a percent) | 7% | 7% | ||||||||||
Senior unsecured 2024 Notes | ||||||||||||
Long-term debt: | ||||||||||||
Face amount | € | € 350 | |||||||||||
2024 Notes | ||||||||||||
Long-term debt: | ||||||||||||
Interest rate (as a percent) | 4.375% | 4.375% | ||||||||||
Installment One | SOFR | Interest rate swap | ||||||||||||
Long-term debt: | ||||||||||||
Payment made to counter party | $ 3.4 | |||||||||||
Installment One | SOFR | Interest rate swap | Subsequent event | ||||||||||||
Long-term debt: | ||||||||||||
Net proceeds | $ 12 | |||||||||||
Installment Two | SOFR | Interest rate swap | ||||||||||||
Long-term debt: | ||||||||||||
Net proceeds | $ 3.4 | $ 1.2 | ||||||||||
Payment of debt in Installments | $ 1.2 | |||||||||||
Payment made to counter party | $ 9.5 | |||||||||||
Installment Two | SOFR | Interest rate swap | Unrestricted cash | ||||||||||||
Long-term debt: | ||||||||||||
Net proceeds | $ 9.5 | |||||||||||
Installment Two | SOFR | Interest rate swap | Unrestricted cash | Subsequent event | ||||||||||||
Long-term debt: | ||||||||||||
Net proceeds | $ 12 |
Long-term debt_ Limitations und
Long-term debt: Limitations under the Indentures (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Long-term debt: | |
Consolidated leverage ratio | 6 |
Consolidated secured leverage ratio | 4 |
Amount unrestricted and permitted for investment payments | $ 461.8 |
Fixed charge coverage ratio | 2 |
Restriction on incurring additional indebtedness | Senior secured 2026 Notes | Minimum | |
Long-term debt: | |
Consolidated leverage ratio | 1 |
Consolidated secured leverage ratio | 1 |
Fixed charge coverage ratio | 2 |
Restriction on incurring additional indebtedness | Senior secured 2026 Notes | Maximum | |
Long-term debt: | |
Consolidated leverage ratio | 6 |
Consolidated secured leverage ratio | 4 |
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 |
Unrestricted general basket payment | |
Long-term debt: | |
Amount unrestricted and permitted for investment payments | $ 250 |
Commitments and contingencies_
Commitments and contingencies: Current and potential litigation (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Commitments and contingencies: | |
Estimate of possible loss in excess of accrual | $ 4 |
Income taxes_ The components of
Income taxes: The components of income (loss) before income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
The components of income (loss) before income taxes | ||||
Domestic | $ (58,402) | $ (3,382) | $ 1,057,523 | $ 22,953 |
Foreign | (11,944) | (3,656) | (17,834) | (8,596) |
Total | $ (70,346) | $ (7,038) | $ 1,039,689 | $ 14,357 |
Common stock buyback program _2
Common stock buyback program and stock options and award plan: (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May 31, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2024 | |
Common stock buyback program and stock options and award plan: | |||||
Repurchase of common stock (in shares) | 0 | 0 | |||
Increased number of shares available under the 2017 Incentive Award Plan | 1,200,000 | ||||
Subsequent event | |||||
Common stock buyback program and stock options and award plan: | |||||
Remaining authorized amount for common stock repurchases | $ 30.4 | ||||
Sprint Business | |||||
Common stock buyback program and stock options and award plan: | |||||
Number of restricted stock granted | 308,782 | ||||
Sprint Business | Maximum | |||||
Common stock buyback program and stock options and award plan: | |||||
Vesting period | 3 years | ||||
Sprint Business | Minimum | |||||
Common stock buyback program and stock options and award plan: | |||||
Vesting period | 2 years | ||||
Performance Shares | |||||
Common stock buyback program and stock options and award plan: | |||||
Number of restricted stock granted | 104,850 | ||||
Restricted stock | Former employees of the Wireline Business | |||||
Common stock buyback program and stock options and award plan: | |||||
Fair value of shares of restricted stock vested | $ 19.5 | ||||
Executive employees and directors | |||||
Common stock buyback program and stock options and award plan: | |||||
Number of restricted stock granted | 258,762 | ||||
Shares issued, Value | $ 16 | ||||
CEO | Performance Shares | |||||
Common stock buyback program and stock options and award plan: | |||||
Number of restricted stock granted | 29,334 |
Dividends on common stock_ (Det
Dividends on common stock: (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Dec. 08, 2023 | Nov. 01, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Dividends on common stock: | ||||
Dividends paid | $ 135,354 | $ 125,882 | ||
Subsequent Events | ||||
Dividends on common stock: | ||||
Quarterly dividend payment approved (per share) | $ 0.955 | |||
Dividends paid | $ 45,100 |
