Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 31, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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, par value $0.001 per share | ||
Trading Symbol | CCOI | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 2.9 | ||
Entity Common Stock, Shares Outstanding | 47,425,367 | ||
Entity Central Index Key | 0001158324 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Tysons, VA |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 75,092 | $ 223,783 |
Restricted cash | 38,689 | 52,129 |
Accounts receivable, net of allowance for credit losses of $3,677 and $2,303, respectively | 135,475 | 44,123 |
Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount of $24,898 | 179,269 | |
Due from T-Mobile, Transition Services Agreement | 4,514 | |
Prepaid expenses and other current assets | 80,588 | 45,878 |
Total current assets | 513,627 | 365,913 |
Property and equipment: | ||
Property and equipment | 2,947,376 | 1,714,906 |
Accumulated depreciation and amortization | (1,409,559) | (1,170,476) |
Total property and equipment, net | 1,537,817 | 544,430 |
Right-of-use leased assets | 361,587 | 81,601 |
Intangible assets, net | 472,815 | |
Due from T-Mobile, IP Transit Services Agreement, net of discount of $27,916 | 263,750 | |
Due from T-Mobile, Purchase Agreement, net of discount of $13,725 | 38,585 | |
Deposits and other assets | 23,438 | 18,238 |
Total assets | 3,211,619 | 1,010,182 |
Current liabilities: | ||
Accounts payable | 48,356 | 27,208 |
Accrued and other current liabilities | 120,523 | 63,889 |
Due to T-Mobile - Transition Services Agreement | 66,908 | |
Due to T-Mobile - Purchase Agreement | 4,981 | |
Current maturities, operating lease liabilities | 67,962 | 12,005 |
Finance lease obligations, current maturities | 64,594 | 17,182 |
Total current liabilities | 373,324 | 120,284 |
Operating lease liabilities, net of current maturities | 330,095 | 94,587 |
Finance lease obligations, net of current maturities | 419,921 | 287,044 |
Deferred income tax liabilities | 471,498 | 47,646 |
Other long-term liabilities | 61,639 | 34,990 |
Total liabilities | 2,602,063 | 1,528,814 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 75,000,000 shares authorized; 48,608,569 and 48,013,330 shares issued and outstanding, respectively | 49 | 48 |
Additional paid-in capital | 606,755 | 575,064 |
Accumulated other comprehensive loss | (14,385) | (19,156) |
Accumulated earnings (deficit) | 17,137 | (1,074,588) |
Total stockholders' equity (deficit) | 609,556 | (518,632) |
Total liabilities and stockholders' equity (deficit) | 3,211,619 | 1,010,182 |
Senior secured 2026 Notes | ||
Current liabilities: | ||
Senior secured 2026 notes, net of unamortized debt costs of $645 and $905, respectively, and discount of $857 and $1,203, respectively | 498,498 | 497,892 |
Senior unsecured 2027 Notes | ||
Current liabilities: | ||
Senior unsecured 2027 notes, net of unamortized debt costs of $941 and $1,173, respectively, and discount of $1,970 and $2,456, respectively | $ 447,088 | $ 446,371 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Accounts receivable, net of allowance for credit losses | $ 3,677 | $ 2,303 |
Due from T-Mobile, IP Transit Services Agreement, current portion, net of discount | 24,898 | |
Due from T-Mobile, IP Transit Services Agreement, noncurrent portion discount | 27,916 | |
Due from T-Mobile, Purchase Agreement, net of discount | $ 13,725 | |
Liabilities and stockholders' 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 | 48,608,569 | 48,013,330 |
Common stock, shares outstanding | 48,608,569 | 48,013,330 |
Senior secured 2026 Notes | ||
Liabilities and stockholders' equity | ||
Unamortized debt costs | $ 645 | $ 905 |
Unamortized debt discount | 857 | 1,203 |
Senior unsecured 2027 Notes | ||
Liabilities and stockholders' equity | ||
Unamortized debt costs | 941 | 1,173 |
Unamortized debt discount | $ 1,970 | $ 2,456 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Service revenue | $ 940,922 | $ 599,604 | $ 589,797 |
Operating expenses: | |||
Network operations (including $1,069, $553 and $2,521 of equity-based compensation expense, respectively), exclusive of amounts shown separately | 544,232 | 228,154 | 226,337 |
Selling, general, and administrative (including $25,855, $23,886 and $24,301 of equity-based compensation expense, respectively) | 275,318 | 163,021 | 162,380 |
Acquisition costs - Sprint Business | 18,492 | 2,248 | |
Depreciation and amortization | 92,222 | 89,240 | |
Total operating expenses | 1,070,251 | 485,645 | 477,957 |
Gain on lease terminations and other | 7,393 | ||
Operating (loss) income | (129,329) | 113,959 | 119,233 |
Interest expense | (106,783) | (67,584) | (58,059) |
Change in valuation - interest rate swap | 13,439 | (43,113) | (9,015) |
Foreign exchange gain on 2024 Notes | 31,561 | 32,522 | |
Loss on debt extinguishment and redemption - 2022 Notes | (14,698) | ||
Gain on bargain purchase - Sprint Business | 1,406,435 | ||
Interest income - IP Transit Services Agreement | 26,796 | ||
Interest income - Purchase Agreement | 1,889 | ||
Interest income and other | 7,030 | 3,438 | 1,437 |
Income before income taxes | 1,219,477 | 26,376 | 71,420 |
Income tax benefit (expense) | 53,964 | (21,230) | (23,235) |
Net income | 1,273,441 | 5,146 | 48,185 |
Comprehensive income (loss): | |||
Net income | 1,273,441 | 5,146 | 48,185 |
Foreign currency translation adjustment | (8,153) | (9,697) | |
Comprehensive income (loss) | $ 1,278,213 | $ (3,007) | $ 38,488 |
Net income (loss) per common share: | |||
Basic net income per common share | $ 26.88 | $ 0.11 | $ 1.04 |
Diluted net income per common share | 26.62 | 0.11 | 1.03 |
Dividends declared per common share | $ 3.760 | $ 3.555 | $ 3.170 |
Weighted-average common shares - basic | 47,373,361 | 46,875,992 | 46,419,180 |
Weighted-average common shares - diluted | 47,837,512 | 47,207,298 | 46,963,920 |
2022 Notes | |||
Operating expenses: | |||
Loss on debt extinguishment and redemption - 2022 Notes | $ (14,698) | ||
2024 Notes | |||
Operating expenses: | |||
Loss on debt extinguishment and redemption- 2024 Notes | $ (11,885) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity-based compensation expense | $ 26,924 | $ 24,439 | $ 26,822 |
Network operations | |||
Equity-based compensation expense | 1,069 | 553 | 2,521 |
Selling, general and administrative | |||
Equity-based compensation expense | $ 25,855 | $ 23,886 | $ 24,301 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Earnings (Deficit) | Total |
Balance at Dec. 31, 2020 | $ 47 | $ 515,867 | $ (1,306) | $ (807,774) | $ (293,166) |
Balance (in shares) at Dec. 31, 2020 | 47,214,077 | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY | |||||
Forfeitures of shares granted to employees (in shares) | (47,436) | ||||
Equity-based compensation | 30,044 | 30,044 | |||
Foreign currency translation | (9,697) | (9,697) | |||
Issuances of common stock | $ 1 | 1 | |||
Issuances of common stock (in shares) | 471,080 | ||||
Exercises of options | 1,823 | 1,823 | |||
Exercises of options (in shares) | 36,468 | ||||
Dividends paid | (150,288) | (150,288) | |||
Net income | 48,185 | 48,185 | |||
Balance at Dec. 31, 2021 | $ 48 | 547,734 | (11,003) | (909,877) | (373,098) |
Balance (in shares) at Dec. 31, 2021 | 47,674,189 | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY | |||||
Forfeitures of shares granted to employees (in shares) | (77,079) | ||||
Equity-based compensation | 26,716 | 26,716 | |||
Foreign currency translation | (8,153) | (8,153) | |||
Issuances of common stock (in shares) | 401,036 | ||||
Exercises of options | 614 | 614 | |||
Exercises of options (in shares) | 15,184 | ||||
Dividends paid | (169,857) | (169,857) | |||
Net income | 5,146 | 5,146 | |||
Balance at Dec. 31, 2022 | $ 48 | 575,064 | (19,156) | (1,074,588) | $ (518,632) |
Balance (in shares) at Dec. 31, 2022 | 48,013,330 | 48,013,330 | |||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY | |||||
Forfeitures of shares granted to employees (in shares) | (63,890) | ||||
Equity-based compensation | 30,464 | $ 30,464 | |||
Foreign currency translation | 4,771 | ||||
Issuances of common stock | $ 1 | 1 | |||
Issuances of common stock (in shares) | 634,056 | ||||
Exercises of options | 1,227 | 1,227 | |||
Exercises of options (in shares) | 25,073 | ||||
Dividends paid | (181,716) | (181,716) | |||
Net income | 1,273,441 | 1,273,441 | |||
Balance at Dec. 31, 2023 | $ 49 | $ 606,755 | $ (14,385) | $ 17,137 | $ 609,556 |
Balance (in shares) at Dec. 31, 2023 | 48,608,569 | 48,608,569 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 1,273,441 | $ 5,146 | $ 48,185 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 92,222 | 89,240 | |
Amortization of debt discounts and premium | 1,323 | 1,464 | 1,759 |
Amortization of discounts, due from T-Mobile, IP Transit Services & Purchase Agreements | (28,685) | ||
Equity-based compensation expense (net of amounts capitalized) | 26,924 | 24,439 | 26,822 |
Gain on bargain purchase - Sprint Business | (1,406,435) | ||
Foreign currency exchange gain on 2024 Notes | (31,561) | (32,522) | |
Loss on extinguishment & redemption of 2024 notes | 11,885 | ||
Loss on extinguishment & redemption of 2022 notes | 14,698 | ||
Gain - lease termination | (7,375) | ||
Gains - equipment transactions and other, net | 212 | 372 | 69 |
Deferred income taxes | (69,582) | 16,539 | 18,159 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (51,002) | (2,838) | 1,385 |
Prepaid expenses and other current assets | (11,001) | (7,427) | (17) |
Change in valuation - interest rate swap agreement | (13,439) | 43,113 | 9,015 |
Due to T-Mobile - Transition Services Agreement | 66,908 | ||
Due from T-Mobile - Transition Services Agreement | (4,514) | ||
Deposits and other assets | (1,548) | (282) | (12) |
Unfavorable lease liabilities | (26,511) | ||
Accounts payable, accrued liabilities and other long-term liabilities | 29,045 | 20,635 | 851 |
Net cash provided by operating activities | 17,345 | 173,707 | 170,257 |
Cash flows from investing activities: | |||
Cash receipts - IP Transit Services Agreement - T-Mobile | 204,167 | ||
Acquisition of Sprint Business, net of $47.1 million of cash acquired | 2,191 | ||
Purchases of property and equipment | (129,632) | (78,971) | (69,916) |
Net cash provided by (used in) investing activities | 76,726 | (78,971) | (69,916) |
Cash flows from financing activities: | |||
Redemption and extinguishment of 2024 Notes | (375,354) | ||
Redemption and extinguishment of 2022 Notes | (459,317) | ||
Dividends paid | (181,716) | (169,857) | (150,288) |
Principal payments of finance lease obligations | (77,362) | (45,472) | (23,054) |
Principal payments of installment payment agreement | (790) | (6,922) | |
Proceeds from exercises of common stock options | 1,227 | 614 | 1,823 |
Net cash used in financing activities | (257,851) | (144,849) | (140,825) |
Effect of exchange rate changes on cash | 1,649 | (2,599) | (2,193) |
Net decrease in cash and cash equivalents & restricted cash | (162,131) | (52,712) | (42,677) |
Cash and cash equivalents & restricted cash, beginning of year | 275,912 | 328,624 | 371,301 |
Cash and cash equivalents & restricted cash, end of year | 113,781 | 275,912 | 328,624 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 104,698 | 66,479 | 59,497 |
Cash paid for income taxes | 35,291 | 7,156 | 4,452 |
Non-cash investing and financing activities: | |||
Finance lease obligations incurred | 232,468 | 107,875 | 50,831 |
Fair value of equipment acquired in leases | $ 141 | 1,969 | |
2022 Notes | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Loss on extinguishment & redemption of 2022 notes | 14,698 | ||
Senior unsecured 2026 Notes | |||
Cash flows from financing activities: | |||
Net proceeds from issuance net of debt costs | $ 496,933 | ||
Senior unsecured 2027 Notes | |||
Cash flows from financing activities: | |||
Net proceeds from issuance net of debt costs | $ 446,010 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Cash flows from operating activities: | |
Cash acquired | $ 47,100 |
Senior unsecured 2027 Notes | |
Cash flows from operating activities: | |
Debt costs | 1,290 |
Senior secured 2026 Notes | |
Cash flows from operating activities: | |
Debt costs | $ 1,317 |
Description of the business and
Description of the business and summary of significant accounting policies: | 12 Months Ended |
Dec. 31, 2023 | |
Description of the business and summary of significant accounting policies: | |
Description of the business and summary of significant accounting policies: | 1. Description of the business and summary of significant accounting policies: Reorganization and merger On May 15, 2014, pursuant to the Agreement and Plan of Reorganization (the “Merger Agreement”) by and among Cogent Communications Group, Inc. (“Group”), a Delaware corporation, Cogent Communications Holdings, Inc., a Delaware corporation (“Holdings” or the “Company”) and Cogent Communications Merger Sub, Inc., a Delaware corporation, Group adopted a new holding company organizational structure whereby Group is now a wholly owned subsidiary of Holdings. Holdings is a “successor issuer” to Group pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Cogent Communications, Inc. is wholly owned by Group and the vast majority of Group’s assets, contractual arrangements, and operations are executed by Cogent Communications, Inc. and its subsidiaries. Description of business The Company is a facilities-based provider of low-cost, high-speed Internet access, private network services, and data center colocation space and power. The Company’s network is specifically designed and optimized to transmit packet routed data. The Company delivers its services primarily to businesses, large and small, 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. The Company’s net-centric 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 the Company’s 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 income for the year ended December 31, 2023 were $283.3 million and $234.5 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. During the third quarter of 2023, an additional Working Capital Adjustment of $5.0 million was accrued due to the Seller. 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 $1.9 million for the year ended December 31, 2023. The Seller is disputing approximately $24.2 million of the Short-term Lease Payment amount. The Purchase Agreement also includes reimbursement from Seller to Buyer for qualifying severance expenses incurred, which were $16.2 million in 2023. A final determination of the Working Capital Adjustment and the Short-term Lease Payment is expected by the end of the first quarter of 2024. 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 year ended December 31, 2023, TMUSA paid the Company $204.2 million under the IP Transit Agreement. 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. 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 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 year ended December 31, 2023, the Company recorded $23.9 million from TMUSA as service revenue under the Commercial Agreement. As of December 31, 2023, TMUSA owed $1.6 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 professional fees and $16.2 million of reimbursed severance costs, in the year ended December 31, 2023, with such professional fees and reimbursed severance costs totaling $18.5 million and $2.2 million for the years ended December 31, 2023 and 2022, respectively. Consideration The acquisition-date fair value of consideration to be received from the Transaction totaled $607.2 million and comprised of the following: (In thousands) May 1, 2023 Estimated working capital payments made to the Seller, net of severance reimbursements (a) $ 49,865 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) 607,221 (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. Includes an offsetting $16.2 million in severance reimbursement payments received from the Seller recorded as a measurement period adjustment during the fourth quarter. A final determination of the Working Capital Adjustment is expected by the end of the first quarter of 2024. (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 four equal installments in months 55-58 from the Closing Date and is recorded at its present value resulting in a discount of $15.6 million. During the third quarter of 2023, the Short-term Lease Payment was reduced by $4.8 million. A final determination of the Short-term Lease Payment is expected by the end of the first quarter of 2024. (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 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 $1.4 billion. During the third quarter of 2023, 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. During the fourth quarter of 2023, the Company recorded the following measurement period adjustments resulting in an increase to the gain on bargain purchase of $254.0 million. Excluding the impact to the bargain purchase gain, the corresponding impact from these adjustments to the condensed consolidated statements of comprehensive loss for the three-month period ended September 30, 2023 and for the period from May 1, 2023 to December 31, 2023 was not material. ● An intangible asset totaling $458.0 million for acquired IPv4 addresses. This asset was recorded once management determined both the quantity of IPv4 addresses for which title was transferred and the valuation approach. Because of the novel nature of this asset and that the Transaction has resulted in a material bargain purchase gain, management recorded the asset after appropriate consideration of the valuation approach, in the context of a distressed business. ● A reduction to an intangible asset, acquired customer relationships, totaling $41.0 million from revisions to certain assumptions. ● A reduction to acquired owned property totaling $86.4 million from revisions to certain assumptions. ● Severance reimbursement payments received from the Seller Includes totaling $16.2 million recorded as a measurement period adjustment during the fourth quarter. ● Other less significant adjustments. ● An increase to the net deferred tax liability totaling $89.5 million from the impact of the adjustments noted above. 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. The Company believes that estimates that are potentially subject to change include the valuations of IPv4 addresses, property and equipment, right-of-use leased assets, operating lease liabilities and the related income tax effects from such estimate revisions. 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 965,715 Right-of-use leased assets 311,022 Intangible assets 474,000 Deposits and other assets 7,521 Total assets $ 1,868,057 Liabilities Current liabilities: Accounts payable $ 13,313 Accrued and other current liabilities 36,628 Current maturities, operating lease liabilities 74,562 Current maturities, finance lease liabilities 39,559 Total current liabilities 164,062 Operating lease liabilities, net of current maturities 251,573 Finance lease liabilities, net of current maturities 121,342 Deferred income tax liabilities 496,500 Other long-term liabilities 35,366 Total liabilities 1,068,843 Fair value of net assets acquired $ 799,214 Gain on bargain purchase Fair value of net assets acquired $ 799,214 Total net consideration to be received from the Seller, net of discounts - see table above 607,221 Gain on bargain purchase $ 1,406,435 Acquired Property & Equipment The Company acquired property and equipment of $965.7 million. This is primarily comprised of the legacy Sprint network and consists of optical fiber, related equipment, and owned real estate which were valued using a combination of the cost and market approaches. Management intends to operate the acquired business; however, management valued these assets using factors which represent an orderly liquidation value, to approximate the highest and best use of assets acquired in a distressed business. The estimated fair value of the optical fiber on the Transaction date is $369.2 million. The valuation requires the estimation of the total replacement cost per mile of fiber and a factor to reflect the orderly liquidation value. There is not active market data for these assumptions and these assumptions are inherently subjective. Market participants could have differing views on these assumptions, which could result in a materially different fair value of the optical fiber. Acquired Leases The Company acquired a portfolio of lease arrangements for the lease of dark fiber, rights-of-way and facilities. In accordance with ASC 805 and ASC 842, the acquired leases are accounted for as if the leases are new at the acquisition date however, the Company will retain the lease classification from the Seller. The Company followed its historical policies with respect to evaluating the renewal periods of the acquired leases and estimating the incremental borrowing rate. The Company also evaluated the leases for unfavorable terms and recorded an adjustment for unfavorable market terms of $151.1 million, was valued using the income approach, and which is presented net of the corresponding right of use assets. Acquired Intangible Assets Intangible assets acquired include $458.0 million of IPv4 address intangible assets and $16.0 million of acquired customer relationships. The fair value measurement of the IPv4 addresses was based on recent auction prices and a factor to incorporate the uncertainty for how the market for IPv4 addresses will function in the future. The Company believes that these IPv4 addresses have an indefinite useful live and are not being amortized. The Company evaluates these assets for impairment on the first day of the fourth quarter. There was no impairment recorded during the period from May 1, 2023 through December 31, 2023. The acquired customer relationships have an estimated useful life of nine years and the estimated fair value was determined using a market based income approach. Amortization expense for the year ended December 31, 2023 was $1.3 million. Future amortization expense of the customer relationships is $1.8 million per year for eight years. Acquired Asset Retirement Obligations In connection with the Transaction, the Company assumed $32.0 million of asset retirement obligations primarily related to restoration obligations for acquired leases which was valued using the income approach. 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 year ended December 31, 2023 were $1.7 million and $5.1 million, respectively. In accordance with ASC 410, the Company has not recorded an asset retirement obligation related to the removal of the acquired optical fiber because a settlement date for which to remove the fiber is indeterminable and therefore a reasonable estimation of fair value cannot be made. Reassessment of Bargain Purchase Gain Because the fair value of the identifiable assets acquired and liabilities assumed exceeded the fair value of the consideration transferred, the Company recorded a material bargain purchase gain. Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed in accordance with ASC 805-30-25-4 and concluded that all acquired assets and assumed liabilities were recognized and that the valuation procedures and resulting measures were appropriate. 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 year ended December 31, 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 eight months ended December 31, 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. Year Year Ended Ended (In thousands) (unaudited) December 31, 2023 December 31, 2022 Service revenue $ 1,121,680 $ 1,170,904 Operating loss from continuing operations (304,931) (713,576) Net income 1,108,873 596,762 The pro forma results for the year ended December 31, 2022 include estimates for the gain on bargain purchase related to the Transaction of $1.4 billion, interest income from the amortization of the discount recorded under the IP Transit Services Agreement of $36.2 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 $58.0 million, amortization expense related to the customer relationship intangible assets of $1.8 million, the elimination of amounts charged from the parent company to the Sprint Business as autonomous entity expense adjustments of $45.7 million, amortization of unfavorable lease liabilities of $3.0 million, a reduction to network operations expense of $50.4 million and an increase to interest expense of $10.9 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 $17.2 million. The historical results of the Sprint Business for the year ended December 31, 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 year ended December 31, 2023 include the gain on bargain purchase related to the Transaction of $1.4 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 $28.3 million, amortization expense related to the customer relationship intangible assets of $0.6 million, amortization of unfavorable lease liabilities of $1.0 million, a reduction to network operations expense of $16.8 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 $0.2 million. Principles of consolidation The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and all of its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles 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. Allowance for credit losses The Company establishes an allowance for credit losses and other sales credit adjustments related to its trade receivables. Trade receivables are recorded at the invoiced amount and can bear interest. Allowances for sales credits are established through a reduction of revenue, while allowances for credit losses are established through a charge to selling, general, and administrative expenses as bad debt expense. The Company assesses the adequacy of these reserves by evaluating factors, such as the length of time individual receivables are past due, historical collection experience, and changes in the credit worthiness of its customers. The Company also assesses the ability of specific customers to meet their financial obligations and establishes specific allowances related to these customers. If circumstances relating to specific customers change or economic conditions change such that the Company’s past collection experience and assessment of the economic environment are no longer appropriate, the Company’s estimate of the recoverability of its trade receivables could be impacted. Accounts receivable balances are written off against the allowance for credit losses after all means of internal collection activities have been exhausted and the potential for recovery is considered remote. The Company uses third-party collection services to continue to seek collection for it’s written off accounts receivable. 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 Balance at Provision for Write offs Balance at Beginning Expected Credit Charged Against End of Description of Period Losses Allowance Period Allowance for credit losses (deducted from accounts receivable) Year ending December 31, 2023 $ 2,303 $ 10,475 $ (9,101) $ 3,677 Year ending December 31, 2022 $ 1,510 $ 4,318 $ (3,525) $ 2,303 Year ending December 31, 2021 $ 1,921 $ 5,595 $ (6,006) $ 1,510 The current-period provision for expected credit losses is net of bad debt recoveries of $1.9 million, $1.9 million and $2.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Leases |
Property and equipment_
Property and equipment: | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment: | |
Property and equipment: | 2. Property and equipment: Property and equipment consisted of the following (in thousands): December 31, 2023 2022 Owned assets: Network equipment $ 983,996 $ 673,479 Leasehold improvements 297,785 263,861 System infrastructure 607,060 171,694 Software 12,747 11,277 Office and other equipment 26,656 22,071 Buildings and improvements 146,402 6,140 Land 135,877 101 Asset retirement obligations 34,951 — 2,245,474 1,148,623 Less—Accumulated depreciation and amortization (1,124,385) (949,277) 1,121,089 199,346 Assets under finance leases: IRUs 701,902 566,283 Less—Accumulated depreciation and amortization (285,174) (221,199) 416,728 345,084 Property and equipment, net $ 1,537,817 $ 544,430 Depreciation and amortization expense related to property and equipment and finance leases was $229.9 million, $92.2 million and $89.2 million, for the years ended December 31, 2023, 2022 and 2021, respectively. The Company capitalizes the compensation cost of employees directly involved with its construction activities. In the years ended December 31, 2023, 2022 and 2021, the Company capitalized compensation costs of $35.5 million, $12.6 million and $13.4 million, respectively. These amounts are included in system infrastructure costs. |
Accrued and other liabilities_
Accrued and other liabilities: | 12 Months Ended |
Dec. 31, 2023 | |
Accrued and other liabilities: | |
Accrued and other liabilities: | 3. Accrued and other liabilities: Accrued and other current liabilities consist of the following (in thousands): December 31, 2023 2022 Operating accruals $ 31,254 $ 19,488 Interest rate swap agreement - current portion 21,568 20,267 Deferred revenue—current portion 6,549 4,911 Payroll and benefits 13,696 11,880 Taxes—non-income based 41,820 2,687 Interest 5,636 4,656 Total $ 120,523 $ 63,889 |
Long-term debt_
Long-term debt: | 12 Months Ended |
Dec. 31, 2023 | |
Long-term debt: | |
Long-term debt: | 4. Long-term debt: As of December 31, 2023, the Company had outstanding $450.0 million aggregate principal amount of Senior Unsecured Notes due 2027 (the “2027 Notes”) and $500.0 million aggregate principal amount of Senior Secured Notes due 2026 (the “2026 Notes”). The 2027 Notes were issued in June 2022, are due on June 15, 2027 and bear interest at a rate of 7.00% per year. Interest on the 2027 Notes is paid semi-annually on June 15 and December 15 of each year. The 2026 Notes were issued in May 2021, are due on May 1, 2026 and bear interest at a rate of 3.50% per year. Interest on the 2026 Notes is paid semi-annually on May 1 and November 1 of each year. In June 2022, the Company redeemed and extinguished its €350.0 million aggregate principal amount of Senior Unsecured Euro Notes due 2024 (the “2024 Notes”). The 2024 Notes were due on June 30, 2024 and bore interest at a rate of 4.375% per year. Interest on the 2024 Notes was paid semi-annually on June 30 and December 30 of each year. Issuance of 2027 Notes and redemption of 2024 Notes On June 22, 2022 (the “2027 Notes Closing Date”), Group completed its offering of $450.0 million aggregate principal amount of its 2027 Notes for issuance in a private placement not registered under the Securities Act of 1933, as amended (the “Securities Act”). The 2027 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers in an unregistered offering pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States in compliance with Regulation S under the Securities Act. The 2027 Notes were issued pursuant to, and are governed by, an indenture (the “2027 Notes Indenture”), dated the 2027 Notes Closing Date by and among Group, Holdings, the other guarantors named therein and the trustee. The 2027 Notes are jointly and severally guaranteed on a senior unsecured basis by each of the Company’s existing and future material domestic subsidiaries, subject to certain exceptions, and by the Company. Under certain circumstances, the Guarantors may be released from these Guarantees without the consent of the holders of the 2027 Notes. The net proceeds from the 2027 Notes offering were $446.0 million after deducting the $2.7 million discount and $1.3 million of offering expenses. The Company used a portion of the net proceeds from the 2027 Notes offering to redeem its 2024 Notes. The Company expects to use the remaining net proceeds from the 2027 Notes offering for general corporate purposes, and/or to repurchase the Company’s common stock or for special or recurring dividends to the Company’s stockholders. In connection with full redemption of its 2024 Notes, Group issued a conditional notice of full redemption to holders of the 2024 Notes, specifying June 30, 2022 as the redemption date (the “Redemption Date”). On the 2027 Notes Closing Date, Group satisfied and discharged its obligations under the 2024 Notes by depositing with a designee of the trustee for the 2024 Notes sufficient funds to pay the principal of the Premium (defined below) and accrued and unpaid interest on the Euro Notes to the Redemption Date. The 2024 Notes were issued in Euros and were reported in the Company’s reporting currency, US dollars, until they were extinguished and redeemed. Prior to the redemption of the 2024 Notes, the gains on foreign exchange on the 2024 Notes from converting Euros into US dollars were $31.6 million and $32.5 million for 2022 and 2021, respectively. Unless earlier redeemed or repurchased, the 2027 Notes will mature on June 15, 2027. Group may redeem some or all of the 2027 Notes at any time prior to June 15, 2024 at a price equal to 100% of the principal amount of the 2027 Notes, plus a “make-whole” premium, as set forth in the 2027 Notes Indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, or may redeem up to 40.0% of the 2027 Notes using proceeds of certain equity offerings completed prior to June 15, 2024 at 107.0% of the principal amount plus accrued and unpaid interest, if any. Thereafter, Group may redeem the 2027 Notes, in whole or in part, at a redemption price ranging from 103.5% of the aggregate principal amount of the 2027 Notes redeemed to par (depending on the year), in each case, as set forth in the 2027 Notes Indenture, plus accrued and unpaid interest, if any. On the Redemption Date, Group redeemed its €350.0 million of 2024 Notes at a price of 101.094% (€353.8 million or $375.2 million) of the principal amount (the “Premium”) plus €7.7 million ($8.1 million) of interest paid through June 30, 2022, the Redemption Date where the Premium reduced to 101.094%, for a total payment of €361.5 million ($383.4 million). Group entered into a short-term USD to Euro forward purchase agreement to mitigate the risk of foreign currency fluctuations. As a result of these transactions, the Company incurred a loss on debt extinguishment and redemption of $11.9 million. On the Redemption Date the 2024 Notes were valued at $365.8 million, resulting in a gain on foreign exchange of $31.6 million for the year ended December 31, 2022. Issuance of the 2026 Notes and redemption of 2022 Notes On May 7, 2021 (the “2026 Notes Closing Date”), Group completed an offering of $500.0 million aggregate principal amount of its 2026 Notes for issuance in a private placement exempt from registration under the Securities Act. The 2026 Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States in compliance with Regulation S under the Securities Act. The 2026 Notes were issued pursuant to, and are governed by, an indenture (the “2026 Notes Indenture”), dated the 2026 Notes Closing Date by and among Group, Holdings, the other guarantors named therein, the trustee and the collateral agent. The 2026 Notes are guaranteed on a senior secured basis, jointly and severally, by Group’s material domestic subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”). In addition, the 2026 Notes are guaranteed on a senior unsecured basis by Holdings (together with the Subsidiary Guarantors, the “Guarantors”). Under certain circumstances, the Guarantors may be released from these guarantees without the consent of the holders of the 2026 Notes. The net proceeds from the 2026 Notes offering were $496.9 million after deducting the $1.8 million discount and $1.3 million of offering expenses. Unless earlier redeemed or repurchased, the 2026 Notes will mature on May 1, 2026. Group may redeem some or all of the 2026 Notes at any time prior to February 1, 2026 at a price equal to 100% of the principal amount of the 2026 Notes, plus a “make-whole” premium as set forth in the 2026 Notes Indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. Thereafter, Group may redeem the 2026 Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2026 Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. In March 2021, Group redeemed $115.9 million aggregate principal amount of its 5.375% Senior Secured Notes due 2022 (the “2022 Notes”) at an average price of 103.2% of the principal amount plus $0.4 million of accrued and unpaid interest. As a result of this transaction, the Company incurred a loss on debt extinguishment and redemption of $3.9 million from the premium payment above par value, the amortization of the remaining unamortized notes cost and certain transaction expenses. In May 2021, Group redeemed $45.0 million aggregate principal amount of its 2022 Notes at par plus the “make-whole amount” as defined in the 2022 Notes indenture of $1.9 million ($41.41533 per $1,000 aggregate principal amount) plus accrued interest to, but excluding, the redemption date of $0.4 million ($9.70486 per aggregate principal amount). Following the $115.9 million and the $45.0 million redemptions there was $284.1 million aggregate principal amount of 2022 Notes remaining. On the 2026 Notes Closing Date, Group used the net proceeds from the offering of its 2026 Notes to fully satisfy and discharge its remaining obligations under its 2022 Notes. As a result of these transactions, the Company incurred an additional loss on debt extinguishment and redemption of $10.8 million from the payment of $11.5 million of interest on the 2022 Notes through December 1, 2021 and the amortization of the remaining unamortized notes costs and debt premium. Senior unsecured notes - €350.0 million 2024 Notes In June 2019, Group completed an offering of €135.0 million of 2024 Notes. The net proceeds from the June 2019 offering, after deducting offering expenses, were $152.1 million. In June 2020, Group completed an offering of €215.0 million of 2024 Notes. The net proceeds from the June 2020 offering, after deducting offering expenses, was $240.3 million. The 2024 Notes were guaranteed (the “Guarantees”) on a senior unsecured basis, jointly and severally, by the Company’s material domestic subsidiaries, subject to certain exceptions, and by the Company (collectively, the “Guarantors”). Under certain circumstances, the Guarantors could be released from these Guarantees without the consent of the holders of the 2024 Notes. The 2024 Notes bore interest at a rate of 4.375% per annum and was paid semi-annually in arrears on June 30 and December 30 of each year. The 2024 Notes were scheduled to mature on June 30, 2024. The 2024 Notes were issued in Euros and were reported in the Company’s reporting currency — US dollars. As of December 31, 2020, the Company’s €350.0 million of 2024 Notes were valued at $429.3 million. As of December 31, 2021, the 2024 Notes were valued at $397.0 million, resulting in a gain on foreign exchange of $32.5 million for the year ended December 31, 2021. In June 2022, Group redeemed the 2024 Notes, as noted above. Senior secured notes - $445.0 million 2022 Notes In February 2015, Group issued $250.0 million of 2022 Notes. In December 2016, the Company issued an additional $125.0 million par value of its 2022 Notes at a premium of 100.375% of par value. In August 2018, the Company issued an additional $70.0 million par value of its 2022 Notes at a premium of 101.75% of par value. The 2022 Notes were sold in private offerings for resale to qualified institutional buyers pursuant to SEC Rule 144A and were scheduled to mature on March 1, 2022. Interest accrued at 5.375% and was paid semi-annually in arrears on March 1 and September 1 of each year. The 2022 Notes were redeemable prior to December 1, 2021 (three months prior to the maturity date of the Notes) in whole or from time to time in part, at a redemption price equal to the sum of (1) 100% of the principal amount plus accrued and unpaid interest, if any, to, but not including, the redemption date, and (2) a make-whole premium, if any. The make-whole premium is the excess of (1) the net present value, on the redemption date, of the principal being redeemed or paid and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable if such redemption had not been made, over (2) the aggregate principal amount of the notes being redeemed or paid. Net present value shall be determined by discounting, on a semi-annual basis, such principal and interest at the reinvestment rate (as determined in the indenture governing the 2022 Notes) from the respective dates on which such principal and interest would have been payable if such redemption had not been made. In May 2021, Group redeemed the 2022 Notes, as noted above. Limitations under the indentures The 2027 Notes Indenture and the 2026 Notes Indenture (the “Indentures”), among other things, limit the Company’s ability to incur indebtedness; to pay dividends or make other distributions; to make certain investments and other restricted payments; to create liens; to consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; to incur restrictions on the ability of a subsidiary to pay dividends or make other payments; and to enter into certain transactions with its affiliates. There are certain exceptions to the limitations on the Company’s ability to incur indebtedness under the Indentures, including IRU agreements incurred in the normal course of business and any additional indebtedness if the Company’s consolidated leverage ratio, as defined in the Indentures, is less than 6.0 to 1.0 or the Company’s fixed charge coverage ratio, as defined in the Indentures, is 2.0 to 1.0 or greater. The Company can also incur unlimited liens (which can be used, together with capacity under the debt covenant, to incur additional secured indebtedness) if the Company’s consolidated secured leverage ratio, as defined in the Indentures, is than The aggregate future contractual maturities of long-term debt were as follows as of December 31, 2023 (in thousands): For the year ending December 31, 2024 $ — 2025 — 2026 500,000 2027 450,000 2028 — Thereafter — Total $ 950,000 Interest rate swap agreement As of December 31, 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 December 31, 2023 the fair value of the Swap Agreement was a net liability of $38.7 million of which $21.6 million is presented with accrued and other current liabilities and $17.1 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 years ended December 31, 2023, 2022 and 2021, the Company recorded gains (losses) related to the Swap Agreement of $13.4 million, ($43.1) million and ($9.0) million, respectively. The Company has made a $38.8 million deposit with the counterparty to the Swap Agreement. If the fair value of the Swap Agreement exceeds a net liability of $38.8 million the Company will be required to deposit additional funds with the counterparty equal to the net liability fair value. As of December 31, 2023, $38.7 million of the deposit was restricted and $0.1 million was unrestricted. Under the Swap Agreement, the Company pays the counterparty a semi-annual payment based upon overnight SOFR plus a contractual interest rate spread, and the counterparty pays the Company a semi-annual fixed 3.50% interest payment. The settlement payment is made each November and May until the Swap Agreement expires in February 2026. Under the first Swap Agreement settlement in November 2021, the Company received a payment of $0.6 million from the counterparty for a net cash savings of $0.6 million for the period from August 9, 2021 (the Swap Agreement inception date) to October 31, 2021. Under the settlement payment made in May 2022, the Company received a payment of $1.2 million from the counterparty for a net cash savings of $1.2 million for the period from November 1, 2021 to April 30, 2022. Under the settlement payment made in November 2022, the Company made a payment of $3.4 million to the counterparty for a net cash interest cost of $3.4 million for the period from May 1, 2022 to October 31, 2022. 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. |
Income taxes_
Income taxes: | 12 Months Ended |
Dec. 31, 2023 | |
Income taxes: | |
Income taxes: | 5. Income taxes: The components of income before income taxes consist of the following (in thousands): Years Ended December 31, 2023 2022 2021 Domestic $ 1,217,084 $ 34,784 $ 73,753 Foreign 2,393 (8,408) (2,333) Total income before income taxes $ 1,219,477 $ 26,376 $ 71,420 The income tax expense is comprised of the following (in thousands): Years Ended December 31, 2023 2022 2021 Current: Federal $ (3,638) $ — $ — State (11,868) (4,195) (3,116) Foreign (203) (496) (1,833) Deferred: Federal 53,393 (16,299) (17,959) State 16,086 (143) (2,348) Foreign 194 (97) 2,021 Total income tax benefit (expense) $ 53,964 $ (21,230) $ (23,235) Our consolidated temporary differences comprising our net deferred tax assets are as follows (in thousands): December 31, 2023 2022 Deferred Tax Assets: Net operating loss carry-forwards $ 244,306 $ 226,625 Interest expense limitation 34,828 12,331 Accrued liabilities and other 12,055 9,972 Operating leases 107,563 32,769 Total gross deferred tax assets 398,752 281,697 Valuation allowance (136,533) (140,895) 262,219 140,802 Deferred Tax Liabilities: Property & equipment 295,630 61,761 Intangibles 118,727 — Deferred consideration – IP Transit Services Agreement 114,844 — Investment in foreign subsidiaries 100,081 96,977 Right-of-use assets 104,435 29,710 Gross deferred tax liabilities 733,717 188,448 Net deferred tax liabilities $ 471,498 $ 47,646 The acquisition of Sprint was an asset acquisition for tax purposes. The Company recorded a net, deferred tax liability of $494 million which represents the difference in book basis and tax basis of the assets acquired and liabilities assumed. The Seller indemnified the Company for historical tax exposures and the estimated indemnification asset is not material. At each balance sheet date, the Company assesses the likelihood that it will be able to realize its deferred tax assets. The Company considers all available positive and negative evidence in assessing the need for a valuation allowance. The Company maintains a full valuation allowance against certain of its deferred tax assets consisting primarily of net operating loss carryforwards related to its foreign operations in Europe, South America, Oceania and Africa. As of December 31, 2023, the Company has combined net operating loss carry-forwards of $1.0 billion. This amount includes federal net operating loss carry-forwards in the United States of $23.5 million, net operating loss carry-forwards related to its European operations of $960.4 million and $19.5 million related to its other international operations. Section 382 of the Internal Revenue Code in the United States limits the utilization of net operating losses when ownership changes, as defined by that section, occur. The Company has performed an analysis of its Section 382 ownership changes and has determined that the utilization of certain of its net operating loss carryforwards in the United States is limited based on the annual Section 382 limitation and remaining carryforward period. Of the net operating losses available at December 31, 2023 in the United States $19.2 million are limited for use under Section 382. Net operating loss carryforwards outside of the United States totaling $979.9 million are not subject to limitations similar to Section 382. The net operating loss carryforwards in the United States will expire, if unused, in 2025. The net operating loss carry-forwards related to the Company’s European operations include $820.0 million that do not expire and $140.4 million that expire between 2024 and 2038. The Company has not provided for United States deferred income taxes or foreign withholding taxes on its undistributed earnings for certain non-US subsidiaries earnings or cumulative translation adjustments because these earnings and adjustments are intended to be permanently reinvested in operations outside the United States. It is not practical to determine the amount of the unrecognized deferred tax liability on such undistributed earnings or cumulative translation adjustments. In the normal course of business the Company takes positions on its tax returns that may be challenged by taxing authorities. The Company evaluates all uncertain tax positions to assess whether the position will more likely than not be sustained upon examination. If the Company determines that the tax position is not more likely than not to be sustained, the Company records a liability for the amount of the benefit that is not more likely than not to be realized when the tax position is settled. The Company does not have a material liability for uncertain tax positions at December 31, 2023 and does not expect that its liability for uncertain tax positions will materially increase during the twelve months ended December 31, 2024, however, actual changes in the liability for uncertain tax positions could be different than currently expected. If recognized, changes in the Company’s total unrecognized tax benefits would impact the Company’s effective income tax rate. The Company or one of its subsidiaries files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. The Company is subject to US federal tax and state tax examinations for years 2005 to 2023. The Company is subject to tax examinations in its foreign jurisdictions generally for years 2005 to 2023. The following is a reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements (in thousands). Years Ended December 31, 2023 2022 2021 Federal income tax expense at statutory rates $ (256,086) $ (5,537) $ (14,999) Effect of: State income taxes, net of federal benefit 3,722 (1,700) (4,123) Impact of foreign operations 868 (651) 715 Non-deductible expenses (2,783) (2,679) (1,365) Bargain purchase gain - Sprint Business acquisition 295,351 — — Tax effect of TCJA from foreign earnings (490) (360) (389) Changes in valuation allowance 13,382 (10,303) (3,074) Income tax benefit (expense) $ 53,964 $ (21,230) $ (23,235) |
Commitments and contingencies_
Commitments and contingencies: | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies: | |
Commitments and contingencies: | 6. Commitments and contingencies: Current and potential litigation In accordance with the accounting guidance for contingencies, the Company accrues its estimate of a contingent liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Where it is probable that a liability has been incurred and there is a range of expected loss for which no amount in the range is more likely than any other amount, the Company accrues at the low end of the range. The Company reviews its accruals at least quarterly and adjusts them to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. The Company has taken certain positions related to its obligations for leased circuits for which it is reasonably possible to result in a loss of up to $4.1 million in excess of the amount accrued at December 31, 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. Network equipment sites and data center facilities The Company enters into service agreements related to network equipment sites and for data center facilities. Future minimum annual payments under these arrangements are as follows (in thousands): For the year ending December 31, 2024 $ 38,572 2025 18,713 2026 15,169 2027 5,745 2028 2,262 Thereafter 496 $ 80,957 Expenses related to these arrangements were $29.1 million in 2023, $21.8 million in 2022 and $22.0 million in 2021. Short - term lease expense was $9.8 million for 2023. Unconditional purchase obligations Unconditional purchase obligations for equipment and services totaled $62.8 million at December 31, 2023. As of December 31, 2023, the Company had also committed to additional dark fiber IRU finance and operating lease agreements totaling $242.8 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 2024. Future minimum payments under these dark fiber IRU obligations are $28.9 million, $12.7 million, $11.0 million, $11.0 million and $11.0 million for the years ending December 31, 2024 to December 31, 2028, respectively, and $168.2 million, thereafter. Defined contribution plan The Company sponsors a 401(k) defined contribution plan that provides for a Company matching payment. The Company matching payments were paid in cash and were $2.3 million for 2023, $0.9 million for 2022 and $0.9 million for 2021. |
Stockholders' equity_
Stockholders' equity: | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' equity: | |
Stockholders' equity: | 7. Stockholders’ equity: Authorized shares The Company has 75.0 million shares of authorized $0.001 par value common stock and 10,000 authorized but unissued shares of $0.001 par value preferred stock. The holders of common stock are entitled to one vote per common share and, subject to any rights of any series of preferred stock, dividends may be declared and paid on the common stock when determined by the Company’s Board of Directors. Common stock buybacks The Company’s Board of Directors has approved $50.0 million for purchases of the Company’s common stock under a buyback program (the “Buyback Program”). At December 31, 2023, there was $30.4 million remaining for purchases under the Buyback Program.There were no purchases of common stock in 2023, 2022 or 2021. Dividends on common stock Dividends are recorded as a reduction to retained earnings. Dividends on unvested restricted shares of common stock are paid as the awards vest. 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 Corporate Law of the State of Delaware distributions may be restricted including a restriction that distributions, including stock purchases and dividends, do not result in an impairment of a corporation’s capital, as defined under Delaware Law. The indentures governing the Company’s notes limit the Company’s ability to return cash to its stockholders. |
Stock option and award plan_
Stock option and award plan: | 12 Months Ended |
Dec. 31, 2023 | |
Stock option and award plan: | |
Stock option and award plan: | 8. Stock option and award plan: Incentive award plan The Company grants restricted stock and options for common stock under its award plan, as amended (the “Award Plan”). Stock options granted under the Award Plan generally vest over a four-year period and have a term of ten years. Grants of shares of restricted stock granted under the Award Plan generally vest over periods ranging from three The accounting for equity-based compensation expense requires the Company to make estimates and judgments that affect its financial statements. These estimates for stock options include the following. Expected Dividend Yield—The Company uses an expected dividend yield based upon expected annual dividends and the Company’s stock price. Expected Volatility—The Company uses its historical volatility for a period commensurate with the expected term of the option. Risk-Free Interest Rate—The Company uses the zero coupon US Treasury rate during the quarter having a term that most closely resembles the expected term of the option. Expected Term of the Option—The Company estimates the expected life of the option term by analyzing historical stock option exercises. Forfeiture Rates—The Company estimates its forfeiture rate based on historical data with further consideration given to the class of employees to whom the options or shares were granted. The weighted-average per share grant date fair value of options was $12.81 in 2023, $10.73 in 2022 and $12.22 in 2021. The following assumptions were used for determining the fair value of options granted in the three years ended December 31, 2023: Years Ended December 31, Black-Scholes Assumptions 2023 2022 2021 Dividend yield 5.8 % 5.9 % 4.6 % Expected volatility 33.4 % 33.1 % 33.4 % Risk-free interest rate 3.8 % 3.0 % 0.6 % Expected life of the option term (in years) 4.1 4.1 4.2 Stock option activity under the Company’s Award Plan during the year ended December 31, 2023, was as follows: Number of Weighted-Average Options Exercise Price Outstanding at December 31, 2022 167,991 $ 58.85 Granted 105,508 $ 64.90 Cancelled and expired (49,651) $ 64.19 Exercised—intrinsic value $0.5 million; cash received $1.2 million (25,073) $ 48.94 Outstanding at December 31, 2023—$2.8 million intrinsic value and 7.6 years weighted-average remaining contractual term 198,775 $ 61.97 Exercisable at December 31, 2023—$1.6 million intrinsic value and 6.1 years weighted-average remaining contractual term 96,351 $ 59.64 Expected to vest—$2.5 million intrinsic value and 7.3 years weighted-average remaining contractual term 167,894 $ 61.59 A summary of the Company’s non-vested restricted stock awards as of December 31, 2023 and the changes during the year ended December 31, 2023 are as follows: Weighted-Average Grant Date Non-vested awards Shares Fair Value Non-vested at December 31, 2022 1,164,021 $ 66.22 Granted 634,056 $ 60.05 Vested (472,564) $ 66.84 Forfeited (63,890) $ 66.01 Non-vested at December 31, 2023 1,261,623 $ 62.89 The weighted average per share grant date fair value of restricted stock granted was $60.05 in 2023 (0.6 million shares), $66.08 in 2022 (0.4 million shares) and $64.59 in 2021 (0.5 million shares). The fair value was determined using the quoted market price of the Company’s common stock on the date of grant. Valuations were obtained to determine the fair value for the shares granted to the Company’s CEO that are subject to the total shareholder return of the Company’s common stock compared to the total shareholder return of the Nasdaq Telecommunications Index. Years Ended December 31, Additional Award Plan Information – Related to Stock Options & Restricted Stock (thousands) 2023 2022 2021 Equity-based compensation expense $ 26,924 $ 24,439 $ 26,822 Income tax benefit related to stock options and restricted stock 3,307 2,489 6,314 Capitalized compensation expense related to stock options and restricted stock 3,541 2,277 3,222 Intrinsic value of stock options exercised 456 305 881 Fair value of shares of restricted stock vested 30,113 25,792 35,749 As of December 31, 2023, there was $38.1 million of total unrecognized compensation cost related to non-vested equity-based compensation awards. That cost is expected to be recognized over a weighted average period of 2.0 years. |
Related party transactions_
Related party transactions: | 12 Months Ended |
Dec. 31, 2023 | |
Related party transactions: | |
Related party transactions: | 9. Related party transactions: 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 $2.8 million in 2023, $1.7 million in 2022 and $1.7 million in 2021 for rent and related costs (including taxes and utilities) for this lease for these leases. |
Geographic information_
Geographic information: | 12 Months Ended |
Dec. 31, 2023 | |
Geographic information: | |
Geographic information: | 10. Geographic information: Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing the Company’s performance. The Company has one operating segment. Revenues are attributed to regions based on where the services are provided. Below are the Company’s service revenues and long lived assets by geographic region (in thousands): Year Ended December 31, 2023 On-net Off-net Non-core Total North America $ 406,866 $ 367,210 $ 28,614 $ 802,690 Europe 88,310 19,913 147 108,370 Oceania 15,769 5,587 71 21,427 South America 6,957 684 8 7,649 Africa 687 99 — 786 Total $ 518,589 $ 393,493 $ 28,840 $ 940,922 Year Ended December 31, 2022 On-net Off-net Non-core Total North America $ 350,256 $ 128,486 $ 619 $ 479,361 Europe 82,451 16,144 49 98,644 Oceania 13,689 1,271 3 14,963 South America 5,656 174 2 5,832 Africa 727 77 — 804 Total $ 452,779 $ 146,152 $ 673 $ 599,604 Year Ended December 31, 2021 On-net Off-net Non-core Total North America $ 340,107 $ 127,383 $ 502 $ 467,992 Europe 87,929 17,729 72 105,730 Oceania 10,197 1,094 1 11,292 South America 4,102 173 1 4,276 Africa 503 4 — 507 Total $ 442,838 $ 146,383 $ 576 $ 589,797 December 31, December 31, 2023 2022 Long lived assets, net North America $ 1,959,704 $ 397,434 Europe and other 163,034 147,005 Total $ 2,122,738 $ 544,439 |
Quarterly financial information
Quarterly financial information (unaudited): | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly financial information (unaudited): | |
Quarterly financial information (unaudited): | 11. Quarterly financial information (unaudited): Three months ended March 31, June 30, September 30, December 31, 2023 2023 2023 2023 (in thousands, except share and per share amounts) Service revenue $ 153,588 $ 239,806 $ 275,429 $ 272,099 Network operations, including equity-based compensation expense 58,638 137,502 173,594 174,550 Operating income (loss) 24,312 (34,604) (50,558) (68,478) Net income (loss) (1) 6,148 1,123,863 (56,723) 200,153 Net income (loss) per common share - basic 0.13 23.84 (1.20) 4.23 Net income (loss) per common share - diluted 0.13 23.65 (1.20) 4.17 Weighted-average number of common shares—basic 47,037,091 47,137,822 47,227,338 47,353,291 Weighted-average number of common shares—diluted 47,381,226 47,526,207 47,227,338 48,037,841 Three months ended March 31, June 30, September 30, December 31, 2022 2022 2022 2022 (in thousands, except share and per share amounts) Service revenue $ 149,175 $ 148,450 $ 150,000 $ 151,979 Network operations, including equity-based compensation expense 57,449 56,514 57,220 56,972 Operating income 28,784 29,566 28,095 27,311 Net income ( loss) (2) 1,137 11,164 (8,007) 851 Net income (loss) per common share - basic 0.02 0.24 (0.17) 0.02 Net income (loss) per common share - diluted 0.02 0.24 (0.17) 0.02 Weighted-average number of common shares—basic 46,575,848 46,691,142 46,736,742 46,885,512 Weighted-average number of common shares—diluted 46,929,191 47,029,446 46,736,742 47,196,890 (1) Included in net income for the three months ended June 30, 2023, September 30, 2023 and December 31, 2023 are gains (losses) on the bargain purchase of the Sprint Business of $1.2 billon, ( $3.3 )million, and $254.0 million, respectively. Included in net income (loss) for the three months ended March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023 are non - cash (charges) benefits from changes in the valuation of the Swap Agreement of $1.8 million, ( $1.3 ) million, ( $4.8 ) million and $17.7 million, respectively. (2) Included in net income for the three months ended March 31, 2022 and June 30, 2022, are unrealized gains on foreign exchange on the 2024 Notes of $8.0 million and $23.5 million, respectively. Included in net income (loss) for the three months ended June 30, 2022, is a loss on debt extinguishment and redemption on the 2024 Notes of $11.9 million. Included in net income (loss) for the three months ended March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022 are non-cash charges (benefit) from changes in the valuation of the Swap Agreement of $21.3 million, $7.5 million, $16.9 million and ( $2.6 ) million, respectively. |
Subsequent Events_
Subsequent Events: | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events: | |
Subsequent Events: | 12. Subsequent Events: Dividend On February 28, 2024, the Company’s Board of Directors approved the payment of a quarterly dividend of $0.965 per common share. The dividend for the first quarter of 2024 will be paid to holders of record on March 15, 2024. This estimated $45.7 million dividend payment is expected to be made on April 9, 2024. |
Schedule II VALUATION AND QUALI
Schedule II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2023 | |
Schedule II VALUATION AND QUALIFYING ACCOUNTS | |
Schedule II VALUATION AND QUALIFYING ACCOUNTS | Schedule II COGENT COMMUNICATIONS HOLDINGS, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (in thousands ) Balance at Charged to Balance at Beginning of Costs and End of Description Period Expenses (Deductions) Period Deferred tax valuation allowance Year ended December 31, 2021 $ 150,589 $ 4,918 $ (22,707) $ 132,800 Year ended December 31, 2022 $ 132,800 $ 16,583 $ (8,488) $ 140,895 Year ended December 31, 2023 $ 140,895 $ 10,486 $ (14,848) $ 136,533 |
Description of the business a_2
Description of the business and summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Description of the business and summary of significant accounting policies: | |
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 the Company’s consolidated financial statements as a result of the adoption. |
Principles of consolidation | Principles of consolidation The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and all of its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles 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. |
Allowance for credit losses | Allowance for credit losses The Company establishes an allowance for credit losses and other sales credit adjustments related to its trade receivables. Trade receivables are recorded at the invoiced amount and can bear interest. Allowances for sales credits are established through a reduction of revenue, while allowances for credit losses are established through a charge to selling, general, and administrative expenses as bad debt expense. The Company assesses the adequacy of these reserves by evaluating factors, such as the length of time individual receivables are past due, historical collection experience, and changes in the credit worthiness of its customers. The Company also assesses the ability of specific customers to meet their financial obligations and establishes specific allowances related to these customers. If circumstances relating to specific customers change or economic conditions change such that the Company’s past collection experience and assessment of the economic environment are no longer appropriate, the Company’s estimate of the recoverability of its trade receivables could be impacted. Accounts receivable balances are written off against the allowance for credit losses after all means of internal collection activities have been exhausted and the potential for recovery is considered remote. The Company uses third-party collection services to continue to seek collection for it’s written off accounts receivable. 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 Balance at Provision for Write offs Balance at Beginning Expected Credit Charged Against End of Description of Period Losses Allowance Period Allowance for credit losses (deducted from accounts receivable) Year ending December 31, 2023 $ 2,303 $ 10,475 $ (9,101) $ 3,677 Year ending December 31, 2022 $ 1,510 $ 4,318 $ (3,525) $ 2,303 Year ending December 31, 2021 $ 1,921 $ 5,595 $ (6,006) $ 1,510 The current-period provision for expected credit losses is net of bad debt recoveries of $1.9 million, $1.9 million and $2.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
Leases | Leases In February 2016, the FASB issued ASU No. 2016-02, Leases Year Year Ended Ended December 31, 2023 December 31, 2022 Finance lease cost amortization of right-of-use assets $ 64,698 $ 28,915 Interest expense on finance lease liabilities 34,940 23,317 Operating lease cost 92,763 18,331 Total lease costs 192,401 70,563 Other lease information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases (33,080) (23,317) Operating cash flows from operating leases (93,924) (18,836) Financing cash flows from finance leases (77,362) (45,472) Right-of-use assets obtained in exchange for new finance lease liabilities 232,468 107,875 Right-of-use assets obtained in exchange for new operating lease liabilities 13,682 11,168 Weighted-average remaining lease term — finance leases (in years) 11.5 13.5 Weighted-average remaining lease term — operating leases (in years) 12.2 16.6 Weighted average discount rate — finance leases 7.6 % 8.6 % Weighted average discount rate — operating leases 8.1 % 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 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 December 31, 2023, the Company had committed to additional dark fiber IRU lease agreements totaling $242.8 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, rights-of-way, dark fiber and certain data center facilities under operating leases. 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 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 and deferred rent liabilities for facilities operating leases are presented with, and netted against, the right-of-use leased asset. Lease expense for lease payments is recognized on a straight-line basis over the term of the lease. The future minimum payments under these operating lease and finance lease agreements are as follows (in thousands): Operating Finance For the twelve months ending December 31, Leases Leases 2024 $ 79,272 $ 100,357 2025 62,443 95,370 2026 57,600 91,955 2027 51,511 41,469 2028 48,154 40,198 Thereafter 328,298 382,361 Total minimum lease obligations 627,278 751,710 Less—amounts representing interest (229,221) (267,195) Present value of minimum lease obligations 398,057 484,515 Current maturities (67,962) (64,594) Lease obligations, net of current maturities $ 330,095 $ 419,921 |
Revenue recognition | Revenue recognition The Company recognizes revenue under ASU No. 2014-09, Revenue from Contracts with Customers The Company’s service offerings consist of on-net and off-net telecommunications services. Fixed fees are billed monthly in advance and usage fees are billed monthly in arrears. Amounts billed are due upon receipt and contract lengths range from 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 customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date. To achieve this core principle, the Company follows the following five steps: 1) Identification of the contract, or contracts with a customer; 2) Identification of the performance obligations in the contract; 3) Determination of the transaction price; 4) Allocation of the transaction price to the performance obligations in the contract; and 5) Recognition of revenue when, or as, the Company satisfies a performance obligation. Fees billed in connection with customer installations are deferred (as deferred revenue) and recognized as noted above. 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 termination fees. The Company recognizes revenue for termination fees as they are collected. Service revenue recognized from amounts in deferred revenue (contract liabilities) at the beginning of the period during the years ended December 31, 2023, 2022 and 2021 was $4.9 million, $5.0 million and $4.6 million, respectively. Amortization expense for contract costs for the years ended December 31, 2023, 2022 and 2021 was $19.3 million, $19.4 million and $18.4 million, respectively. |
Gross receipts taxes, universal service fund and other surcharges | Gross receipts taxes, universal service fund and other surcharges Revenue recognition standards include guidance relating to taxes or surcharges assessed by a governmental authority that are directly imposed on a revenue-producing transaction between a seller and a customer and may include, but are not limited to, gross receipts taxes, excise taxes, Universal Service Fund fees and certain state regulatory fees. Such charges may be presented gross or net based upon the Company’s accounting policy election. The Company records certain excise taxes and surcharges on a gross basis and includes them in its revenues and costs of network operations. Excise taxes and surcharges billed to customers and recorded on a gross basis (as service revenue and network operations expense) were $50.2 million, $15.4 million, and $18.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
Network operations | Network operations Network operations expenses include the costs of personnel and related operating expenses associated with service delivery, network management, and customer support, network facilities costs, fiber and equipment maintenance fees, leased circuit costs, access fees paid to building owners and certain excise taxes and surcharges recorded on a gross basis. The Company estimates its accruals for any disputed leased circuit obligations based upon the nature and age of the dispute. Network operations costs are impacted by the timing and amounts of disputed circuit costs. The Company generally records these disputed amounts when billed by the vendor and reverses these amounts when the vendor credit has been received or the dispute has otherwise been resolved. The Company does not allocate depreciation and amortization expense to its network operations expense. |
Foreign currency translation adjustment and comprehensive income | Foreign currency translation adjustment and comprehensive income The consolidated financial statements of the Company’s non-US operations are translated into US dollars using the period-end foreign currency exchange rates for assets and liabilities and the average foreign currency exchange rates for revenues and expenses. Gains and losses on translation of the accounts are accumulated and reported as a component of other comprehensive income in stockholders’ equity. The Company’s only components of “other comprehensive income” are currency translation adjustments for all periods presented. The Company considers the majority of its investments in its foreign subsidiaries to be long-term in nature. The Company’s foreign exchange transaction gains (losses) are included within interest income and other on the consolidated statements of comprehensive income. |
Financial instruments | Financial instruments The Company considers all highly liquid investments with an original maturity of three months or less at purchase to be cash equivalents. The Company determines the appropriate classification of its investments at the time of purchase and evaluates such designation at each balance sheet date. At December 31, 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 December 31, 2023, the fair value of the Company’s $500.0 million senior secured notes due 2026 was $477.5 million, the fair value of the Company’s $450.0 million senior unsecured notes due 2027 was $451.1 million and the estimated fair value of the Company’s Swap Agreement was $38.7 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 4, and was $38.7 million as of December 31, 2023. Additional cash may be further restricted to maintain our interest rate swap instrument as interest rates fluctuate and margin requirements change. The Company does not use derivative financial instruments for trading purposes. |
Concentrations of credit risk | Concentrations of credit risk The Company’s assets that are exposed to credit risk consist of its cash and cash equivalents, other assets and accounts receivable. As of December 31, 2023 and 2022, the Company’s cash equivalents were invested in demand deposit accounts, overnight investments and money market funds. The Company places its cash equivalents in instruments that meet high-quality credit standards as specified in the Company’s investment policy guidelines. Accounts receivable are due from customers located in major metropolitan areas in the United States, Europe, Canada, Mexico, South America, Oceania and Africa. Receivables from the Company’s net-centric (wholesale) customers are generally subject to a higher degree of credit risk than the Company’s corporate customers. |
Property and equipment | Property and equipment Property and equipment are recorded at cost and depreciated once deployed using the straight-line method over the estimated useful lives of the assets. Useful lives are determined based on historical usage with consideration given to technological changes and trends in the industry that could impact the asset utilization. System infrastructure costs include the capitalized compensation costs of employees directly involved with construction activities and costs incurred by third-party contractors. Assets and liabilities under finance leases are recorded at the lesser of the present value of the aggregate future minimum lease payments or the fair value of the assets under lease. Leasehold improvements include costs associated with building improvements and customer installation costs. The Company determines the number of renewal option periods, if any, included in the lease term for purposes of amortizing leasehold improvements and the lease term of its finance leases based upon its assessment at the inception of the lease for which the failure to renew the lease imposes a penalty on the Company in such amount that a renewal appears to be reasonably assured. Expenditures for maintenance and repairs are expensed as incurred. Depreciation and amortization periods are as follows: Type of asset Depreciation or amortization period Indefeasible rights of use (IRUs) Shorter of useful life or the IRU lease agreement; generally 15 to 20 years Network equipment 2 to 8 years Leasehold improvements Shorter of lease term, including reasonably assured renewal periods, or useful life Software 5 years Owned buildings 16 to 40 years Office and other equipment 2 to 7 years Asset retirement obligations 4 years System infrastructure 2 to 14 years |
Long-lived assets | Long-lived assets The Company’s long-lived assets include property and equipment. These long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment is determined by comparing the carrying value of these long-lived assets to management’s probability weighted estimate of the future undiscounted cash flows expected to result from the use of the assets. In the event an impairment exists, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset, which would be determined by using quoted market prices or valuation techniques such as the discounted present value of expected future cash flows, appraisals, or other pricing models. In the event there are changes in the planned use of the Company’s long-term assets or the Company’s expected future undiscounted cash flows are reduced significantly, the Company’s assessment of its ability to recover the carrying value of these assets could change. |
Equity-based compensation | Equity-based compensation The Company recognizes compensation expense for its share-based payments granted to its employees based on their grant date fair values with the expense being recognized on a straight-line basis over the requisite service period. The Company begins recording equity-based compensation expense related to performance awards when it is considered probable that the performance conditions will be met and for market-based awards compensation cost is recognized if the service condition is satisfied even if the market condition is not satisfied. Equity-based compensation expense is recognized in the statements of comprehensive income in a manner consistent with the classification of the employee’s salary and other compensation. |
Income taxes | Income taxes The Company’s deferred tax assets or liabilities are computed based upon the differences between financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. Deferred income tax expenses or benefits are based upon the changes in the assets or liability from period to period. At each balance sheet date, the Company assesses the likelihood that it will be able to realize its deferred tax assets. Valuation allowances are established when management determines that it is “more likely than not” that some portion or all of the deferred tax asset may not be realized. The Company considers all available positive and negative evidence in assessing the need for a valuation allowance including its historical operating results, ongoing tax planning, and forecasts of future taxable income, on a jurisdiction by jurisdiction basis. The Company reduces its valuation allowance if the Company concludes that it is “more likely than not” that it would be able to realize its deferred tax assets. Management determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. Once it is determined that a position meets this recognition threshold, the position is measured to determine the amount of benefit to be recognized in the financial statements. The Company adjusts its estimated liabilities for uncertain tax positions periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of its income tax expense. |
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 the diluted weighted average shares: Year Ended Year Ended Year Ended December 31, December 31, December 31, 2023 2022 2021 Weighted average common shares—basic 47,373,361 46,875,992 46,419,180 Dilutive effect of stock options 15,380 16,064 34,007 Dilutive effect of restricted stock 448,771 315,242 510,733 Weighted average common shares—diluted 47,837,512 47,207,298 46,963,920 The following details unvested shares of restricted common stock as well as the anti-dilutive effects of stock options and restricted stock awards outstanding: December 31, December 31, December 31, 2023 2022 2021 Unvested shares of restricted common stock 1,261,623 1,164,021 1,253,321 Anti-dilutive options for common stock 118,985 105,556 45,809 Anti-dilutive shares of restricted common stock 11,365 541,608 86,619 |
Description of the business a_3
Description of the business and summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Description of the business and summary of significant accounting policies: | |
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, net of severance reimbursements (a) $ 49,865 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) 607,221 (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. Includes an offsetting $16.2 million in severance reimbursement payments received from the Seller recorded as a measurement period adjustment during the fourth quarter. A final determination of the Working Capital Adjustment is expected by the end of the first quarter of 2024. (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 four equal installments in months 55-58 from the Closing Date and is recorded at its present value resulting in a discount of $15.6 million. During the third quarter of 2023, the Short-term Lease Payment was reduced by $4.8 million. A final determination of the Short-term Lease Payment is expected by the end of the first quarter of 2024. (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 fair values for each major class of assets acquired and liabilities assumed at the closing 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 965,715 Right-of-use leased assets 311,022 Intangible assets 474,000 Deposits and other assets 7,521 Total assets $ 1,868,057 Liabilities Current liabilities: Accounts payable $ 13,313 Accrued and other current liabilities 36,628 Current maturities, operating lease liabilities 74,562 Current maturities, finance lease liabilities 39,559 Total current liabilities 164,062 Operating lease liabilities, net of current maturities 251,573 Finance lease liabilities, net of current maturities 121,342 Deferred income tax liabilities 496,500 Other long-term liabilities 35,366 Total liabilities 1,068,843 Fair value of net assets acquired $ 799,214 Gain on bargain purchase Fair value of net assets acquired $ 799,214 Total net consideration to be received from the Seller, net of discounts - see table above 607,221 Gain on bargain purchase $ 1,406,435 |
Schedule of proforma information | Year Year Ended Ended (In thousands) (unaudited) December 31, 2023 December 31, 2022 Service revenue $ 1,121,680 $ 1,170,904 Operating loss from continuing operations (304,931) (713,576) Net income 1,108,873 596,762 |
Schedule of allowance for credit losses | Current-period Balance at Provision for Write offs Balance at Beginning Expected Credit Charged Against End of Description of Period Losses Allowance Period Allowance for credit losses (deducted from accounts receivable) Year ending December 31, 2023 $ 2,303 $ 10,475 $ (9,101) $ 3,677 Year ending December 31, 2022 $ 1,510 $ 4,318 $ (3,525) $ 2,303 Year ending December 31, 2021 $ 1,921 $ 5,595 $ (6,006) $ 1,510 |
Schedule of lease cost | In February 2016, the FASB issued ASU No. 2016-02, Leases Year Year Ended Ended December 31, 2023 December 31, 2022 Finance lease cost amortization of right-of-use assets $ 64,698 $ 28,915 Interest expense on finance lease liabilities 34,940 23,317 Operating lease cost 92,763 18,331 Total lease costs 192,401 70,563 Other lease information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases (33,080) (23,317) Operating cash flows from operating leases (93,924) (18,836) Financing cash flows from finance leases (77,362) (45,472) Right-of-use assets obtained in exchange for new finance lease liabilities 232,468 107,875 Right-of-use assets obtained in exchange for new operating lease liabilities 13,682 11,168 Weighted-average remaining lease term — finance leases (in years) 11.5 13.5 Weighted-average remaining lease term — operating leases (in years) 12.2 16.6 Weighted average discount rate — finance leases 7.6 % 8.6 % Weighted average discount rate — operating leases 8.1 % 5.4 % |
Schedule of future minimum payments under these operating lease and finance lease agreements | The future minimum payments under these operating lease and finance lease agreements are as follows (in thousands): Operating Finance For the twelve months ending December 31, Leases Leases 2024 $ 79,272 $ 100,357 2025 62,443 95,370 2026 57,600 91,955 2027 51,511 41,469 2028 48,154 40,198 Thereafter 328,298 382,361 Total minimum lease obligations 627,278 751,710 Less—amounts representing interest (229,221) (267,195) Present value of minimum lease obligations 398,057 484,515 Current maturities (67,962) (64,594) Lease obligations, net of current maturities $ 330,095 $ 419,921 |
Schedule of depreciation and amortization periods | Type of asset Depreciation or amortization period Indefeasible rights of use (IRUs) Shorter of useful life or the IRU lease agreement; generally 15 to 20 years Network equipment 2 to 8 years Leasehold improvements Shorter of lease term, including reasonably assured renewal periods, or useful life Software 5 years Owned buildings 16 to 40 years Office and other equipment 2 to 7 years Asset retirement obligations 4 years System infrastructure 2 to 14 years |
Schedule of diluted weighted average shares | Year Ended Year Ended Year Ended December 31, December 31, December 31, 2023 2022 2021 Weighted average common shares—basic 47,373,361 46,875,992 46,419,180 Dilutive effect of stock options 15,380 16,064 34,007 Dilutive effect of restricted stock 448,771 315,242 510,733 Weighted average common shares—diluted 47,837,512 47,207,298 46,963,920 |
Schedule of details unvested shares of restricted common stock as well as the anti-dilutive effects of stock options and restricted stock awards outstanding | December 31, December 31, December 31, 2023 2022 2021 Unvested shares of restricted common stock 1,261,623 1,164,021 1,253,321 Anti-dilutive options for common stock 118,985 105,556 45,809 Anti-dilutive shares of restricted common stock 11,365 541,608 86,619 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment: | |
Schedule of property and equipment | Property and equipment consisted of the following (in thousands): December 31, 2023 2022 Owned assets: Network equipment $ 983,996 $ 673,479 Leasehold improvements 297,785 263,861 System infrastructure 607,060 171,694 Software 12,747 11,277 Office and other equipment 26,656 22,071 Buildings and improvements 146,402 6,140 Land 135,877 101 Asset retirement obligations 34,951 — 2,245,474 1,148,623 Less—Accumulated depreciation and amortization (1,124,385) (949,277) 1,121,089 199,346 Assets under finance leases: IRUs 701,902 566,283 Less—Accumulated depreciation and amortization (285,174) (221,199) 416,728 345,084 Property and equipment, net $ 1,537,817 $ 544,430 |
Accrued and other liabilities (
Accrued and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued and other liabilities: | |
Schedule of accrued and other current liabilities | Accrued and other current liabilities consist of the following (in thousands): December 31, 2023 2022 Operating accruals $ 31,254 $ 19,488 Interest rate swap agreement - current portion 21,568 20,267 Deferred revenue—current portion 6,549 4,911 Payroll and benefits 13,696 11,880 Taxes—non-income based 41,820 2,687 Interest 5,636 4,656 Total $ 120,523 $ 63,889 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-term debt: | |
Schedule of aggregate future contractual maturities of long-term debt | The aggregate future contractual maturities of long-term debt were as follows as of December 31, 2023 (in thousands): For the year ending December 31, 2024 $ — 2025 — 2026 500,000 2027 450,000 2028 — Thereafter — Total $ 950,000 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income taxes: | |
Schedule of the components of income before income taxes | The components of income before income taxes consist of the following (in thousands): Years Ended December 31, 2023 2022 2021 Domestic $ 1,217,084 $ 34,784 $ 73,753 Foreign 2,393 (8,408) (2,333) Total income before income taxes $ 1,219,477 $ 26,376 $ 71,420 |
Schedule of income tax expense | The income tax expense is comprised of the following (in thousands): Years Ended December 31, 2023 2022 2021 Current: Federal $ (3,638) $ — $ — State (11,868) (4,195) (3,116) Foreign (203) (496) (1,833) Deferred: Federal 53,393 (16,299) (17,959) State 16,086 (143) (2,348) Foreign 194 (97) 2,021 Total income tax benefit (expense) $ 53,964 $ (21,230) $ (23,235) |
Schedule of net deferred tax assets | Our consolidated temporary differences comprising our net deferred tax assets are as follows (in thousands): December 31, 2023 2022 Deferred Tax Assets: Net operating loss carry-forwards $ 244,306 $ 226,625 Interest expense limitation 34,828 12,331 Accrued liabilities and other 12,055 9,972 Operating leases 107,563 32,769 Total gross deferred tax assets 398,752 281,697 Valuation allowance (136,533) (140,895) 262,219 140,802 Deferred Tax Liabilities: Property & equipment 295,630 61,761 Intangibles 118,727 — Deferred consideration – IP Transit Services Agreement 114,844 — Investment in foreign subsidiaries 100,081 96,977 Right-of-use assets 104,435 29,710 Gross deferred tax liabilities 733,717 188,448 Net deferred tax liabilities $ 471,498 $ 47,646 |
Schedule of reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements | The following is a reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements (in thousands). Years Ended December 31, 2023 2022 2021 Federal income tax expense at statutory rates $ (256,086) $ (5,537) $ (14,999) Effect of: State income taxes, net of federal benefit 3,722 (1,700) (4,123) Impact of foreign operations 868 (651) 715 Non-deductible expenses (2,783) (2,679) (1,365) Bargain purchase gain - Sprint Business acquisition 295,351 — — Tax effect of TCJA from foreign earnings (490) (360) (389) Changes in valuation allowance 13,382 (10,303) (3,074) Income tax benefit (expense) $ 53,964 $ (21,230) $ (23,235) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies: | |
Schedule of future minimum annual payments under operating leases, network equipment sites and data center facilities | The Company enters into service agreements related to network equipment sites and for data center facilities. Future minimum annual payments under these arrangements are as follows (in thousands): For the year ending December 31, 2024 $ 38,572 2025 18,713 2026 15,169 2027 5,745 2028 2,262 Thereafter 496 $ 80,957 |
Stock option and award plan_ (T
Stock option and award plan: (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock option and award plan: | |
Schedule of assumptions used for determining the fair value of options granted | Years Ended December 31, Black-Scholes Assumptions 2023 2022 2021 Dividend yield 5.8 % 5.9 % 4.6 % Expected volatility 33.4 % 33.1 % 33.4 % Risk-free interest rate 3.8 % 3.0 % 0.6 % Expected life of the option term (in years) 4.1 4.1 4.2 |
Schedule of stock option activity | Number of Weighted-Average Options Exercise Price Outstanding at December 31, 2022 167,991 $ 58.85 Granted 105,508 $ 64.90 Cancelled and expired (49,651) $ 64.19 Exercised—intrinsic value $0.5 million; cash received $1.2 million (25,073) $ 48.94 Outstanding at December 31, 2023—$2.8 million intrinsic value and 7.6 years weighted-average remaining contractual term 198,775 $ 61.97 Exercisable at December 31, 2023—$1.6 million intrinsic value and 6.1 years weighted-average remaining contractual term 96,351 $ 59.64 Expected to vest—$2.5 million intrinsic value and 7.3 years weighted-average remaining contractual term 167,894 $ 61.59 |
Schedule of non-vested restricted stock awards | Weighted-Average Grant Date Non-vested awards Shares Fair Value Non-vested at December 31, 2022 1,164,021 $ 66.22 Granted 634,056 $ 60.05 Vested (472,564) $ 66.84 Forfeited (63,890) $ 66.01 Non-vested at December 31, 2023 1,261,623 $ 62.89 Years Ended December 31, Additional Award Plan Information – Related to Stock Options & Restricted Stock (thousands) 2023 2022 2021 Equity-based compensation expense $ 26,924 $ 24,439 $ 26,822 Income tax benefit related to stock options and restricted stock 3,307 2,489 6,314 Capitalized compensation expense related to stock options and restricted stock 3,541 2,277 3,222 Intrinsic value of stock options exercised 456 305 881 Fair value of shares of restricted stock vested 30,113 25,792 35,749 |
Geographic information_ (Tables
Geographic information: (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Geographic information: | |
Schedule of service revenue by geographic region and product class and long lived assets by geographic region | Year Ended December 31, 2023 On-net Off-net Non-core Total North America $ 406,866 $ 367,210 $ 28,614 $ 802,690 Europe 88,310 19,913 147 108,370 Oceania 15,769 5,587 71 21,427 South America 6,957 684 8 7,649 Africa 687 99 — 786 Total $ 518,589 $ 393,493 $ 28,840 $ 940,922 Year Ended December 31, 2022 On-net Off-net Non-core Total North America $ 350,256 $ 128,486 $ 619 $ 479,361 Europe 82,451 16,144 49 98,644 Oceania 13,689 1,271 3 14,963 South America 5,656 174 2 5,832 Africa 727 77 — 804 Total $ 452,779 $ 146,152 $ 673 $ 599,604 Year Ended December 31, 2021 On-net Off-net Non-core Total North America $ 340,107 $ 127,383 $ 502 $ 467,992 Europe 87,929 17,729 72 105,730 Oceania 10,197 1,094 1 11,292 South America 4,102 173 1 4,276 Africa 503 4 — 507 Total $ 442,838 $ 146,383 $ 576 $ 589,797 December 31, December 31, 2023 2022 Long lived assets, net North America $ 1,959,704 $ 397,434 Europe and other 163,034 147,005 Total $ 2,122,738 $ 544,439 |
Quarterly financial informati_2
Quarterly financial information (unaudited): (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Quarterly financial information (unaudited): | |
Schedule of quarterly financial information | Three months ended March 31, June 30, September 30, December 31, 2023 2023 2023 2023 (in thousands, except share and per share amounts) Service revenue $ 153,588 $ 239,806 $ 275,429 $ 272,099 Network operations, including equity-based compensation expense 58,638 137,502 173,594 174,550 Operating income (loss) 24,312 (34,604) (50,558) (68,478) Net income (loss) (1) 6,148 1,123,863 (56,723) 200,153 Net income (loss) per common share - basic 0.13 23.84 (1.20) 4.23 Net income (loss) per common share - diluted 0.13 23.65 (1.20) 4.17 Weighted-average number of common shares—basic 47,037,091 47,137,822 47,227,338 47,353,291 Weighted-average number of common shares—diluted 47,381,226 47,526,207 47,227,338 48,037,841 Three months ended March 31, June 30, September 30, December 31, 2022 2022 2022 2022 (in thousands, except share and per share amounts) Service revenue $ 149,175 $ 148,450 $ 150,000 $ 151,979 Network operations, including equity-based compensation expense 57,449 56,514 57,220 56,972 Operating income 28,784 29,566 28,095 27,311 Net income ( loss) (2) 1,137 11,164 (8,007) 851 Net income (loss) per common share - basic 0.02 0.24 (0.17) 0.02 Net income (loss) per common share - diluted 0.02 0.24 (0.17) 0.02 Weighted-average number of common shares—basic 46,575,848 46,691,142 46,736,742 46,885,512 Weighted-average number of common shares—diluted 46,929,191 47,029,446 46,736,742 47,196,890 (1) Included in net income for the three months ended June 30, 2023, September 30, 2023 and December 31, 2023 are gains (losses) on the bargain purchase of the Sprint Business of $1.2 billon, ( $3.3 )million, and $254.0 million, respectively. Included in net income (loss) for the three months ended March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023 are non - cash (charges) benefits from changes in the valuation of the Swap Agreement of $1.8 million, ( $1.3 ) million, ( $4.8 ) million and $17.7 million, respectively. (2) Included in net income for the three months ended March 31, 2022 and June 30, 2022, are unrealized gains on foreign exchange on the 2024 Notes of $8.0 million and $23.5 million, respectively. Included in net income (loss) for the three months ended June 30, 2022, is a loss on debt extinguishment and redemption on the 2024 Notes of $11.9 million. Included in net income (loss) for the three months ended March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022 are non-cash charges (benefit) from changes in the valuation of the Swap Agreement of $21.3 million, $7.5 million, $16.9 million and ( $2.6 ) million, respectively. |
Description of the business a_4
Description of the business and summary of significant accounting policies - Acquisition of Sprint Communications (Details) | 3 Months Ended | 12 Months Ended | |||
May 01, 2023 USD ($) installment | Sep. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) country GB MB | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Description of the business and summary of significant accounting policies: | |||||
Number of countries entity operates | country | 54 | ||||
Pre-tax loss | $ (1,219,477,000) | $ (26,376,000) | $ (71,420,000) | ||
Estimated Purchase Agreement payment to be received, amount of discount | 13,725,000 | ||||
Lease liability | 398,057,000 | ||||
Acquisition related costs | 18,492,000 | 2,248,000 | |||
Unfavorable lease liabilities | 151,100,000 | ||||
Optical fiber and rights of way | |||||
Description of the business and summary of significant accounting policies: | |||||
Total property and equipment | 369,200,000 | ||||
Commercial Agreement | |||||
Description of the business and summary of significant accounting policies: | |||||
Amount due to the seller | 1,600,000 | ||||
Amount due from the seller recorded during the period | 23,900,000 | ||||
IP Transit Services Agreement | T-Mobile USA, Inc., | |||||
Description of the business and summary of significant accounting policies: | |||||
Amount payable | $ 700,000,000 | ||||
Amortization of discount resulted in interest income | 26,800,000 | ||||
Amounts due from Seller - IP Transit Services Agreement, amount of discount | 79,600,000 | ||||
Consideration paid | $ 204,200,000 | ||||
IP Transit Services Agreement | Equal monthly installments during the first year after the Closing | T-Mobile USA, Inc., | |||||
Description of the business and summary of significant accounting policies: | |||||
Amount payable | 350,000,000 | ||||
IP Transit Services Agreement | Equal monthly installments over the subsequent 42 months | T-Mobile USA, Inc., | |||||
Description of the business and summary of significant accounting policies: | |||||
Amount payable | 350,000,000 | ||||
IP Transit Services Agreement | Per Month During First Year After Closing Date | T-Mobile USA, Inc., | |||||
Description of the business and summary of significant accounting policies: | |||||
Amount payable | 29,200,000 | ||||
IP Transit Services Agreement | Per Month Over Subsequent Forty Two Months | T-Mobile USA, Inc., | |||||
Description of the business and summary of significant accounting policies: | |||||
Amount payable | $ 8,300,000 | ||||
Transition Services Agreement | |||||
Description of the business and summary of significant accounting policies: | |||||
Agreement term (in years) | 2 years | ||||
Extension period | 1 year | ||||
Period of prior written notice | 30 days | ||||
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 | ||||
Maturity period from receipt of the related invoice for amount billed under the agreement | 30 days | ||||
Amount due to the seller recorded during the period | $ 284,100,000 | ||||
Amount paid to the seller | 217,200,000 | ||||
Amount due to the seller | 66,900,000 | ||||
Amount due from the seller | 4,500,000 | ||||
Sprint Communications | Purchase Agreement | |||||
Description of the business and summary of significant accounting policies: | |||||
Amount payable | $ 1,000 | ||||
Sprint Business | |||||
Description of the business and summary of significant accounting policies: | |||||
Revenue | 283,300,000 | ||||
Pre-tax loss | 234,500,000 | ||||
Sprint Business | Purchase Agreement | Buyer | |||||
Description of the business and summary of significant accounting policies: | |||||
Cash and cash equivalents | 43,400,000 | ||||
Working capital adjustment | 61,100,000 | ||||
Additional working capital adjustment | $ 5,000,000 | ||||
Purchased Interests of Wireline Network Holdings LLC | |||||
Description of the business and summary of significant accounting policies: | |||||
Cash and cash equivalents | 47,074,000 | ||||
Estimated payment related to acquired short-term lease obligations | 16,000,000 | ||||
Estimated Purchase Agreement payment to be received, amount of discount | 15,614,000 | ||||
Amounts due from Seller - IP Transit Services Agreement, amount of discount | 79,610,000 | ||||
Consideration paid | 1,000 | 1,000 | |||
Acquisition related costs | 18,500,000 | $ 2,200,000 | |||
Total property and equipment | $ 965,715,000 | 965,700,000 | |||
Acquired customer relationships, estimated useful life | 9 years | ||||
Amortization of intangible assets | 1,300,000 | ||||
Acquired customer relationships, future amortization expense per year | $ 1,800,000 | ||||
Acquired customer relationships, future amortization expense, amortization period | 8 years | ||||
Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | |||||
Description of the business and summary of significant accounting policies: | |||||
Acquisition related costs | $ 16,200,000 | ||||
Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | Buyer | |||||
Description of the business and summary of significant accounting policies: | |||||
Working capital adjustment | $ 61,100,000 | ||||
Estimated payment related to acquired short-term lease obligations | $ 52,300,000 | ||||
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 | $ 15,600,000 | ||||
Amortization of discount resulted in interest income | 1,900,000 | ||||
Short-term lease payments | 24,200,000 | ||||
Severance costs | $ 16,200,000 | ||||
Purchased Interests of Wireline Network Holdings LLC | IP Transit Services Agreement | Buyer | |||||
Description of the business and summary of significant accounting policies: | |||||
Estimated payment related to acquired short-term lease obligations | $ 52,300,000 | $ 4,800,000 | |||
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 | $ 15,600,000 | ||||
Minimum | |||||
Description of the business and summary of significant accounting policies: | |||||
On-net service speed range | MB | 100 | ||||
Minimum | Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | Buyer | |||||
Description of the business and summary of significant accounting policies: | |||||
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 and summary of significant accounting policies: | |||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 55 days | ||||
Maximum | |||||
Description of the business and summary of significant accounting policies: | |||||
On-net service speed range | GB | 400 | ||||
Maximum | Purchased Interests of Wireline Network Holdings LLC | Purchase Agreement | Buyer | |||||
Description of the business and summary of significant accounting policies: | |||||
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 and summary of significant accounting policies: | |||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 58 days |
Description of the business a_5
Description of the business and summary of significant accounting policies - Acquisition of Sprint Communications - Consideration (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
May 01, 2023 USD ($) installment | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Description of the business and summary of significant accounting policies: | ||||
Total to be received from the transaction | $ 657,086 | |||
Estimated working capital payments made to the Seller | 49,865 | |||
Estimated Purchase Agreement payment to be received from the Seller, net of discount of $15,614 | 36,696 | $ 38,585 | $ 38,585 | |
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 | 607,221 | |||
Estimated Purchase Agreement payment to be received, amount of discount | 13,725 | 13,725 | ||
IP Transit Services Agreement | T-Mobile USA, Inc., | ||||
Description of the business and summary of significant accounting policies: | ||||
Amount payable | 700,000 | |||
Amounts due from Seller - IP Transit Services Agreement, amount of discount | 79,600 | |||
Consideration paid | 204,200 | |||
Wireline Network Holdings LLC | ||||
Description of the business and summary of significant accounting policies: | ||||
Total to be received from the transaction | 607,200 | |||
Total to be received from the Seller | 607,200 | |||
Total net consideration to be received from the Seller | 607,221 | |||
Estimated Purchase Agreement payment to be received, amount of discount | 15,614 | |||
Estimated payment related to acquired short-term lease obligations | 16,000 | |||
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 | |||
Consideration paid | 1 | $ 1 | ||
Wireline Network Holdings LLC | Purchase Agreement | ||||
Description of the business and summary of significant accounting policies: | ||||
Severance reimbursement payments received | 16,200 | |||
Wireline Network Holdings LLC | Purchase Agreement | Buyer | ||||
Description of the business and summary of significant accounting policies: | ||||
Estimated Purchase Agreement payment to be received, amount of discount | 15,600 | |||
Working capital adjustment | 61,100 | |||
Additional consideration due to the seller | 5,000 | $ 1,500 | ||
Severance reimbursement payments received | $ 16,200 | |||
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 | |||
Wireline Network Holdings LLC | Purchase Agreement | Buyer | Minimum | ||||
Description of the business and summary of significant accounting policies: | ||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 55 months | |||
Wireline Network Holdings LLC | Purchase Agreement | Buyer | Maximum | ||||
Description of the business and summary of significant accounting policies: | ||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 58 months | |||
Wireline Network Holdings LLC | IP Transit Services Agreement | Buyer | ||||
Description of the business and summary of significant accounting policies: | ||||
Estimated Purchase Agreement payment to be received, amount of discount | $ 15,600 | |||
Percentage of short term lease liabilities assumed | 50% | |||
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 | |||
Wireline Network Holdings LLC | IP Transit Services Agreement | Buyer | Minimum | ||||
Description of the business and summary of significant accounting policies: | ||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 55 days | |||
Wireline Network Holdings LLC | IP Transit Services Agreement | Buyer | Maximum | ||||
Description of the business and summary of significant accounting policies: | ||||
Estimated payment related to acquired short-term lease obligations, payment period after closing date | 58 days |
Description of the business a_6
Description of the business and summary of significant accounting policies - Acquisition of Sprint Communications - Fair Value of Assets Acquired and Liabilities Assumed and Gain on Bargain Purchase (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
May 01, 2023 | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | |
Description of the business and summary of significant accounting policies: | ||||
Adjustment to reclassify, right-of-use leased assets | $ 24,900 | |||
Adjustment to reclassify operating lease liabilities to finance lease liability | 160,900 | |||
Gain on bargain purchase | ||||
Total net consideration to be received from the Seller, net of discounts | $ 607,221 | |||
Gain on bargain purchase | $ 254,000 | $ 1,406,435 | ||
Adjustment to reclassify, right-of-use leased assets | 24,900 | |||
Adjustment to reclassify operating lease liabilities to finance lease liability | $ 160,900 | |||
Estimated Purchase Agreement payment to be received, amount of discount | 13,725 | 13,725 | ||
Wireline Network Holdings LLC | ||||
Description of the business and summary of significant accounting policies: | ||||
Intangible asset acquired | 458,000 | |||
Increase in deferred tax liability | 89,500 | |||
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 | 965,715 | 965,700 | 965,700 | |
Right-of-use leased assets | 311,022 | |||
Intangible assets | $ 474,000 | |||
Deposits and other assets | 7,521 | |||
Total assets | $ 1,868,057 | |||
Current liabilities: | ||||
Accounts payable | 13,313 | |||
Accrued and other current liabilities | $ 36,628 | |||
Current maturities, operating lease liabilities | 74,562 | |||
Current maturities, finance lease liabilities | $ 39,559 | |||
Total current liabilities | 164,062 | |||
Operating lease liabilities, net of current maturities | 251,573 | |||
Finance lease liabilities, net of current maturities | 121,342 | |||
Deferred income tax liabilities | 496,500 | |||
Other long-term liabilities | 35,366 | |||
Total liabilities | 1,068,843 | |||
Fair value of net assets acquired | 799,214 | |||
Gain on bargain purchase | ||||
Fair value of net assets acquired | 799,214 | |||
Total net consideration to be received from the Seller, net of discounts | 607,221 | |||
Gain on bargain purchase | 1,406,435 | 1,400,000 | ||
Intangible asset acquired | 458,000 | |||
Increase in deferred tax liability | 89,500 | |||
Estimated payment related to acquired short-term lease obligations | 16,000 | |||
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 | 8 years | |||
Acquired customer relationships, estimated useful life | 9 years | |||
Acquired customer relationships, future amortization expense per year | $ 1,800 | $ 1,800 | ||
Intangible Assets | 1,300 | |||
Wireline Network Holdings LLC | Customer relationships | ||||
Description of the business and summary of significant accounting policies: | ||||
Reduction of intangible assets | 41,000 | |||
Gain on bargain purchase | ||||
Reduction of intangible assets | 41,000 | |||
Wireline Network Holdings LLC | Assets | ||||
Description of the business and summary of significant accounting policies: | ||||
Reduction of property | 86,400 | |||
Gain on bargain purchase | ||||
Reduction of property | $ 86,400 |
Description of the business a_7
Description of the business and summary of significant accounting policies - Acquisition of Sprint Communications - Asset Retirement Obligations (Details) - Asset retirement obligations $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Description of the business and summary of significant accounting policies: | |
Obligations related to restoration obligations for acquired leases | $ 32 |
Assets amortization period | 4 years |
Accretion of asset retirement obligations (recorded as an increase to network operations expenses) | $ 1.7 |
Amortization of asset retirement assets (recorded a depreciation and amortization expenses) | $ 5.1 |
Description of the business a_8
Description of the business and summary of significant accounting policies - Acquisition of Sprint Communications - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Description of the business and summary of significant accounting policies: | ||
Amortization of unfavorable lease liabilities increase interest expense | $ 10,900 | |
Sprint Wireline Business | ||
Description of the business and summary of significant accounting policies: | ||
Loss on impairment | 477,300 | |
Gain on sale of IP addresses | 120,800 | |
Wireline Network Holdings LLC | ||
Description of the business and summary of significant accounting policies: | ||
Service revenue | $ 1,121,680 | 1,170,904 |
Operating loss from continuing operations | (304,931) | (713,576) |
Net income | 1,108,873 | 596,762 |
Amortization of unfavorable lease liabilities increase interest expense | 3,900 | |
Impact to income tax expense from pro-forma and autonomous entity adjustments | 200 | |
Sprint Business | ||
Description of the business and summary of significant accounting policies: | ||
Gain on bargain purchase | 1,400,000 | 1,400,000 |
Net increase (reduction) to historical depreciation expense based on fair value of property and equipment | 28,300 | 58,000 |
Amortization expense related to customer relationship intangible assets | 600 | 1,800 |
Autonomous entity expense adjustments | 45,700 | |
Amortization of unfavorable lease liabilities | 1,000 | 3,000 |
Amortization of unfavorable lease liabilities operation expenses | 16,800 | 50,400 |
Impact to income tax expense from pro-forma and autonomous entity adjustments | 17,200 | |
Sprint Business | IP Transit Services Agreement | ||
Description of the business and summary of significant accounting policies: | ||
Interest income from amortization of discount recorded | $ 14,700 | $ 36,200 |
Description of the business a_9
Description of the business and summary of significant accounting policies - Allowance for credit losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Description of the business and summary of significant accounting policies: | |||
Balance at Beginning of Period | $ 2,303 | $ 1,510 | $ 1,921 |
Current-period Provision for Expected Credit Losses | 10,475 | 4,318 | 5,595 |
Write offs Charged Against Allowance | (9,101) | (3,525) | (6,006) |
Balance at End of Period | $ 3,677 | $ 2,303 | $ 1,510 |
Description of the business _10
Description of the business and summary of significant accounting policies - Allowance for credit losses - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Description of the business and summary of significant accounting policies: | |||
Bad debt recoveries | $ (1.9) | $ (1.9) | $ (2.2) |
Description of the business _11
Description of the business and summary of significant accounting policies - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Finance lease cost amortization of right-of-use assets | $ 64,698 | $ 28,915 | |
Interest expense on finance lease liabilities | 34,940 | 23,317 | |
Operating lease cost | 92,763 | 18,331 | |
Total lease costs | 192,401 | 70,563 | |
Operating cash flows from finance leases | (33,080) | (23,317) | |
Operating cash flows from operating leases | (93,924) | (18,836) | |
Financing cash flows from finance leases | (77,362) | (45,472) | $ (23,054) |
Right-of-use assets obtained in exchange for new finance lease liabilities | 232,468 | 107,875 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 13,682 | $ 11,168 | |
Weighted-average remaining lease term - finance leases (in years) | 11 years 6 months | 13 years 6 months | |
Weighted-average remaining lease term - operating leases (in years) | 12 years 2 months 12 days | 16 years 7 months 6 days | |
Weighted-average discount rate - finance leases | 7.60% | 8.60% | |
Weighted-average discount rate - operating leases | 8.10% | 5.40% | |
Finance leases-fiber lease agreements | |||
Initial terms | 20 years | ||
Additional finance lease future payments due | $ 242,800 | ||
Future minimum payments (principal and interest) under these finance leases | |||
2024 | 100,357 | ||
2025 | 95,370 | ||
2026 | 91,955 | ||
2027 | 41,469 | ||
2028 | 40,198 | ||
Thereafter | 382,361 | ||
Total minimum lease obligations | 751,710 | ||
Less-amounts representing interest | (267,195) | ||
Present value of minimum lease obligations | 484,515 | ||
Current maturities | (64,594) | $ (17,182) | |
Finance lease obligations, net of current maturities | 419,921 | 287,044 | |
Future minimum payments under these operating lease agreements | |||
2024 | 79,272 | ||
2025 | 62,443 | ||
2026 | 57,600 | ||
2027 | 51,511 | ||
2028 | 48,154 | ||
Thereafter | 328,298 | ||
Total minimum lease obligations | 627,278 | ||
Less-amounts representing interest | (229,221) | ||
Present value of minimum lease obligations | 398,057 | ||
Current maturities | (67,962) | (12,005) | |
Lease obligations, net of current maturities | $ 330,095 | $ 94,587 | |
Minimum | |||
Finance leases-fiber lease agreements | |||
Initial terms | 15 years | ||
Maximum | |||
Finance leases-fiber lease agreements | |||
Initial terms | 20 years |
Description of the business _12
Description of the business and summary of significant accounting policies - Revenue recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Description of the business and summary of significant accounting policies: | |||
Contract costs | $ 24.3 | $ 23.7 | |
Maximum contract lengths for billing due upon receipts (in months) | 60 months | ||
Accounting Standards Update 2014-09 [Member] | |||
Description of the business and summary of significant accounting policies: | |||
Service revenue recognized from balance at beginning of period | $ 4.9 | 5 | $ 4.6 |
Amortization expense for contract costs | $ 19.3 | $ 19.4 | $ 18.4 |
Description of the business _13
Description of the business and summary of significant accounting policies - Gross receipts taxes, universal service fund and other surcharges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Description of the business and summary of significant accounting policies: | |||
Excise taxes and surcharge | $ 50.2 | $ 15.4 | $ 18.5 |
Description of the business _14
Description of the business and summary of significant accounting policies - Financial instruments (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Level 2 | Interest rate swap | |
Description of the business: | |
Fair value of interest rate swaps | $ 38.7 |
long-term liability | 38.7 |
Senior secured 2026 Notes | |
Description of the business: | |
Senior notes | 500 |
Senior secured 2026 Notes | Level 2 | |
Description of the business: | |
Senior notes, fair value | 477.5 |
Senior unsecured 2027 Notes | Level 2 | |
Description of the business: | |
Senior notes | 450 |
Senior notes, fair value | $ 451.1 |
Description of the business _15
Description of the business and summary of significant accounting policies - Property and equipment (Details) | Dec. 31, 2023 |
Indefeasible rights of use (IRUs) | |
Property and equipment | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
Indefeasible rights of use (IRUs) | Minimum | |
Property and equipment | |
Depreciation or amortization period (in years) | 15 years |
Indefeasible rights of use (IRUs) | Maximum | |
Property and equipment | |
Depreciation or amortization period (in years) | 20 years |
Network equipment | Minimum | |
Property and equipment | |
Depreciation or amortization period (in years) | 2 years |
Network equipment | Maximum | |
Property and equipment | |
Depreciation or amortization period (in years) | 8 years |
Leasehold improvements | |
Property and equipment | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
Software | |
Property and equipment | |
Depreciation or amortization period (in years) | 5 years |
Owned buildings | Minimum | |
Property and equipment | |
Depreciation or amortization period (in years) | 16 years |
Owned buildings | Maximum | |
Property and equipment | |
Depreciation or amortization period (in years) | 40 years |
Office and other equipment | Minimum | |
Property and equipment | |
Depreciation or amortization period (in years) | 2 years |
Office and other equipment | Maximum | |
Property and equipment | |
Depreciation or amortization period (in years) | 7 years |
Asset retirement obligations | |
Property and equipment | |
Depreciation or amortization period (in years) | 4 years |
System infrastructure | Minimum | |
Property and equipment | |
Depreciation or amortization period (in years) | 2 years |
System infrastructure | Maximum | |
Property and equipment | |
Depreciation or amortization period (in years) | 14 years |
Description of the business _16
Description of the business and summary of significant accounting policies - Basic and diluted net income per common share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Diluted weighted average shares | |||
Weighted-average number of common shares - basic | 47,373,361 | 46,875,992 | 46,419,180 |
Weighted-average common shares - diluted | 47,837,512 | 47,207,298 | 46,963,920 |
Employee Stock Option | |||
Diluted weighted average shares | |||
Dilutive effect | 15,380 | 16,064 | 34,007 |
Anti-dilutive effects | |||
Anti-dilutive | 118,985 | 105,556 | 45,809 |
Restricted stock | |||
Diluted weighted average shares | |||
Dilutive effect | 448,771 | 315,242 | 510,733 |
Anti-dilutive effects | |||
Unvested shares of restricted common stock | 1,261,623 | 1,164,021 | 1,253,321 |
Anti-dilutive | 11,365 | 541,608 | 86,619 |
Property and equipment (Details
Property and equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Owned assets: | |||
Property and equipment, gross | $ 2,947,376 | $ 1,714,906 | |
Accumulated depreciation and amortization | (1,409,559) | (1,170,476) | |
Total property and equipment, net | 1,537,817 | 544,430 | |
Assets under finance leases: | |||
Total property and equipment, net | 1,537,817 | 544,430 | |
Depreciation and amortization expense | 92,222 | $ 89,240 | |
Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 2,245,474 | 1,148,623 | |
Accumulated depreciation and amortization | (1,124,385) | (949,277) | |
Total property and equipment, net | 1,121,089 | 199,346 | |
Network equipment | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 983,996 | 673,479 | |
Leasehold improvements | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 297,785 | 263,861 | |
System infrastructure | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 607,060 | 171,694 | |
Assets under finance leases: | |||
Capitalized compensation cost | 35,500 | 12,600 | $ 13,400 |
Software | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 12,747 | 11,277 | |
Office and other equipment | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 26,656 | 22,071 | |
Owned buildings | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 146,402 | 6,140 | |
Land | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 135,877 | 101 | |
Asset Retirement Obligation | Owned assets | |||
Owned assets: | |||
Property and equipment, gross | 34,951 | ||
Indefeasible rights of use (IRUs) | |||
Assets under finance leases: | |||
IRUs | 701,902 | 566,283 | |
Less- Accumulated depreciation and amortization | 285,174 | 221,199 | |
IRUs, Net | $ 416,728 | $ 345,084 |
Accrued and other liabilities_2
Accrued and other liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued and other liabilities: | ||
Operating accruals | $ 31,254 | $ 19,488 |
Interest rate swap agreement - current portion | 21,568 | 20,267 |
Deferred revenue-current portion | 6,549 | 4,911 |
Payroll and benefits | 13,696 | 11,880 |
Taxes-non-income based | 41,820 | 2,687 |
Interest | 5,636 | 4,656 |
Total | $ 120,523 | $ 63,889 |
Long-term debt (Details)
Long-term debt (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Jun. 22, 2022 USD ($) | Jun. 22, 2022 EUR (€) | Dec. 01, 2021 USD ($) | May 07, 2021 USD ($) | May 31, 2022 USD ($) | May 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | Jun. 30, 2020 USD ($) | Jun. 30, 2019 USD ($) | Aug. 31, 2018 USD ($) | Dec. 31, 2016 USD ($) | Jun. 30, 2022 USD ($) | Oct. 31, 2021 USD ($) | Oct. 31, 2023 USD ($) | Apr. 30, 2023 USD ($) | Oct. 31, 2022 USD ($) | Apr. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 EUR (€) | Jun. 30, 2022 EUR (€) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 EUR (€) | Jun. 30, 2020 EUR (€) | Jun. 30, 2019 EUR (€) | Feb. 28, 2015 USD ($) | |
Long-term debt | |||||||||||||||||||||||||||
Gain and loss on foreign exchange | $ 11,900,000 | ||||||||||||||||||||||||||
Redemption price percentage | 101.094% | 101.094% | 103.20% | ||||||||||||||||||||||||
Loss on extinguishment & redemption of 2022 notes | $ 14,698,000 | ||||||||||||||||||||||||||
Accrued and unpaid interest | $ 5,636,000 | $ 4,656,000 | |||||||||||||||||||||||||
Interest rate swap | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Face amount | 38,700,000 | 52,100,000 | |||||||||||||||||||||||||
Net liability, prepaid expenses | 21,600,000 | 20,300,000 | |||||||||||||||||||||||||
Net liability, other long term | 17,100,000 | 31,900,000 | |||||||||||||||||||||||||
Interest expense | 13,400,000 | (43,100,000) | (9,000,000) | ||||||||||||||||||||||||
Interest rate swap | Cash | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Margin deposits | 38,800,000 | ||||||||||||||||||||||||||
Interest rate swap | Restricted cash | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Margin deposits | 38,700,000 | ||||||||||||||||||||||||||
Interest rate swap | Unrestricted cash | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Margin deposits | $ 100,000 | ||||||||||||||||||||||||||
SOFR | Interest rate swap | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Interest rate (as a percent) | 3.50% | ||||||||||||||||||||||||||
Senior secured 2026 Notes | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Face amount | $ 500,000,000 | € 500,000,000 | |||||||||||||||||||||||||
Interest rate (as a percent) | 3.50% | 3.50% | |||||||||||||||||||||||||
Discount on issuance of debt | 1,800,000 | ||||||||||||||||||||||||||
Debt costs | 1,300,000 | $ 1,317,000 | |||||||||||||||||||||||||
Redemption price percentage of principal amount redeemed | 100% | ||||||||||||||||||||||||||
Net proceeds | $ 496,900,000 | ||||||||||||||||||||||||||
Senior notes outstanding | $ 500,000,000 | ||||||||||||||||||||||||||
2027 Notes | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Face amount | $ 450,000,000 | $ 450,000,000 | |||||||||||||||||||||||||
Interest rate (as a percent) | 7% | 7% | |||||||||||||||||||||||||
Discount on issuance of debt | $ 2,700,000 | ||||||||||||||||||||||||||
Debt costs | 1,300,000 | ||||||||||||||||||||||||||
Redemption price percentage of principal amount redeemed | 100% | 100% | |||||||||||||||||||||||||
Redemption price percentage | 40% | 40% | |||||||||||||||||||||||||
Proceeds from issuance of secured debt | $ 446,000,000 | ||||||||||||||||||||||||||
2027 Notes | Prior to June 15, 2024 | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Redemption price percentage of principal amount redeemed | 107% | 107% | |||||||||||||||||||||||||
2027 Notes | June 15, 2024 to June 14, 2025 | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Redemption price percentage of principal amount redeemed | 103.50% | ||||||||||||||||||||||||||
Senior secured notes due 2022 | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Face amount | $ 115,900,000 | $ 115,900,000 | |||||||||||||||||||||||||
Redemption price percentage | 5.375% | ||||||||||||||||||||||||||
Redemption value | 1,900,000 | ||||||||||||||||||||||||||
Accrued and unpaid interest | $ 11,500,000 | $ 400,000 | |||||||||||||||||||||||||
Loss on extinguishment debt purchases | $ 10,800,000 | $ 3,900,000 | |||||||||||||||||||||||||
Notice issued for redemption of debt | $ 45,000,000 | ||||||||||||||||||||||||||
Redemption price per $1,000 aggregate principal amount | 41.41533 | ||||||||||||||||||||||||||
Accrued interest value | $ 400,000 | ||||||||||||||||||||||||||
Accrued interest per $1,000 aggregate principal amount | 9.70486 | ||||||||||||||||||||||||||
Amount of debt redeemed | $ 45,000,000 | ||||||||||||||||||||||||||
Senior notes outstanding | $ 284,100,000 | ||||||||||||||||||||||||||
Senior unsecured 2024 Notes | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Face amount | € | € 350,000,000 | € 350,000,000 | € 215,000,000 | € 135,000,000 | |||||||||||||||||||||||
Interest rate (as a percent) | 4.375% | ||||||||||||||||||||||||||
Gain on foreign exchange | 31,600,000 | 32,500,000 | |||||||||||||||||||||||||
Redemption price percentage | 101.094% | 101.094% | |||||||||||||||||||||||||
Aggregate principal amount of redemption | € | 350,000,000 | ||||||||||||||||||||||||||
Redemption value | $ 375,200,000 | € 353,800,000 | |||||||||||||||||||||||||
Repayments of interest | 8,100,000 | 7,700,000 | |||||||||||||||||||||||||
Total repayment | 383,400,000 | € 361,500,000 | |||||||||||||||||||||||||
Loss on extinguishment & redemption of 2022 notes | $ 11,900,000 | ||||||||||||||||||||||||||
Net proceeds | $ 240,300,000 | $ 152,100,000 | |||||||||||||||||||||||||
Debt fair value | 365,800,000 | 397,000,000 | $ 429,300,000 | ||||||||||||||||||||||||
Senior notes | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Face amount | $ 70,000,000 | $ 125,000,000 | $ 250,000,000 | ||||||||||||||||||||||||
Interest rate (as a percent) | 5.375% | ||||||||||||||||||||||||||
Premium percentage (as a percent) | 101.75% | 100.375% | |||||||||||||||||||||||||
Senior notes | Prior to December 1, 2021 | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Redemption price percentage | 100% | ||||||||||||||||||||||||||
2024 Notes | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Interest rate (as a percent) | 4.375% | ||||||||||||||||||||||||||
Gain (loss) on foreign exchange | $ 31,600,000 | $ 32,500,000 | |||||||||||||||||||||||||
Installment One | SOFR | Interest rate swap | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Net proceeds | $ 600,000 | $ 12,000,000 | |||||||||||||||||||||||||
Payment of debt in Installments | $ 600,000 | ||||||||||||||||||||||||||
Payment made to counter party | $ 3,400,000 | ||||||||||||||||||||||||||
Installment Two | SOFR | Interest rate swap | |||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||
Net proceeds | $ 12,000,000 | $ 9,500,000 | $ 3,400,000 | $ 1,200,000 | |||||||||||||||||||||||
Payment of debt in Installments | $ 1,200,000 | ||||||||||||||||||||||||||
Payment made to counter party | $ 9,500,000 |
Long-term debt- Debt extinguish
Long-term debt- Debt extinguishment and redemptions of 2022 Notes (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||
Jun. 22, 2022 USD ($) | Jun. 22, 2022 EUR (€) | Dec. 01, 2021 USD ($) | May 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 EUR (€) | Dec. 31, 2020 EUR (€) | Jun. 30, 2020 EUR (€) | Jun. 30, 2019 EUR (€) | Aug. 31, 2018 USD ($) | Dec. 31, 2016 USD ($) | Feb. 28, 2015 USD ($) | |
Long-term debt | ||||||||||||||
Redemption price percentage | 101.094% | 101.094% | 103.20% | |||||||||||
Interest | $ 5,636,000 | $ 4,656,000 | ||||||||||||
Senior secured notes due 2022 | ||||||||||||||
Long-term debt | ||||||||||||||
Redemption price percentage | 5.375% | |||||||||||||
Face amount | $ 115,900,000 | $ 115,900,000 | ||||||||||||
Interest | $ 11,500,000 | 400,000 | ||||||||||||
Loss on debt purchase | $ 10,800,000 | $ 3,900,000 | ||||||||||||
Notice issued for redemption of debt | 45,000,000 | |||||||||||||
Amount of debt redeemed | 45,000,000 | |||||||||||||
Redemption value | $ 1,900,000 | |||||||||||||
Redemption price per $1,000 aggregate principal amount | 41.41533 | |||||||||||||
Accrued interest value | $ 400,000 | |||||||||||||
Accrued interest per $1,000 aggregate principal amount | 9.70486 | |||||||||||||
Senior notes outstanding | $ 284,100,000 | |||||||||||||
Senior unsecured 2024 Notes | ||||||||||||||
Long-term debt | ||||||||||||||
Redemption price percentage | 101.094% | 101.094% | ||||||||||||
Face amount | € | € 350,000,000 | € 350,000,000 | € 215,000,000 | € 135,000,000 | ||||||||||
Redemption value | $ 375,200,000 | € 353,800,000 | ||||||||||||
Senior notes | ||||||||||||||
Long-term debt | ||||||||||||||
Face amount | $ 70,000,000 | $ 125,000,000 | $ 250,000,000 | |||||||||||
Senior notes | Prior to December 1, 2021 | ||||||||||||||
Long-term debt | ||||||||||||||
Redemption price percentage | 100% |
Long-term debt- Senior unsecure
Long-term debt- Senior unsecured notes (Details) - EUR (€) | 1 Months Ended | |||||
Jun. 22, 2022 | Mar. 31, 2021 | Jun. 30, 2022 | Dec. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Senior unsecured notes- $189.2 million 2021 Notes | ||||||
Redemption price percentage | 101.094% | 103.20% | ||||
Senior unsecured 2024 Notes | ||||||
Senior unsecured notes- $189.2 million 2021 Notes | ||||||
Principal amount | € 350,000,000 | € 350,000,000 | € 215,000,000 | € 135,000,000 | ||
Interest rate (as a percent) | 4.375% | |||||
Redemption price percentage | 101.094% |
Long-term debt - Limitations un
Long-term debt - Limitations under the Indentures (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Long-term debt | |
Consolidated leverage ratio | 6 |
Consolidated secured leverage ratio | 4 |
Amount unrestricted and permitted for investment payments | $ 511,300,000 |
Fixed charge coverage ratio | 2 |
Restriction on incurring additional indebtedness | Senior notes | Minimum | |
Long-term debt | |
Consolidated secured leverage ratio | 1 |
Restriction on incurring additional indebtedness | Senior unsecured 2024 Notes | Minimum | |
Long-term debt | |
Consolidated leverage ratio | 1 |
Restriction on incurring additional indebtedness | Senior unsecured 2024 Notes | Maximum | |
Long-term debt | |
Consolidated leverage ratio | 6 |
Consolidated secured leverage ratio | 4 |
Restriction on incurring additional indebtedness | Senior secured 2026 Notes | Minimum | |
Long-term debt | |
Consolidated secured leverage ratio | 1 |
Fixed charge coverage ratio | 2 |
Restriction on incurring additional indebtedness | Senior secured 2026 Notes | Maximum | |
Long-term debt | |
Consolidated secured leverage ratio | 4 |
Fixed charge coverage ratio | 1 |
Restriction on dividends and stock purchases | Senior unsecured 2024 Notes | Minimum | |
Long-term debt | |
Indebtedness that may occur | $ 1 |
Restriction on dividends and stock purchases | Senior secured 2026 Notes | |
Long-term debt | |
Fixed charge coverage ratio | 6 |
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 | 2 |
Fixed charge coverage ratio | 6 |
Unrestricted general basket payment | |
Long-term debt | |
Amount unrestricted and permitted for investment payments | $ 250,000,000 |
Long-term debt - Long-term debt
Long-term debt - Long-term debt maturities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Long-term debt: | |
2026 | $ 500,000 |
2027 | 450,000 |
Total | $ 950,000 |
Income taxes - The components o
Income taxes - The components of income before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
The components of income (loss) before income taxes | |||
Domestic | $ 1,217,084 | $ 34,784 | $ 73,753 |
Foreign | 2,393 | (8,408) | (2,333) |
Total income before income taxes | $ 1,219,477 | $ 26,376 | $ 71,420 |
Income taxes - Income tax expen
Income taxes - Income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ (3,638) | ||
State | (11,868) | $ (4,195) | $ (3,116) |
Foreign | (203) | (496) | (1,833) |
Deferred: | |||
Federal | 53,393 | (16,299) | (17,959) |
State | 16,086 | (143) | (2,348) |
Foreign | 194 | (97) | 2,021 |
Total income tax benefit (expense) | $ (53,964) | $ 21,230 | $ 23,235 |
Income taxes - Temporary differ
Income taxes - Temporary differences (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets: | ||
Net operating loss carry-forwards | $ 244,306 | $ 226,625 |
Interest expense limitation | 34,828 | 12,331 |
Accrued liabilities and other | 12,055 | 9,972 |
Operating leases | 107,563 | 32,769 |
Total gross deferred tax assets | 398,752 | 281,697 |
Valuation allowance | (136,533) | (140,895) |
Net deferred tax assets | 262,219 | 140,802 |
Deferred Tax Liabilities: | ||
Property & equipment | 295,630 | 61,761 |
Intangibles | 118,727 | |
Deferred liability - IP Transit Services Agreement | 114,844 | |
Investment in foreign subsidiaries | 100,081 | 96,977 |
Right-of-use assets | 104,435 | 29,710 |
Gross deferred tax liabilities | 733,717 | 188,448 |
Net deferred tax liabilities | 471,498 | $ 47,646 |
Sprint Business | ||
Deferred Tax Liabilities: | ||
Net deferred tax liabilities | $ 494,000 |
Income taxes - Loss carry-forwa
Income taxes - Loss carry-forwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Income taxes | |
Net operating loss carry-forwards | $ 1,000 |
United States | |
Income taxes | |
Net operating loss carry-forwards | 23.5 |
Carry-forwards limited for use | 19.2 |
Europe | |
Income taxes | |
Net operating loss carry-forwards | 960.4 |
Carry-forwards limited for use | 140.4 |
Carry-forwards not limited for use | 820 |
Mexico | |
Income taxes | |
Net operating loss carry-forwards | 19.5 |
Other than United States | |
Income taxes | |
Carry-forwards not limited for use | $ 979.9 |
Income taxes - Effective income
Income taxes - Effective income tax rate reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements | |||
Federal income tax expense at statutory rates | $ (256,086) | $ (5,537) | $ (14,999) |
State income tax, net of federal benefit | 3,722 | (1,700) | (4,123) |
Impact of foreign operations | 868 | (651) | 715 |
Non-deductible expenses | (2,783) | (2,679) | (1,365) |
Bargain purchase gain - Sprint Business acquisition | 295,351 | ||
Tax effect of TCJA from foreign earnings | (490) | (360) | (389) |
Changes in valuation allowance | 13,382 | (10,303) | (3,074) |
Income tax benefit (expense) | $ 53,964 | $ (21,230) | $ (23,235) |
Commitments and contingencies -
Commitments and contingencies - Current and potential litigation (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Commitments and contingencies: | |
Estimate of possible loss in excess of accrual | $ 4.1 |
Commitments and contingencies_
Commitments and contingencies: Capital leases - future minimum payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Future minimum annual payments | |||
Total minimum lease obligations | $ 751,710 | ||
Amount of lease expenses | 29,100 | $ 21,800 | $ 22,000 |
Short - term lease expense | 9,800 | ||
Network Equipment Sites And Data Center Facilities | |||
Future minimum annual payments | |||
2024 | 38,572 | ||
2025 | 18,713 | ||
2026 | 15,169 | ||
2027 | 5,745 | ||
2028 | 2,262 | ||
Thereafter | 496 | ||
Total minimum lease obligations | $ 80,957 |
Commitments and contingencies_2
Commitments and contingencies - Unconditional purchase obligations (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Equipment and services | |
Unconditional purchase obligations | |
Unconditional purchase obligation | $ 62.8 |
IRU | |
Unconditional purchase obligations | |
2024 | 28.9 |
2025 | 12.7 |
2026 | 11 |
2027 | 11 |
2028 | 11 |
Thereafter | 168.2 |
Unconditional purchase obligation | $ 242.8 |
Maximum period of maintenance payment (in years) | 20 years |
Commitments and contingencies_3
Commitments and contingencies - Defined contribution plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and contingencies: | |||
Matching cash payments towards defined contribution plan | $ 2.3 | $ 0.9 | $ 0.9 |
Stockholders' equity_ Authorize
Stockholders' equity: Authorized shares (Details) | 12 Months Ended | |
Dec. 31, 2023 Vote / shares $ / shares shares | Dec. 31, 2022 $ / shares shares | |
Dividends on common stock: | ||
Common stock, shares authorized | shares | 75,000,000 | 75,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock, authorized but unissued shares (in shares) | shares | 10,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
Voting rights per common share | Vote / shares | 1 |
Stockholders' equity_ Common st
Stockholders' equity: Common stock buyback program (Details) $ in Millions | 36 Months Ended |
Dec. 31, 2023 USD ($) shares | |
Dividends on common stock: | |
Authorized amount for common stock repurchases | $ 50 |
Remaining authorized amount for common stock repurchases | $ 30.4 |
Repurchase of common stock (in shares) | shares | 0 |
Stock option and award plan_ In
Stock option and award plan: Incentive award plan (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Employee Stock Option | |
Stock option and award plan | |
Vesting period | 4 years |
Expiration period | 10 years |
Exercise period of options vested, when an employee is terminated prior to full vesting | 90 days |
Restricted stock | Minimum | |
Stock option and award plan | |
Vesting period | 3 years |
Restricted stock | Maximum | |
Stock option and award plan | |
Vesting period | 4 years |
Stock option and award plan_ _2
Stock option and award plan: Incentive award plan fair value assumptions (Details) - Employee Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock option and award plan | |||
Weighted-average per share grant date fair value (in dollars per share) | $ 12.81 | $ 10.73 | $ 12.22 |
Assumptions used for determining the fair value of options granted | |||
Dividend yield (as a percent) | 5.80% | 5.90% | 4.60% |
Expected volatility (as a percent) | 33.40% | 33.10% | 33.40% |
Risk-free interest rate (as a percent) | 3.80% | 3% | 0.60% |
Expected life of the option term (in years) | 4 years 1 month 6 days | 4 years 1 month 6 days | 4 years 2 months 12 days |
Stock option and award plan_ _3
Stock option and award plan: Incentive award plan - activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock option activity parenthetical | |||
Proceeds from exercises of common stock options | $ 1,227 | $ 614 | $ 1,823 |
Employee Stock Option | |||
Stock option activity | |||
Outstanding at the beginning of the period (in shares) | 167,991 | ||
Granted (in shares) | 105,508 | ||
Cancelled and expired (in shares) | (49,651) | ||
Exercised (in shares) | (25,073) | ||
Outstanding at the end of the period (in shares) | 198,775 | 167,991 | |
Exercisable at the end of the period (in shares) | 96,351 | ||
Expected to vest (in shares) | 167,894 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 58.85 | ||
Granted (in dollars per share) | 64.90 | ||
Cancelled and expired (in dollars per share) | 64.19 | ||
Exercised (in dollars per share) | 48.94 | ||
Outstanding at the end of the period (in dollars per share) | 61.97 | $ 58.85 | |
Exercisable at the end of the period (in dollars per share) | 59.64 | ||
Expected to vest (in dollars per share) | $ 61.59 | ||
Stock option activity parenthetical | |||
Exercised - intrinsic value | $ 500 | ||
Proceeds from exercises of common stock options | 1,200 | ||
Outstanding end of period - intrinsic value | $ 2,800 | ||
Outstanding - weighted-average term | 7 years 7 months 6 days | ||
Exercisable - intrinsic value | $ 1,600 | ||
Exercisable - weighted average term | 6 years 1 month 6 days | ||
Expected to vest - intrinsic value | $ 2,500 | ||
Expected to vest - weighted average term | 7 years 3 months 18 days |
Stock option and award plan_ No
Stock option and award plan: Non-vested restricted stock (Details) - Restricted stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of shares | |||
Non-vested at the beginning of the period (in shares) | 1,164,021 | ||
Granted (in shares) | 634,056 | 400,000 | 500,000 |
Vested (in shares) | (472,564) | ||
Forfeited (in shares) | (63,890) | ||
Non-vested at the end of the period (in shares) | 1,261,623 | 1,164,021 | |
Weighted-Average Grant Date Fair Value | |||
Non-vested at the beginning of the period (in dollars per share) | $ 66.22 | ||
Granted (in dollars per share) | 60.05 | $ 66.08 | $ 64.59 |
Vested (in dollars per share) | 66.84 | ||
Forfeited (in dollars per share) | 66.01 | ||
Non-vested at the end of the period (in dollars per share) | $ 62.89 | $ 66.22 |
Stock option and award plan_ _4
Stock option and award plan: Incentive award plan, additional information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Incentive Award Plan, additional information | |||
Equity-based compensation expense | $ 26,924 | $ 24,439 | $ 26,822 |
Total unrecognized compensation cost | $ 38,100 | ||
Weighted-average period to recognize unrecognized compensation cost | 2 years | ||
Restricted stock | |||
Incentive Award Plan, additional information | |||
Granted (in dollars per share) | $ 60.05 | $ 66.08 | $ 64.59 |
Granted (in shares) | 634,056 | 400,000 | 500,000 |
Equity-based compensation expense | $ 26,924 | $ 24,439 | $ 26,822 |
Income tax benefit related to stock options and restricted stock | 3,307 | 2,489 | 6,314 |
Capitalized compensation expense related to stock options and restricted stock | 3,541 | 2,277 | 3,222 |
Intrinsic value of stock options exercised | 456 | 305 | 881 |
Fair value of shares of restricted stock vested | $ 30,113 | $ 25,792 | $ 35,749 |
Related party transactions_ (De
Related party transactions: (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 25, 2023 USD ($) ft² | May 31, 2015 | Dec. 31, 2023 USD ($) ft² | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
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 | $ | $ 2,800 | $ 1,700 | $ 1,700 | ||
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 | ||||
Notice period for cancellation of lease | 60 days | ||||
Area of land | ft² | 54,803 | ||||
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 | ||||
Notice period for cancellation of lease | 60 days | ||||
Area of land | ft² | 1,587 | ||||
Operating lease income | $ | $ 34,914 |
Geographic information_ (Detail
Geographic information: (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment information: | |||
Number of operating segments | segment | 1 | ||
Revenues | $ 940,922 | $ 599,604 | $ 589,797 |
Long-lived assets, net | 2,122,738 | 544,439 | |
On-net | |||
Segment information: | |||
Revenues | 518,589 | 452,779 | 442,838 |
Off-net | |||
Segment information: | |||
Revenues | 393,493 | 146,152 | 146,383 |
Non-core | |||
Segment information: | |||
Revenues | 28,840 | 673 | 576 |
North America | |||
Segment information: | |||
Revenues | 802,690 | 479,361 | 467,992 |
Long-lived assets, net | 1,959,704 | 397,434 | |
North America | On-net | |||
Segment information: | |||
Revenues | 406,866 | 350,256 | 340,107 |
North America | Off-net | |||
Segment information: | |||
Revenues | 367,210 | 128,486 | 127,383 |
North America | Non-core | |||
Segment information: | |||
Revenues | 28,614 | 619 | 502 |
Europe | |||
Segment information: | |||
Revenues | 108,370 | 98,644 | 105,730 |
Europe | On-net | |||
Segment information: | |||
Revenues | 88,310 | 82,451 | 87,929 |
Europe | Off-net | |||
Segment information: | |||
Revenues | 19,913 | 16,144 | 17,729 |
Europe | Non-core | |||
Segment information: | |||
Revenues | 147 | 49 | 72 |
South America | |||
Segment information: | |||
Revenues | 7,649 | 5,832 | 4,276 |
South America | On-net | |||
Segment information: | |||
Revenues | 6,957 | 5,656 | 4,102 |
South America | Off-net | |||
Segment information: | |||
Revenues | 684 | 174 | 173 |
South America | Non-core | |||
Segment information: | |||
Revenues | 8 | 2 | 1 |
Oceania | |||
Segment information: | |||
Revenues | 21,427 | 14,963 | 11,292 |
Oceania | On-net | |||
Segment information: | |||
Revenues | 15,769 | 13,689 | 10,197 |
Oceania | Off-net | |||
Segment information: | |||
Revenues | 5,587 | 1,271 | 1,094 |
Oceania | Non-core | |||
Segment information: | |||
Revenues | 71 | 3 | 1 |
Africa | |||
Segment information: | |||
Revenues | 786 | 804 | 507 |
Africa | On-net | |||
Segment information: | |||
Revenues | 687 | 727 | 503 |
Africa | Off-net | |||
Segment information: | |||
Revenues | 99 | 77 | $ 4 |
Europe and other | |||
Segment information: | |||
Long-lived assets, net | $ 163,034 | $ 147,005 |
Quarterly financial informati_3
Quarterly financial information (unaudited): (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Quarterly financial information | |||||||||||
Service revenue | $ 940,922 | $ 599,604 | $ 589,797 | ||||||||
Network operations, including equity-based compensation expense | 544,232 | 228,154 | 226,337 | ||||||||
Operating income | (129,329) | 113,959 | 119,233 | ||||||||
Net income | $ 1,273,441 | $ 5,146 | $ 48,185 | ||||||||
Net income (loss) per common share - basic | $ 26.88 | $ 0.11 | $ 1.04 | ||||||||
Net income (loss) per common share - diluted | $ 26.62 | $ 0.11 | $ 1.03 | ||||||||
Weighted-average number of common shares - basic | 47,373,361 | 46,875,992 | 46,419,180 | ||||||||
Weighted-average number of common shares - diluted | 47,837,512 | 47,207,298 | 46,963,920 | ||||||||
Unrealized foreign currency exchange gain (loss) | $ 254,000 | $ 3,300 | $ 1,200,000 | $ (23,500) | $ 8,000 | $ 31,561 | $ 32,522 | ||||
Loss on debt extinguishment and redemption | 11,900 | ||||||||||
Non cash charges (benefit) | 17,700 | 4,800 | 1,300 | $ 1,800 | $ 2,600 | $ 16,900 | 7,500 | 21,300 | |||
Unaudited | |||||||||||
Quarterly financial information | |||||||||||
Service revenue | 272,099 | 275,429 | 239,806 | 153,588 | 151,979 | 150,000 | 148,450 | 149,175 | |||
Network operations, including equity-based compensation expense | 174,550 | 173,594 | 137,502 | 58,638 | 56,972 | 57,220 | 56,514 | 57,449 | |||
Operating income | (68,478) | (50,558) | (34,604) | 24,312 | 27,311 | 28,095 | 29,566 | 28,784 | |||
Net income | $ 200,153 | $ (56,723) | $ 1,123,863 | $ 6,148 | $ 851 | $ (8,007) | $ 11,164 | $ 1,137 | |||
Net income (loss) per common share - basic | $ 4.23 | $ (1.20) | $ 23.84 | $ 0.13 | $ 0.02 | $ (0.17) | $ 0.24 | $ 0.02 | |||
Net income (loss) per common share - diluted | $ 4.17 | $ (1.20) | $ 23.65 | $ 0.13 | $ 0.02 | $ (0.17) | $ 0.24 | $ 0.02 | |||
Weighted-average number of common shares - basic | 47,353,291 | 47,227,338 | 47,137,822 | 47,037,091 | 46,885,512 | 46,736,742 | 46,691,142 | 46,575,848 | |||
Weighted-average number of common shares - diluted | 48,037,841 | 47,227,338 | 47,526,207 | 47,381,226 | 47,196,890 | 46,736,742 | 47,029,446 | 46,929,191 |
Subsequent Events_ (Details)
Subsequent Events: (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Apr. 29, 2024 | Feb. 28, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent Events | |||||
Dividends paid | $ 181,716 | $ 169,857 | $ 150,288 | ||
Subsequent Events | |||||
Subsequent Events | |||||
Quarterly dividend payment approved (per share) | $ 0.965 | ||||
Dividends paid | $ 45,700 |
Schedule II VALUATION AND QUA_2
Schedule II VALUATION AND QUALIFYING ACCOUNTS (Details) - Deferred tax valuation allowance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Movement in valuation and qualifying accounts | |||
Balance at Beginning of Period | $ 140,895 | $ 132,800 | $ 150,589 |
Charged to Costs and Expenses | 10,486 | 16,583 | 4,918 |
Deductions | (14,848) | (8,488) | (22,707) |
Balance at End of Period | $ 136,533 | $ 140,895 | $ 132,800 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | During the three months ended December 31, 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 |