Related party transactions_ (De
Related party transactions: (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jul. 25, 2023 USD ($) ft² | May 31, 2015 | Sep. 30, 2023 USD ($) ft² | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) ft² | Sep. 30, 2022 USD ($) | |
Amendment | ||||||
Related party transactions | ||||||
Notice period for cancellation of lease | 60 days | |||||
Area of land | ft² | 7,369 | |||||
Operating lease income | $ | $ 162,118 | |||||
Amendment | Auditorium suitable for training | ||||||
Related party transactions | ||||||
Area of land | ft² | 4,987 | |||||
Amendment | Data center in building | ||||||
Related party transactions | ||||||
Area of land | ft² | 2,382 | |||||
Related party | Office Lease | ||||||
Related party transactions | ||||||
Payment made for rent and related costs | $ | $ 900 | $ 500 | $ 2,100 | $ 1,400 | ||
Related party | Office Lease | Sodium LLC | ||||||
Related party transactions | ||||||
Fixed annual rent | $ | $ 1,000 | |||||
Lease term (in years) | 5 years | |||||
Notice period for cancellation of lease | 60 days | |||||
Related party | Office Lease | Thorium LLC | ||||||
Related party transactions | ||||||
Lease term (in years) | 5 years | 5 years | ||||
Notice period for cancellation of lease | 60 days | |||||
Area of land | ft² | 54,803 | 54,803 | ||||
Lease term | 5 years | |||||
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Gains on Lease Transactions | |||||
Operating lease income payments | $ | $ 1,200 | |||||
Related party | Network Operations Lease | Germanium LLC | ||||||
Related party transactions | ||||||
Lease term (in years) | 5 years | 5 years | ||||
Notice period for cancellation of lease | 60 days | |||||
Area of land | ft² | 1,587 | 1,587 | ||||
Operating lease income | $ | $ 34,914 |
Segment information_ (Details)
Segment information: (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment information: | |||||
Number of operating segments | segment | 1 | ||||
Revenues | $ 275,429 | $ 150,000 | $ 668,822 | $ 447,625 | |
Long-lived assets, net | 1,792,619 | 1,792,619 | $ 544,439 | ||
On-net | |||||
Segment information: | |||||
Revenues | 130,050 | 113,219 | 373,856 | 337,829 | |
Off-net | |||||
Segment information: | |||||
Revenues | 130,970 | 36,611 | 270,234 | 109,279 | |
Wavelength | |||||
Segment information: | |||||
Revenues | 2,992 | 4,578 | |||
Non-core | |||||
Segment information: | |||||
Revenues | 11,417 | 170 | 20,154 | 517 | |
North America | |||||
Segment information: | |||||
Revenues | 239,659 | 120,785 | 566,547 | 357,775 | |
Long-lived assets, net | 1,637,855 | 1,637,855 | 397,434 | ||
North America | On-net | |||||
Segment information: | |||||
Revenues | 102,103 | 88,298 | 290,622 | 261,427 | |
North America | Off-net | |||||
Segment information: | |||||
Revenues | 123,164 | 32,325 | 251,278 | 95,873 | |
North America | Wavelength | |||||
Segment information: | |||||
Revenues | 2,992 | 4,578 | |||
North America | Non-core | |||||
Segment information: | |||||
Revenues | 11,400 | 162 | 20,069 | 475 | |
Europe | |||||
Segment information: | |||||
Revenues | 27,475 | 23,790 | 80,571 | 74,095 | |
Europe | On-net | |||||
Segment information: | |||||
Revenues | 21,913 | 19,853 | 65,880 | 61,807 | |
Europe | Off-net | |||||
Segment information: | |||||
Revenues | 5,550 | 3,929 | 14,640 | 12,249 | |
Europe | Non-core | |||||
Segment information: | |||||
Revenues | 12 | 8 | 51 | 39 | |
South America | |||||
Segment information: | |||||
Revenues | 2,150 | 1,392 | 5,683 | 4,232 | |
South America | On-net | |||||
Segment information: | |||||
Revenues | 1,862 | 1,358 | 5,159 | 4,080 | |
South America | Off-net | |||||
Segment information: | |||||
Revenues | 287 | 34 | 522 | 150 | |
South America | Non-core | |||||
Segment information: | |||||
Revenues | 1 | 2 | 2 | ||
Oceania | |||||
Segment information: | |||||
Revenues | 5,960 | 3,829 | 15,410 | 10,949 | |
Oceania | On-net | |||||
Segment information: | |||||
Revenues | 4,011 | 3,530 | 11,659 | 9,992 | |
Oceania | Off-net | |||||
Segment information: | |||||
Revenues | 1,945 | 299 | 3,719 | 956 | |
Oceania | Non-core | |||||
Segment information: | |||||
Revenues | 4 | 32 | 1 | ||
Africa | |||||
Segment information: | |||||
Revenues | 185 | 204 | 611 | 574 | |
Africa | On-net | |||||
Segment information: | |||||
Revenues | 161 | 180 | 536 | 523 | |
Africa | Off-net | |||||
Segment information: | |||||
Revenues | 24 | $ 24 | 75 | $ 51 | |
Europe and other | |||||
Segment information: | |||||
Long-lived assets, net | $ 154,764 | $ 154,764 | $ 147,005 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | During the three months ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K. |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |