Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 27, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 000-51446 | ||
Entity Registrant Name | CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 02-0636095 | ||
Entity Central Index Key | 0001304421 | ||
Entity Address, Address Line One | 2116 South 17th Street | ||
Entity Address, City or Town | Mattoon | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 61938-5973 | ||
City Area Code | 217 | ||
Local Phone Number | 235-3311 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Title of 12(b) Security | Common Stock - $0.01 par value | ||
Trading Symbol | CNSL | ||
Security Exchange Name | NASDAQ | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Amendment Flag | false | ||
Entity Public Float | $ 515,607,358 | ||
Entity Common Stock, Shares Outstanding | 114,680,271 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | St. Louis, Missouri |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Net revenues | $ 1,191,263 | $ 1,282,233 | $ 1,304,028 |
Operating expense: | |||
Cost of services and products (exclusive of depreciation and amortization) | 546,661 | 569,629 | 560,644 |
Selling, general and administrative expenses | 301,667 | 271,125 | 275,361 |
Acquisition and other transaction costs | 7,646 | ||
Loss on impairment of assets held for sale | 131,698 | 5,704 | |
Loss on disposal of assets | 4,233 | ||
Depreciation and amortization | 300,166 | 300,597 | 324,864 |
Income (loss) from operations | (93,162) | 135,178 | 135,513 |
Other income (expense): | |||
Interest expense, net of interest income | (124,978) | (175,195) | (143,591) |
Loss on extinguishment of debt | (17,101) | (18,264) | |
Change in fair value of contingent payment rights | (86,476) | 23,802 | |
Other, net | 13,378 | 1,335 | 10,093 |
Income (loss) from continuing operations before income taxes | (204,762) | (142,259) | 7,553 |
Income tax expense (benefit) | (27,058) | (3,132) | 1,679 |
Income (loss) from continuing operations | (177,704) | (139,127) | 5,874 |
Discontinued operations: | |||
Income from discontinued operations | 23,467 | 41,845 | 40,685 |
Gain on sale of discontinued operations | 389,885 | ||
Income tax expense | 94,999 | 9,411 | 9,257 |
Income from discontinued operations | 318,353 | 32,434 | 31,428 |
Net income (loss) | 140,649 | (106,693) | 37,302 |
Less: dividends on Series A preferred stock | 40,104 | 2,677 | |
Less: net income attributable to noncontrolling interest | 564 | 392 | 325 |
Net income (loss) attributable to common shareholders | $ 99,981 | $ (109,762) | $ 36,977 |
Net income (loss) per common share - basic and diluted | |||
Income (loss) from continuing operations - Basic | $ (1.90) | $ (1.63) | $ 0.07 |
Income (loss) from continuing operations - Diluted | (1.90) | (1.63) | 0.07 |
Income from discontinued operations - Basic | 2.77 | 0.37 | 0.40 |
Income from discontinued operations - Diluted | 2.77 | 0.37 | 0.40 |
Net income (loss) per basic common shares attributable to common shareholders | 0.87 | (1.26) | 0.47 |
Net income (loss) per diluted common shares attributable to common shareholders | $ 0.87 | $ (1.26) | $ 0.47 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net income (loss) | $ 140,649 | $ (106,693) | $ 37,302 |
Pension and post-retirement obligations: | |||
Change in net actuarial loss and prior service cost, net of tax of $16,744, $11,903 and $(9,710) | 47,123 | 33,344 | (27,007) |
Amortization of actuarial loss (gain) and prior service cost (credit) to earnings, net of tax $(269), $1,950 and $140 | (762) | 5,444 | 436 |
Derivative instruments designated as cash flow hedges: | |||
Change in fair value of derivatives, net of tax of $3,847, $306 and $(4,797) | 10,879 | 868 | (13,601) |
Reclassification of realized loss to earnings, net of tax of $607, $3,773 and $4,061 | 1,721 | 10,191 | 11,622 |
Comprehensive income (loss) | 199,610 | (56,846) | 8,752 |
Less: comprehensive income attributable to noncontrolling interest | 564 | 392 | 325 |
Total comprehensive income (loss) attributable to common shareholders | $ 199,046 | $ (57,238) | $ 8,427 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Change in net actuarial loss and prior service cost, tax | $ 16,744 | $ 11,903 | $ (9,710) |
Amortization of actuarial losses and prior service cost to earnings, tax | (269) | 1,950 | 140 |
Change in fair value of derivatives, tax | 3,847 | 306 | (4,797) |
Reclassification of realized loss to earnings, tax | $ 607 | $ 3,773 | $ 4,061 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 325,852 | $ 99,635 |
Short-term investments | 87,951 | 110,801 |
Accounts receivable, net of allowance for credit losses | 119,675 | 133,362 |
Income tax receivable | 1,670 | 1,134 |
Prepaid expenses and other current assets | 62,996 | 56,831 |
Assets held for sale | 26,052 | |
Total current assets | 598,144 | 427,815 |
Property, plant and equipment, net | 2,234,122 | 2,019,444 |
Investments | 10,297 | 10,799 |
Goodwill | 929,570 | 1,013,243 |
Customer relationships, net | 43,089 | 73,939 |
Other intangible assets | 10,557 | 10,557 |
Assets of discontinued operations | 98,779 | |
Other assets | 61,315 | 58,116 |
Total assets | 3,887,094 | 3,712,692 |
Current liabilities: | ||
Accounts payable | 33,096 | 40,953 |
Advance billings and customer deposits | 46,664 | 53,028 |
Accrued compensation | 60,903 | 68,272 |
Accrued interest | 18,201 | 17,819 |
Accrued expense | 95,206 | 97,417 |
Current portion of long-term debt and finance lease obligations | 12,834 | 7,959 |
Liabilities held for sale | 97 | |
Total current liabilities | 266,904 | 285,545 |
Long-term debt and finance lease obligations | 2,129,462 | 2,118,853 |
Deferred income taxes | 274,309 | 194,458 |
Pension and other post-retirement obligations | 123,644 | 214,671 |
Other long-term liabilities | 47,326 | 62,789 |
Total liabilities | 2,841,645 | 2,876,316 |
Commitments and contingencies (Note 15) | ||
Series A preferred stock, par value $0.01 per share; 10,000,000 shares authorized, 456,343 and 434,266 shares outstanding as of December 31, 2022 and December 31, 2021, respectively; liquidation preference of $477,047 and $436,943 as of December 31, 2022 and December 31, 2021, respectively | 328,680 | 288,576 |
Shareholders' equity: | ||
Common stock, par value $0.01 per share; 150,000,000 shares authorized, 115,167,193 and 113,647,364 shares outstanding as of December 31, 2022 and December 31, 2021, respectively | 1,152 | 1,137 |
Additional paid-in capital | 720,442 | 740,746 |
Retained earnings (accumulated deficit) | (11,866) | (141,599) |
Accumulated other comprehensive loss, net | (610) | (59,571) |
Noncontrolling interest | 7,651 | 7,087 |
Total shareholders' equity | 716,769 | 547,800 |
Total liabilities, mezzanine equity and shareholders' equity | $ 3,887,094 | $ 3,712,692 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Temporary equity, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Temporary equity, shares authorized | 10,000,000 | 10,000,000 |
Temporary equity, shares outstanding | 456,343 | 434,266 |
Temporary equity, liquidation preference | $ 477,047 | $ 436,943 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 115,167,193 | 113,647,364 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Preferred Stock | Additional Paid-in Capital | Retained Earnings (Deficit) Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss, net | Non-controlling Interest | Cumulative Effect, Period of Adoption, Adjustment | Total |
Balance at Dec. 31, 2019 | $ 720 | $ 492,246 | $ (71,217) | $ (80,868) | $ 6,370 | $ 347,251 | |||
Balance (in shares) at Dec. 31, 2019 | 71,961,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Shares issued under employee plan, net of forfeitures | $ 11 | (11) | |||||||
Shares issued under employee plan, net of forfeitures (in shares) | 1,061,000 | ||||||||
Shares issued to Searchlight | $ 63 | 26,716 | 26,779 | ||||||
Shares issued to Searchlight (in shares) | 6,353,000 | ||||||||
Non-cash, share-based compensation | 7,533 | 7,533 | |||||||
Purchase and retirement of common stock | $ (2) | (811) | (813) | ||||||
Purchase and retirement of common stock (in shares) | (147,000) | ||||||||
Other comprehensive income (loss) | (28,550) | (28,550) | |||||||
Net income (loss) | 36,977 | 325 | 37,302 | ||||||
Balance (ASU 2016-13) at Dec. 31, 2020 | $ (274) | $ (274) | |||||||
Balance at Dec. 31, 2020 | $ 792 | 525,673 | (34,514) | (109,418) | 6,695 | $ 389,228 | |||
Balance (in shares) at Dec. 31, 2020 | 79,228,000 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Series A preferred stock issued | $ 285,899 | ||||||||
Series A preferred stock issued (in shares) | 434,000 | ||||||||
Dividends on Series A preferred stock accrued | $ 2,677 | ||||||||
Balance at Dec. 31, 2021 | $ 288,576 | ||||||||
Balance (in shares) at Dec. 31, 2021 | 434,000 | 434,266 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Shares issued under employee plan, net of forfeitures | $ 17 | (17) | |||||||
Shares issued under employee plan, net of forfeitures (in shares) | 1,652,000 | ||||||||
Shares issued to Searchlight | $ 330 | 209,387 | $ 209,717 | ||||||
Shares issued to Searchlight (in shares) | 32,986,000 | ||||||||
Dividends on Series A preferred stock accrued | (2,677) | (2,677) | |||||||
Non-cash, share-based compensation | 10,097 | 10,097 | |||||||
Purchase and retirement of common stock | $ (2) | (1,717) | (1,719) | ||||||
Purchase and retirement of common stock (in shares) | (219,000) | ||||||||
Other comprehensive income (loss) | 49,847 | 49,847 | |||||||
Net income (loss) | (107,085) | 392 | (106,693) | ||||||
Balance at Dec. 31, 2021 | $ 1,137 | 740,746 | (141,599) | (59,571) | 7,087 | $ 547,800 | |||
Balance (in shares) at Dec. 31, 2021 | 113,647,000 | ||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Series A preferred stock issued (in shares) | 22,000 | ||||||||
Dividends on Series A preferred stock accrued | $ 40,104 | ||||||||
Balance at Dec. 31, 2022 | $ 328,680 | ||||||||
Balance (in shares) at Dec. 31, 2022 | 456,000 | 456,343 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Shares issued under employee plan, net of forfeitures | $ 17 | (17) | |||||||
Shares issued under employee plan, net of forfeitures (in shares) | 1,809,000 | ||||||||
Dividends on Series A preferred stock accrued | (29,752) | (10,352) | $ (40,104) | ||||||
Non-cash, share-based compensation | 10,755 | 10,755 | |||||||
Purchase and retirement of common stock | $ (2) | (1,290) | (1,292) | ||||||
Purchase and retirement of common stock (in shares) | (289,000) | ||||||||
Other comprehensive income (loss) | 58,961 | 58,961 | |||||||
Net income (loss) | 140,085 | 564 | 140,649 | ||||||
Balance at Dec. 31, 2022 | $ 1,152 | $ 720,442 | $ (11,866) | $ (610) | $ 7,651 | $ 716,769 | |||
Balance (in shares) at Dec. 31, 2022 | 115,167,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ 140,649 | $ (106,693) | $ 37,302 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 300,166 | 300,597 | 324,864 | |
Deferred income taxes | 58,894 | 5,504 | 8,386 | |
Cash distributions from wireless partnerships in excess of current earnings | 5,697 | 1,195 | 844 | |
Pension and post-retirement contributions in excess of expense | (29,205) | (33,208) | (37,301) | |
Stock-based compensation expense | 10,755 | 10,097 | 7,533 | |
Amortization of deferred financing costs and discounts | 7,331 | 15,622 | 7,871 | |
Noncash interest expense on convertible security interest | 30,927 | 7,875 | ||
Loss on extinguishment of debt | 17,101 | 10,629 | ||
Loss (gain) on change in fair value of contingent payment rights | 86,476 | (23,802) | ||
Loss on impairment of assets held for sale | 131,698 | 5,704 | ||
Gain on sale of partnership interests | (389,885) | |||
Loss on disposal of assets | 4,233 | |||
Other, net | (367) | 3,226 | (2,501) | |
Changes in operating assets and liabilities: | ||||
Accounts receivable, net | 5,167 | 4,103 | (4,993) | |
Income tax receivable | (536) | (62) | 3,103 | |
Prepaid expenses and other assets | (7,699) | (12,863) | (7,457) | |
Accounts payable | (909) | (189) | (5,653) | |
Accrued expenses and other liabilities | (12,279) | (8,670) | 38,280 | |
Net cash provided by operating activities | 223,710 | 318,867 | 364,980 | |
Cash flows from investing activities: | ||||
Purchases of property, plant and equipment, net | (619,981) | (480,346) | (217,563) | |
Purchase of investments | (302,907) | (175,764) | ||
Proceeds from sale and maturity of investments | 327,419 | 66,198 | 426 | |
Proceeds from sale of assets | 22,918 | 3,469 | 7,071 | |
Proceeds from business dispositions | 105,823 | |||
Proceeds from sale of partnership interests | 482,966 | |||
Net cash provided by (used in) investing activities | 16,238 | (586,443) | (210,066) | |
Cash flows from financing activities: | ||||
Proceeds from bond offering | 400,000 | 750,000 | ||
Proceeds from issuance of long-term debt | 150,000 | 1,271,250 | ||
Proceeds from issuance of common stock | 75,000 | 350,000 | ||
Payment of finance lease obligations | (9,836) | (6,365) | (9,020) | |
Payment on long-term debt | (397,000) | (1,867,838) | ||
Retirement of senior notes | (444,717) | |||
Payment of financing costs | (2,603) | (8,266) | (59,139) | |
Share repurchases for minimum tax withholding | (1,292) | (1,719) | (812) | |
Other | (1,472) | |||
Net cash provided by (used in) financing activities | (13,731) | 211,650 | (11,748) | |
Change in cash and cash equivalents | 226,217 | (55,926) | 143,166 | |
Cash and cash equivalents at beginning of period | 99,635 | 155,561 | 12,395 | $ 12,395 |
Cash and cash equivalents at end of period | $ 325,852 | $ 99,635 | $ 155,561 | $ 99,635 |
BUSINESS DESCRIPTION & SUMMARY
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Basis of Accounting Consolidated Communications Holdings, Inc. (the “Company,” “we,” “our” or “us”) is a holding company with operating subsidiaries (collectively “Consolidated”) that provide communication solutions to consumer, commercial and carrier customers across a service area in over 20 states. Leveraging our advanced fiber network spanning approximately 57,800 fiber route miles, we offer residential high-speed Internet, video, phone and home security services as well as a comprehensive business product suite including: data and Internet solutions, voice, data center services, security services, managed and IT services, and an expanded suite of cloud services. Use of Estimates Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates. Our critical accounting estimates include (i) impairment evaluations associated with indefinite-lived intangible assets (Note 1), (ii) the determination of deferred tax asset and liability balances (Notes 1 and 14) and (iii) pension plan and other post-retirement costs and obligations (Notes 1 and 13). Principles of Consolidation Our consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries and subsidiaries in which we have a controlling financial interest. All significant intercompany transactions have been eliminated. Recent Business Developments Discontinued Operations – Sale of Investment in Wireless Partnerships On September 13, 2022, we completed the sale of our five limited wireless partnership interests to Cellco Partnership (“Cellco”) for an aggregate purchase price of $490.0 million, other than a portion of the interest in one of the partnerships which was sold to a limited partner of such partnership pursuant to its right of first refusal. Cellco is the general partner for each of the five wireless partnerships and is an indirect, wholly-owned subsidiary of Verizon Communications, Inc. In accordance with Accounting Standards Codification (“ASC”) 205-20, Presentation of Financial Statements – Discontinued Operations Searchlight Investment On December 7, 2021, we closed on the final stage of the investment agreement (the “Investment Agreement”) entered into on September 13, 2020 with an affiliate of Searchlight Capital Partners, L.P. (“Searchlight”). In connection with the Investment Agreement, affiliates of Searchlight have invested an aggregate of $425.0 million in the Company and hold a combination of Series A perpetual preferred stock and approximately 34% of the Company’s outstanding common stock as of December 31, 2022. For a more complete discussion of the transaction, refer to Note 4. With the strategic investment from Searchlight, we launched our fiber build plan to enhance our fiber infrastructure and accelerate the investment in our network, which will include the upgrade over six years of approximately 1.6 million passings across select service areas to enable multi-Gig capable services to these homes and small businesses Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Our cash equivalents consist primarily of money market funds and commercial paper. The carrying amounts of our cash equivalents approximate their fair values. Accounts Receivable and Allowance for Credit Losses Accounts receivable (“AR”) consists primarily of amounts due to the Company from normal business activities. We maintain an allowance for credit losses (“ACL”) based on our historical loss experience, current conditions and forecasted changes including but not limited to changes related to the economy, our industry and business. Uncollectible accounts are written-off (removed from AR and charged against the ACL) when internal collection efforts have been unsuccessful. Subsequently, if payment is received from the customer, the recovery is credited to the ACL. The following table summarizes the activity in the ACL for the years ended December 31, 2022, 2021 and 2020: (In thousands) 2022 2021 2020 Balance at beginning of year $ 9,961 $ 9,136 $ 4,549 Cumulative adjustment upon adoption of ASU 2016-13 — — 144 Provision charged to expense 8,684 7,752 11,573 Write-offs, less recoveries (7,175) (6,927) (7,130) Balance at end of year $ 11,470 $ 9,961 $ 9,136 Investments Investments in debt securities that we have the positive intent and ability to hold until maturity are classified as held-to-maturity. We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Investments with original maturities of more than three months and less than one year are classified as short-term investments. Held-to maturity debt securities are recorded at amortized cost, which approximates fair value, and realized gains or losses are recognized in earnings. Our long-term investments are primarily accounted for under either the equity method or at cost. If we have the ability to exercise significant influence over the operations and financial policies of an affiliated company, the investment in the affiliated company is accounted for using the equity method. If we do not have control and also cannot exercise significant influence, we account for these investments at our initial cost less impairment because fair value is not readily available for these investments. We review our investment portfolio periodically to determine whether there are identified events or circumstances that would indicate there is a decline in the fair value that is considered to be other than temporary. If we believe the decline is other than temporary, we evaluate the financial performance of the business and compare the carrying value of the investment to quoted market prices (if available) or the fair value of similar investments. If an investment is deemed to have experienced an impairment that is considered other-than temporary, the carrying amount of the investment is reduced to its quoted or estimated fair value, as applicable, and an impairment loss is recognized in other income (expense). Fair Value of Financial Instruments We account for certain assets and liabilities at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A financial asset or liability’s classification within a three-tiered value hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The hierarchy prioritizes the inputs to valuation techniques into three broad levels in order to maximize the use of observable inputs and minimize the use of unobservable inputs. The levels of the fair value hierarchy are as follows: Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs that reflect quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets and inputs other than quoted prices that are directly or indirectly observable in the marketplace. Level 3 – Unobservable inputs which are supported by little or no market activity. Property, Plant and Equipment Property, plant and equipment are recorded at cost. We capitalize additions and substantial improvements and expense repairs and maintenance costs as incurred. We capitalize the cost of internal-use network and non-network software which has a useful life in excess of one year. Subsequent additions, modifications or upgrades to internal-use network and non-network software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance and training costs are expensed in the period in which they are incurred. Also, we capitalize interest associated with the development of internal-use network and non-network software. Property, plant and equipment consisted of the following as of December 31, 2022 and 2021: December 31, December 31, Estimated (In thousands) 2022 2021 Useful Lives Land and buildings $ 270,708 $ 276,027 18 - 40 years Central office switching and transmission 1,635,263 1,590,510 3 - 25 years Outside plant cable, wire and fiber facilities 2,445,298 2,152,253 3 - 50 years Furniture, fixtures and equipment 347,346 324,562 3 - 15 years Assets under finance leases 58,081 44,495 2 - 20 years Total plant in service 4,756,696 4,387,847 Less: accumulated depreciation and amortization (2,754,587) (2,698,421) Plant in service 2,002,109 1,689,426 Construction in progress 123,736 265,054 Construction inventory 108,277 64,964 Totals $ 2,234,122 $ 2,019,444 Construction inventory, which is stated at weighted average cost, consists primarily of network construction materials and supplies that when issued are predominately capitalized as part of new customer installations and the construction of the network. We record depreciation using the straight-line method over estimated useful lives using either the group or unit method. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets, anticipated technological changes and the expected impact of our strategic operating plan on our network infrastructure. In addition, the ranges of estimated useful lives presented above are impacted by the accounting for business combinations as the lives assigned to these acquired assets are generally much shorter than that of a newly acquired asset. The group method is used for depreciable assets dedicated to providing regulated telecommunication services, including the majority of the network, outside plant facilities and certain support assets. A depreciation rate for each asset group is developed based on the average useful life of the group. The group method requires periodic revision of depreciation rates. When an individual asset is sold or retired, the difference between the proceeds, if any, and the cost of the asset is charged or credited to accumulated depreciation, without recognition of a gain or loss. The unit method is primarily used for buildings, furniture, fixtures and other support assets. Each asset is depreciated on the straight-line basis over its estimated useful life. When an individual asset is sold or retired, the cost basis of the asset and related accumulated depreciation are removed from the accounts and any associated gain or loss is recognized. Depreciation and amortization expense related to property, plant and equipment was $269.3 million, $261.1 million and $274.2 million in 2022, 2021 and 2020, respectively. Amortization of assets under capital leases is included in the depreciation and amortization expense in the consolidated statements of operations. We evaluate the recoverability of our property, plant and equipment whenever events or substantive changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the total of the expected future undiscounted cash flows were less than the carrying amount of the asset group, we would recognize an impairment charge for the difference between the estimated fair value and the carrying value of the asset group. Intangible Assets Indefinite-Lived Intangibles Goodwill and tradenames are evaluated for impairment annually or more frequently when events or changes in circumstances indicate that the asset might be impaired. We evaluate the carrying value of goodwill and tradenames as of November 30 of each year. Goodwill Goodwill is the excess of the acquisition cost of a business over the fair value of the identifiable net assets acquired. Goodwill is not amortized but instead evaluated annually for impairment. The evaluation of goodwill may first include a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Events and circumstances integrated into the qualitative assessment process include a combination of macroeconomic conditions affecting equity and credit markets, significant changes to the cost structure, overall financial performance and other relevant events affecting the reporting unit. When we use the quantitative approach to assess the goodwill carrying value and the fair value of our single reporting unit, the fair value of our reporting unit is compared to its carrying amount, including goodwill. The estimated fair value of the reporting unit is determined using a combination of market-based approaches and a discounted cash flow (“DCF”) model and reconciled to our market capitalization plus an estimated control premium. The assumptions used in the estimate of fair value are based upon a combination of historical results and trends, new industry developments and future cash flow projections, as well as relevant comparable company earnings multiples for the market-based approaches. Significant assumptions used in the analysis include a long-term growth rate and the weighted average cost of capital which is used to discount estimates of projected future results and cash flows. Such assumptions are judgmental and subject to change as a result of changing economic and competitive conditions. We use a weighting of the results derived from the valuation approaches to estimate the fair value of the reporting unit. For the 2022 assessment, using the quantitative approach, we concluded that the fair value of the reporting unit exceeded the carrying value at November 30, 2022 and that there was no impairment of goodwill. In measuring the fair value of our single reporting unit as described, we consider the fair value of our reporting unit in relation to our overall enterprise value, measured as the publicly traded stock price multiplied by the fully diluted shares outstanding plus the fair value of outstanding debt. Our reporting unit fair value models are consistent with a range in value indicated by both the preceding three-month average stock price and the stock price on the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies, if applicable. For the 2021 assessment, we evaluated the fair value of goodwill compared to the carrying value using the qualitative approach. The results of the qualitative approach concluded that it was more likely than not that the fair value of goodwill was greater than the carrying value as of November 30, 2021. If the carrying value of the reporting unit exceeds its fair value, a goodwill impairment is recorded for the difference in the carrying value and fair value. We did not recognize any goodwill impairment in 2022, 2021 or 2020 as a result of the impairment tests. At December 31, 2022 and 2021, the carrying value of goodwill was $929.6 million and $1,013.2 million, respectively. Goodwill decreased $83.6 million during 2022 as a result of a divestiture, as described in Note 5. Trade Name Our trade name is the federally registered mark CONSOLIDATED, a design of interlocking circles, which is used in association with our communication services. The Company’s corporate branding strategy leverages the CONSOLIDATED name and brand identity. All of the Company’s business units and several of our products and services incorporate the CONSOLIDATED name. Trade names with indefinite useful lives are not amortized but are tested for impairment at least annually. If facts and circumstances change relating to a trade name’s continued use in the branding of our products and services, it may be treated as a finite-lived asset and begin to be amortized over its estimated remaining life. When we use the quantitative approach to estimate the fair value of our trade names, we use DCFs based on a relief from royalty method. If the fair value of our trade names was less than the carrying amount, we would recognize an impairment charge for the difference between the estimated fair value and the carrying value of the assets. We perform our impairment testing of our trade names as single units of accounting based on their use in our single reporting unit. For the 2022 assessment, we used the qualitative approach to evaluate the fair value compared to the carrying value of the trade name. Based on our assessment, we concluded that the fair value of the trade names continued to exceed the carrying value. The carrying value of our trade names, excluding any finite lived trade names, was $10.6 million at December 31, 2022 and 2021. Finite-Lived Intangible Assets Finite-lived intangible assets subject to amortization consist primarily of our customer lists of an established base of customers that subscribe to our services. Finite-lived intangible assets are amortized using an accelerated amortization method or on a straight-line basis over their estimated useful lives. We evaluate the potential impairment of finite-lived intangible assets when impairment indicators exist. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment equal to the difference between the carrying amount and the fair value of the asset is recognized. We did not recognize any intangible impairment charges in the years ended December 31, 2022, 2021 or 2020. The components of finite-lived intangible assets are as follows: December 31, 2022 December 31, 2021 Gross Carrying Accumulated Gross Carrying Accumulated (In thousands) Useful Lives Amount Amortization Amount Amortization Customer relationships 7 - 11 years $ 318,498 $ (275,409) $ 318,498 $ (244,559) Amortization expense related to the finite-lived intangible assets for the years ended December 31, 2022, 2021 and 2020 was $30.9 million, $39.5 million and $50.7 million, respectively. Expected future amortization expense of finite-lived intangible assets is as follows: (In thousands) 2023 $ 23,963 2024 10,617 2025 3,180 2026 2,529 2027 1,996 Thereafter 804 Total $ 43,089 Derivative Financial Instruments We use derivative financial instruments to manage our exposure to the risks associated with fluctuations in interest rates. Our interest rate swap agreements effectively convert a portion of our floating-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on future cash interest payments. At the inception of a hedge transaction, we formally document the relationship between the hedging instruments including our objective and strategy for establishing the hedge. In addition, the effectiveness of the derivative instrument is assessed at inception and on an ongoing basis throughout the hedging period. Counterparties to derivative instruments expose us to credit-related losses in the event of nonperformance. We execute agreements only with financial institutions we believe to be creditworthy and regularly assess the credit worthiness of each of the counterparties. We do not use derivative instruments for trading or speculative purposes. Derivative financial instruments are recorded at fair value in our consolidated balance sheets. Fair value is determined based on projected interest rate yield curves and an estimate of our nonperformance risk or our counterparty’s nonperformance credit risk, as applicable. We do not anticipate any nonperformance by any counterparty. For derivative instruments designated as a cash flow hedge, the change in the fair value is recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) and is recognized as an adjustment to earnings over the period in which the hedged item impacts earnings. When an interest rate swap agreement terminates, any resulting gain or loss is recognized over the shorter of the remaining original term of the hedging instrument or the remaining life of the underlying debt obligation. If a derivative instrument is de-designated, the remaining gain or loss in AOCI on the date of de-designation is amortized to earnings over the remaining term of the hedging instrument. For derivative financial instruments that are not designated as a hedge, including those that have been de-designated, changes in fair value are recognized on a current basis in earnings. Cash flows from hedging activities are classified under the same category as the cash flows from the hedged items in our consolidated statement of cash flows. See Note 9 for further discussion of our derivative financial instruments. Series A Preferred Stock Our Series A Preferred Stock is classified as mezzanine equity in the consolidated balance sheets due to a deemed liquidation feature, which gives holders the right to require the Company to redeem all or any part of the holders’ Series A Preferred Stock for cash in the event of a fundamental change or change in control. We have not adjusted the carrying value of the Series A Preferred Stock to its liquidation value since the securities are not currently redeemable nor is it probable that they will become redeemable. Subsequent adjustments to increase the carrying value to the liquidation value will be made only if and when it becomes probable that such a deemed liquidation event will occur. Share-based Compensation We recognize share-based compensation expense for all restricted stock awards (“RSAs”) and performance share awards (“PSAs”) (collectively, “stock awards”) based on the estimated fair value of the stock awards on the date of grant. We recognize the expense associated with RSAs and PSAs on a straight-line basis over the requisite service period, which generally ranges from immediate vesting to a four-year vesting period, and account for forfeitures as they occur. See Note 12 for additional information regarding share-based compensation. Pension Plan and Other Post-Retirement Benefits We maintain noncontributory defined benefit pension plans and provide certain post-retirement health care and life insurance benefits to certain eligible employees. We also maintain two unfunded supplemental retirement plans to provide incremental pension payments to certain former employees. See Note 13 for a more detailed discussion regarding our pension and other post-retirement benefits. We recognize pension and post-retirement benefits expense during the current period in the consolidated statement of operations using certain assumptions, including the expected long-term rate of return on plan assets, interest cost implied by the discount rate, expected health care cost trend rate and the amortization of unrecognized gains and losses. We determine expected long-term rate of return on plan assets by considering historical investment performance, plan asset allocation strategies and return forecasts for each asset class and input from its advisors. Projected returns by such advisors were based on broad equity and fixed income indices. The expected long-term rate of return is reviewed annually in conjunction with other plan assumptions and revised, if considered necessary, to reflect changes in the financial markets and the investment strategy. Our plan assets are valued at fair value as of the measurement date. Our discount rate assumption is determined annually to reflect the rate at which the benefits could be effectively settled and approximate the timing of expected future payments based on current market determined interest rates for similar obligations. We use bond matching model BOND:Link comprising of high quality corporate bonds to match cash flows to the expected benefit payments. We recognize the overfunded or underfunded status of our defined benefit pension and post-retirement plans as either an asset or liability in the consolidated balance sheet. Actuarial gains and losses that arise during the year are recognized as a component of comprehensive income (loss), net of applicable income taxes, and included in accumulated other comprehensive income (loss). These gains and losses are amortized over future years as a component of the net periodic benefit cost when the net gains and losses exceed 10% of the greater of the market-related value of the plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over the average remaining service period of participating employees expected to receive benefits under the plans. Income Taxes Our estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities are disclosed in Note 14 and reflect our assessment of future tax consequences of transactions that have been reflected in our financial statements or tax returns for each taxing jurisdiction in which we operate. We base our provision for income taxes on our current period income, changes in our deferred income tax assets and liabilities, income tax rates, changes in estimates of our uncertain tax positions and tax planning opportunities available in the jurisdictions in which we operate. We recognize deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of our assets and liabilities and for the expected benefits of using net operating loss and tax credit loss carryforwards. We establish valuation allowances when necessary to reduce the carrying amount of deferred income tax assets to the amounts that we believe are more likely than not to be realized. We evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. When a change in the tax rate or tax law has an impact on deferred taxes, we apply the change when the tax law change is enacted, based on the years in which the temporary differences are expected to reverse. As we operate in more than one state, changes in our state apportionment factors, based on operating results, may affect our future effective tax rates and the value of our deferred tax assets and liabilities. We record a change in tax rates in our consolidated financial statements in the period of enactment. Income tax consequences that arise in connection with a business combination include identifying the tax basis of assets and liabilities acquired and any contingencies associated with uncertain tax positions assumed or resulting from the business combination. Deferred tax assets and liabilities related to temporary differences of an acquired entity are recorded as of the date of the business combination and are based on our estimate of the appropriate tax basis that will be accepted by the various taxing authorities. We record unrecognized tax benefits as liabilities in accordance with ASC 740, Income Taxes, Revenue Recognition Revenue is recognized when or as performance obligations are satisfied by transferring control of the good or service to the customer. Services Services revenues, with the exception of usage-based revenues, are generally billed in advance and recognized in subsequent periods when or as services are transferred to the customer. We offer bundled service packages that consists of high-speed Internet, video and voice services including local and long distance calling, voicemail and calling features. Each service is considered distinct and therefore accounted for as a separate performance obligation. Service revenue is recognized over time, consistent with the transfer of service, as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the Company performs. Usage-based services, such as per-minute long-distance service and access charges billed to other telephone carriers for originating and terminating long-distance calls in our network, are billed in arrears. We recognize revenue from these services when or as services are transferred to the customer. Revenue related to nonrefundable upfront fees, such as service activation and set-up fees are deferred and amortized over the expected customer life. Equipment Equipment revenue is generated from the sale of voice and data communications equipment as well as design, configuration, installation and professional support services related to such equipment. Equipment revenue generated from telecommunications systems and structured cabling projects is recognized when or as the project is completed and control is transferred to the customer. Maintenance services are provided on both a contract and time and material basis and are recognized when or as services are transferred. Subsidies and Surcharges Subsidies consist of both federal and state funding, designed to promote widely available, quality telephone and broadband services at affordable prices and with higher data speeds in rural areas and for low-income consumers across the country. These revenues are calculated by the administering government agency based on information we provide. There is a reasonable possibility that out-of-period subsidy adjustments may be recorded in the future, but they are expected to be immaterial to our results of operations, financial position and cash flows. We recognize Federal Universal Service contributions on a gross basis. We account for all other taxes collected from customers and remitted to the respective government agencies on a net basis. Some subsidies are funded by end user surcharges to which telecommunications providers, including local, long-distance and wireless carriers, contribute on a monthly basis, while others are components of broader economic stimulus or recovery legislation. In other cases, subsidies are awarded to carriers periodically over a predetermined number of years to support their deployment of high-speed broadband infrastructure in underserved or unserved areas. During the year ended December 31, 2022, subsidies included federal funding from the Rural Development Opportunity Fund (“RDOF”). The RDOF provides funding to bring faster broadband speeds to unserved and underserved areas of America. In the first phase of the RDOF auction process, we were awarded annual funding of approximately $5.9 million, beginning January 1, 2022 through December 31, 2031. The specific obligations associated with the RDOF funding include the obligation to deliver 1 Gbps downstream and 500 Mbps upstream data speeds to approximately 27,000 locations in seven states. RDOF subsidies are recognized as operating revenue since the primary conditions for the funding are the upgrade and operation of the broadband network over the funding period. Advertising Costs Advertising costs are expensed as incurred. Advertising expense was $34.5 million, $18.8 million and $11.1 million in 2022, 2021 and 2020, respectively. Statement of Cash Flows Information During 2022, 2021 and 2020, we made payments for interest and income taxes as follows: (In thousands) 2022 2021 2020 Interest, net of amounts capitalized ($10,112, $5,590 and $1,660 in 2022, 2021 and 2020, respectively) $ 119,322 $ 123,031 $ 120,897 Income taxes paid (received), net $ 9,585 $ 836 $ (553) In 2022, 2021 and 2020, we acquired equipment of $20.6 million, $13.9 million and $2.5 million, respectively, through finance lease agreements. In 2022, 2021 and 2020, we acquired property and equipment of $34.1 million, $52.9 million and $17.4 million, respectiv |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE | |
REVENUE | 2. REVENUE Nature of Contracts with Customers Our revenue contracts with customers may include a promise or promises to deliver goods such as equipment and/or services such as broadband, video or voice services. Promised goods and services are considered distinct as the customer can benefit from the goods or services either on their own or together with other resources that are readily available to the customer and the Company’s promise to transfer a good or service to the customer is separately identifiable from other promises in the contract. The Company accounts for goods and services as separate performance obligations. Each service is considered a single performance obligation as it is providing a series of distinct services that are substantially the same and have the same pattern of transfer. The transaction price is determined at contract inception and reflects the amount of consideration to which we expect to be entitled in exchange for transferring a good or service to the customer. This amount is generally equal to the market price of the goods and/or services promised in the contract and may include promotional discounts. The transaction price excludes amounts collected on behalf of third parties such as sales taxes and regulatory fees. Conversely, nonrefundable upfront fees, such as service activation and set-up fees, are included in the transaction price. In determining the transaction price, we consider our enforceable rights and obligations within the contract. We do not consider the possibility of a contract being cancelled, renewed or modified. The transaction price is allocated to each performance obligation based on the standalone selling price of the good or service, net of the related discount, as applicable. Revenue is recognized when or as performance obligations are satisfied by transferring control of the good or service to the customer. Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, (In thousands) 2022 2021 2020 Operating Revenues Consumer: Broadband (Data and VoIP) $ 272,146 $ 269,323 $ 263,059 Voice services 144,853 160,698 170,503 Video services 54,153 65,114 74,343 471,152 495,135 507,905 Commercial: Data services (includes VoIP) 228,466 228,931 225,279 Voice services 142,274 154,567 161,179 Other 43,100 40,032 43,454 413,840 423,530 429,912 Carrier: Data and transport services 137,378 133,434 136,799 Voice services 14,772 17,183 20,521 Other 1,688 1,592 1,701 153,838 152,209 159,021 Subsidies 33,382 69,739 71,989 Network access 104,644 120,487 125,261 Other products and services 14,407 21,133 9,940 Total operating revenues $ 1,191,263 $ 1,282,233 $ 1,304,028 Contract Assets and Liabilities The following table provides information about receivables, contract assets and contract liabilities from our revenue contracts with customers: Year Ended December 31, (In thousands) 2022 2021 Accounts receivable, net $ 119,675 $ 133,362 Contract assets 25,322 23,893 Contract liabilities 54,537 60,503 Contract assets include costs that are incremental to the acquisition of a contract. Incremental costs are those that result directly from obtaining a contract or costs that would not have been incurred if the contract had not been obtained, which primarily relate to sales commissions. These costs are deferred and amortized over the expected customer life. We determined that the expected customer life is the expected period of benefit as the commission on the renewal contract is not commensurate with the commission on the initial contract. During the years ended December 31, 2022, 2021 and 2020, the Company recognized expense of $12.9 million, $11.1 million and $9.0 million, respectively, related to deferred contract acquisition costs. Contract liabilities include deferred revenues related to advanced payments for services and nonrefundable, upfront service activation and set-up fees, which are generally deferred and amortized over the expected customer life as the option to renew without paying an upfront fee provides the customer with a material right. During the years ended December 31, 2022, 2021 and 2020, the Company recognized previously deferred revenues of $478.9 million, $471.7 million and $443.0 million, respectively. A receivable is recognized in the period the Company provides goods or services when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are generally 30 to 60 days. Performance Obligations ASC 606, Revenue from Contracts with Customers 1. The performance obligation is part of a contract that has an original expected duration of one year or less. 2. Revenue is recognized from the satisfaction of the performance obligations in the amount billable to the customer in accordance with ASC 606-10-55-18. The Company has elected these practical expedients. Performance obligations related to our service revenue contracts are generally satisfied over time. For services transferred over time, revenue is recognized based on amounts invoiced to the customer as the Company has concluded that the invoice amount directly corresponds with the value of services provided to the customer. Management considers this a faithful depiction of the transfer of control as services are substantially the same and have the same pattern of transfer over the life of the contract. As such, revenue related to unsatisfied performance obligations that will be billed in future periods has not been disclosed. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 3. EARNINGS PER SHARE Basic and diluted earnings (loss) per common share (“EPS”) are computed using the two-class method, which is an earnings allocation method that determines EPS for each class of common stock and participating securities considering dividends declared and participation rights in undistributed earnings. Common stock related to certain of the Company’s restricted stock awards are considered participating securities because holders are entitled to receive non-forfeitable dividends, if declared, during the vesting term. The potentially dilutive impact of the Company’s restricted stock awards is determined using the treasury stock method. Under the treasury stock method, if the average market price during the period exceeds the exercise price, these instruments are treated as if they had been exercised with the proceeds of exercise used to repurchase common stock at the average market price during the period. Any incremental difference between the assumed number of shares issued and repurchased is included in the diluted share computation. Diluted EPS includes securities that could potentially dilute basic EPS during a reporting period. Dilutive securities are not included in the computation of loss per share when a company reports a net loss from continuing operations as the impact would be anti-dilutive. The computation of basic and diluted EPS attributable to common shareholders computed using the two-class method is as follows: Year Ended December 31, (In thousands, except per share amounts) 2022 2021 2020 Income (loss) from continuing operations $ (177,704) $ (139,127) $ 5,874 Less: dividends on Series A preferred stock 40,104 2,677 — Less: net income attributable to noncontrolling interest 564 392 325 Loss attributable to common shareholders before allocation of earnings to participating securities (218,372) (142,196) 5,549 Less: earnings allocated to participating securities (6,284) — 427 Income (loss) from continuing operations attributable to common shareholders, after earnings allocated to participating securities (212,088) (142,196) 5,122 Income from discontinued operations 318,353 32,434 31,428 Less: earnings allocated to participating securities 9,161 — 2,417 Income from discontinued operations attributable to common shareholders, after earnings allocated to participating securities 309,192 32,434 29,011 Net income (loss) attributable to common shareholders, after earnings allocated to participating securities $ 97,104 $ (109,762) $ 34,133 Weighted-average number of common shares outstanding 111,754 87,293 72,752 Basic and diluted earnings (loss) per common share: Income (loss) from continuing operations $ (1.90) $ (1.63) $ 0.07 Income from discontinued operations 2.77 0.37 0.40 Net income (loss) per common share attributable to common shareholders - basic and diluted $ 0.87 $ (1.26) $ 0.47 Diluted EPS attributable to common shareholders for the year ended December 31, 2022 and 2021 excludes 3.3 million and 3.2 million potential common shares, respectively, related to our share-based compensation plan. Diluted EPS attributable to common shareholders for the year ended December 31, 2020 excludes 6.1 million potential common shares related to our share-based compensation plan and the contingent payment right (“CPR”) issued to Searchlight on October 2, 2020, as described in Note 4, because the inclusion of the potential common shares would have an antidilutive effect. |
SEARCHLIGHT INVESTMENT
SEARCHLIGHT INVESTMENT | 12 Months Ended |
Dec. 31, 2022 | |
SEARCHLIGHT INVESTMENT | |
SEARCHLIGHT INVESTMENT | 4. SEARCHLIGHT INVESTMENT In connection with the Investment Agreement entered into on September 13, 2020, affiliates of Searchlight committed to invest up to an aggregate of $425.0 million in the Company. The investment commitment was structured in two stages. In the first stage of the transaction, which was completed on October 2, 2020, Searchlight invested $350.0 million in the Company in exchange for 6,352,842 shares, or approximately 8%, of the Company’s common stock and was issued a CPR that was convertible, upon the receipt of certain regulatory and shareholder approvals, into an additional 17,870,012 shares, or 16.9% of the Company’s common stock. In addition, Searchlight received the right to an unsecured subordinated note with an aggregate principal amount of approximately $395.5 million (the “Note”), which will be convertible into shares of a new series of perpetual preferred stock of the Company with an aggregate liquidation preference equal to the principal amount of the Note plus accrued interest as of the date of conversion. On July 15, 2021, the Company received all required state public utility commission regulatory approvals necessary for the conversion of the CPR into 16.9% additional shares of the Company’s common stock. As a result, the CPR was converted into 17,870,012 shares of common stock, which were issued to Searchlight on July 16, 2021. In the second stage of the transaction, which was completed on December 7, 2021 following the receipt of Federal Communications Commission (“FCC”) and certain regulatory approvals and the satisfaction of certain other customary closing conditions, Searchlight invested an additional $75.0 million and was issued the Note. On December 7, 2021, Searchlight elected to convert the Note into 434,266 shares of Series A Perpetual Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”). In addition, the CPR converted into an additional 15,115,899 shares, or an additional 10.1%, of the Company’s common stock. As of December 31, 2022 and 2021, the total shares of common stock issued to Searchlight represent approximately 34% and 35%, respectively, of the Company’s outstanding common stock. Prior to conversion, the CPR was reported at its estimated fair value within long-term liabilities in the consolidated balance sheet. Subsequent changes in fair value were reflected in earnings within other income and expense in the consolidated statements of operations. During the years ended December 31, 2021 and 2020, we recognized a loss of $86.5 million and a gain of $23.5 million, respectively, on the change in the fair value of the CPR. Issuance costs allocated to the CPR of $7.6 million were expensed as incurred during the year ended December 31, 2020, which were included in acquisition and other transaction costs in the consolidated statements of operations. The Note bore interest at 9.0% per annum from the date of the closing of the first stage of the transaction and was payable semi-annually in arrears on April 1 and October 1 of each year. The term of the Note was 10 years and was due on October 1, 2029. The Note’s unamortized discount and issuance costs were being amortized over the contractual term of the Note using the effective interest method. The Note included a paid-in-kind (“PIK”) option for a five-year period beginning as of October 2, 2020. During the year ended December 31, 2021, the Company elected the PIK option and accrued interest of $38.8 million was added to the principal balance of the Note. On December 7, 2021, Searchlight exercised its option to convert the Note and the net carrying value of the Note of $285.9 million, net of unamortized discount and issuance costs of $139.7 million and $8.7 million, respectively, was converted into 434,266 shares of Series A Preferred Stock at a liquidation preference of $1,000 per share. Dividends on the Series A Preferred Stock accrue daily on the liquidation preference at a rate of 9.0% per annum, payable semi-annually in arrears. See Note 11 for more information on the terms of the Series A Preferred Stock. |
DIVESTITURES
DIVESTITURES | 12 Months Ended |
Dec. 31, 2022 | |
DIVESTITURES | |
DIVESTITURES | 5. DIVESTITURES Kansas City Operations On March 2, 2022, we entered into a definitive agreement to sell substantially all the assets of our business located in the Kansas City market (the “Kansas City operations”). The Kansas City operations provides data, voice and video services to customers within the Kansas City metropolitan area and surrounding counties and includes approximately 17,100 consumer customers and 1,600 commercial customers. The sale closed on November 30, 2022 for gross cash proceeds of $82.1 million, subject to the finalization of certain working capital and other post-closing purchase price adjustments. We expect to utilize the proceeds from the sale to support our fiber expansion plan in our core regions. The major classes of assets and liabilities sold consisted of the following: (In thousands) Current assets $ 3,205 Property, plant and equipment 138,587 Goodwill 83,673 Other long-term assets 1,238 Impairment to net realizable value (148,462) Total assets $ 78,241 Current liabilities $ 1,064 Other long-term liabilities 790 Total liabilities $ 1,854 In 2022, in connection with the classification as assets held for sale, the carrying value of the net assets were reduced to their estimated fair value, which was determined based on the estimated selling price less costs to sell, and as a result, we recognized an impairment loss of $131.7 million during the year ended December 31, 2022. During the quarter and year ended December 31, 2022, we recognized an additional loss on the sale of $16.8 million as a result of purchase price adjustments and an increase in net assets held for sale and estimated selling costs during the period. Tower Assets During the year ended December 31, 2022, we completed the sale of certain non-strategic communication towers for cash proceeds of approximately $21.0 million and recognized a pre-tax gain on the sale of $20.8 million. Ohio Operations On September 22, 2021, we entered into a definitive agreement to sell substantially all of the assets of our non-core, rural ILEC business located in Ohio, Consolidated Communications of Ohio Company (“CCOC”). CCOC provides telecommunications and data services to residential and business customers in 11 rural communities in Ohio and surrounding areas and includes approximately 3,800 access lines and 3,900 data connections. The sale was completed on January 31, 2022 for gross cash proceeds of $26.1 million, including customary working capital adjustments. The asset sale aligns with our strategic asset review and focus on our core broadband regions. The major classes of assets and liabilities sold consisted of the following: (In thousands) Current assets $ 137 Property, plant and equipment 9,584 Goodwill 16,327 Total assets $ 26,048 Current liabilities $ 102 Other long-term liabilities 6 Total liabilities $ 108 At December 31, 2021, the assets and liabilities to be sold were classified as held for sale in the consolidated balance sheet. In 2021, in connection with the expected sale, the carrying value of the net assets were reduced to their estimated fair value of approximately $25.9 million, which was determined based on the estimated selling price less costs to sell and were classified as Level 2 within the fair value hierarchy. As a result, we recognized an impairment loss of $5.7 million during the year ended December 31, 2021. During the year ended December 31, 2022, we recognized an additional loss on the sale of $0.8 million, which is included in selling, general and administrative expense |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENTS. | |
INVESTMENTS | 6. INVESTMENTS Our investments are as follows: (In thousands) 2022 2021 Short-term investments: Held-to-maturity debt securities $ 87,951 $ 110,801 Long-term investments: Cash surrender value of life insurance policies $ 2,774 $ 2,659 CoBank, ACB Stock 7,250 7,867 Other 273 273 $ 10,297 $ 10,799 Assets of discontinued operations: Investments at cost: GTE Mobilnet of South Texas Limited Partnership (2.34% interest) $ — $ 21,450 Pittsburgh SMSA Limited Partnership (3.60% interest) — 22,950 Equity method investments: GTE Mobilnet of Texas RSA #17 Limited Partnership (20.51% interest) — 19,648 Pennsylvania RSA 6(I) Limited Partnership (16.67% interest) — 7,303 Pennsylvania RSA 6(II) Limited Partnership (23.67% interest) — 27,428 $ — $ 98,779 Held-to-Maturity Debt Securities Our held-to-maturity debt securities consist of investments in commercial paper and certificate of deposits. At December 31, 2022, we had $88.0 million of investments in commercial paper included in short-term investments. At December 31, 2021, we had $20.0 million of investments in commercial paper included in cash and cash equivalents and $40.0 million of investments in commercial paper and $70.8 million of investments in certificate of deposits included in short-term investments. The investments have original maturities of less than one year. As of December 31, 2022 and 2021, the amortized cost of the investments approximated their fair value and the gross unrecognized gains and losses were not material. Long-Term Investments CoBank, ACB (“CoBank”) is a cooperative bank owned by its customers. Annually, CoBank distributes patronage in the form of cash and stock in the cooperative based on the Company’s outstanding loan balance with CoBank, which has traditionally been a significant lender in the Company’s credit facility. The investment in CoBank represents the accumulation of the equity patronage paid by CoBank to the Company. Discontinued Operations Investments at Cost We owned 2.34% of GTE Mobilnet of South Texas Limited Partnership (the “Mobilnet South Partnership”). The principal activity of the Mobilnet South Partnership is providing cellular service in the Houston, Galveston, and Beaumont, Texas metropolitan areas. We also owned 3.60% of Pittsburgh SMSA Limited Partnership (“Pittsburgh SMSA”), which provides cellular service in and around the Pittsburgh metropolitan area. Because of our limited influence over these partnerships, we accounted for these investments at our initial cost less any impairment because fair value is not readily available for these investments. We did not evaluate any of the investments for impairment as no factors indicating impairment existed during the year. For these investments, we adjusted the carrying value for any purchases or sales of our ownership interests, if any (there were none during the periods presented). Prior to classification as discontinued operations, we recorded distributions received from these investments as investment income in non-operating income (expense). In 2022, 2021 and 2020, we received cash distributions from these partnerships totaling $11.7 million, $20.7 million and $19.1 million, respectively. Equity Method We owned 20.51% of GTE Mobilnet of Texas RSA #17 Limited Partnership (“RSA #17”), 16.67% of Pennsylvania RSA 6(I) Limited Partnership (“RSA 6(I)”) and 23.67% of Pennsylvania RSA 6(II) Limited Partnership (“RSA 6(II)”). RSA #17 provides cellular service to a limited rural area in Texas. RSA 6(I) and RSA 6(II) provide cellular service in and around our Pennsylvania service territory. Because we had significant influence over the operating and financial policies of these three entities, we accounted for the investments using the equity method. Prior to classification as discontinued operations, income was recognized as investment income in non-operating income (expense) on our proportionate share of earnings and cash distributions were recorded as a reduction in our investment. In 2022, 2021 and 2020, we received cash distributions from these partnerships totaling $17.5 million, $22.3 million and $22.4 million, respectively. The carrying value of the investments exceeded the underlying equity in net assets of the partnerships by $32.8 million as of December 31, 2021. On September 13, 2022, we completed the sale of our five limited wireless partnership interests to Cellco for an aggregate purchase price of $490.0 million. Cellco is the general partner for each of the five wireless partnerships and is an indirect, wholly-owned subsidiary of Verizon Communications, Inc. A portion of the interest in one of the partnerships was sold to a limited partner of such partnership, pursuant to its right of first refusal. We intend to use the proceeds from the sale to support our fiber expansion plan. The financial results of the limited partnership interests have been reported as discontinued operations in our consolidated financial statements for all periods presented. At December 31, 2021, the carrying value of the investments in the partnership interests of $98.8 million were reported as assets of discontinued operations in the consolidated balance sheet. The results of discontinued operations included in the consolidated statements of operations consisted of the following: (In thousands) 2022 2021 2020 Investment income $ 23,467 $ 41,845 $ 40,685 Gain on sale of discontinued operations 389,885 — — Income from discontinued operations, before income taxes 413,352 41,845 40,685 Income tax expense 94,999 9,411 9,257 Net income from discontinued operations $ 318,353 $ 32,434 $ 31,428 In connection with the sale of the partnership interests, we expect to recognize a taxable gain of approximately of $477.7 million on the transaction. For federal income tax purposes, we expect to utilize our available net operating loss carryforwards to offset the taxable gain. For state income tax purposes, we are estimating approximately $8.0 million in state tax liabilities. In the statement of cash flows, we have elected to combine cash flows from discontinued operations with cash flows from continuing operations. The following table presents cash flows from operating and investing activities for discontinued operations: (In thousands) 2022 2021 2020 Cash provided by operating activities - discontinued operations $ 29,165 $ 43,040 $ 41,529 Cash provided by investing activities - discontinued operations $ 482,966 $ — $ — |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS Financial Instruments Interest Rate Swap Agreements Our derivative instruments related to interest rate swap agreements are required to be measured at fair value on a recurring basis. The fair values of the interest rate swaps are determined using valuation models and are categorized within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and observable market data of similar instruments. See Note 9 for further discussion regarding our interest rate swap agreements. Our interest rate swap agreements measured at fair value on a recurring basis at December 31, 2022 and 2021 were as follows: As of December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Interest rate swap assets $ 5,959 $ — $ 5,959 $ — As of December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Long-term interest rate swap liabilities $ (12,813) $ — $ (12,813) $ — We have not elected the fair value option for any of our other assets or liabilities. The carrying value of other financial instruments, including cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short maturities. The following table presents the other financial instruments that are not carried at fair value but which require fair value disclosure as of December 31, 2022 and 2021. As of December 31, 2022 As of December 31, 2021 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding finance leases $ 2,141,176 $ 1,759,430 $ 2,139,567 $ 2,186,508 Investments Our investments at December 31, 2022 and 2021 accounted for at cost consisted primarily of our investment in CoBank. It is impracticable to determine the fair value of this investment. Long-term Debt The fair value of our senior notes was based on quoted market prices, and the fair value of borrowings under our credit facility was determined using current market rates for similar types of borrowing arrangements. We have categorized the long-term debt as Level 2 within the fair value hierarchy. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 8. LONG-TERM DEBT Long-term debt outstanding, presented net of unamortized discounts, consisted of the following as of December 31, 2022 and 2021: (In thousands) 2022 2021 Senior secured credit facility: Term loans, net of discounts of $8,699 and $10,308 at December 31, 2022 and 2021, respectively $ 991,176 $ 989,567 6.50% Senior notes due 2028 750,000 750,000 5.00% Senior notes due 2028 400,000 400,000 Finance leases 35,746 24,990 2,176,922 2,164,557 Less: current portion of long-term debt and finance leases (12,834) (7,959) Less: deferred debt issuance costs (34,626) (37,745) Total long-term debt $ 2,129,462 $ 2,118,853 Credit Agreement On October 2, 2020, the Company, through certain of its wholly-owned subsidiaries, entered into a Credit Agreement with various financial institutions (the “Credit Agreement”) to replace the Company’s previous credit agreement in its entirety. The Credit Agreement consisted of term loans in the aggregate amount of $1,250.0 million (the “Initial Term Loans”) and a revolving loan facility of $250.0 million. The Credit Agreement also includes an incremental loan facility which provides the ability to borrow, subject to certain terms and conditions, incremental loans in an aggregate amount of up to the greater of (a) $300.0 million plus (b) an amount which would not cause its senior secured leverage ratio not to exceed 3.70:1.00 (the “Incremental Facility”). Borrowings under the Credit Agreement are secured by substantially all of the assets of the Company and its subsidiaries, subject to certain exceptions. The Term Loans were issued in an original aggregate principal amount of $1,250.0 million with a maturity date of October 2, 2027 and contained an original issuance discount of 1.5% or $18.8 million, which is being amortized over the term of the loan. Prior to amendments to the Credit Agreement, as described below, the Initial Term Loans required quarterly principal payments of $3.1 million, which commenced December 31, 2020, and bore interest at a rate 4.75% plus the LIBOR subject to a 1.00% LIBOR floor. On January 15, 2021, the Company entered into Amendment No. 1 to the Credit Agreement in which we borrowed an additional $150.0 million aggregate principal amount of incremental term loans (the “Incremental Term Loans”). The Incremental Term Loans have terms and conditions identical to the Initial Term Loans including the same maturity date and interest rate. The Initial Term Loans and Incremental Term Loans, collectively (the “Term Loans”) comprise a single class of term loans under the Credit Agreement. On March 18, 2021, the Company repaid $397.0 million of the outstanding Term Loans with the net proceeds received from the issuance of $400.0 million aggregate principal amount of 5.00% senior secured notes due 2028 (the “5.00% Senior Notes”), as described below. The repayment of the Term Loans was applied to the remaining principal payments in direct order of maturity, thereby eliminating the required quarterly principal payments through the remaining term of the loan. In connection with the repayment of the Term Loans, we recognized a loss on extinguishment of debt of $12.0 million during the year ended December 31, 2021. On April 5, 2021, the Company, entered into Amendment No. 2 to the Credit Agreement (the “Second Amendment”) to refinance the outstanding Term Loans of $999.9 million. The terms and conditions of the Credit Agreement remain substantially similar and unchanged except with respect to the interest rate applicable to the Term Loans and certain other provisions. As a result of the Second Amendment, the interest rate of the Term Loans was reduced to 3.50% plus LIBOR subject to a 0.75% LIBOR floor. The maturity date of the Term Loans of October 2, 2027 remains unchanged. In connection with entering into the Second Amendment, we recognized a loss of $5.1 million on the extinguishment of debt during the year ended December 31, 2021. The revolving credit facility has a maturity date of October 2, 2027 and an applicable margin (at our election) of 4.00% for SOFR-based borrowings or 3.00% for alternate base rate borrowings, with a 0.25% reduction in each case if the consolidated first lien leverage ratio, as defined in the Credit Agreement, does not exceed 3.20 to 1.00. As of December 31, 2022 and 2021, there were no borrowings outstanding under the revolving credit facility. Stand-by letters of credit of $24.5 million were outstanding under our revolving credit facility as of December 31, 2022. The stand-by letters of credit are renewable annually and reduce the borrowing availability under the revolving credit facility. As of December 31, 2022, $225.5 million was available for borrowing under the revolving credit facility. On November 22, 2022, the Company, entered into Amendment No. 3 to the Credit Agreement (the “Third Amendment”) to, among other things, extend the maturity of the revolving credit facility by two years from October 2, 2025 to October 2, 2027, subject to springing maturity on April 2, 2027 if the Term Loans, as of April 1, 2027, are scheduled to mature earlier than March 31, 2028. The Third Amendment also relaxed the revolving credit facility’s consolidated first lien leverage maintenance covenant, as described below, through June 30, 2025 to 6.35:1.00 from 5.85:1.00. The weighted-average interest rate on outstanding borrowings under our credit facilities was 7.63% and 4.25% at December 31, 2022 and 2021, respectively. Interest is payable at least quarterly. Credit Agreement Covenant Compliance The Credit Agreement contains various provisions and covenants, including, among other items, restrictions on the ability to pay dividends, incur additional indebtedness, and issue certain capital stock. We have agreed to maintain certain financial ratios, including a maximum consolidated first lien leverage ratio, as defined in the Credit Agreement. Among other things, it will be an event of default, with respect to the revolving credit facility only, if our consolidated first lien leverage ratio is greater than 6.35:1.00 as of the end of any fiscal quarter, if on such date the testing threshold is met. The testing threshold is met if the aggregate amount of our borrowings outstanding under the revolving credit facility exceeds 35%. As of December 31, 2022, the testing threshold was not met and our consolidated first lien leverage ratio under the Credit Agreement was 4.40:1.00. As of December 31, 2022, we were in compliance with the Credit Agreement covenants. Senior Notes On October 2, 2020, we completed an offering of $750.0 million aggregate principal amount of 6.50% unsubordinated secured notes due 2028 (the “6.50% Senior Notes”). The 6.50% Senior Notes were priced at par and bear interest at a rate of 6.50%, payable semi-annually on April 1 and October 1 of each year, beginning on April 1, 2021. The 6.50% Senior Notes mature on October 1, 2028. On March 18, 2021, we issued $400.0 million aggregate principal amount 5.00% Senior Notes, together with the 6.50% Senior Notes (the “Senior Notes”). The 5.00% Senior Notes were priced at par and bear interest at a rate of 5.00% per year, payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2021. The 5.00% Senior Notes will mature on October 1, 2028. The net proceeds from the issuance of the 5.00% Senior Notes were used to repay $397.0 million of the Term Loans outstanding under the Credit Agreement. The Senior Notes are unsubordinated secured obligations of the Company, secured by a first priority lien on the collateral that secures the Company’s obligations under the Credit Agreement. The Senior Notes are fully and unconditionally guaranteed on a first priority secured basis by the Company and the majority of our wholly-owned subsidiaries. The offering of the Senior Notes has not been registered under the Securities Act of 1933, as amended or any state securities laws. Senior Notes Covenant Compliance Subject to certain exceptions and qualifications, the indenture governing the Senior Notes contains customary covenants that, among other things, limits the Company and its restricted subsidiaries’ ability to: incur additional debt or issue certain preferred stock; pay dividends or make other distributions on capital stock or prepay subordinated indebtedness; purchase or redeem any equity interests; make investments; create liens; sell assets; enter into agreements that restrict dividends or other payments by restricted subsidiaries; consolidate, merge or transfer all or substantially all of its assets; engage in transactions with its affiliates; or enter into any sale and leaseback transactions. The indenture also contains customary events of default. At December 31, 2022, the Company was in compliance with all terms, conditions and covenants under the indenture governing the Senior Notes. Future Maturities of Debt At December 31, 2022, the aggregate maturities of our long-term debt excluding finance leases were as follows: (In thousands) 2023 $ — 2024 — 2025 — 2026 — 2027 999,875 Thereafter 1,150,000 Total maturities 2,149,875 Less: Unamortized discount (8,699) Carrying value $ 2,141,176 See Note 10 regarding the future maturities of our obligations for finance leases. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 9. DERIVATIVE FINANCIAL INSTRUMENTS We may utilize interest rate swap agreements to mitigate risk associated with fluctuations in interest rates related to our variable rate debt obligations under the Credit Agreement. Derivative financial instruments are recorded at fair value in our consolidated balance sheets. The following interest rate swaps were outstanding at December 31, 2022: Notional (In thousands) Amount 2022 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating LIBOR (with floor) $ 500,000 Prepaid expenses and other current assets $ 5,959 Our interest rate swap agreements mature on July 31, 2023. The following interest rate swaps were outstanding at December 31, 2021: Notional (In thousands) Amount 2021 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating LIBOR (with floor) $ 500,000 Other long-term liabilities $ (12,813) The counterparties to our various swaps are highly rated financial institutions. None of the swap agreements provide for either us or the counterparties to post collateral nor do the agreements include any covenants related to the financial condition of Consolidated or the counterparties. The swaps of any counterparty that is a lender, as defined in our credit facility, are secured along with the other creditors under the credit facility. Each of the swap agreements provides that in the event of a bankruptcy filing by either Consolidated or the counterparty, any amounts owed between the two parties would be offset in order to determine the net amount due between parties. At December 31, 2022 and 2021, the total pre-tax unrealized gain (loss) related to our interest rate swap agreements included in AOCI was $6.9 million and $(10.1) million, respectively. From the balance in AOCI as of December 31, 2022, we expect to recognize a gain of approximately $6.9 million in earnings as a reduction to interest expense in the next twelve months. Information regarding our cash flow hedge transactions is as follows: Year Ended December 31, (In thousands) 2022 2021 2020 Unrealized gain (loss) recognized in AOCI, pretax $ 14,726 $ 1,174 $ (18,398) Deferred loss reclassified from AOCI to interest expense $ (2,328) $ (13,964) $ (15,683) |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | 10. LEASES We have entered into various leases for certain facilities, land, underground conduit, colocations, and equipment used in our operations. For leases with a term greater than 12 months, we recognize a right-to-use asset and a lease liability based on the present value of lease payments over the lease term. The leases have remaining lease terms of one year to 86 years and may include one or more options to renew, which can extend the lease term from one As most of our leases do not provide a readily determinable implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. We use the implicit rate when a rate is readily determinable. Our leases may also include scheduled rent increases and options to extend or terminate the lease which is included in the determination of lease payments when it is reasonably certain that we will exercise that option. For all asset classes, we do not separate lease and nonlease components, as such we account for the components as a single lease component. Leases with an initial term of 12 months or less are not recognized on the balance sheet and the expense for these short-term leases is recognized on a straight-line basis over the lease term. Short-term lease expense, which is recognized in cost of services and products, was not material to the consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020. Variable lease payments are expensed as incurred. The following table summarizes the components of our lease right-of use assets and liabilities at December 31, 2022 and 2021: (In thousands) Balance Sheet Classification 2022 2021 Operating leases Operating lease right-of-use assets Other assets $ 26,548 $ 25,072 Current lease liabilities Accrued expense $ (5,076) $ (6,383) Noncurrent lease liabilities Other long-term liabilities $ (22,249) $ (19,072) Finance leases Finance lease right-of-use assets, net of accumulated depreciation of $15,308 and $16,255 Property, plant and equipment, net $ 42,773 $ 28,240 Current lease liabilities Current portion of long-term debt and finance lease obligations $ (12,834) $ (7,959) Noncurrent lease liabilities Long-term debt and finance lease obligations $ (22,912) $ (17,031) Weighted-average remaining lease term Operating leases 7.7 years 7.1 years Finance leases 3.5 years 4.6 years Weighted-average discount rate Operating leases 6.47 % 6.27 % Finance leases 6.60 % 5.55 % The components of lease expense for the years ended December 31, 2022, 2021 and 2020 consisted of the following: Year Ended December 31, (In thousands) 2022 2021 2020 Finance lease cost: Amortization of right-of-use assets $ 4,804 $ 4,152 $ 7,442 Interest on lease liabilities 1,444 1,106 1,356 Operating lease cost 8,469 8,359 8,421 Variable lease cost 2,167 2,054 2,205 Total lease cost $ 16,884 $ 15,671 $ 19,424 The following table presents supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, (In thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,003 $ 8,111 $ 8,325 Operating cash flows for finance leases 1,444 1,106 1,356 Financing cash flows for finance leases 9,836 6,365 9,020 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 9,261 5,673 6,842 Finance leases 20,592 13,888 2,534 At December 31, 2022, the aggregate maturities of our lease liabilities were as follows: (In thousands) Operating Leases Finance Leases 2023 $ 6,659 $ 14,742 2024 5,684 12,903 2025 4,973 7,209 2026 3,488 1,847 2027 2,847 1,770 Thereafter 11,695 1,224 Total lease payments 35,346 39,695 Less: Interest (8,021) (3,949) $ 27,325 $ 35,746 Lessor We have various arrangements for use of our network assets for which we are the lessor, including tower space, certain colocation, conduit and dark fiber arrangements. These leases meet the criteria for operating lease classification. Lease income associated with these types of leases is not material. Occasionally, we enter into arrangements where the term may be for a major part of the asset’s remaining economic life such as in indefeasible right of use (“IRU”) arrangements for dark fiber or conduit, which meet the criteria for sales-type lease classification. During the years ended December 31, 2022, 2021 and 2020, we entered into IRU arrangements for exclusive access to and unrestricted use of specific assets. These arrangements were recognized as sales-type leases as the term of the arrangements were for a major part of the asset’s remaining economic life. During the year ended December 31, 2022, we recognized revenue We elected the practical expedient to combine lease and non-lease components in our lessor arrangements. We have arrangements where the non-lease component associated with the lease component is the predominant component in the contract, such as in revenue contracts that involve the customer leasing equipment from us. In such cases, we account for the combined component in accordance with ASC 606 as the service component is the predominant component in the contract. |
MEZZANINE EQUITY
MEZZANINE EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
MEZZANINE EQUITY | |
MEZZANINE EQUITY | 11. MEZZANINE EQUITY Series A Preferred Stock The Company is authorized to issue up to 10,000,000 shares of Series A Perpetual Preferred Stock with a par value of $0.01 per share. The Series A Preferred Stock ranks senior to the Company’s common stock with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company and redemption rights. The following is a summary of certain provisions under the Certificate of Designations of the Series A Perpetual Preferred Stock (“Certificate of Designations”). Dividends Dividends on each share of Series A Preferred Stock accrue daily on the liquidation preference at a rate of 9.0% per annum and will be payable semi-annually in arrears on January 1 and July 1 of each year. Subsequent to a waiver issued by Searchlight in November 2022 as described below, dividends are payable until October 2, 2027 at our election, either in cash or in-kind through an accrual of unpaid dividends, which are automatically added to the liquidation preference; and after October 2, 2027, solely in cash. The liquidation preference at any given time is $1,000 per share. In the event that the Company’s Board of Directors fails to declare and pay dividends in cash after October 2, 2027, among other conditions, the dividend rate applicable to each subsequent dividend period will increase to 11.0%. On November 22, 2022, in connection with entering into the Third Amendment to the Credit Agreement, Searchlight waived for two years, until October 2, 2027, the obligation under the Certificate of Designations to begin paying in cash after October 2, 2025 rather than being permitted to accrue dividends on the Series A Preferred Stock. Any dividend not declared and fully paid in cash during the waiver period or otherwise, will continue to accrue in accordance with the Certificate of Designations. Redemption Upon a fundamental change such as a change of control, liquidation, dissolution or winding up event, holders of the Series A Preferred Stock will have the right to require the Company to repurchase all or any part of the outstanding Series A Preferred Stock for cash at a price equal the liquidation preference and accrued and unpaid dividends through and including the fundamental change date. The Company may, at its option redeem all or any part of the outstanding shares of Series A Preferred Stock at a purchase price per share in cash equal to the sum of the liquidation preference and accrued and unpaid dividends. A premium may also be payable in connection with any such redemption. Voting Rights Holders of Series A Preferred Stock are entitled to one vote per share on matters specifically related to the Series A Preferred Stock. The holders do not otherwise have any voting rights. If preferred dividends have not been paid in cash in full for two dividend periods after October 2, 2027, whether or not consecutive, then the holders of the Series A Preferred Stock, voting together as a single class, will be entitled to elect two additional directors to the board of directors. On December 7, 2021, upon the completion of the Searchlight investment as described in Note 4, we issued 434,266 shares of Series A Preferred Stock with a carrying value of $285.9 million. In accordance with ASC 480, Distinguishing Liabilities from Equity |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 12. SHAREHOLDERS’ EQUITY Common Stock Dividends On April 25, 2019, we announced the elimination of the payment of quarterly dividends on our stock beginning in the second quarter of 2019. Future dividend payments, if any, are at the discretion of our Board of Directors. Changes in our dividend program will depend on our earnings, capital requirements, financial condition, debt covenant compliance, expected cash needs and other factors considered relevant by our Board of Directors. Share-based Compensation Our Board of Directors may grant share-based awards from our shareholder approved Consolidated Communications Holdings, Inc. Long-Term Incentive Plan, as amended and restated (the “Plan”). The Plan permits the issuance of awards in the form of stock options, stock appreciation rights, stock grants and stock unit grants to eligible directors and employees at the discretion of the Compensation Committee of the Board of Directors. On April 26, 2021, the shareholders approved an amendment to the Plan to increase by 5,400,000 shares the number of shares of our common stock authorized for issuance under the Plan and extend the term of the Plan through April 30, 2028. With the amendment, approximately 10,050,000 shares of our common stock are authorized for issuance under the Plan, provided that no more than 300,000 shares may be granted in the form of stock options or stock appreciation rights to any eligible employee or director in any calendar year. Unless terminated sooner, the Plan will continue in effect until April 30, 2028. We measure the fair value of RSAs based on the market price of the underlying common stock on the date of grant. We recognize the expense associated with RSAs on a straight-line basis over the requisite service period, which generally ranges from immediate vesting to a four-year vesting period. We implemented an ongoing performance-based incentive program under the Plan. The performance-based incentive program provides for annual grants of PSAs. PSAs are restricted stock that are issued, to the extent earned, at the end of each annual performance cycle. Under the performance-based incentive program, each participant is given a target award expressed as a number of shares, with a payout opportunity ranging from 0% to 120% of the target, depending on performance relative to predetermined goals. An estimate of the number of PSAs that are expected to vest is made, and the fair value of the PSAs is expensed utilizing the fair value on the date of grant over the requisite service period. The awards generally vest ratably over a four-year vesting period. Pursuant to the performance-based incentive program, PSAs issued to certain senior executives entitle the executives to earn shares depending on the level of attainment of the predetermined performance goals over a three-year performance period, with payouts ranging from 0% to 150% of the target for PSAs issued in 2022 and from 0% to 120% for PSAs issued in 2021 and 2020. The earned PSAs are then subject to possible adjustment based on our total shareholder return relative to our peer group over the same performance period, which may increase or decrease the number of shares actually awarded by up to 25%. The following table summarizes grants of RSAs and PSAs under the Plan during the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, Grant Date Grant Date Grant Date 2022 Fair Value 2021 Fair Value 2020 Fair Value RSAs Granted 1,031,999 $ 4.70 941,748 $ 7.51 863,710 $ 6.30 PSAs Granted 904,435 $ 7.52 788,054 $ 6.31 240,669 $ 9.86 Total 1,936,434 1,729,802 1,104,379 The following table summarizes the RSA and PSA activity during the year ended December 31, 2022: RSAs PSAs Weighted Weighted Average Grant Average Grant Shares Date Fair Value Shares Date Fair Value Non-vested shares outstanding - December 31, 2021 1,069,817 $ 7.34 920,010 $ 7.40 Shares granted 1,031,999 $ 4.70 904,435 $ 7.52 Shares vested (839,609) $ 6.31 (309,387) $ 9.18 Shares forfeited, cancelled or retired (76,227) $ 6.31 (51,000) $ 8.20 Non-vested shares outstanding - December 31, 2022 1,185,980 $ 5.84 1,464,058 $ 7.07 The total fair value of the RSAs and PSAs that vested during the years ended December 31, 2022, 2021 and 2020 was $8.1 million, $7.3 million and $6.4 million, respectively. Share-based Compensation Expense The following table summarizes total compensation costs recognized for share-based payments during the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, (In thousands) 2022 2021 2020 Restricted stock $ 5,296 $ 5,478 $ 4,597 Performance shares 5,459 4,619 2,936 Total $ 10,755 $ 10,097 $ 7,533 Income tax benefits related to share-based compensation of approximately $2.8 million, $2.6 million and $2.0 million were recorded for the years ended December 31, 2022, 2021 and 2020, respectively. Share-based compensation expense is included in “selling, general and administrative expenses” in the accompanying consolidated statements of operations. As of December 31, 2022, total unrecognized compensation cost related to non-vested RSAs and PSAs was $12.4 million and will be recognized over a weighted-average period of approximately 1.6 years. Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in accumulated other comprehensive income (loss), net of tax, by component during 2022 and 2021: Pension and Post-Retirement Derivative (In thousands) Obligations Instruments Total Balance at December 31, 2020 $ (90,887) $ (18,531) $ (109,418) Other comprehensive gain before reclassifications 33,344 868 34,212 Amounts reclassified from accumulated other comprehensive loss 5,444 10,191 15,635 Net current period other comprehensive income (loss) 38,788 11,059 49,847 Balance at December 31, 2021 $ (52,099) $ (7,472) $ (59,571) Other comprehensive gain before reclassifications 47,123 10,879 58,002 Amounts reclassified from accumulated other comprehensive loss (762) 1,721 959 Net current period other comprehensive income 46,361 12,600 58,961 Balance at December 31, 2022 $ (5,738) $ 5,128 $ (610) The following table summarizes reclassifications from accumulated other comprehensive loss during 2022 and 2021: Year Ended December 31, Affected Line Item in the (In thousands) 2022 2021 Statement of Income Amortization of pension and post-retirement items: Prior service credit $ 777 $ 779 (a) Actuarial gain (loss) 254 (2,309) (a) Settlement loss — (5,864) (a) 1,031 (7,394) Total before tax (269) 1,950 Tax (expense) benefit $ 762 $ (5,444) Net of tax Loss on cash flow hedges: Interest rate derivatives $ (2,328) $ (13,964) Interest expense 607 3,773 Tax benefit $ (1,721) $ (10,191) Net of tax (a) These items are included in the components of net periodic benefit cost for our pension and post-retirement benefit plans. See Note 13 for additional details. |
PENSION PLANS AND OTHER POST-RE
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS | 12 Months Ended |
Dec. 31, 2022 | |
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS | |
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS | 13. PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS Defined Benefit Plans We sponsor three qualified defined benefit pension plans that are non-contributory covering substantially all of our hourly employees under collective bargaining agreements who fulfill minimum age and service requirements and certain salaried employees. The defined benefit pension plans are closed to all new entrants. All of our defined benefit pension plans are now frozen to all current employees and no additional monthly pension benefits will accrue under those plans. We also have two non-qualified supplemental retirement plans (the “Supplemental Plans” and, together with the defined benefit pension plans, the “Pension Plans”). The Supplemental Plans provide supplemental retirement benefits to certain former employees by providing for incremental pension payments to partially offset the reduction of the amount that would have been payable under the qualified defined benefit pension plans if it were not for limitations imposed by federal income tax regulations. The Supplemental Plans are frozen so that no person is eligible to become a new participant. These plans are unfunded and have no assets. The benefits paid under the Supplemental Plans are paid from the general operating funds of the Company. The following tables summarize the change in benefit obligation, plan assets and funded status of the Pension Plans as of December 31, 2022 and 2021: (In thousands) 2022 2021 Change in benefit obligation Benefit obligation at the beginning of the year $ 744,463 $ 826,120 Interest cost 22,273 22,758 Actuarial gain (197,697) (19,218) Benefits paid (30,071) (36,381) Plan settlement — (48,816) Benefit obligation at the end of the year $ 538,968 $ 744,463 (In thousands) 2022 2021 Change in plan assets Fair value of plan assets at the beginning of the year $ 617,540 $ 623,826 Employer contributions 10,055 20,755 Actual return on plan assets (132,767) 58,156 Benefits paid (30,071) (36,381) Plan settlement — (48,816) Fair value of plan assets at the end of the year $ 464,757 $ 617,540 Funded status at year end $ (74,211) $ (126,923) In the years ended December 31, 2022 and 2021, the actuarial gain on the benefit obligation was primarily due to an increase in the discount rate. Amounts recognized in the consolidated balance sheets at December 31, 2022 and 2021 consisted of: (In thousands) 2022 2021 Current liabilities $ (236) $ (242) Long-term liabilities $ (73,975) $ (126,681) Amounts recognized in accumulated other comprehensive loss for the years ended December 31, 2022 and 2021 consisted of: (In thousands) 2022 2021 Unamortized prior service cost $ 685 $ 808 Unamortized net actuarial loss 61,193 90,318 $ 61,878 $ 91,126 The following table summarizes the components of net periodic pension cost recognized in the consolidated statements of operations for the plans for the years ended December 31, 2022, 2021 and 2020: (In thousands) 2022 2021 2020 Interest cost $ 22,273 $ 22,758 $ 25,971 Expected return on plan assets (36,535) (36,997) (34,544) Amortization of: Net actuarial loss 730 2,309 1,165 Prior service cost 123 122 123 Plan settlement — 5,864 — Net periodic pension cost (benefit) $ (13,409) $ (5,944) $ (7,285) The components of net periodic pension cost other than the service cost component are included in other, net within other income (expense) in the consolidated statements of operations. In 2021, we purchased a group annuity contract to transfer the pension benefit obligations and annuity administration for a select group of retirees or their beneficiaries to an annuity provider. Upon issuance of the group annuity contract, in 2021 the pension benefit obligation of $47.1 million for approximately 400 participants was irrevocably transferred to the annuity provider. The purchase of the group annuity contracts was funded directly by the assets of the Pension Plans. During the year ended December 31, 2021, we recognized a pension settlement charge of $5.9 million as a result of the transfer of the pension liability to the annuity provider and other lump sum payments made during the year. The following table summarizes other changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects, during 2022 and 2021: (In thousands) 2022 2021 Actuarial gain, net $ (28,395) $ (40,377) Recognized actuarial loss (730) (2,309) Recognized prior service cost (123) (122) Plan settlement — (5,864) Total amount recognized in other comprehensive loss, before tax effects $ (29,248) $ (48,672) The weighted-average assumptions used to determine the projected benefit obligations and net periodic benefit cost for the years ended December 31, 2022, 2021 and 2020 were as follows: 2022 2021 2020 Discount rate - net periodic benefit cost 3.05 % 2.81 % 3.51 % Discount rate - benefit obligation 5.63 % 3.05 % 2.81 % Expected long-term rate of return on plan assets 6.00 % 6.00 % 6.25 % Rate of compensation/salary increase N/A N/A 2.50 % Interest crediting rate for cash balance plans 4.00 % 2.00 % 2.00 % Other Non-Qualified Deferred Compensation Agreements We also are liable for deferred compensation agreements with former members of the board of directors and certain other former employees of acquired companies. Depending on the plan, benefits are payable in monthly or annual installments for a period of time based on the terms of the agreement which range from five years up to the life of the participant or to the beneficiary upon death of the participant and may begin as early as age 55. Participants accrue no new benefits as these plans had previously been frozen. Payments related to the deferred compensation agreements totaled approximately $0.2 million for each of the years ended December 31, 2022 and 2021, respectively. The net present value of the remaining obligations was approximately $0.5 million and $0.6 million at December 31, 2022 and 2021, respectively, and is included in pension and post-retirement benefit obligations in the accompanying balance sheets. We also maintain 22 life insurance policies on certain of the participating former directors and employees. We recognized $0.1 million in life insurance proceeds as other non-operating income in 2021. We did not recognize any life insurance proceeds in 2022. The excess of the cash surrender value of the remaining life insurance policies over the notes payable balances related to these policies is determined by an independent consultant, and totaled $2.8 million and $2.7 million at December 31, 2022 and 2021, respectively. These amounts are included in investments in the accompanying consolidated balance sheets. Cash principal payments for the policies and any proceeds from the policies are classified as operating activities in the consolidated statements of cash flows. The aggregate death benefit payment payable under these policies totaled $6.3 million and $6.2 million as of December 31, 2022 and 2021, respectively. Post-retirement Benefit Obligations We sponsor various healthcare and life insurance plans (“Post-retirement Plans”) that provide post-retirement medical and life insurance benefits to certain groups of retired employees. Certain plans are frozen so that no person is eligible to become a new participant. Retirees share in the cost of healthcare benefits, making contributions that are adjusted periodically—either based upon collective bargaining agreements or because total costs of the program have changed. Covered expenses for retiree health benefits are paid as they are incurred. Post-retirement life insurance benefits are fully insured. A majority of the healthcare plans are unfunded and have no assets, and benefits are paid from the general operating funds of the Company. However, a certain healthcare plan is funded by assets that are separately designated within the Pension Plans for the sole purpose of providing payments of retiree medical benefits for this specific plan. The following tables summarize the change in benefit obligation, plan assets and funded status of the post-retirement benefit obligations as of December 31, 2022 and 2021: (In thousands) 2022 2021 Change in benefit obligation Benefit obligation at the beginning of the year $ 96,434 $ 106,704 Service cost 658 649 Interest cost 2,593 2,579 Plan participant contributions 447 868 Actuarial gain (36,567) (4,860) Benefits paid (7,342) (9,506) Benefit obligation at the end of the year $ 56,223 $ 96,434 (In thousands) 2022 2021 Change in plan assets Fair value of plan assets at the beginning of the year $ 3,546 $ 3,337 Employer contributions 6,894 8,638 Plan participant’s contributions 447 868 Actual return on plan assets (852) 209 Benefits paid (7,342) (9,506) Fair value of plan assets at the end of the year $ 2,693 $ 3,546 Funded status at year end $ (53,530) $ (92,888) In the years ended December 31, 2022 and 2021, the actuarial gain on the benefit obligation was primarily due to the underwriting gain and an increase in the discount rate. Amounts recognized in the consolidated balance sheets at December 31, 2022 and 2021 consist of: (In thousands) 2022 2021 Current liabilities $ (4,328) $ (5,446) Long-term liabilities $ (49,202) $ (87,442) Amounts recognized in accumulated other comprehensive loss for the years ended December 31, 2022 and 2021 consist of: (In thousands) 2022 2021 Unamortized prior service credit $ (1,965) $ (2,865) Unamortized net actuarial gain (39,103) (4,585) $ (41,068) $ (7,450) The following table summarizes the components of the net periodic costs for post-retirement benefits for the years ended December 31, 2022, 2021 and 2020: (In thousands) 2022 2021 2020 Service cost $ 658 $ 649 $ 825 Interest cost 2,593 2,579 3,265 Expected return on plan assets (213) (200) (197) Amortization of: Net actuarial gain (984) — (1,859) Prior service cost (credit) (900) (901) 1,147 Net periodic postretirement benefit cost $ 1,154 $ 2,127 $ 3,181 The components of net periodic post-retirement benefit cost other than the service cost component are included in other, net within other income (expense) in the consolidated statements of operations. The following table summarizes other changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects, during 2022 and 2021: (In thousands) 2022 2021 Actuarial gain, net $ (35,502) $ (4,869) Recognized actuarial gain 984 — Recognized prior service credit 900 901 Total amount recognized in other comprehensive loss, before tax effects $ (33,618) $ (3,968) The weighted-average assumptions used to determine the projected benefit obligations and net periodic benefit cost for the years ended December 31, 2022, 2021 and 2020 were as follows: 2022 2021 2020 Discount rate - net periodic benefit cost 2.94 % 2.57 % 3.35 % Discount rate - benefit obligation 5.64 % 2.93 % 2.56 % Rate of compensation/salary increase 2.50 % 2.50 % 2.50 % For purposes of determining the cost and obligation for post-retirement medical benefits, a 6.50% healthcare cost trend rate was assumed for the plan in 2022, declining to the ultimate trend rate of 5.00% in 2029. Plan Assets Our investment strategy is designed to provide a stable environment to earn a rate of return over time to satisfy the benefit obligations and minimize the reliance on contributions as a source of benefit security. The objectives are based on a long-term ( 5 The asset return objective is to achieve, as a minimum over time, the passively managed return earned by managed index funds, weighted in the proportions outlined by the asset class exposures identified in the pension plan’s strategic allocation. We update our long-term, strategic asset allocations every few years to ensure they are in line with our fund objectives. At December 31, 2022, the target allocation of the Pension Plan assets is approximately 70 - 90% in return seeking assets consisting primarily of equity and fixed income funds with the remainder in hedge funds. Our investment policy allows the use of derivative instruments when appropriate to reduce anticipated asset volatility or to gain desired exposure to various markets and return drivers. Currently, we believe that there are no significant concentrations of risk associated with the Pension Plan assets. The following is a description of the valuation methodologies for assets measured at fair value utilizing the fair value hierarchy discussed in Note 1, which prioritizes the inputs used in the valuation methodologies in measuring fair value. The fair value measurements used to value our plan assets as of December 31, 2022 were generated by using market transactions involving identical or comparable assets. There were no changes in the valuation techniques used during 2022. Common Stock: Common Collective Trusts and Commingled Funds: The fair values of our assets for our defined benefit pension plans at December 31, 2022 and 2021, by asset category were as follows: As of December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 38 $ 38 $ — $ — Equities: Stocks: U.S. common stocks 21 21 — — International stocks 2 2 — — Total plan assets in the fair value hierarchy 61 $ 61 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 4,739 Equities: Global 154,626 Real estate 96,641 Fixed Income 137,174 Hedge Funds 71,519 Other liabilities (3) (3) Total plan assets $ 464,757 As of December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 459 $ 459 $ — $ — Equities: Stocks: U.S. common stocks 24 24 — — International stocks 1 1 — — Total plan assets in the fair value hierarchy 484 $ 484 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 6,477 Equities: Global 223,101 Real estate 126,980 Fixed Income 194,189 Hedge Funds 66,309 Total plan assets $ 617,540 (1) Certain investments that are measured at fair value using NAV per share as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets. (2) Short-term investments include an investment in a common collective trust which is principally comprised of certificates of deposit, commercial paper, U.S. government obligations and variable rate securities with maturities less than one year. (3) Other liabilities include net amount due from pending securities purchased and sold. The fair values of our assets for our post-retirement benefit plans at December 31, 2022 and 2021 were as follows: As of December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 1 $ 1 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 28 Equities: Global 917 Real estate 573 Fixed Income 814 Hedge Funds 425 Total plan assets 2,758 Benefit payments payable (65) Net plan assets $ 2,693 As of December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 3 $ 3 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 39 Equities: Global 1,330 Real estate 757 Fixed Income 1,158 Hedge Funds 395 Total plan assets 3,682 Benefit payments payable (136) Net plan assets $ 3,546 (1) Certain investments that are measured at fair value using NAV per share as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets. (2) Short-term investments include investment in a common collective trust which is principally comprised of certificates of deposit, commercial paper and U.S. government obligations with maturities less than one year. Cash Flows Contributions Our funding policy is to contribute annually an actuarially determined amount necessary to meet the minimum funding requirements as set forth in employee benefit and tax laws. We elected to participate in ARPA beginning with the 2021 plan year. ARPA, which was signed into law in March 2021, included changes to the employer funding requirements and is designed to reduce the amounts of required contributions to provide funding relief for employers. During 2021 and the six months ended June 30, 2022, we elected to fund our pension contributions at the pre-ARPA levels, which has created a pre-funded balance. We expect that for the year ended December 31, 2023, no pension contributions will be required as we will use our current pre-funded balance to satisfy the minimum contribution requirements under ARPA. We expect to contribute approximately $6.2 million to our other post-retirement plans in 2023. Estimated Future Benefit Payments As of December 31, 2022, benefit payments expected to be paid over the next ten years are outlined in the following table: Other Pension Post-retirement (In thousands) Plans Plans 2023 $ 32,568 $ 6,159 2024 33,866 5,558 2025 34,648 5,046 2026 35,539 4,655 2027 36,284 4,400 2028 - 2032 189,696 19,290 Defined Contribution Plans We offer defined contribution 401(k) plans to substantially all of our employees. Contributions made under the defined contribution plans include a match, at the Company’s discretion, of employee contributions to the plans. We recognized expense with respect to these plans of $15.8 million, $15.6 million and $15.6 million in 2022, 2021 and 2020, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 14. INCOME TAXES Income tax expense (benefit) consists of the following components: For the Year Ended (In thousands) 2022 2021 2020 Current: Federal $ 199 $ 305 $ 314 State 830 470 2,578 Total current expense 1,029 775 2,892 Deferred: Federal (20,983) (3,921) 187 State (7,104) 14 (1,400) Total deferred expense (benefit) (28,087) (3,907) (1,213) Total income tax expense (benefit) $ (27,058) $ (3,132) $ 1,679 The following is a reconciliation of the federal statutory tax rate to the effective tax rate for the years ended December 31, 2022, 2021 and 2020: For the Year Ended (In percentages) 2022 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 5.3 4.7 10.4 Searchlight investment — (23.3) (20.8) Other permanent differences (0.7) (0.4) 9.8 Change in deferred tax rate 1.5 0.2 (5.4) Valuation allowance (0.3) (1.2) 17.8 Provision to return 0.1 1.9 (7.0) Non deductible goodwill (13.4) (1.0) — Other (0.3) 0.3 (3.6) 13.2 % 2.2 % 22.2 % Deferred Taxes The components of the net deferred tax liability are as follows: Year Ended December 31, (In thousands) 2022 2021 Non-current deferred tax assets: Reserve for uncollectible accounts $ 3,032 $ 2,632 Accrued vacation pay deducted when paid 4,501 4,388 Accrued expenses and deferred revenue 15,458 15,019 Net operating loss carryforwards 71,576 100,402 Excess interest carryforward 19,580 2,402 Pension and postretirement obligations 34,083 57,507 Share-based compensation 2,347 1,706 Derivative instruments (1,815) 2,633 Tax credit carryforwards 4,282 4,854 153,044 191,543 Valuation allowance (8,379) (8,580) Net non-current deferred tax assets 144,665 182,963 Non-current deferred tax liabilities: Goodwill and other intangibles (36,384) (44,044) Basis in investment — (4) Partnership investments 271 (16,902) Property, plant and equipment (377,886) (310,579) Financing costs (4,976) (5,892) Other 1 — (418,974) (377,421) Net non-current deferred taxes $ (274,309) $ (194,458) In connection to the sale of our five limited wireless partnership interests to Cellco in 2022, we have recognized a taxable gain of approximately $477.7 million. For federal income tax purposes, we expect to utilize our available net operating loss carry forwards to offset the taxable gain. For state income tax purposes, we are estimating approximately $8.0 million in state tax liabilities. The financial results of the limited partnership interests have been classified as discontinued operations in our consolidated financial statements for all periods presented. Refer to Note 6 for additional information on the transaction and the partnership interests. As a result of the Kansas City and Ohio transactions in 2022, we recorded an increase of $23.2 million and $4.2 million, respectively, to our current tax expense in 2022 related to the write-down of noncash goodwill included in the transactions that is not deductible for tax purposes. The investment made by Searchlight in 2020 is treated as a contribution of equity for federal tax purposes; therefore, the impact of the non-cash PIK interest expense, discount and issuance costs, and fair value adjustments on the CPR resulted in an increase of $33.1 million and a decrease of $1.6 million to our current tax expense for 2021 and 2020, respectively. As of December 31, 2022, the American Rescue Plan Act did not have a material impact on the Company’s income tax positions. We will continue to evaluate the impact of enacted and future legislation. Deferred income taxes are provided for the temporary differences between assets and liabilities recognized for financial reporting purposes and assets and liabilities recognized for tax purposes. The ultimate realization of deferred tax assets depends upon taxable income during the future periods in which those temporary differences become deductible. To determine whether deferred tax assets can be realized, management assesses whether it is more likely than not that some portion or all of the deferred tax assets will not be realized, taking into consideration the scheduled reversal of deferred tax liabilities, projected future taxable income and tax-planning strategies. Consolidated and its wholly owned subsidiaries, which file a consolidated federal income tax return, estimates it has available federal NOL carryforwards as of December 31, 2022 of $295.4 million and related deferred tax assets of $62.0 million. The federal NOL carryforwards for tax years beginning after December 31, 2017 of $154.7 million and related deferred tax assets of $32.5 million can be carried forward indefinitely. The federal NOL carryforwards for the tax years prior to December 31, 2017 of $140.7 million and related deferred tax assets of $29.5 million expire in 2030 to 2035. ETFL, a nonconsolidated subsidiary for federal income tax return purposes, estimates it has available NOL carryforwards as of December 31, 2022 of $0.4 million and related deferred tax assets of $0.1 million. ETFL’s federal NOL carryforwards are for the tax years prior to December 31, 2017 and expire in 2023 to 2024. We estimate that we have available state NOL carryforwards as of December 31, 2022 of $406.4 million and related deferred tax assets of $14.2 million. The state NOL carryforwards expire from 2023 to 2042. Management believes that it is more likely than not that we will not be able to realize state NOL carryforwards of $91.5 million and related deferred tax asset of $6.3 million and has placed a valuation allowance on this amount. The related NOL carryforwards expire from 2023 to 2042. If or when recognized, the tax benefits related to any reversal of the valuation allowance will be accounted for as a reduction of income tax expense. We estimate that we have available state tax credit carryforwards as of December 31, 2022 of $5.4 million and related deferred tax assets of $4.3 million. The state tax credit carryforwards are limited annually and expire from 2023 to 2032. Management believes that it is more likely than not that we will not be able to realize state tax credit carryforwards of $2.7 million and related deferred tax asset of $2.1 million and has placed a valuation allowance on this amount. The related state tax credit carryforwards expire from 2023 to 2032. If or when recognized, the tax benefits related to any reversal of the valuation allowance will be accounted for as a reduction of income tax expense. Unrecognized Tax Benefits Under the accounting guidance applicable to uncertainty in income taxes, we have analyzed filing positions in all of the federal and state jurisdictions where we are required to file income tax returns as well as all open tax years in these jurisdictions. Our unrecognized tax benefits as of December 31, 2022 and 2021 were $4.9 million. There were no material effects on the Company’s effective tax rate. The net amount of unrecognized benefits that, if recognized, would result in an impact to the effective rate is $4.7 million for each of the years ended December 31, 2022 and 2021. Our practice is to recognize interest and penalties related to income tax matters in interest expense and selling, general and administrative expenses, respectively. As of December 31, 2022 and 2021, we did not have a material liability for interest or penalties and had no material interest or penalty expense. The periods subject to examination for our federal return are years 2019 through 2021. The periods subject to examination for our state returns are years 2018 through 2021. In addition, prior tax years may be subject to examination by federal or state taxing authorities if the Company’s NOL carryovers from those prior years are utilized in the future. We are currently under examination by state taxing authorities. We do not expect any settlement or payment that may result from the examination to have a material effect on our results or cash flows. We do not expect that the total unrecognized tax benefits and related accrued interest will significantly change due to the settlement of audits or the expiration of statute of limitations in the next twelve months. There were no material effects on the Company’s effective tax rate. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES We have certain obligations for various contractual agreements to secure future rights to goods and services to be used in the normal course of our operations. These include purchase commitments for planned capital expenditures, agreements securing dedicated access and transport services, and service and support agreements. As of December 31, 2022, future minimum contractual obligations and the estimated timing and effect the obligations will have on our liquidity and cash flows in future periods are as follows: Minimum Annual Contractual Obligations (in thousands) 2023 2024 2025 2026 2027 Thereafter Total Service and support agreements (1) $ 12,552 $ 10,272 $ 6,350 $ 299 $ 307 $ 753 $ 30,533 Transport and data connectivity 7,392 5,624 232 87 87 82 13,504 Capital expenditures (2) 112,100 — — — — — 112,100 Other operating agreements (3) 2,094 1,954 1,013 575 491 1,440 7,567 Total $ 134,138 $ 17,850 $ 7,595 $ 961 $ 885 $ 2,275 $ 163,704 (1) We have entered into service and maintenance agreements to support various computer hardware and software applications and certain equipment. (2) We have binding commitments with numerous suppliers for future capital expenditures. (3) We have entered into various non-cancelable rental agreements for certain facilities and equipment used in our operations. Litigation, Regulatory Proceedings and Other Contingencies Gross Receipts Tax Two of our subsidiaries, Consolidated Communications of Pennsylvania Company LLC (“CCPA”) and Consolidated Communications Enterprise Services Inc. (“CCES”), have, at various times, received Assessment Notices and/or Audit Assessment Notices from the Commonwealth of Pennsylvania Department of Revenue (“DOR”) increasing the amounts owed for the Pennsylvania Gross Receipts Tax, and have had audits performed for the tax years 2008 through 2018. We filed Petitions for Reassessment with the DOR’s Board of Appeals contesting these audit assessments. These cases remain pending and are in various stages of appeal. In May 2017, we entered into an agreement to guarantee any potential liabilities to the DOR up to $5.0 million. We believe that certain of the DOR’s findings regarding CCPA’s and CCES’s additional tax liabilities for the tax years 2008 through 2018, for which we have filed appeals, continue to lack merit. However, in 2019, CCPA and CCES finalized a settlement of the intrastate and interstate tax liabilities for the tax years 2008 through 2013, except for the 2010 CCPA appeals, bringing the appeals to a conclusion. The additional tax liabilities calculated by the DOR for these tax years for CCPA and CCES were approximately $3.4 million and $4.0 million, respectively. The settlement resulted in a payment from us to the DOR of $2.1 million, including interest, which the Company previously reserved for. The additional tax liabilities calculated by the DOR for CCPA and CCES for the remaining unsettled tax years 2010 (CCPA) and 2014 through 2018 (CCPA and CCES) are approximately $4.6 million and $2.6 million, respectively. Based on the initial settlement offers for the tax years 2008 through 2013 and the Company’s best estimate of the potential additional tax liabilities for the remaining unsettled tax years 2010 (CCPA) and 2014 through 2018 (CCPA and CCES), we have reserved $0.8 million and $1.6 million, including interest, for our CCPA and CCES subsidiaries, respectively. We expect the filings for the tax years 2014 through 2018 to be settled at a later date similar to the initial settlement. In 2022, the DOR performed audits for the tax years 2019 and 2020 and we received Audit Assessment Notices for CCPA, which included additional tax liabilities calculated by the DOR of approximately $0.8 million. We intend to contest these audit assessments and file Petitions for Reassessment with the DOR’s Board of Appeals, which were filed on December 26, 2022. While we continue to believe a settlement of all remaining disputed claims is possible, we cannot anticipate at this time what the ultimate resolution of these cases will be, nor can we evaluate the likelihood of a favorable or unfavorable outcome or the potential losses (or gains) should such an outcome occur. We do not believe that the outcome of these claims will have a material adverse impact on our financial statements. Pole Sale On December 30, 2020, the Company reached an agreement to sell to Public Service Company of New Hampshire d/b/a Eversource Energy (“Eversource”) its joint ownership interest in approximately 343,000 poles and its sole ownership interest in approximately 3,800 poles located in the Eversource electric service area. The agreement also included the settlement of all vegetation maintenance costs disputed between the Company and Eversource through December 2020. The Company recognized a net loss of $1.9 million during the quarter ended December 31, 2020 associated with the execution of this agreement. Upon the closing of the sale, the Company will become a tenant on the poles and pay pole attachment fees to Eversource. The Company will also no longer have any future obligations associated with vegetation maintenance. The purchase and sale transaction requires regulatory approval by the New Hampshire Public Utilities Commission (“NHPUC”) and was submitted for approval by the parties in 2021. Formal hearings on the transaction concluded in May 2022. The NHPUC issued its order on November 18, 2022. During the quarter ended December 31, 2022, the Company recorded an additional loss on the proposed sale of $8.3 million as a result of the November 18, 2022 NHPUC order which included certain adjustments to components of the purchase price and expense allocations between Eversource and the Company. The Company also increased its estimated closing costs necessary to complete the sale. The New England Cable and Telecommunications Alliance has filed a motion for reconsideration and both parties have filed a motion for clarification. The NHPUC has not yet issued a ruling on either of these motions. From time to time we may be involved in litigation that we believe is of the type common to companies in our industry, including regulatory issues. While the outcome of these claims cannot be predicted with certainty, we do not believe that the outcome of any of these legal matters will have a material adverse impact on our financial statements. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2022 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 16. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Quarter Ended 2022 March 31, June 30, September 30, December 31, (In thousands, except per share amounts) Net revenues $ 300,278 $ 298,390 $ 296,619 $ 295,976 Operating income (loss) $ (107,742) $ 14,449 $ 20,852 $ (20,721) Loss from continuing operations $ (119,096) $ (10,591) $ (7,257) $ (40,760) Discontinued operations, net of tax $ 3,547 $ 9,079 $ 299,934 $ 5,793 Net income (loss) attributable to common stockholders $ (125,262) $ (11,517) $ 282,250 $ (45,490) Basic and diluted earnings (loss) per common share: Loss from continuing operations $ (1.15) $ (0.18) $ (0.15) $ (0.46) Income from discontinued operations 0.03 0.08 2.60 0.05 Net income (loss) per common share attributable to common shareholders - basic and diluted $ (1.12) $ (0.10) $ 2.45 $ (0.41) Quarter Ended 2021 March 31, June 30, September 30, December 31, (In thousands, except per share amounts) Net revenues $ 324,766 $ 320,403 $ 318,584 $ 318,480 Operating income $ 38,326 $ 30,015 $ 32,508 $ 34,329 Income (loss) from continuing operations $ (78,304) $ (55,138) $ (13,100) $ 7,415 Discontinued operations, net of tax $ 16,221 $ 49 $ 8,619 $ 7,545 Net income (loss) attributable to common stockholders $ (62,099) $ (55,356) $ (4,721) $ 12,414 Basic and diluted earnings (loss) per common share: Income (loss) from continuing operations $ (1.00) $ (0.71) $ (0.14) $ 0.05 Income from discontinued operations 0.20 - 0.09 0.07 Net income (loss) per common share attributable to common shareholders - basic and diluted $ (0.80) $ (0.71) $ (0.05) $ 0.12 In connection with the classification of the Kansas City operations as assets held for sale, as discussed in Note 5, we recognized an impairment loss of $126.5 million and $5.2 million during the quarters ended March 31, 2022 and September 30, 2022, respectively. During the quarter ended December 31, 2022, we recognized an additional loss on the sale of $16.8 million as a result of purchase price adjustments and an increase in net assets held for sale and estimated selling costs during the period. During the quarters ended September 30, 2022 and December 31, 2022, we recognized a pre-tax gain of $19.2 million and $1.6 million, respectively, related to the sale of certain non-strategic communication towers. As discussed in Note 15, we recognized a loss of $8.3 million related to the proposed sale of certain utility poles during the quarter ended December 31, 2022. During the quarter ended December 31, 2021, we purchased a group annuity contract to transfer the pension benefit obligations and annuity administration for a select group of retirees or their beneficiaries to an annuity provider. As a result of the transfer of the pension liability to the annuity provider, we recognized a non-cash pension settlement charge of $5.9 million during the quarter ended December 31, 2021. During the quarter ended December 31, 2021, we recognized a gain of $13.1 million on the decline in the fair value of contingent payment rights issued to Searchlight. |
BUSINESS DESCRIPTION & SUMMAR_2
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Business and Basis of Accounting | Business and Basis of Accounting Consolidated Communications Holdings, Inc. (the “Company,” “we,” “our” or “us”) is a holding company with operating subsidiaries (collectively “Consolidated”) that provide communication solutions to consumer, commercial and carrier customers across a service area in over 20 states. Leveraging our advanced fiber network spanning approximately 57,800 fiber route miles, we offer residential high-speed Internet, video, phone and home security services as well as a comprehensive business product suite including: data and Internet solutions, voice, data center services, security services, managed and IT services, and an expanded suite of cloud services. |
Use of Estimates | Use of Estimates Preparation of the financial statements in conformity with accounting principles generally accepted in the United States and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from those estimates. Our critical accounting estimates include (i) impairment evaluations associated with indefinite-lived intangible assets (Note 1), (ii) the determination of deferred tax asset and liability balances (Notes 1 and 14) and (iii) pension plan and other post-retirement costs and obligations (Notes 1 and 13). |
Principles of Consolidation | Principles of Consolidation Our consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries and subsidiaries in which we have a controlling financial interest. All significant intercompany transactions have been eliminated. |
Searchlight Investment | Recent Business Developments Discontinued Operations – Sale of Investment in Wireless Partnerships On September 13, 2022, we completed the sale of our five limited wireless partnership interests to Cellco Partnership (“Cellco”) for an aggregate purchase price of $490.0 million, other than a portion of the interest in one of the partnerships which was sold to a limited partner of such partnership pursuant to its right of first refusal. Cellco is the general partner for each of the five wireless partnerships and is an indirect, wholly-owned subsidiary of Verizon Communications, Inc. In accordance with Accounting Standards Codification (“ASC”) 205-20, Presentation of Financial Statements – Discontinued Operations Searchlight Investment On December 7, 2021, we closed on the final stage of the investment agreement (the “Investment Agreement”) entered into on September 13, 2020 with an affiliate of Searchlight Capital Partners, L.P. (“Searchlight”). In connection with the Investment Agreement, affiliates of Searchlight have invested an aggregate of $425.0 million in the Company and hold a combination of Series A perpetual preferred stock and approximately 34% of the Company’s outstanding common stock as of December 31, 2022. For a more complete discussion of the transaction, refer to Note 4. With the strategic investment from Searchlight, we launched our fiber build plan to enhance our fiber infrastructure and accelerate the investment in our network, which will include the upgrade over six years of approximately 1.6 million passings across select service areas to enable multi-Gig capable services to these homes and small businesses |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Our cash equivalents consist primarily of money market funds and commercial paper. The carrying amounts of our cash equivalents approximate their fair values. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable (“AR”) consists primarily of amounts due to the Company from normal business activities. We maintain an allowance for credit losses (“ACL”) based on our historical loss experience, current conditions and forecasted changes including but not limited to changes related to the economy, our industry and business. Uncollectible accounts are written-off (removed from AR and charged against the ACL) when internal collection efforts have been unsuccessful. Subsequently, if payment is received from the customer, the recovery is credited to the ACL. The following table summarizes the activity in the ACL for the years ended December 31, 2022, 2021 and 2020: (In thousands) 2022 2021 2020 Balance at beginning of year $ 9,961 $ 9,136 $ 4,549 Cumulative adjustment upon adoption of ASU 2016-13 — — 144 Provision charged to expense 8,684 7,752 11,573 Write-offs, less recoveries (7,175) (6,927) (7,130) Balance at end of year $ 11,470 $ 9,961 $ 9,136 |
Investments | Investments Investments in debt securities that we have the positive intent and ability to hold until maturity are classified as held-to-maturity. We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Investments with original maturities of more than three months and less than one year are classified as short-term investments. Held-to maturity debt securities are recorded at amortized cost, which approximates fair value, and realized gains or losses are recognized in earnings. Our long-term investments are primarily accounted for under either the equity method or at cost. If we have the ability to exercise significant influence over the operations and financial policies of an affiliated company, the investment in the affiliated company is accounted for using the equity method. If we do not have control and also cannot exercise significant influence, we account for these investments at our initial cost less impairment because fair value is not readily available for these investments. We review our investment portfolio periodically to determine whether there are identified events or circumstances that would indicate there is a decline in the fair value that is considered to be other than temporary. If we believe the decline is other than temporary, we evaluate the financial performance of the business and compare the carrying value of the investment to quoted market prices (if available) or the fair value of similar investments. If an investment is deemed to have experienced an impairment that is considered other-than temporary, the carrying amount of the investment is reduced to its quoted or estimated fair value, as applicable, and an impairment loss is recognized in other income (expense). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We account for certain assets and liabilities at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A financial asset or liability’s classification within a three-tiered value hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The hierarchy prioritizes the inputs to valuation techniques into three broad levels in order to maximize the use of observable inputs and minimize the use of unobservable inputs. The levels of the fair value hierarchy are as follows: Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Inputs that reflect quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets and inputs other than quoted prices that are directly or indirectly observable in the marketplace. Level 3 – Unobservable inputs which are supported by little or no market activity. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. We capitalize additions and substantial improvements and expense repairs and maintenance costs as incurred. We capitalize the cost of internal-use network and non-network software which has a useful life in excess of one year. Subsequent additions, modifications or upgrades to internal-use network and non-network software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Software maintenance and training costs are expensed in the period in which they are incurred. Also, we capitalize interest associated with the development of internal-use network and non-network software. Property, plant and equipment consisted of the following as of December 31, 2022 and 2021: December 31, December 31, Estimated (In thousands) 2022 2021 Useful Lives Land and buildings $ 270,708 $ 276,027 18 - 40 years Central office switching and transmission 1,635,263 1,590,510 3 - 25 years Outside plant cable, wire and fiber facilities 2,445,298 2,152,253 3 - 50 years Furniture, fixtures and equipment 347,346 324,562 3 - 15 years Assets under finance leases 58,081 44,495 2 - 20 years Total plant in service 4,756,696 4,387,847 Less: accumulated depreciation and amortization (2,754,587) (2,698,421) Plant in service 2,002,109 1,689,426 Construction in progress 123,736 265,054 Construction inventory 108,277 64,964 Totals $ 2,234,122 $ 2,019,444 Construction inventory, which is stated at weighted average cost, consists primarily of network construction materials and supplies that when issued are predominately capitalized as part of new customer installations and the construction of the network. We record depreciation using the straight-line method over estimated useful lives using either the group or unit method. The useful lives are estimated at the time the assets are acquired and are based on historical experience with similar assets, anticipated technological changes and the expected impact of our strategic operating plan on our network infrastructure. In addition, the ranges of estimated useful lives presented above are impacted by the accounting for business combinations as the lives assigned to these acquired assets are generally much shorter than that of a newly acquired asset. The group method is used for depreciable assets dedicated to providing regulated telecommunication services, including the majority of the network, outside plant facilities and certain support assets. A depreciation rate for each asset group is developed based on the average useful life of the group. The group method requires periodic revision of depreciation rates. When an individual asset is sold or retired, the difference between the proceeds, if any, and the cost of the asset is charged or credited to accumulated depreciation, without recognition of a gain or loss. The unit method is primarily used for buildings, furniture, fixtures and other support assets. Each asset is depreciated on the straight-line basis over its estimated useful life. When an individual asset is sold or retired, the cost basis of the asset and related accumulated depreciation are removed from the accounts and any associated gain or loss is recognized. Depreciation and amortization expense related to property, plant and equipment was $269.3 million, $261.1 million and $274.2 million in 2022, 2021 and 2020, respectively. Amortization of assets under capital leases is included in the depreciation and amortization expense in the consolidated statements of operations. We evaluate the recoverability of our property, plant and equipment whenever events or substantive changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the total of the expected future undiscounted cash flows were less than the carrying amount of the asset group, we would recognize an impairment charge for the difference between the estimated fair value and the carrying value of the asset group. |
Intangible Assets | Intangible Assets Indefinite-Lived Intangibles Goodwill and tradenames are evaluated for impairment annually or more frequently when events or changes in circumstances indicate that the asset might be impaired. We evaluate the carrying value of goodwill and tradenames as of November 30 of each year. Goodwill Goodwill is the excess of the acquisition cost of a business over the fair value of the identifiable net assets acquired. Goodwill is not amortized but instead evaluated annually for impairment. The evaluation of goodwill may first include a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Events and circumstances integrated into the qualitative assessment process include a combination of macroeconomic conditions affecting equity and credit markets, significant changes to the cost structure, overall financial performance and other relevant events affecting the reporting unit. When we use the quantitative approach to assess the goodwill carrying value and the fair value of our single reporting unit, the fair value of our reporting unit is compared to its carrying amount, including goodwill. The estimated fair value of the reporting unit is determined using a combination of market-based approaches and a discounted cash flow (“DCF”) model and reconciled to our market capitalization plus an estimated control premium. The assumptions used in the estimate of fair value are based upon a combination of historical results and trends, new industry developments and future cash flow projections, as well as relevant comparable company earnings multiples for the market-based approaches. Significant assumptions used in the analysis include a long-term growth rate and the weighted average cost of capital which is used to discount estimates of projected future results and cash flows. Such assumptions are judgmental and subject to change as a result of changing economic and competitive conditions. We use a weighting of the results derived from the valuation approaches to estimate the fair value of the reporting unit. For the 2022 assessment, using the quantitative approach, we concluded that the fair value of the reporting unit exceeded the carrying value at November 30, 2022 and that there was no impairment of goodwill. In measuring the fair value of our single reporting unit as described, we consider the fair value of our reporting unit in relation to our overall enterprise value, measured as the publicly traded stock price multiplied by the fully diluted shares outstanding plus the fair value of outstanding debt. Our reporting unit fair value models are consistent with a range in value indicated by both the preceding three-month average stock price and the stock price on the valuation date, plus an estimated acquisition premium which is based on observable transactions of comparable companies, if applicable. For the 2021 assessment, we evaluated the fair value of goodwill compared to the carrying value using the qualitative approach. The results of the qualitative approach concluded that it was more likely than not that the fair value of goodwill was greater than the carrying value as of November 30, 2021. If the carrying value of the reporting unit exceeds its fair value, a goodwill impairment is recorded for the difference in the carrying value and fair value. We did not recognize any goodwill impairment in 2022, 2021 or 2020 as a result of the impairment tests. At December 31, 2022 and 2021, the carrying value of goodwill was $929.6 million and $1,013.2 million, respectively. Goodwill decreased $83.6 million during 2022 as a result of a divestiture, as described in Note 5. Trade Name Our trade name is the federally registered mark CONSOLIDATED, a design of interlocking circles, which is used in association with our communication services. The Company’s corporate branding strategy leverages the CONSOLIDATED name and brand identity. All of the Company’s business units and several of our products and services incorporate the CONSOLIDATED name. Trade names with indefinite useful lives are not amortized but are tested for impairment at least annually. If facts and circumstances change relating to a trade name’s continued use in the branding of our products and services, it may be treated as a finite-lived asset and begin to be amortized over its estimated remaining life. When we use the quantitative approach to estimate the fair value of our trade names, we use DCFs based on a relief from royalty method. If the fair value of our trade names was less than the carrying amount, we would recognize an impairment charge for the difference between the estimated fair value and the carrying value of the assets. We perform our impairment testing of our trade names as single units of accounting based on their use in our single reporting unit. For the 2022 assessment, we used the qualitative approach to evaluate the fair value compared to the carrying value of the trade name. Based on our assessment, we concluded that the fair value of the trade names continued to exceed the carrying value. The carrying value of our trade names, excluding any finite lived trade names, was $10.6 million at December 31, 2022 and 2021. Finite-Lived Intangible Assets Finite-lived intangible assets subject to amortization consist primarily of our customer lists of an established base of customers that subscribe to our services. Finite-lived intangible assets are amortized using an accelerated amortization method or on a straight-line basis over their estimated useful lives. We evaluate the potential impairment of finite-lived intangible assets when impairment indicators exist. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment equal to the difference between the carrying amount and the fair value of the asset is recognized. We did not recognize any intangible impairment charges in the years ended December 31, 2022, 2021 or 2020. The components of finite-lived intangible assets are as follows: December 31, 2022 December 31, 2021 Gross Carrying Accumulated Gross Carrying Accumulated (In thousands) Useful Lives Amount Amortization Amount Amortization Customer relationships 7 - 11 years $ 318,498 $ (275,409) $ 318,498 $ (244,559) Amortization expense related to the finite-lived intangible assets for the years ended December 31, 2022, 2021 and 2020 was $30.9 million, $39.5 million and $50.7 million, respectively. Expected future amortization expense of finite-lived intangible assets is as follows: (In thousands) 2023 $ 23,963 2024 10,617 2025 3,180 2026 2,529 2027 1,996 Thereafter 804 Total $ 43,089 |
Derivative Financial Instruments | Derivative Financial Instruments We use derivative financial instruments to manage our exposure to the risks associated with fluctuations in interest rates. Our interest rate swap agreements effectively convert a portion of our floating-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on future cash interest payments. At the inception of a hedge transaction, we formally document the relationship between the hedging instruments including our objective and strategy for establishing the hedge. In addition, the effectiveness of the derivative instrument is assessed at inception and on an ongoing basis throughout the hedging period. Counterparties to derivative instruments expose us to credit-related losses in the event of nonperformance. We execute agreements only with financial institutions we believe to be creditworthy and regularly assess the credit worthiness of each of the counterparties. We do not use derivative instruments for trading or speculative purposes. Derivative financial instruments are recorded at fair value in our consolidated balance sheets. Fair value is determined based on projected interest rate yield curves and an estimate of our nonperformance risk or our counterparty’s nonperformance credit risk, as applicable. We do not anticipate any nonperformance by any counterparty. For derivative instruments designated as a cash flow hedge, the change in the fair value is recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) and is recognized as an adjustment to earnings over the period in which the hedged item impacts earnings. When an interest rate swap agreement terminates, any resulting gain or loss is recognized over the shorter of the remaining original term of the hedging instrument or the remaining life of the underlying debt obligation. If a derivative instrument is de-designated, the remaining gain or loss in AOCI on the date of de-designation is amortized to earnings over the remaining term of the hedging instrument. For derivative financial instruments that are not designated as a hedge, including those that have been de-designated, changes in fair value are recognized on a current basis in earnings. Cash flows from hedging activities are classified under the same category as the cash flows from the hedged items in our consolidated statement of cash flows. See Note 9 for further discussion of our derivative financial instruments. |
Series A Preferred Stock | Series A Preferred Stock Our Series A Preferred Stock is classified as mezzanine equity in the consolidated balance sheets due to a deemed liquidation feature, which gives holders the right to require the Company to redeem all or any part of the holders’ Series A Preferred Stock for cash in the event of a fundamental change or change in control. We have not adjusted the carrying value of the Series A Preferred Stock to its liquidation value since the securities are not currently redeemable nor is it probable that they will become redeemable. Subsequent adjustments to increase the carrying value to the liquidation value will be made only if and when it becomes probable that such a deemed liquidation event will occur. |
Share-based Compensation | Share-based Compensation We recognize share-based compensation expense for all restricted stock awards (“RSAs”) and performance share awards (“PSAs”) (collectively, “stock awards”) based on the estimated fair value of the stock awards on the date of grant. We recognize the expense associated with RSAs and PSAs on a straight-line basis over the requisite service period, which generally ranges from immediate vesting to a four-year vesting period, and account for forfeitures as they occur. See Note 12 for additional information regarding share-based compensation. |
Pension Plan and Other Post-Retirement Benefits | Pension Plan and Other Post-Retirement Benefits We maintain noncontributory defined benefit pension plans and provide certain post-retirement health care and life insurance benefits to certain eligible employees. We also maintain two unfunded supplemental retirement plans to provide incremental pension payments to certain former employees. See Note 13 for a more detailed discussion regarding our pension and other post-retirement benefits. We recognize pension and post-retirement benefits expense during the current period in the consolidated statement of operations using certain assumptions, including the expected long-term rate of return on plan assets, interest cost implied by the discount rate, expected health care cost trend rate and the amortization of unrecognized gains and losses. We determine expected long-term rate of return on plan assets by considering historical investment performance, plan asset allocation strategies and return forecasts for each asset class and input from its advisors. Projected returns by such advisors were based on broad equity and fixed income indices. The expected long-term rate of return is reviewed annually in conjunction with other plan assumptions and revised, if considered necessary, to reflect changes in the financial markets and the investment strategy. Our plan assets are valued at fair value as of the measurement date. Our discount rate assumption is determined annually to reflect the rate at which the benefits could be effectively settled and approximate the timing of expected future payments based on current market determined interest rates for similar obligations. We use bond matching model BOND:Link comprising of high quality corporate bonds to match cash flows to the expected benefit payments. We recognize the overfunded or underfunded status of our defined benefit pension and post-retirement plans as either an asset or liability in the consolidated balance sheet. Actuarial gains and losses that arise during the year are recognized as a component of comprehensive income (loss), net of applicable income taxes, and included in accumulated other comprehensive income (loss). These gains and losses are amortized over future years as a component of the net periodic benefit cost when the net gains and losses exceed 10% of the greater of the market-related value of the plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over the average remaining service period of participating employees expected to receive benefits under the plans. |
Income Taxes | Income Taxes Our estimates of income taxes and the significant items resulting in the recognition of deferred tax assets and liabilities are disclosed in Note 14 and reflect our assessment of future tax consequences of transactions that have been reflected in our financial statements or tax returns for each taxing jurisdiction in which we operate. We base our provision for income taxes on our current period income, changes in our deferred income tax assets and liabilities, income tax rates, changes in estimates of our uncertain tax positions and tax planning opportunities available in the jurisdictions in which we operate. We recognize deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of our assets and liabilities and for the expected benefits of using net operating loss and tax credit loss carryforwards. We establish valuation allowances when necessary to reduce the carrying amount of deferred income tax assets to the amounts that we believe are more likely than not to be realized. We evaluate the need to retain all or a portion of the valuation allowance on our deferred tax assets. When a change in the tax rate or tax law has an impact on deferred taxes, we apply the change when the tax law change is enacted, based on the years in which the temporary differences are expected to reverse. As we operate in more than one state, changes in our state apportionment factors, based on operating results, may affect our future effective tax rates and the value of our deferred tax assets and liabilities. We record a change in tax rates in our consolidated financial statements in the period of enactment. Income tax consequences that arise in connection with a business combination include identifying the tax basis of assets and liabilities acquired and any contingencies associated with uncertain tax positions assumed or resulting from the business combination. Deferred tax assets and liabilities related to temporary differences of an acquired entity are recorded as of the date of the business combination and are based on our estimate of the appropriate tax basis that will be accepted by the various taxing authorities. We record unrecognized tax benefits as liabilities in accordance with ASC 740, Income Taxes, |
Revenue Recognition | Revenue Recognition Revenue is recognized when or as performance obligations are satisfied by transferring control of the good or service to the customer. Services Services revenues, with the exception of usage-based revenues, are generally billed in advance and recognized in subsequent periods when or as services are transferred to the customer. We offer bundled service packages that consists of high-speed Internet, video and voice services including local and long distance calling, voicemail and calling features. Each service is considered distinct and therefore accounted for as a separate performance obligation. Service revenue is recognized over time, consistent with the transfer of service, as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the Company performs. Usage-based services, such as per-minute long-distance service and access charges billed to other telephone carriers for originating and terminating long-distance calls in our network, are billed in arrears. We recognize revenue from these services when or as services are transferred to the customer. Revenue related to nonrefundable upfront fees, such as service activation and set-up fees are deferred and amortized over the expected customer life. Equipment Equipment revenue is generated from the sale of voice and data communications equipment as well as design, configuration, installation and professional support services related to such equipment. Equipment revenue generated from telecommunications systems and structured cabling projects is recognized when or as the project is completed and control is transferred to the customer. Maintenance services are provided on both a contract and time and material basis and are recognized when or as services are transferred. Subsidies and Surcharges Subsidies consist of both federal and state funding, designed to promote widely available, quality telephone and broadband services at affordable prices and with higher data speeds in rural areas and for low-income consumers across the country. These revenues are calculated by the administering government agency based on information we provide. There is a reasonable possibility that out-of-period subsidy adjustments may be recorded in the future, but they are expected to be immaterial to our results of operations, financial position and cash flows. We recognize Federal Universal Service contributions on a gross basis. We account for all other taxes collected from customers and remitted to the respective government agencies on a net basis. Some subsidies are funded by end user surcharges to which telecommunications providers, including local, long-distance and wireless carriers, contribute on a monthly basis, while others are components of broader economic stimulus or recovery legislation. In other cases, subsidies are awarded to carriers periodically over a predetermined number of years to support their deployment of high-speed broadband infrastructure in underserved or unserved areas. During the year ended December 31, 2022, subsidies included federal funding from the Rural Development Opportunity Fund (“RDOF”). The RDOF provides funding to bring faster broadband speeds to unserved and underserved areas of America. In the first phase of the RDOF auction process, we were awarded annual funding of approximately $5.9 million, beginning January 1, 2022 through December 31, 2031. The specific obligations associated with the RDOF funding include the obligation to deliver 1 Gbps downstream and 500 Mbps upstream data speeds to approximately 27,000 locations in seven states. RDOF subsidies are recognized as operating revenue since the primary conditions for the funding are the upgrade and operation of the broadband network over the funding period. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising expense was $34.5 million, $18.8 million and $11.1 million in 2022, 2021 and 2020, respectively. |
Statement of Cash Flows Information | Statement of Cash Flows Information During 2022, 2021 and 2020, we made payments for interest and income taxes as follows: (In thousands) 2022 2021 2020 Interest, net of amounts capitalized ($10,112, $5,590 and $1,660 in 2022, 2021 and 2020, respectively) $ 119,322 $ 123,031 $ 120,897 Income taxes paid (received), net $ 9,585 $ 836 $ (553) In 2022, 2021 and 2020, we acquired equipment of $20.6 million, $13.9 million and $2.5 million, respectively, through finance lease agreements. In 2022, 2021 and 2020, we acquired property and equipment of $34.1 million, $52.9 million and $17.4 million, respectively, which were accrued but not yet paid. |
Noncontrolling Interest | Noncontrolling Interest We have a majority-owned subsidiary, East Texas Fiber Line Incorporated (“ETFL”), which is a joint venture owned 63% by the Company and 37% by Eastex Telecom Investments, LLC. ETFL provides connectivity over a fiber optic transport network to certain customers residing in Texas. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Effective January 1, 2022, we adopted the Accounting Standards Update (“ASU”) No. 2021-10 (“ASU 2021-10”), Disclosures by Business Entities about Government Assistance In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04 (“ASU 2020-04”), Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Scope Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 |
Reclassifications | Reclassifications Certain amounts in our 2021 and 2020 consolidated financial statements have been reclassified to conform to the current year presentation primarily related to the presentation of the financial results for our wireless partnership interests as discontinued operations. |
BUSINESS DESCRIPTION & SUMMAR_3
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of activity for ACL | (In thousands) 2022 2021 2020 Balance at beginning of year $ 9,961 $ 9,136 $ 4,549 Cumulative adjustment upon adoption of ASU 2016-13 — — 144 Provision charged to expense 8,684 7,752 11,573 Write-offs, less recoveries (7,175) (6,927) (7,130) Balance at end of year $ 11,470 $ 9,961 $ 9,136 |
Schedule of property, plant and equipment | December 31, December 31, Estimated (In thousands) 2022 2021 Useful Lives Land and buildings $ 270,708 $ 276,027 18 - 40 years Central office switching and transmission 1,635,263 1,590,510 3 - 25 years Outside plant cable, wire and fiber facilities 2,445,298 2,152,253 3 - 50 years Furniture, fixtures and equipment 347,346 324,562 3 - 15 years Assets under finance leases 58,081 44,495 2 - 20 years Total plant in service 4,756,696 4,387,847 Less: accumulated depreciation and amortization (2,754,587) (2,698,421) Plant in service 2,002,109 1,689,426 Construction in progress 123,736 265,054 Construction inventory 108,277 64,964 Totals $ 2,234,122 $ 2,019,444 |
Schedule of carrying amount of finite-lived intangible assets | December 31, 2022 December 31, 2021 Gross Carrying Accumulated Gross Carrying Accumulated (In thousands) Useful Lives Amount Amortization Amount Amortization Customer relationships 7 - 11 years $ 318,498 $ (275,409) $ 318,498 $ (244,559) |
Schedule of expected amortization expense | (In thousands) 2023 $ 23,963 2024 10,617 2025 3,180 2026 2,529 2027 1,996 Thereafter 804 Total $ 43,089 |
Schedule of supplemental cash flow information | (In thousands) 2022 2021 2020 Interest, net of amounts capitalized ($10,112, $5,590 and $1,660 in 2022, 2021 and 2020, respectively) $ 119,322 $ 123,031 $ 120,897 Income taxes paid (received), net $ 9,585 $ 836 $ (553) |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE | |
Schedule of disaggregation of revenue | Year Ended December 31, (In thousands) 2022 2021 2020 Operating Revenues Consumer: Broadband (Data and VoIP) $ 272,146 $ 269,323 $ 263,059 Voice services 144,853 160,698 170,503 Video services 54,153 65,114 74,343 471,152 495,135 507,905 Commercial: Data services (includes VoIP) 228,466 228,931 225,279 Voice services 142,274 154,567 161,179 Other 43,100 40,032 43,454 413,840 423,530 429,912 Carrier: Data and transport services 137,378 133,434 136,799 Voice services 14,772 17,183 20,521 Other 1,688 1,592 1,701 153,838 152,209 159,021 Subsidies 33,382 69,739 71,989 Network access 104,644 120,487 125,261 Other products and services 14,407 21,133 9,940 Total operating revenues $ 1,191,263 $ 1,282,233 $ 1,304,028 |
Schedule of receivables, contract assets and contract liabilities | Year Ended December 31, (In thousands) 2022 2021 Accounts receivable, net $ 119,675 $ 133,362 Contract assets 25,322 23,893 Contract liabilities 54,537 60,503 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted EPS | Year Ended December 31, (In thousands, except per share amounts) 2022 2021 2020 Income (loss) from continuing operations $ (177,704) $ (139,127) $ 5,874 Less: dividends on Series A preferred stock 40,104 2,677 — Less: net income attributable to noncontrolling interest 564 392 325 Loss attributable to common shareholders before allocation of earnings to participating securities (218,372) (142,196) 5,549 Less: earnings allocated to participating securities (6,284) — 427 Income (loss) from continuing operations attributable to common shareholders, after earnings allocated to participating securities (212,088) (142,196) 5,122 Income from discontinued operations 318,353 32,434 31,428 Less: earnings allocated to participating securities 9,161 — 2,417 Income from discontinued operations attributable to common shareholders, after earnings allocated to participating securities 309,192 32,434 29,011 Net income (loss) attributable to common shareholders, after earnings allocated to participating securities $ 97,104 $ (109,762) $ 34,133 Weighted-average number of common shares outstanding 111,754 87,293 72,752 Basic and diluted earnings (loss) per common share: Income (loss) from continuing operations $ (1.90) $ (1.63) $ 0.07 Income from discontinued operations 2.77 0.37 0.40 Net income (loss) per common share attributable to common shareholders - basic and diluted $ 0.87 $ (1.26) $ 0.47 |
DIVESTITURES (Tables)
DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Kansas City operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of major classes of assets and liabilities sold | (In thousands) Current assets $ 3,205 Property, plant and equipment 138,587 Goodwill 83,673 Other long-term assets 1,238 Impairment to net realizable value (148,462) Total assets $ 78,241 Current liabilities $ 1,064 Other long-term liabilities 790 Total liabilities $ 1,854 |
Assets of non-core, rural ILEC business located in Ohio | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of major classes of assets and liabilities sold | (In thousands) Current assets $ 137 Property, plant and equipment 9,584 Goodwill 16,327 Total assets $ 26,048 Current liabilities $ 102 Other long-term liabilities 6 Total liabilities $ 108 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of investments | (In thousands) 2022 2021 Short-term investments: Held-to-maturity debt securities $ 87,951 $ 110,801 Long-term investments: Cash surrender value of life insurance policies $ 2,774 $ 2,659 CoBank, ACB Stock 7,250 7,867 Other 273 273 $ 10,297 $ 10,799 Assets of discontinued operations: Investments at cost: GTE Mobilnet of South Texas Limited Partnership (2.34% interest) $ — $ 21,450 Pittsburgh SMSA Limited Partnership (3.60% interest) — 22,950 Equity method investments: GTE Mobilnet of Texas RSA #17 Limited Partnership (20.51% interest) — 19,648 Pennsylvania RSA 6(I) Limited Partnership (16.67% interest) — 7,303 Pennsylvania RSA 6(II) Limited Partnership (23.67% interest) — 27,428 $ — $ 98,779 |
Disposed of by Sale | Five Limited Partnership Interests | |
Schedule of income statement effects and cash flows related to discontinued operations | (In thousands) 2022 2021 2020 Investment income $ 23,467 $ 41,845 $ 40,685 Gain on sale of discontinued operations 389,885 — — Income from discontinued operations, before income taxes 413,352 41,845 40,685 Income tax expense 94,999 9,411 9,257 Net income from discontinued operations $ 318,353 $ 32,434 $ 31,428 (In thousands) 2022 2021 2020 Cash provided by operating activities - discontinued operations $ 29,165 $ 43,040 $ 41,529 Cash provided by investing activities - discontinued operations $ 482,966 $ — $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
Schedule of interest rate swap agreements measured at fair value on a recurring basis | As of December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Interest rate swap assets $ 5,959 $ — $ 5,959 $ — As of December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Long-term interest rate swap liabilities $ (12,813) $ — $ (12,813) $ — |
Schedule of other financial instruments that are not carried at fair value but which require fair value disclosure | As of December 31, 2022 As of December 31, 2021 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding finance leases $ 2,141,176 $ 1,759,430 $ 2,139,567 $ 2,186,508 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT | |
Schedule of components of long-term debt, presented net of unamortized discounts | (In thousands) 2022 2021 Senior secured credit facility: Term loans, net of discounts of $8,699 and $10,308 at December 31, 2022 and 2021, respectively $ 991,176 $ 989,567 6.50% Senior notes due 2028 750,000 750,000 5.00% Senior notes due 2028 400,000 400,000 Finance leases 35,746 24,990 2,176,922 2,164,557 Less: current portion of long-term debt and finance leases (12,834) (7,959) Less: deferred debt issuance costs (34,626) (37,745) Total long-term debt $ 2,129,462 $ 2,118,853 |
Schedule of aggregate maturities of long-term debt | (In thousands) 2023 $ — 2024 — 2025 — 2026 — 2027 999,875 Thereafter 1,150,000 Total maturities 2,149,875 Less: Unamortized discount (8,699) Carrying value $ 2,141,176 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of outstanding interest rate swaps | The following interest rate swaps were outstanding at December 31, 2022: Notional (In thousands) Amount 2022 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating LIBOR (with floor) $ 500,000 Prepaid expenses and other current assets $ 5,959 Our interest rate swap agreements mature on July 31, 2023. The following interest rate swaps were outstanding at December 31, 2021: Notional (In thousands) Amount 2021 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating LIBOR (with floor) $ 500,000 Other long-term liabilities $ (12,813) |
Schedule of gains and losses on cash flow hedge transactions | Year Ended December 31, (In thousands) 2022 2021 2020 Unrealized gain (loss) recognized in AOCI, pretax $ 14,726 $ 1,174 $ (18,398) Deferred loss reclassified from AOCI to interest expense $ (2,328) $ (13,964) $ (15,683) |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Summary of components of lease right-of-use assets and liabilities | (In thousands) Balance Sheet Classification 2022 2021 Operating leases Operating lease right-of-use assets Other assets $ 26,548 $ 25,072 Current lease liabilities Accrued expense $ (5,076) $ (6,383) Noncurrent lease liabilities Other long-term liabilities $ (22,249) $ (19,072) Finance leases Finance lease right-of-use assets, net of accumulated depreciation of $15,308 and $16,255 Property, plant and equipment, net $ 42,773 $ 28,240 Current lease liabilities Current portion of long-term debt and finance lease obligations $ (12,834) $ (7,959) Noncurrent lease liabilities Long-term debt and finance lease obligations $ (22,912) $ (17,031) Weighted-average remaining lease term Operating leases 7.7 years 7.1 years Finance leases 3.5 years 4.6 years Weighted-average discount rate Operating leases 6.47 % 6.27 % Finance leases 6.60 % 5.55 % |
Summary of components of lease expense | Year Ended December 31, (In thousands) 2022 2021 2020 Finance lease cost: Amortization of right-of-use assets $ 4,804 $ 4,152 $ 7,442 Interest on lease liabilities 1,444 1,106 1,356 Operating lease cost 8,469 8,359 8,421 Variable lease cost 2,167 2,054 2,205 Total lease cost $ 16,884 $ 15,671 $ 19,424 |
Schedule of supplemental cash flow information related to leases | Year Ended December 31, (In thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 8,003 $ 8,111 $ 8,325 Operating cash flows for finance leases 1,444 1,106 1,356 Financing cash flows for finance leases 9,836 6,365 9,020 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases 9,261 5,673 6,842 Finance leases 20,592 13,888 2,534 |
Schedule of maturities for operating leases | At December 31, 2022, the aggregate maturities of our lease liabilities were as follows: (In thousands) Operating Leases Finance Leases 2023 $ 6,659 $ 14,742 2024 5,684 12,903 2025 4,973 7,209 2026 3,488 1,847 2027 2,847 1,770 Thereafter 11,695 1,224 Total lease payments 35,346 39,695 Less: Interest (8,021) (3,949) $ 27,325 $ 35,746 |
Schedule of maturities for finance leases | (In thousands) Operating Leases Finance Leases 2023 $ 6,659 $ 14,742 2024 5,684 12,903 2025 4,973 7,209 2026 3,488 1,847 2027 2,847 1,770 Thereafter 11,695 1,224 Total lease payments 35,346 39,695 Less: Interest (8,021) (3,949) $ 27,325 $ 35,746 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHAREHOLDERS' EQUITY | |
Summary of the grants of RSAs and PSAs under the Plan | Year Ended December 31, Grant Date Grant Date Grant Date 2022 Fair Value 2021 Fair Value 2020 Fair Value RSAs Granted 1,031,999 $ 4.70 941,748 $ 7.51 863,710 $ 6.30 PSAs Granted 904,435 $ 7.52 788,054 $ 6.31 240,669 $ 9.86 Total 1,936,434 1,729,802 1,104,379 |
Summary of RSA and PSA activity | RSAs PSAs Weighted Weighted Average Grant Average Grant Shares Date Fair Value Shares Date Fair Value Non-vested shares outstanding - December 31, 2021 1,069,817 $ 7.34 920,010 $ 7.40 Shares granted 1,031,999 $ 4.70 904,435 $ 7.52 Shares vested (839,609) $ 6.31 (309,387) $ 9.18 Shares forfeited, cancelled or retired (76,227) $ 6.31 (51,000) $ 8.20 Non-vested shares outstanding - December 31, 2022 1,185,980 $ 5.84 1,464,058 $ 7.07 |
Summary of total compensation costs recognized for share-based payments | Year Ended December 31, (In thousands) 2022 2021 2020 Restricted stock $ 5,296 $ 5,478 $ 4,597 Performance shares 5,459 4,619 2,936 Total $ 10,755 $ 10,097 $ 7,533 |
Schedule of changes in accumulated other comprehensive income (loss), net of tax, by component | Pension and Post-Retirement Derivative (In thousands) Obligations Instruments Total Balance at December 31, 2020 $ (90,887) $ (18,531) $ (109,418) Other comprehensive gain before reclassifications 33,344 868 34,212 Amounts reclassified from accumulated other comprehensive loss 5,444 10,191 15,635 Net current period other comprehensive income (loss) 38,788 11,059 49,847 Balance at December 31, 2021 $ (52,099) $ (7,472) $ (59,571) Other comprehensive gain before reclassifications 47,123 10,879 58,002 Amounts reclassified from accumulated other comprehensive loss (762) 1,721 959 Net current period other comprehensive income 46,361 12,600 58,961 Balance at December 31, 2022 $ (5,738) $ 5,128 $ (610) |
Summary of reclassifications from accumulated other comprehensive loss | Year Ended December 31, Affected Line Item in the (In thousands) 2022 2021 Statement of Income Amortization of pension and post-retirement items: Prior service credit $ 777 $ 779 (a) Actuarial gain (loss) 254 (2,309) (a) Settlement loss — (5,864) (a) 1,031 (7,394) Total before tax (269) 1,950 Tax (expense) benefit $ 762 $ (5,444) Net of tax Loss on cash flow hedges: Interest rate derivatives $ (2,328) $ (13,964) Interest expense 607 3,773 Tax benefit $ (1,721) $ (10,191) Net of tax (a) These items are included in the components of net periodic benefit cost for our pension and post-retirement benefit plans. See Note 13 for additional details. |
PENSION PLANS AND OTHER POST-_2
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Post-retirement benefit obligation | |
Schedule of expected benefit payments | Other Pension Post-retirement (In thousands) Plans Plans 2023 $ 32,568 $ 6,159 2024 33,866 5,558 2025 34,648 5,046 2026 35,539 4,655 2027 36,284 4,400 2028 - 2032 189,696 19,290 |
Defined Benefit Plans | |
Post-retirement benefit obligation | |
Summary of change in benefit obligation, plan assets and funded status of the Pension Plans | (In thousands) 2022 2021 Change in benefit obligation Benefit obligation at the beginning of the year $ 744,463 $ 826,120 Interest cost 22,273 22,758 Actuarial gain (197,697) (19,218) Benefits paid (30,071) (36,381) Plan settlement — (48,816) Benefit obligation at the end of the year $ 538,968 $ 744,463 (In thousands) 2022 2021 Change in plan assets Fair value of plan assets at the beginning of the year $ 617,540 $ 623,826 Employer contributions 10,055 20,755 Actual return on plan assets (132,767) 58,156 Benefits paid (30,071) (36,381) Plan settlement — (48,816) Fair value of plan assets at the end of the year $ 464,757 $ 617,540 Funded status at year end $ (74,211) $ (126,923) |
Schedule of amounts recognized in the consolidated balance sheets | (In thousands) 2022 2021 Current liabilities $ (236) $ (242) Long-term liabilities $ (73,975) $ (126,681) |
Schedule of amounts recognized in accumulated other comprehensive loss | (In thousands) 2022 2021 Unamortized prior service cost $ 685 $ 808 Unamortized net actuarial loss 61,193 90,318 $ 61,878 $ 91,126 |
Schedule of the components of net periodic pension cost | (In thousands) 2022 2021 2020 Interest cost $ 22,273 $ 22,758 $ 25,971 Expected return on plan assets (36,535) (36,997) (34,544) Amortization of: Net actuarial loss 730 2,309 1,165 Prior service cost 123 122 123 Plan settlement — 5,864 — Net periodic pension cost (benefit) $ (13,409) $ (5,944) $ (7,285) |
Summary of changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects | (In thousands) 2022 2021 Actuarial gain, net $ (28,395) $ (40,377) Recognized actuarial loss (730) (2,309) Recognized prior service cost (123) (122) Plan settlement — (5,864) Total amount recognized in other comprehensive loss, before tax effects $ (29,248) $ (48,672) |
Schedule of weighted-average discount rate assumptions used to determine benefit obligations and net periodic pension benefit cost | 2022 2021 2020 Discount rate - net periodic benefit cost 3.05 % 2.81 % 3.51 % Discount rate - benefit obligation 5.63 % 3.05 % 2.81 % Expected long-term rate of return on plan assets 6.00 % 6.00 % 6.25 % Rate of compensation/salary increase N/A N/A 2.50 % Interest crediting rate for cash balance plans 4.00 % 2.00 % 2.00 % |
Schedule of fair values of assets for the entity's defined benefit pension plans | As of December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 38 $ 38 $ — $ — Equities: Stocks: U.S. common stocks 21 21 — — International stocks 2 2 — — Total plan assets in the fair value hierarchy 61 $ 61 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 4,739 Equities: Global 154,626 Real estate 96,641 Fixed Income 137,174 Hedge Funds 71,519 Other liabilities (3) (3) Total plan assets $ 464,757 As of December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 459 $ 459 $ — $ — Equities: Stocks: U.S. common stocks 24 24 — — International stocks 1 1 — — Total plan assets in the fair value hierarchy 484 $ 484 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 6,477 Equities: Global 223,101 Real estate 126,980 Fixed Income 194,189 Hedge Funds 66,309 Total plan assets $ 617,540 (1) Certain investments that are measured at fair value using NAV per share as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets. (2) Short-term investments include an investment in a common collective trust which is principally comprised of certificates of deposit, commercial paper, U.S. government obligations and variable rate securities with maturities less than one year. (3) Other liabilities include net amount due from pending securities purchased and sold. |
Post-retirement Benefit Obligations | |
Post-retirement benefit obligation | |
Summary of change in benefit obligation, plan assets and funded status of the Pension Plans | (In thousands) 2022 2021 Change in benefit obligation Benefit obligation at the beginning of the year $ 96,434 $ 106,704 Service cost 658 649 Interest cost 2,593 2,579 Plan participant contributions 447 868 Actuarial gain (36,567) (4,860) Benefits paid (7,342) (9,506) Benefit obligation at the end of the year $ 56,223 $ 96,434 (In thousands) 2022 2021 Change in plan assets Fair value of plan assets at the beginning of the year $ 3,546 $ 3,337 Employer contributions 6,894 8,638 Plan participant’s contributions 447 868 Actual return on plan assets (852) 209 Benefits paid (7,342) (9,506) Fair value of plan assets at the end of the year $ 2,693 $ 3,546 Funded status at year end $ (53,530) $ (92,888) |
Schedule of amounts recognized in the consolidated balance sheets | (In thousands) 2022 2021 Current liabilities $ (4,328) $ (5,446) Long-term liabilities $ (49,202) $ (87,442) |
Schedule of amounts recognized in accumulated other comprehensive loss | (In thousands) 2022 2021 Unamortized prior service credit $ (1,965) $ (2,865) Unamortized net actuarial gain (39,103) (4,585) $ (41,068) $ (7,450) |
Schedule of the components of net periodic pension cost | (In thousands) 2022 2021 2020 Service cost $ 658 $ 649 $ 825 Interest cost 2,593 2,579 3,265 Expected return on plan assets (213) (200) (197) Amortization of: Net actuarial gain (984) — (1,859) Prior service cost (credit) (900) (901) 1,147 Net periodic postretirement benefit cost $ 1,154 $ 2,127 $ 3,181 |
Summary of changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects | (In thousands) 2022 2021 Actuarial gain, net $ (35,502) $ (4,869) Recognized actuarial gain 984 — Recognized prior service credit 900 901 Total amount recognized in other comprehensive loss, before tax effects $ (33,618) $ (3,968) |
Schedule of weighted-average discount rate assumptions used to determine benefit obligations and net periodic pension benefit cost | 2022 2021 2020 Discount rate - net periodic benefit cost 2.94 % 2.57 % 3.35 % Discount rate - benefit obligation 5.64 % 2.93 % 2.56 % Rate of compensation/salary increase 2.50 % 2.50 % 2.50 % |
Schedule of fair values of assets for the entity's defined benefit pension plans | As of December 31, 2022 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 1 $ 1 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 28 Equities: Global 917 Real estate 573 Fixed Income 814 Hedge Funds 425 Total plan assets 2,758 Benefit payments payable (65) Net plan assets $ 2,693 As of December 31, 2021 Quoted Prices Significant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (In thousands) Total (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 3 $ 3 $ — $ — Common Collective Trusts measured at NAV: (1) Short-term investments (2) 39 Equities: Global 1,330 Real estate 757 Fixed Income 1,158 Hedge Funds 395 Total plan assets 3,682 Benefit payments payable (136) Net plan assets $ 3,546 (1) Certain investments that are measured at fair value using NAV per share as a practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets. (2) Short-term investments include investment in a common collective trust which is principally comprised of certificates of deposit, commercial paper and U.S. government obligations with maturities less than one year. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of components of income tax expense (benefit) | For the Year Ended (In thousands) 2022 2021 2020 Current: Federal $ 199 $ 305 $ 314 State 830 470 2,578 Total current expense 1,029 775 2,892 Deferred: Federal (20,983) (3,921) 187 State (7,104) 14 (1,400) Total deferred expense (benefit) (28,087) (3,907) (1,213) Total income tax expense (benefit) $ (27,058) $ (3,132) $ 1,679 |
Schedule of reconciliation of the federal statutory tax rate to the effective tax rate | For the Year Ended (In percentages) 2022 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 5.3 4.7 10.4 Searchlight investment — (23.3) (20.8) Other permanent differences (0.7) (0.4) 9.8 Change in deferred tax rate 1.5 0.2 (5.4) Valuation allowance (0.3) (1.2) 17.8 Provision to return 0.1 1.9 (7.0) Non deductible goodwill (13.4) (1.0) — Other (0.3) 0.3 (3.6) 13.2 % 2.2 % 22.2 % |
Schedule of components of the net deferred tax liability | Year Ended December 31, (In thousands) 2022 2021 Non-current deferred tax assets: Reserve for uncollectible accounts $ 3,032 $ 2,632 Accrued vacation pay deducted when paid 4,501 4,388 Accrued expenses and deferred revenue 15,458 15,019 Net operating loss carryforwards 71,576 100,402 Excess interest carryforward 19,580 2,402 Pension and postretirement obligations 34,083 57,507 Share-based compensation 2,347 1,706 Derivative instruments (1,815) 2,633 Tax credit carryforwards 4,282 4,854 153,044 191,543 Valuation allowance (8,379) (8,580) Net non-current deferred tax assets 144,665 182,963 Non-current deferred tax liabilities: Goodwill and other intangibles (36,384) (44,044) Basis in investment — (4) Partnership investments 271 (16,902) Property, plant and equipment (377,886) (310,579) Financing costs (4,976) (5,892) Other 1 — (418,974) (377,421) Net non-current deferred taxes $ (274,309) $ (194,458) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of minimum annual contractual obligations and the estimated timing and effect the obligations will have on liquidity and cash flows | Minimum Annual Contractual Obligations (in thousands) 2023 2024 2025 2026 2027 Thereafter Total Service and support agreements (1) $ 12,552 $ 10,272 $ 6,350 $ 299 $ 307 $ 753 $ 30,533 Transport and data connectivity 7,392 5,624 232 87 87 82 13,504 Capital expenditures (2) 112,100 — — — — — 112,100 Other operating agreements (3) 2,094 1,954 1,013 575 491 1,440 7,567 Total $ 134,138 $ 17,850 $ 7,595 $ 961 $ 885 $ 2,275 $ 163,704 (1) We have entered into service and maintenance agreements to support various computer hardware and software applications and certain equipment. (2) We have binding commitments with numerous suppliers for future capital expenditures. (3) We have entered into various non-cancelable rental agreements for certain facilities and equipment used in our operations. |
QUARTERLY FINANCIAL INFORMATI_2
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
Schedule of unaudited quarterly financial information | Quarter Ended 2022 March 31, June 30, September 30, December 31, (In thousands, except per share amounts) Net revenues $ 300,278 $ 298,390 $ 296,619 $ 295,976 Operating income (loss) $ (107,742) $ 14,449 $ 20,852 $ (20,721) Loss from continuing operations $ (119,096) $ (10,591) $ (7,257) $ (40,760) Discontinued operations, net of tax $ 3,547 $ 9,079 $ 299,934 $ 5,793 Net income (loss) attributable to common stockholders $ (125,262) $ (11,517) $ 282,250 $ (45,490) Basic and diluted earnings (loss) per common share: Loss from continuing operations $ (1.15) $ (0.18) $ (0.15) $ (0.46) Income from discontinued operations 0.03 0.08 2.60 0.05 Net income (loss) per common share attributable to common shareholders - basic and diluted $ (1.12) $ (0.10) $ 2.45 $ (0.41) Quarter Ended 2021 March 31, June 30, September 30, December 31, (In thousands, except per share amounts) Net revenues $ 324,766 $ 320,403 $ 318,584 $ 318,480 Operating income $ 38,326 $ 30,015 $ 32,508 $ 34,329 Income (loss) from continuing operations $ (78,304) $ (55,138) $ (13,100) $ 7,415 Discontinued operations, net of tax $ 16,221 $ 49 $ 8,619 $ 7,545 Net income (loss) attributable to common stockholders $ (62,099) $ (55,356) $ (4,721) $ 12,414 Basic and diluted earnings (loss) per common share: Income (loss) from continuing operations $ (1.00) $ (0.71) $ (0.14) $ 0.05 Income from discontinued operations 0.20 - 0.09 0.07 Net income (loss) per common share attributable to common shareholders - basic and diluted $ (0.80) $ (0.71) $ (0.05) $ 0.12 |
BUSINESS DESCRIPTION & SUMMAR_4
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Business (Details) | Dec. 31, 2022 state mi |
Number of fiber route miles | mi | 57,800 |
Minimum | |
Number of states | state | 20 |
BUSINESS DESCRIPTION & SUMMAR_5
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Developments (Details) $ in Thousands | 12 Months Ended | 24 Months Ended | |||||
Dec. 07, 2021 USD ($) | Sep. 13, 2020 USD ($) item | Dec. 31, 2022 item | Dec. 31, 2021 USD ($) item | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) item | Sep. 13, 2022 USD ($) item | |
Recent developments | |||||||
Proceeds from issuance of common stock | $ 75,000 | $ 350,000 | |||||
Disposed of by Sale | |||||||
Recent developments | |||||||
Number of wireless partnerships | item | 5 | ||||||
Discontinued operation, consideration | $ 490,000 | ||||||
Fiber Build Plan | |||||||
Recent developments | |||||||
Number of passings across select service areas | item | 1,600,000 | ||||||
Number of homes and small businesses upgraded | item | 403,000 | 330,000 | 330,000 | ||||
Investment Agreement | Searchlight | |||||||
Recent developments | |||||||
Proceeds from issuance of common stock | $ 75,000 | ||||||
Percentage of company stock on as converted basis | 34% | 35% | |||||
Upgrade period | 6 years | ||||||
Investment Agreement | Searchlight | Subordinated Debt | Maximum | |||||||
Recent developments | |||||||
Proceeds from issuance of common stock | $ 425,000 | ||||||
Capital commitment | $ 425,000 |
BUSINESS DESCRIPTION & SUMMAR_6
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Activity in the entity's accounts receivable allowance | |||
Balance at beginning of year | $ 9,961 | $ 9,136 | $ 4,549 |
Provision charged to expense | 8,684 | 7,752 | 11,573 |
Write-offs, less recoveries | (7,175) | (6,927) | (7,130) |
Balance at end of year | $ 11,470 | $ 9,961 | 9,136 |
Adjustment | ASU 2016-13 | |||
Activity in the entity's accounts receivable allowance | |||
Cumulative adjustment upon adoption of ASU 2016-13 | $ 144 |
BUSINESS DESCRIPTION & SUMMAR_7
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, plant and equipment | |||
Total plant in service | $ 4,756,696 | $ 4,387,847 | |
Less: accumulated depreciation and amortization | (2,754,587) | (2,698,421) | |
Plant in service | 2,002,109 | 1,689,426 | |
Totals | 2,234,122 | 2,019,444 | |
Depreciation and amortization expense | $ 269,300 | 261,100 | $ 274,200 |
Internal use network and non-network software | Maximum | |||
Property, plant and equipment | |||
Period after which property plan and equipment capitalized | 1 year | ||
Land and buildings | |||
Property, plant and equipment | |||
Total plant in service | $ 270,708 | 276,027 | |
Land and buildings | Minimum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 18 years | ||
Land and buildings | Maximum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 40 years | ||
Central office switching and transmission | |||
Property, plant and equipment | |||
Total plant in service | $ 1,635,263 | 1,590,510 | |
Central office switching and transmission | Minimum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 3 years | ||
Central office switching and transmission | Maximum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 25 years | ||
Outside plant cable, wire and fiber facilities | |||
Property, plant and equipment | |||
Total plant in service | $ 2,445,298 | 2,152,253 | |
Outside plant cable, wire and fiber facilities | Minimum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 3 years | ||
Outside plant cable, wire and fiber facilities | Maximum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 50 years | ||
Furniture, fixtures and equipment | |||
Property, plant and equipment | |||
Total plant in service | $ 347,346 | 324,562 | |
Furniture, fixtures and equipment | Minimum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 15 years | ||
Assets under finance leases | |||
Property, plant and equipment | |||
Total plant in service | $ 58,081 | 44,495 | |
Assets under finance leases | Minimum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 2 years | ||
Assets under finance leases | Maximum | |||
Property, plant and equipment | |||
Estimated Useful Lives | 20 years | ||
Construction in progress | |||
Property, plant and equipment | |||
Total plant in service | $ 123,736 | 265,054 | |
Construction inventory | |||
Property, plant and equipment | |||
Total plant in service | $ 108,277 | $ 64,964 |
BUSINESS DESCRIPTION & SUMMAR_8
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite lived intangible assets | |||
Impairment charge for goodwill | $ 0 | ||
Preceding period of average stock price used to calculate impairment of reporting unit under the fair value model | 3 months | ||
Goodwill | $ 929,570 | $ 1,013,243 | |
Goodwill increase (decrease) | (83,600) | ||
Amortization of intangible assets | 30,900 | 39,500 | $ 50,700 |
Expected amortization expense | |||
2023 | 23,963 | ||
2024 | 10,617 | ||
2025 | 3,180 | ||
2026 | 2,529 | ||
2027 | 1,996 | ||
Thereafter | 804 | ||
Total | 43,089 | ||
Customer Relationships | |||
Finite lived intangible assets | |||
Gross Carrying Amount | 318,498 | 318,498 | |
Accumulated Amortization | $ (275,409) | (244,559) | |
Customer Relationships | Minimum | |||
Finite lived intangible assets | |||
Useful Lives | 7 years | ||
Customer Relationships | Maximum | |||
Finite lived intangible assets | |||
Useful Lives | 11 years | ||
Tradenames | |||
Finite lived intangible assets | |||
Indefinitely renewable tradenames | $ 10,600 | $ 10,600 |
BUSINESS DESCRIPTION & SUMMAR_9
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-based , Pension Plan, Income Taxes, and Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 120 Months Ended | |||||||||
Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) item state | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2031 state item | |
Share-based Compensation | ||||||||||||
Vesting period over which the cost of RSAs and PSAs is recognized | 4 years | |||||||||||
Pension Plan and Other Post-Retirement Benefits | ||||||||||||
Number of non-qualified plans | item | 2 | |||||||||||
Amortization threshold (as a percentage) | 10% | |||||||||||
Income Taxes | ||||||||||||
Minimum number of states in which entity operates | state | 1 | |||||||||||
Revenue | ||||||||||||
Revenue recorded | $ 295,976 | $ 296,619 | $ 298,390 | $ 300,278 | $ 318,480 | $ 318,584 | $ 320,403 | $ 324,766 | $ 1,191,263 | $ 1,282,233 | $ 1,304,028 | |
Subsidies | ||||||||||||
Revenue | ||||||||||||
Revenue recorded | 33,382 | $ 69,739 | $ 71,989 | |||||||||
Forecast | ||||||||||||
Revenue | ||||||||||||
Number of locations benefiting from RDOF | item | 27,000 | |||||||||||
Number of states in which locations are benefiting from RDOF | state | 7 | |||||||||||
RDOF | Subsidies | ||||||||||||
Revenue | ||||||||||||
Revenue recorded | $ 5,900 |
BUSINESS DESCRIPTION & SUMMA_10
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Costs and Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising Expense | $ 34,500 | $ 18,800 | $ 11,100 |
Interest Paid, Net | 119,322 | 123,031 | 120,897 |
Income taxes paid (received), net | 9,585 | 836 | (553) |
Interest Paid, Capitalized | 10,112 | 5,590 | 1,660 |
Acquired equipment | 20,592 | 13,888 | 2,534 |
Accrued capital expenditures | $ 34,100 | $ 52,900 | $ 17,400 |
BUSINESS DESCRIPTION & SUMMA_11
BUSINESS DESCRIPTION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Noncontrolling Interest (Details) - East Texas Fiber Line | Dec. 31, 2022 |
Noncontrolling Interest | |
Ownership interest (as a percent) | 63% |
Eastex Telecom Investments, LLC | |
Noncontrolling Interest | |
Minority interest holding percentage | 37% |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | $ 295,976 | $ 296,619 | $ 298,390 | $ 300,278 | $ 318,480 | $ 318,584 | $ 320,403 | $ 324,766 | $ 1,191,263 | $ 1,282,233 | $ 1,304,028 |
Receivables, contract assets and contract liabilities | |||||||||||
Accounts receivable, net | 119,675 | 133,362 | 119,675 | 133,362 | |||||||
Contract assets | 25,322 | 23,893 | 25,322 | 23,893 | |||||||
Contract liabilities | $ 54,537 | $ 60,503 | 54,537 | 60,503 | |||||||
Recognized expenses related to deferred contract acquisition costs. | 12,900 | 11,100 | 9,000 | ||||||||
Revenue recognized from beginning of year and current period increase in contract liability | $ 478,900 | 471,700 | 443,000 | ||||||||
Revenue, Practical Expedient, Remaining Performance Obligation | true | ||||||||||
Minimum | |||||||||||
Receivables, contract assets and contract liabilities | |||||||||||
Payment term | 30 days | ||||||||||
Maximum | |||||||||||
Receivables, contract assets and contract liabilities | |||||||||||
Payment term | 60 days | ||||||||||
Consumer | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | $ 471,152 | 495,135 | 507,905 | ||||||||
Consumer - Broadband (Data and VoIP) | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 272,146 | 269,323 | 263,059 | ||||||||
Consumer - Voice services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 144,853 | 160,698 | 170,503 | ||||||||
Consumer - Video services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 54,153 | 65,114 | 74,343 | ||||||||
Commercial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 413,840 | 423,530 | 429,912 | ||||||||
Commercial - Data services (including VoIP) | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 228,466 | 228,931 | 225,279 | ||||||||
Commercial - Voice services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 142,274 | 154,567 | 161,179 | ||||||||
Commercial - Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 43,100 | 40,032 | 43,454 | ||||||||
Carrier | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 153,838 | 152,209 | 159,021 | ||||||||
Carrier - Data and transport services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 137,378 | 133,434 | 136,799 | ||||||||
Carrier - Voice services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 14,772 | 17,183 | 20,521 | ||||||||
Carrier - Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 1,688 | 1,592 | 1,701 | ||||||||
Subsidies | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 33,382 | 69,739 | 71,989 | ||||||||
Network access | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | 104,644 | 120,487 | 125,261 | ||||||||
Other products and services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total operating revenues | $ 14,407 | $ 21,133 | $ 9,940 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic and diluted earnings per share attributable to common shareholders | |||||||||||
Income (loss) from continuing operations | $ (40,760) | $ (7,257) | $ (10,591) | $ (119,096) | $ 7,415 | $ (13,100) | $ (55,138) | $ (78,304) | $ (177,704) | $ (139,127) | $ 5,874 |
Less: dividends on Series A preferred stock | 40,104 | 2,677 | |||||||||
Less: net income attributable to noncontrolling interest | 564 | 392 | 325 | ||||||||
Loss attributable to common shareholders before allocation of earnings to participating securities | (218,372) | (142,196) | 5,549 | ||||||||
Less: earnings allocated to participating securities | (6,284) | 427 | |||||||||
Income (loss) from continuing operations attributable to common shareholders, after earnings allocated to participating securities | (212,088) | (142,196) | 5,122 | ||||||||
Income from discontinued operations | $ 5,793 | $ 299,934 | $ 9,079 | $ 3,547 | $ 7,545 | $ 8,619 | $ 49 | $ 16,221 | 318,353 | 32,434 | 31,428 |
Less: earnings allocated to participating securities | 9,161 | 2,417 | |||||||||
Income from discontinued operations attributable to common shareholders, after earnings allocated to participating securities | 309,192 | 32,434 | 29,011 | ||||||||
Net income (loss) attributable to common shareholders, after earnings allocated to participating securities | $ 97,104 | $ (109,762) | $ 34,133 | ||||||||
Weighted-average number of common shares outstanding, basic | 111,754 | 87,293 | 72,752 | ||||||||
Weighted-average number of common shares outstanding, diluted | 111,754 | 87,293 | 72,752 | ||||||||
Income (loss) from continuing operations - Basic | $ (0.46) | $ (0.15) | $ (0.18) | $ (1.15) | $ 0.05 | $ (0.14) | $ (0.71) | $ (1) | $ (1.90) | $ (1.63) | $ 0.07 |
Income (loss) from continuing operations - Diluted | (0.46) | (0.15) | (0.18) | (1.15) | 0.05 | (0.14) | (0.71) | (1) | (1.90) | (1.63) | 0.07 |
Income from discontinued operations - Basic | 0.05 | 2.60 | 0.08 | 0.03 | 0.07 | 0.09 | 0.20 | 2.77 | 0.37 | 0.40 | |
Income from discontinued operations - Diluted | 0.05 | 2.60 | 0.08 | 0.03 | 0.07 | 0.09 | 0.20 | 2.77 | 0.37 | 0.40 | |
Net income (loss) per basic common shares attributable to common shareholders | (0.41) | 2.45 | (0.10) | (1.12) | 0.12 | (0.05) | (0.71) | (0.80) | 0.87 | (1.26) | 0.47 |
Net income (loss) per diluted common shares attributable to common shareholders | $ (0.41) | $ 2.45 | $ (0.10) | $ (1.12) | $ 0.12 | $ (0.05) | $ (0.71) | $ (0.80) | $ 0.87 | $ (1.26) | $ 0.47 |
Common shares excluded from computation of potentially dilutive shares because of anti-dilutive effect | 3,300 | 3,200 | 6,100 | ||||||||
Series A preferred stock | |||||||||||
Basic and diluted earnings per share attributable to common shareholders | |||||||||||
Less: dividends on Series A preferred stock | $ 40,104 | $ 2,677 |
SEARCHLIGHT INVESTMENT (Details
SEARCHLIGHT INVESTMENT (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||
Dec. 07, 2021 USD ($) $ / shares shares | Jul. 16, 2021 shares | Jul. 15, 2021 | Oct. 02, 2020 USD ($) shares | Sep. 13, 2020 USD ($) item | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) $ / shares | |
Schedule of Investments [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 75,000 | $ 350,000 | ||||||||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Change in fair value of contingent payment rights | $ (86,476) | 23,802 | ||||||||
Transaction costs associated with CPRs issued | 7,600 | |||||||||
Carrying value | $ 2,141,176 | |||||||||
Unamortized discount | 8,699 | |||||||||
Deferred debt issuance costs | $ 37,745 | $ 34,626 | 37,745 | $ 37,745 | ||||||
Series A preferred stock | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Series A preferred stock issued (in shares) | shares | 434,266 | |||||||||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||
Preferred stock dividend rate | 9% | |||||||||
Liquidation preference per share | $ / shares | $ 1,000 | |||||||||
Searchlight | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Change in fair value of contingent payment rights | $ 13,100 | $ (86,500) | $ 23,500 | |||||||
Investment Agreement | Searchlight | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Number of stages | item | 2 | |||||||||
Proceeds from issuance of shares | $ 350,000 | |||||||||
Proceeds from issuance of common stock | $ 75,000 | |||||||||
Number of shares issued | shares | 6,352,842 | |||||||||
Percentage of share issued | 8% | |||||||||
Additional shares upon conversion of contingent payment right | shares | 15,115,899 | 17,870,012 | 17,870,012 | |||||||
Percentage of additional shares approved after conversion of CPR | 10.10% | 16.90% | 16.90% | |||||||
Percentage of stock on an as-converted basis | 34% | 35% | ||||||||
Series A preferred stock issued (in shares) | shares | 434,266 | |||||||||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||
Debt term (in years) | 10 years | |||||||||
Aggregate principal amount | $ 395,500 | |||||||||
Investment Agreement | Searchlight | Subordinated Debt | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Series A preferred stock issued (in shares) | shares | 434,266 | |||||||||
Interest rate (as a percent) | 9% | |||||||||
Preferred stock dividend rate | 9% | |||||||||
Period of PIK option (in years) | 5 years | |||||||||
Carrying value | $ 285,900 | |||||||||
Unamortized discount | 139,700 | |||||||||
Deferred debt issuance costs | $ 8,700 | |||||||||
Paid-in-Kind interest | $ 38,800 | |||||||||
Liquidation preference per share | $ / shares | $ 1,000 | |||||||||
Investment Agreement | Searchlight | Maximum | Subordinated Debt | ||||||||||
Schedule of Investments [Line Items] | ||||||||||
Capital commitment | $ 425,000 | |||||||||
Proceeds from issuance of common stock | $ 425,000 |
DIVESTITURES - Kansas City Oper
DIVESTITURES - Kansas City Operations and Tower Assets (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Nov. 30, 2022 USD ($) customer | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Impairment loss on assets held for sale | $ 131,698 | $ 5,704 | |||||
Proceeds from sale of assets | 22,918 | $ 3,469 | $ 7,071 | ||||
Gain (loss) on disposal of assets | (4,233) | ||||||
Tower Assets | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of assets | 21,000 | ||||||
Gain (loss) on disposal of assets | $ 1,600 | $ 19,200 | 20,800 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Kansas City operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Impairment loss on assets held for sale | $ 5,200 | $ 126,500 | 131,700 | ||||
Loss on disposal | $ 16,800 | $ 16,800 | |||||
Loss on Disposal, Statements of Operations Location | Gain on sale of discontinued operations | Gain on sale of discontinued operations | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Kansas City operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of consumer customers | customer | 17,100 | ||||||
Number of commercial customers | customer | 1,600 | ||||||
Proceeds from sale of assets | $ 82,100 |
DIVESTITURES - Major Classes of
DIVESTITURES - Major Classes of Assets and Liabilities (Details) - USD ($) $ in Thousands | Nov. 30, 2022 | Jan. 31, 2022 | Dec. 31, 2021 |
Major classes of assets and liabilities | |||
Current assets | $ 26,052 | ||
Current liabilities | $ 97 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Assets of non-core, rural ILEC business located in Ohio | |||
Major classes of assets and liabilities | |||
Current assets | $ 137 | ||
Property, plant and equipment | 9,584 | ||
Goodwill | 16,327 | ||
Total assets | 26,048 | ||
Current liabilities | 102 | ||
Other long-term liabilities | 6 | ||
Total liabilities | $ 108 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Kansas City operations | |||
Major classes of assets and liabilities | |||
Current assets | $ 3,205 | ||
Property, plant and equipment | 138,587 | ||
Goodwill | 83,673 | ||
Other long-term assets | 1,238 | ||
Impairment to net realizable value | (148,462) | ||
Total assets | 78,241 | ||
Current liabilities | 1,064 | ||
Other long-term liabilities | 790 | ||
Total liabilities | $ 1,854 |
DIVESTITURES - Ohio Operations
DIVESTITURES - Ohio Operations (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 31, 2022 USD ($) item | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment loss on assets held for sale | $ 131,698 | $ 5,704 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Assets of non-core, rural ILEC business located in Ohio | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash consideration | $ 26,100 | ||
Number of rural communities providing telecommunications and data services | item | 11 | ||
Number of access lines | item | 3,800 | ||
Number of data connections | item | 3,900 | ||
Estimated fair value of net assets held for sale | 25,900 | ||
Impairment loss on assets held for sale | $ 5,700 | ||
Loss on disposal | $ 800 | ||
Loss on Disposal, Statements of Operations Location | Selling, general and administrative expenses |
INVESTMENTS (Details)
INVESTMENTS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 13, 2022 USD ($) item | |
Investments | ||||||||||||
Held-to-maturity debt securities | $ 87,951 | $ 110,801 | $ 87,951 | $ 110,801 | ||||||||
Cash surrender value of life insurance policies | 2,774 | 2,659 | 2,774 | 2,659 | ||||||||
Total | 10,297 | 10,799 | 10,297 | 10,799 | ||||||||
Discontinued operations, additional information | ||||||||||||
Assets of discontinued operations | 98,779 | 98,779 | ||||||||||
Number of entity's investments which is accounted for using equity method | item | 3 | |||||||||||
Number of investments which a portion of interest was sold | item | 1 | |||||||||||
Investment income | 23,467 | 41,845 | $ 40,685 | |||||||||
Gain on sale of discontinued operations | 389,885 | |||||||||||
Income tax expense | 94,999 | 9,411 | 9,257 | |||||||||
Estimated state income taxes | 8,000 | 8,000 | ||||||||||
Income from discontinued operations | 5,793 | $ 299,934 | $ 9,079 | $ 3,547 | 7,545 | $ 8,619 | $ 49 | $ 16,221 | 318,353 | 32,434 | 31,428 | |
Taxable gain on sale | 477,700 | |||||||||||
Discontinued Operations, Previously Recorded At Cost | ||||||||||||
Investments | ||||||||||||
Cash distributions received from partnerships treated as investments at cost | 11,700 | 20,700 | 19,100 | |||||||||
GTE Mobilnet of South Texas Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Ownership percentage of investments at cost | 2.34% | |||||||||||
Pittsburgh SMSA Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Ownership percentage of investments at cost | 3.60% | |||||||||||
Discontinued Operations, Previously Recorded Via The Equity Method | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Carrying value of investments in excess of underlying equity | 32,800 | 32,800 | ||||||||||
Cash distributions received from partnerships treated as equity method investees | 17,500 | 22,300 | 22,400 | |||||||||
Minimum | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Estimated state income taxes | 8,000 | 8,000 | ||||||||||
Disposed of by Sale | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Assets of discontinued operations | 98,800 | 98,800 | ||||||||||
Number of Wireless Partnerships | item | 5 | |||||||||||
Discontinued operation, consideration | $ 490,000 | |||||||||||
Investment income | 23,467 | 41,845 | 40,685 | |||||||||
Gain on sale of discontinued operations | 389,885 | |||||||||||
Income from discontinued operations, before income taxes | 413,352 | 41,845 | 40,685 | |||||||||
Income tax expense | 94,999 | 9,411 | 9,257 | |||||||||
Income from discontinued operations | 318,353 | 32,434 | 31,428 | |||||||||
Cash provided by operating activities - discontinued operations | 29,165 | 43,040 | $ 41,529 | |||||||||
Cash provided by investing activities - discontinued operations | 482,966 | |||||||||||
Disposed of by Sale | GTE Mobilnet of South Texas Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Assets of discontinued operations | 21,450 | 21,450 | ||||||||||
Disposed of by Sale | Pittsburgh SMSA Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Assets of discontinued operations | 22,950 | 22,950 | ||||||||||
Disposed of by Sale | GTE Mobilnet of Texas RSA #17 Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Assets of discontinued operations | 19,648 | 19,648 | ||||||||||
Disposed of by Sale | Pennsylvania RSA 6(I) Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Assets of discontinued operations | 7,303 | 7,303 | ||||||||||
Disposed of by Sale | Pennsylvania RSA 6(II) Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Assets of discontinued operations | 27,428 | 27,428 | ||||||||||
Cash and cash equivalents | ||||||||||||
Investments | ||||||||||||
Investments in commercial paper | 20,000 | 20,000 | ||||||||||
Short-term investments. | ||||||||||||
Investments | ||||||||||||
Investments in commercial paper | 88,000 | 40,000 | 88,000 | 40,000 | ||||||||
Investments in certificate of deposits | 70,800 | 70,800 | ||||||||||
CoBank, ACB Stock | ||||||||||||
Investments | ||||||||||||
Investments at cost | 7,250 | 7,867 | 7,250 | 7,867 | ||||||||
Other | ||||||||||||
Investments | ||||||||||||
Investments at cost | $ 273 | $ 273 | $ 273 | $ 273 | ||||||||
GTE Mobilnet of Texas RSA #17 Limited Partnership | GTE Mobilnet of Texas RSA #17 Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Ownership percentage of equity method investee | 20.51% | |||||||||||
Pennsylvania RSA 6(I) Limited Partnership | Pennsylvania RSA 6(I) Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Ownership percentage of equity method investee | 16.67% | |||||||||||
Pennsylvania RSA 6(II) Limited Partnership | Pennsylvania RSA 6(II) Limited Partnership | ||||||||||||
Discontinued operations, additional information | ||||||||||||
Ownership percentage of equity method investee | 23.67% |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements | ||
Interest rate swap assets | $ 5,959 | |
Long-term interest rate swap liabilities | $ (12,813) | |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Interest rate swap assets | $ 5,959 | |
Long-term interest rate swap liabilities | $ (12,813) |
FAIR VALUE MEASUREMENTS - Fin_2
FAIR VALUE MEASUREMENTS - Financial Instruments Not Carried at FV (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value Measurements | ||
Long-term debt, excluding finance leases | $ 2,141,176 | $ 2,139,567 |
Fair Value | ||
Fair Value Measurements | ||
Long-term debt, excluding finance leases | $ 1,759,430 | $ 2,186,508 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ in Thousands | 12 Months Ended | ||||||||
Nov. 22, 2022 | Apr. 05, 2021 USD ($) | Mar. 18, 2021 USD ($) | Oct. 02, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Nov. 21, 2022 | Jan. 15, 2021 USD ($) | |
Debt | |||||||||
Total long-term debt and finance leases | $ 2,176,922 | $ 2,164,557 | |||||||
Less: current portion of long-term debt and finance leases | (12,834) | (7,959) | |||||||
Less: deferred debt issuance costs | (34,626) | (37,745) | |||||||
Total long-term debt | 2,129,462 | 2,118,853 | |||||||
Unamortized discount | $ 8,699 | ||||||||
Repayment of debt | 397,000 | $ 1,867,838 | |||||||
Repayments of long-term debt | 444,717 | ||||||||
Gain (loss) on extinguishment of debt | $ (17,101) | $ (18,264) | |||||||
Maximum | |||||||||
Debt | |||||||||
Leverage ratio for an event of default | 6.35 | ||||||||
Senior Secured Credit Facility | |||||||||
Debt | |||||||||
Leverage ratio | 4.40 | ||||||||
Covenant testing threshold | 35% | ||||||||
Senior Secured Credit Facility | Weighted average | |||||||||
Debt | |||||||||
Weighted average interest rate (as a percent) | 7.63% | 4.25% | |||||||
Term Loans | |||||||||
Debt | |||||||||
Total long-term debt and finance leases | $ 991,176 | $ 989,567 | |||||||
Unamortized discount | $ 8,699 | 10,308 | |||||||
Aggregate principal amount | $ 1,250,000 | ||||||||
Interest rate (as a percent) | 4.75% | ||||||||
Quarterly principal payments required | $ 3,100 | ||||||||
Issue discount (as a percentage) | 1.50% | ||||||||
Variable rate basis, floor (as a percent) | 1% | ||||||||
Original issuance discount | $ 18,800 | ||||||||
Repayment of debt | $ 397,000 | ||||||||
Gain (loss) on extinguishment of debt | (12,000) | ||||||||
Senior secured credit facility - revolving loan | |||||||||
Debt | |||||||||
Maximum borrowing capacity of credit facility | $ 250,000 | ||||||||
Leverage ratio | 3.20 | ||||||||
Amounts outstanding | $ 0 | 0 | |||||||
Stand-by letter of credit outstanding | 24,500 | ||||||||
Available borrowing capacity | $ 225,500 | ||||||||
Reduction of spread on variable rate | 0.25% | ||||||||
Senior secured credit facility - revolving loan | SOFR | Maximum | |||||||||
Debt | |||||||||
Margin (as a percent) | 4% | ||||||||
Senior secured credit facility - revolving loan | Alternate base rate | Maximum | |||||||||
Debt | |||||||||
Margin (as a percent) | 3% | ||||||||
Finance leases | |||||||||
Debt | |||||||||
Total long-term debt and finance leases | $ 35,746 | 24,990 | |||||||
Incremental Term Loan Facility | |||||||||
Debt | |||||||||
Aggregate principal amount | $ 150,000 | ||||||||
Leverage ratio | 3.70 | ||||||||
Incremental Term Loan Facility | Maximum | |||||||||
Debt | |||||||||
Additional borrowing capacity | $ 300,000 | ||||||||
6.50% senior secured notes due 2028 | |||||||||
Debt | |||||||||
Total long-term debt and finance leases | $ 750,000 | $ 750,000 | |||||||
Aggregate principal amount | $ 750,000 | ||||||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | ||||||
5.00% senior secured notes due 2028 | |||||||||
Debt | |||||||||
Total long-term debt and finance leases | $ 400,000 | $ 400,000 | |||||||
Aggregate principal amount | $ 400,000 | ||||||||
Interest rate (as a percent) | 5% | 5% | 5% | ||||||
Repayments of long-term debt | $ 397,000 | ||||||||
Second Amendment | |||||||||
Debt | |||||||||
Aggregate principal amount | $ 999,900 | ||||||||
Interest rate (as a percent) | 3.50% | ||||||||
Variable rate basis, floor (as a percent) | 0.75% | ||||||||
Gain (loss) on extinguishment of debt | $ (5,100) | ||||||||
Third Amendment | |||||||||
Debt | |||||||||
Debt Instrument, Extension Term | 2 years | ||||||||
Third Amendment | Maximum | |||||||||
Debt | |||||||||
Leverage ratio for an event of default | 6.35 | 5.85 |
LONG-TERM DEBT - Future Maturit
LONG-TERM DEBT - Future Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Aggregate maturities of our long-term debt | |
2027 | $ 999,875 |
Thereafter | 1,150,000 |
Total maturities | 2,149,875 |
Less: Unamortized discount | (8,699) |
Long-term debt excluding capital leases | $ 2,141,176 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Interest Rate Swaps (Details) $ in Thousands | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) |
Derivatives | ||
Number of swap agreements that provide for the entity or the counterparties to post collateral | item | 0 | |
Prepaid expense and other current assets | Cash flow hedges | Fixed to 1-month floating LIBOR (with floor) | ||
Derivatives | ||
Derivative, Notional Amount | $ 500,000 | |
Interest rate swap assets | $ 5,959 | |
Other long-term liabilities | Cash flow hedges | Fixed to 1-month floating LIBOR (with floor) | ||
Derivatives | ||
Derivative, Notional Amount | $ 500,000 | |
Long-term interest rate swap liabilities | $ (12,813) |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Effect of Interest Rate Derivatives (Details) - Interest rate swaps - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments | |||
Derivatives | |||
Deferred gain (losses) included in AOCI (pretax) | $ 6,900 | $ (10,100) | |
Gain included in AOCI to be recognized in the next 12 months | 6,900 | ||
Cash flow hedges | |||
Derivatives | |||
Unrealized gain (loss) recognized in AOCI, pretax | 14,726 | 1,174 | $ (18,398) |
Deferred loss reclassified from AOCI to interest expense | $ (2,328) | $ (13,964) | $ (15,683) |
LEASES - Lease right-of use ass
LEASES - Lease right-of use assets and liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease right-of-use assets | $ 26,548 | $ 25,072 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Current lease liabilities | $ (5,076) | $ (6,383) |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Noncurrent lease liabilities | $ (22,249) | $ (19,072) |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities and Derivative Liabilities, Noncurrent | Other Liabilities and Derivative Liabilities, Noncurrent |
Finance lease right-of-use assets, net of accumulated depreciation of $15,308 and $16,255 | $ 42,773 | $ 28,240 |
Finance Lease Right Of Use Asset Accumulated Depreciation | $ 15,308 | $ 16,255 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property Plant and Equipment Continuing Operations, Net | Property Plant and Equipment Continuing Operations, Net |
Current lease liabilities | $ (12,834) | $ (7,959) |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations, Current | Long-term Debt and Capital Lease Obligations, Current |
Noncurrent lease liabilities | $ (22,912) | $ (17,031) |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations | Long-term Debt and Capital Lease Obligations |
Operating leases, Weighted-average remaining lease term | 7 years 8 months 12 days | 7 years 1 month 6 days |
Finance leases, Weighted-average remaining lease term | 3 years 6 months | 4 years 7 months 6 days |
Operating leases, Weighted-average discount rate | 6.47% | 6.27% |
Finance leases, Weighted-average discount rate | 6.60% | 5.55% |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Remaining Term of Contract | 1 year | |
Operating Lease, Renewal Term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Remaining Term of Contract | 86 years | |
Operating Lease, Renewal Term | 5 years |
LEASES - Components of lease ex
LEASES - Components of lease expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Amortization of right-of-use assets | $ 4,804 | $ 4,152 | $ 7,442 |
Interest on lease liabilities | 1,444 | 1,106 | 1,356 |
Operating lease cost | 8,469 | 8,359 | 8,421 |
Variable lease cost | 2,167 | 2,054 | 2,205 |
Total lease cost | $ 16,884 | $ 15,671 | $ 19,424 |
LEASES - Supplemental cash info
LEASES - Supplemental cash information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Operating cash flows for operating leases | $ 8,003 | $ 8,111 | $ 8,325 |
Operating cash flows for finance leases | 1,444 | 1,106 | 1,356 |
Financing cash flows for finance leases | 9,836 | 6,365 | 9,020 |
Right-of-use assets obtained in exchange for new lease liabilities: Operating leases | 9,261 | 5,673 | 6,842 |
Right-of-use assets obtained in exchange for new lease liabilities: Finance leases | $ 20,592 | $ 13,888 | $ 2,534 |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Operating Leases | |
2023 | $ 6,659 |
2024 | 5,684 |
2025 | 4,973 |
2026 | 3,488 |
2027 | 2,847 |
Thereafter | 11,695 |
Total lease payments | 35,346 |
Less: Interest | (8,021) |
Operating lease liabilities | 27,325 |
Finance Leases | |
2023 | 14,742 |
2024 | 12,903 |
2025 | 7,209 |
2026 | 1,847 |
2027 | 1,770 |
Thereafter | 1,224 |
Total lease payments | 39,695 |
Less: Interest | (3,949) |
Finance lease liabilities | $ 35,746 |
LEASES - Lessor (Details)
LEASES - Lessor (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Lessor | |
Lessor, revenue recognized | $ 3.8 |
Sales-Type Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue from Contract with Customer, Excluding Assessed Tax |
Lessor gain | $ 1.5 |
MEZZANINE EQUITY (Details)
MEZZANINE EQUITY (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Nov. 22, 2022 | Dec. 07, 2021 USD ($) shares | Dec. 31, 2022 USD ($) Vote director item $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Temporary Equity [Line Items] | ||||
Temporary equity, shares authorized | shares | 10,000,000 | 10,000,000 | ||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Temporary equity, liquidation preference | $ 477,047 | $ 436,943 | ||
Cash payment waived duration | 2 years | |||
Series A preferred stock | ||||
Temporary Equity [Line Items] | ||||
Temporary equity, shares authorized | shares | 10,000,000 | |||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.01 | |||
Preferred stock dividend rate | 9% | |||
Liquidation preference per share | $ / shares | $ 1,000 | |||
Number of votes per preferred stock | Vote | 1 | |||
Entitlement of preferred stock holder to appoint director. | director | 2 | |||
Series A preferred stock issued | $ 285,900 | |||
Series A preferred stock issued (in shares) | shares | 434,266 | |||
Temporary equity, liquidation preference | $ 477,000 | 436,900 | ||
Number of dividend payment periods | item | 2 | |||
Dividend paid in kind (Value) | $ 22,100 | |||
Paid dividends in-kind (in shares) | shares | 22,077 | |||
Accrued and unpaid dividends | $ 20,700 | $ 2,700 | ||
Series A preferred stock | Board of directors fails to declare and pay dividends | ||||
Temporary Equity [Line Items] | ||||
Preferred stock dividend rate | 11% |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Apr. 26, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation plans | ||||
Additional shares of common stock authorized | 5,400,000 | |||
Shares of common stock authorized for issuance | 10,050,000 | |||
Vesting period | 4 years | |||
Shares | ||||
Shares granted | 1,936,434 | 1,729,802 | 1,104,379 | |
Total fair value of the awards vested | $ 8.1 | $ 7.3 | $ 6.4 | |
Weighted Average Grant Date Fair Value | ||||
Income tax benefits related to stock-based compensation | 2.8 | $ 2.6 | $ 2 | |
Unrecognized share-based compensation | ||||
Unrecognized compensation cost | $ 12.4 | |||
Weighted-average period of recognition | 1 year 7 months 6 days | |||
Maximum | ||||
Stock-based compensation plans | ||||
Shares that may be granted in the form of stock options or stock appreciation rights to any eligible employee or director in any calendar year | 300,000 | |||
Restricted stock | ||||
Stock-based compensation plans | ||||
Vesting period | 4 years | |||
Shares | ||||
Non-vested shares outstanding at the beginning of the period | 1,069,817 | |||
Shares granted | 1,031,999 | 941,748 | 863,710 | |
Shares vested | (839,609) | |||
Shares forfeited, cancelled or retired | (76,227) | |||
Non-vested shares outstanding at the end of the period | 1,185,980 | 1,069,817 | ||
Weighted Average Grant Date Fair Value | ||||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 7.34 | |||
Shares granted (in dollars per share) | 4.70 | $ 7.51 | $ 6.30 | |
Shares vested (in dollars per share) | 6.31 | |||
Shares forfeited, cancelled or retired (in dollars per share) | 6.31 | |||
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 5.84 | $ 7.34 | ||
Performance shares | ||||
Stock-based compensation plans | ||||
Vesting period | 4 years | |||
Shares | ||||
Non-vested shares outstanding at the beginning of the period | 920,010 | |||
Shares granted | 904,435 | 788,054 | 240,669 | |
Shares vested | (309,387) | |||
Shares forfeited, cancelled or retired | (51,000) | |||
Non-vested shares outstanding at the end of the period | 1,464,058 | 920,010 | ||
Weighted Average Grant Date Fair Value | ||||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 7.40 | |||
Shares granted (in dollars per share) | 7.52 | $ 6.31 | $ 9.86 | |
Shares vested (in dollars per share) | 9.18 | |||
Shares forfeited, cancelled or retired (in dollars per share) | 8.20 | |||
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 7.07 | $ 7.40 | ||
Performance shares | Certain senior executives | ||||
Stock-based compensation plans | ||||
Vesting period | 3 years | |||
Percentage of shares increase (decrease) | 25% | |||
Performance shares | Maximum | ||||
Stock-based compensation plans | ||||
Payout opportunity as a percentage of the target | 120% | |||
Performance shares | Maximum | Certain senior executives | ||||
Stock-based compensation plans | ||||
Payout opportunity as a percentage of the target | 150% | 120% | 120% | |
Performance shares | Minimum | ||||
Stock-based compensation plans | ||||
Payout opportunity as a percentage of the target | 0% | |||
Performance shares | Minimum | Certain senior executives | ||||
Stock-based compensation plans | ||||
Payout opportunity as a percentage of the target | 0% | 0% | 0% |
SHAREHOLDERS' EQUITY - Compensa
SHAREHOLDERS' EQUITY - Compensation costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based compensation plans | |||
Stock-based compensation expense | $ 10,755 | $ 10,097 | $ 7,533 |
Restricted stock | |||
Stock-based compensation plans | |||
Stock-based compensation expense | 5,296 | 5,478 | 4,597 |
Performance shares | |||
Stock-based compensation plans | |||
Stock-based compensation expense | $ 5,459 | $ 4,619 | $ 2,936 |
SHAREHOLDERS' EQUITY - Changes
SHAREHOLDERS' EQUITY - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated other comprehensive loss, net of tax, by component | |||
Balance at the beginning of the period | $ (59,571) | $ (109,418) | |
Other comprehensive gain before reclassifications | 58,002 | 34,212 | |
Amounts reclassified from accumulated other comprehensive loss | 959 | 15,635 | |
Net current period other comprehensive income (loss) | 58,961 | 49,847 | $ (28,550) |
Balance at the end of the period | (610) | (59,571) | (109,418) |
Pension and Post-Retirement Obligations | |||
Accumulated other comprehensive loss, net of tax, by component | |||
Balance at the beginning of the period | (52,099) | (90,887) | |
Other comprehensive gain before reclassifications | 47,123 | 33,344 | |
Amounts reclassified from accumulated other comprehensive loss | (762) | 5,444 | |
Net current period other comprehensive income (loss) | 46,361 | 38,788 | |
Balance at the end of the period | (5,738) | (52,099) | (90,887) |
Derivative Instruments | |||
Accumulated other comprehensive loss, net of tax, by component | |||
Balance at the beginning of the period | (7,472) | (18,531) | |
Other comprehensive gain before reclassifications | 10,879 | 868 | |
Amounts reclassified from accumulated other comprehensive loss | 1,721 | 10,191 | |
Net current period other comprehensive income (loss) | 12,600 | 11,059 | |
Balance at the end of the period | $ 5,128 | $ (7,472) | $ (18,531) |
SHAREHOLDERS' EQUITY - Reclassi
SHAREHOLDERS' EQUITY - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EQUITY | ||||
Settlement loss | $ (5,900) | |||
Income (loss) from continuing operations before income taxes | $ (204,762) | $ (142,259) | $ 7,553 | |
Interest expense | (124,978) | (175,195) | (143,591) | |
Tax benefit (expense) | 27,058 | 3,132 | (1,679) | |
Net income (loss) | 140,649 | (106,693) | $ 37,302 | |
Pension and Post-Retirement Obligations | ||||
EQUITY | ||||
Prior service credit | 777 | 779 | ||
Actuarial gain (loss) | 254 | (2,309) | ||
Settlement loss | (5,864) | |||
Income (loss) from continuing operations before income taxes | 1,031 | (7,394) | ||
Tax benefit (expense) | (269) | 1,950 | ||
Net income (loss) | 762 | (5,444) | ||
Derivative Instruments | ||||
EQUITY | ||||
Interest expense | (2,328) | (13,964) | ||
Tax benefit (expense) | 607 | 3,773 | ||
Net income (loss) | $ (1,721) | $ (10,191) |
PENSION PLANS AND OTHER POST-_3
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS - Defined Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Amounts recognized in the consolidated balance sheets | ||||
Long-term liabilities | $ (214,671) | $ (123,644) | $ (214,671) | |
Components of net periodic pension costs | ||||
Plan settlement | 5,900 | |||
Defined Benefit Plans | ||||
Change in benefit obligation | ||||
Benefit obligation at the beginning of the year | 744,463 | 826,120 | ||
Interest cost | 22,273 | 22,758 | $ 25,971 | |
Actuarial gain | (197,697) | (19,218) | ||
Benefits paid | (30,071) | (36,381) | ||
Plan settlement | (48,816) | |||
Benefit obligation at the end of the year | 744,463 | 538,968 | 744,463 | 826,120 |
Change in plan assets | ||||
Fair value of plan assets at the beginning of the year | 617,540 | 623,826 | ||
Employer contributions | 10,055 | 20,755 | ||
Actual return on plan assets | (132,767) | 58,156 | ||
Benefits paid | (30,071) | (36,381) | ||
Plan settlement | (48,816) | |||
Fair value of plan assets at the end of the year | 617,540 | 464,757 | 617,540 | 623,826 |
Funded status at year end | (126,923) | (74,211) | (126,923) | |
Amounts recognized in the consolidated balance sheets | ||||
Current liabilities | (242) | (236) | (242) | |
Long-term liabilities | (126,681) | (73,975) | (126,681) | |
Amounts recognized in accumulated other comprehensive loss | ||||
Unamortized prior service cost (credit) | 808 | 685 | 808 | |
Unamortized net actuarial loss (gain) | 90,318 | 61,193 | 90,318 | |
Total | $ 91,126 | 61,878 | 91,126 | |
Components of net periodic pension costs | ||||
Interest cost | 22,273 | 22,758 | 25,971 | |
Expected return on plan assets | (36,535) | (36,997) | (34,544) | |
Net amortization (gain) loss | 730 | 2,309 | 1,165 | |
Net prior service cost (credit) amortization | 123 | 122 | 123 | |
Plan settlement | 5,864 | |||
Net periodic pension cost (benefit) | (13,409) | (5,944) | $ (7,285) | |
Changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects | ||||
Actuarial gain, net | (28,395) | (40,377) | ||
Recognized actuarial gain (loss) | (730) | (2,309) | ||
Recognized prior service (cost) credit | (123) | (122) | ||
Plan settlement | (5,864) | |||
Total amount recognized in other comprehensive loss, before tax effects | $ (29,248) | $ (48,672) | ||
Weighted-average assumptions used to determine the projected benefit obligations and net periodic benefit cost | ||||
Discount rate - net periodic benefit cost (as a percent) | 3.05% | 2.81% | 3.51% | |
Discount rate - benefit obligation (as a percent) | 3.05% | 5.63% | 3.05% | 2.81% |
Expected long-term rate of return on plan assets (as a percent) | 6% | 6% | 6.25% | |
Rate of compensation/salary increase (as a percent) | 2.50% | |||
Interest crediting rate for cash balance plans (as a percent) | 4% | 2% | 2% | |
Post-retirement Benefit Obligations | ||||
Change in benefit obligation | ||||
Benefit obligation at the beginning of the year | $ 96,434 | $ 106,704 | ||
Service cost | 658 | 649 | $ 825 | |
Interest cost | 2,593 | 2,579 | 3,265 | |
Plan participant contributions | 447 | 868 | ||
Actuarial gain | (36,567) | (4,860) | ||
Benefits paid | (7,342) | (9,506) | ||
Benefit obligation at the end of the year | $ 96,434 | 56,223 | 96,434 | 106,704 |
Change in plan assets | ||||
Fair value of plan assets at the beginning of the year | 3,546 | 3,337 | ||
Employer contributions | 6,894 | 8,638 | ||
Plan participant contributions | 447 | 868 | ||
Actual return on plan assets | (852) | 209 | ||
Benefits paid | (7,342) | (9,506) | ||
Fair value of plan assets at the end of the year | 3,546 | 2,693 | 3,546 | 3,337 |
Funded status at year end | (92,888) | (53,530) | (92,888) | |
Amounts recognized in the consolidated balance sheets | ||||
Current liabilities | (5,446) | (4,328) | (5,446) | |
Long-term liabilities | (87,442) | (49,202) | (87,442) | |
Amounts recognized in accumulated other comprehensive loss | ||||
Unamortized prior service cost (credit) | (2,865) | (1,965) | (2,865) | |
Unamortized net actuarial loss (gain) | (4,585) | (39,103) | (4,585) | |
Total | $ (7,450) | (41,068) | (7,450) | |
Components of net periodic pension costs | ||||
Service cost | 658 | 649 | 825 | |
Interest cost | 2,593 | 2,579 | 3,265 | |
Expected return on plan assets | (213) | (200) | (197) | |
Net amortization (gain) loss | (984) | (1,859) | ||
Net prior service cost (credit) amortization | (900) | (901) | 1,147 | |
Net periodic pension cost (benefit) | 1,154 | 2,127 | $ 3,181 | |
Changes in plan assets and benefit obligations recognized in other comprehensive loss, before tax effects | ||||
Actuarial gain, net | (35,502) | (4,869) | ||
Recognized actuarial gain (loss) | 984 | |||
Recognized prior service (cost) credit | 900 | 901 | ||
Total amount recognized in other comprehensive loss, before tax effects | $ (33,618) | $ (3,968) | ||
Weighted-average assumptions used to determine the projected benefit obligations and net periodic benefit cost | ||||
Discount rate - net periodic benefit cost (as a percent) | 2.94% | 2.57% | 3.35% | |
Discount rate - benefit obligation (as a percent) | 2.93% | 5.64% | 2.93% | 2.56% |
Rate of compensation/salary increase (as a percent) | 2.50% | 2.50% | 2.50% |
PENSION PLANS AND OTHER POST-_4
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS - Other Non-qualified Deferred Comp Agreements (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Other Non-qualified Deferred Compensation Agreements | ||
Minimum number of years benefits are payable | 5 years | |
Minimum age at which payments under deferred compensation agreements may begin | 55 years | |
Payment related to deferred compensation agreements | $ 200,000 | $ 200,000 |
Net present value of the remaining obligations | $ 500,000 | 600,000 |
Number of life insurance policies | item | 22 | |
Excess of cash surrender value of remaining life insurance policies over notes payable | $ 2,800,000 | 2,700,000 |
Proceeds from life insurance policies | 100,000 | |
Death benefit payable | 6,300,000 | $ 6,200,000 |
New benefits accrued | $ 0 |
PENSION PLANS AND OTHER POST-_5
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS - Contributions (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) item employee | Dec. 31, 2021 USD ($) item | Dec. 31, 2020 USD ($) | |
Defined benefit plans | ||||
Number of non-contributory qualified defined benefit pension plans | item | 3 | |||
New benefits accrued | $ 0 | |||
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements | $ (5,900,000) | |||
Defined Benefit Plans | ||||
Defined benefit plans | ||||
New benefits accrued | 0 | |||
Defined Benefit Plan, Benefit Obligation | 744,463,000 | 538,968,000 | $ 744,463,000 | $ 826,120,000 |
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements | (5,864,000) | |||
Employer contributions | $ 10,055,000 | 20,755,000 | ||
Group annuity contract | ||||
Defined benefit plans | ||||
Defined Benefit Plan, Benefit Obligation | 47,100,000 | $ 47,100,000 | ||
Number Of Participants Transferred | item | 400 | |||
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements | $ (5,900,000) | |||
Post-retirement Benefit Obligations | ||||
Defined benefit plans | ||||
Number of persons eligible to become a new participant | employee | 0 | |||
Defined Benefit Plan, Benefit Obligation | $ 96,434,000 | $ 56,223,000 | 96,434,000 | $ 106,704,000 |
Assets in unfunded plans | 0 | |||
Employer contributions | $ 6,894,000 | $ 8,638,000 | ||
Weighted-average assumptions used to determine the projected benefit obligations and net periodic benefit cost | ||||
Health care trend rate assumed for the next fiscal year (as a percent) | 6.50% | |||
Ultimate health care cost trend rate (as a percent) | 5% | |||
Supplemental Plans | ||||
Defined benefit plans | ||||
Number of non-qualified plans | item | 2 | |||
Number of persons eligible to become a new participant | item | 0 | |||
Assets in unfunded plans | $ 0 |
PENSION PLANS AND OTHER POST-_6
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS - Plan Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Post-retirement benefit obligation | |||
Unfunded commitments | $ 0 | ||
Minimum | |||
Post-retirement benefit obligation | |||
Long-term investment horizon | 5 years | ||
Minimum | Equity Securities | |||
Post-retirement benefit obligation | |||
Target allocation (as a percent) | 70% | ||
Maximum | |||
Post-retirement benefit obligation | |||
Redemption notice period | 180 days | ||
Long-term investment horizon | 15 years | ||
Maximum | Equity Securities | |||
Post-retirement benefit obligation | |||
Target allocation (as a percent) | 90% | ||
Defined Benefit Plans | |||
Post-retirement benefit obligation | |||
Net plan assets | $ 464,757 | $ 617,540 | $ 623,826 |
Expected contribution in the next fiscal year | 0 | ||
Benefit payments expected to be paid | |||
2023 | 32,568 | ||
2024 | 33,866 | ||
2025 | 34,648 | ||
2026 | 35,539 | ||
2027 | 36,284 | ||
2028-2032 | 189,696 | ||
Defined Benefit Plans | Fair Value Level 1 and Level 2 | |||
Post-retirement benefit obligation | |||
Total plan assets | 61 | 484 | |
Defined Benefit Plans | Quoted Prices In Active Markets for Identical Assets (Level 1) | |||
Post-retirement benefit obligation | |||
Total plan assets | 61 | 484 | |
Defined Benefit Plans | Cash and Cash Equivalents [Member] | |||
Post-retirement benefit obligation | |||
Total plan assets | 38 | 459 | |
Defined Benefit Plans | Cash and Cash Equivalents [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) | |||
Post-retirement benefit obligation | |||
Total plan assets | 38 | 459 | |
Defined Benefit Plans | U.S. common stocks | Fair Value Level 1 and Level 2 | |||
Post-retirement benefit obligation | |||
Total plan assets | 21 | 24 | |
Defined Benefit Plans | U.S. common stocks | Quoted Prices In Active Markets for Identical Assets (Level 1) | |||
Post-retirement benefit obligation | |||
Total plan assets | 21 | 24 | |
Defined Benefit Plans | International stocks | Fair Value Level 1 and Level 2 | |||
Post-retirement benefit obligation | |||
Total plan assets | 2 | 1 | |
Defined Benefit Plans | International stocks | Quoted Prices In Active Markets for Identical Assets (Level 1) | |||
Post-retirement benefit obligation | |||
Total plan assets | 2 | 1 | |
Defined Benefit Plans | Global | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 154,626 | 223,101 | |
Defined Benefit Plans | Real Estate | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 96,641 | 126,980 | |
Defined Benefit Plans | Fixed Income | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 137,174 | 194,189 | |
Other assets/(liabilities) | (3) | ||
Defined Benefit Plans | Hedge Funds | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 71,519 | 66,309 | |
Defined Benefit Plans | Short-term investments. | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 4,739 | 6,477 | |
Post-retirement Benefit Obligations | |||
Post-retirement benefit obligation | |||
Net plan assets | 2,693 | 3,546 | $ 3,337 |
Expected contribution in the next fiscal year | 6,200 | ||
Benefit payments expected to be paid | |||
2023 | 6,159 | ||
2024 | 5,558 | ||
2025 | 5,046 | ||
2026 | 4,655 | ||
2027 | 4,400 | ||
2028-2032 | 19,290 | ||
Post-retirement Benefit Obligations | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 2,758 | 3,682 | |
Benefit payments payable | (65) | (136) | |
Net plan assets | 2,693 | 3,546 | |
Post-retirement Benefit Obligations | Cash and Cash Equivalents [Member] | |||
Post-retirement benefit obligation | |||
Total plan assets | 1 | 3 | |
Post-retirement Benefit Obligations | Cash and Cash Equivalents [Member] | Quoted Prices In Active Markets for Identical Assets (Level 1) | |||
Post-retirement benefit obligation | |||
Total plan assets | 1 | 3 | |
Post-retirement Benefit Obligations | Global | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 917 | 1,330 | |
Post-retirement Benefit Obligations | Real Estate | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 573 | 757 | |
Post-retirement Benefit Obligations | Fixed Income | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 814 | 1,158 | |
Post-retirement Benefit Obligations | Hedge Funds | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | 425 | 395 | |
Post-retirement Benefit Obligations | Short-term investments. | Fair Value Measured at Net Asset Value Per Share | |||
Post-retirement benefit obligation | |||
Total plan assets | $ 28 | $ 39 |
PENSION PLANS AND OTHER POST-_7
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS | |||
Expense with respect to 401(k) plans | $ 15.8 | $ 15.6 | $ 15.6 |
INCOME TAXES - Income tax expen
INCOME TAXES - Income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 199 | $ 305 | $ 314 |
State | 830 | 470 | 2,578 |
Total current expense | 1,029 | 775 | 2,892 |
Deferred: | |||
Federal | (20,983) | (3,921) | 187 |
State | (7,104) | 14 | (1,400) |
Total deferred expense (benefit) | (28,087) | (3,907) | (1,213) |
Total income tax expense (benefit) | $ (27,058) | $ (3,132) | $ 1,679 |
Reconciliation of the provision for income taxes computed at federal statutory rates to the effective rates | |||
Statutory federal income tax rate (as a percent) | 21% | 21% | 21% |
State income taxes, net of federal benefit (as a percent) | 5.30% | 4.70% | 10.40% |
Searchlight investment (as a percent) | (23.30%) | (20.80%) | |
Other permanent differences (as a percent) | (0.70%) | (0.40%) | 9.80% |
Change in deferred tax rate (as a percent) | 1.50% | 0.20% | (5.40%) |
Valuation allowance (as a percent) | (0.30%) | (1.20%) | 17.80% |
Provision to return (as a percent) | 0.10% | 1.90% | (7.00%) |
Non deductible goodwill (as a percent) | (13.40%) | (1.00%) | |
Other (as a percent) | (0.30%) | 0.30% | (3.60%) |
Total (as a percent) | 13.20% | 2.20% | 22.20% |
Non-current deferred tax assets: | |||
Reserve for uncollectible accounts | $ 3,032 | $ 2,632 | |
Accrued vacation pay deducted when paid | 4,501 | 4,388 | |
Accrued expenses and deferred revenue | 15,458 | 15,019 | |
Net operating loss carryforwards | 71,576 | 100,402 | |
Excess interest carryforward | 19,580 | 2,402 | |
Pension and postretirement obligations | 34,083 | 57,507 | |
Share-based compensation | 2,347 | 1,706 | |
Derivative instruments | 2,633 | ||
Derivative instruments | (1,815) | ||
Tax credit carryforwards | 4,282 | 4,854 | |
Total | 153,044 | 191,543 | |
Valuation allowance | (8,379) | (8,580) | |
Net non-current deferred tax assets | 144,665 | 182,963 | |
Non-current deferred tax liabilities: | |||
Goodwill and other intangibles | (36,384) | (44,044) | |
Basis in investment | (4) | ||
Partnership investments | 271 | (16,902) | |
Property, plant and equipment | (377,886) | (310,579) | |
Financing costs | (4,976) | (5,892) | |
Other | 1 | ||
Total | (418,974) | (377,421) | |
Net non-current deferred taxes | $ (274,309) | $ (194,458) |
INCOME TAXES - Carryforwards (D
INCOME TAXES - Carryforwards (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 13, 2022 item | Dec. 31, 2017 USD ($) | |
Income taxes | |||||
Increase (decrease) in fair value of CPR | $ 33,100 | $ (1,600) | |||
Deferred tax assets related to net operating loss carryforwards | $ 71,576 | 100,402 | |||
Net operating loss that can be carried forward indefinitely | 154,700 | ||||
Deferred tax assets related to net operating loss that can be carried forward indefinitely | 32,500 | ||||
Net operating loss carryforward that expire in 2030 to 2035 | $ 140,700 | ||||
Deferred tax assets related to net operating loss carryforwards that expire in 2030 to 2035 | $ 29,500 | ||||
Deferred tax asset, valuation allowance | 8,379 | 8,580 | |||
Unrecognized tax benefits | 4,900 | 4,900 | |||
Unrecognized tax benefits that would impact effective tax rate | 4,700 | $ 4,700 | |||
Taxable gain on sale | 477,700 | ||||
Estimated state income taxes | 8,000 | ||||
Disposed of by Sale | |||||
Income taxes | |||||
Number of wireless partnerships | item | 5 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Kansas City operations | |||||
Income taxes | |||||
Tax expense related to non deductible noncash goodwill | 23,200 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Assets of non-core, rural ILEC business located in Ohio | |||||
Income taxes | |||||
Tax expense related to non deductible noncash goodwill | 4,200 | ||||
Minimum | |||||
Income taxes | |||||
Estimated state income taxes | 8,000 | ||||
State | |||||
Income taxes | |||||
Net operating loss carryforwards | 406,400 | ||||
Deferred tax assets related to net operating loss carryforwards | 14,200 | ||||
Tax credit carryforwards | 5,400 | ||||
Deferred tax assets related to tax credit carryforwards | 4,300 | ||||
Federal | |||||
Income taxes | |||||
Net operating loss carryforwards | 295,400 | ||||
Deferred tax assets related to net operating loss carryforwards | 62,000 | ||||
Federal | ETFL | |||||
Income taxes | |||||
Net operating loss carryforwards | 400 | ||||
Deferred tax assets related to net operating loss carryforwards | 100 | ||||
Tax Years 2023 to 2032 | State | |||||
Income taxes | |||||
Tax credit, valuation allowance | 2,700 | ||||
Deferred tax asset, valuation allowance | 2,100 | ||||
Tax Years 2023 to 2042 | State | |||||
Income taxes | |||||
Operating loss carryforwards, valuation allowance | 91,500 | ||||
Deferred tax asset, valuation allowance | $ 6,300 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long-term Purchase Commitment [Line Items] | |
2023 | $ 134,138 |
2024 | 17,850 |
2025 | 7,595 |
2026 | 961 |
2027 | 885 |
Thereafter | 2,275 |
Total | 163,704 |
Service and support agreements | |
Long-term Purchase Commitment [Line Items] | |
2023 | 12,552 |
2024 | 10,272 |
2025 | 6,350 |
2026 | 299 |
2027 | 307 |
Thereafter | 753 |
Total | 30,533 |
Transport and data connectivity | |
Long-term Purchase Commitment [Line Items] | |
2023 | 7,392 |
2024 | 5,624 |
2025 | 232 |
2026 | 87 |
2027 | 87 |
Thereafter | 82 |
Total | 13,504 |
Capital expenditures | |
Long-term Purchase Commitment [Line Items] | |
2023 | 112,100 |
Total | 112,100 |
Other operating agreements | |
Long-term Purchase Commitment [Line Items] | |
2023 | 2,094 |
2024 | 1,954 |
2025 | 1,013 |
2026 | 575 |
2027 | 491 |
Thereafter | 1,440 |
Total | $ 7,567 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Litigation (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) subsidiary | Dec. 31, 2019 USD ($) | Dec. 30, 2020 item | May 31, 2017 USD ($) | |
Litigation and Contingencies | ||||||
Number of subsidiaries that received assessment notice | subsidiary | 2 | |||||
Payments to DOR | $ 2.1 | |||||
Number of poles sold in joint venture | item | 343,000 | |||||
Number of poles sold that were solely owned | item | 3,800 | |||||
Loss from sale of poles | $ 8.3 | $ 1.9 | $ 8.3 | |||
Consolidated Communications of Pennsylvania Company LLC (CCPA) | ||||||
Litigation and Contingencies | ||||||
Litigation amount accrued | 0.8 | 0.8 | ||||
Consolidated Communications of Pennsylvania Company LLC (CCPA) | Tax Year 2008 Through 2013, excluding 2010 | ||||||
Litigation and Contingencies | ||||||
Total additional tax liability calculated by the auditors | 3.4 | |||||
Consolidated Communications of Pennsylvania Company LLC (CCPA) | Tax Year 2010, 2014 Through 2018 | ||||||
Litigation and Contingencies | ||||||
Total additional tax liability calculated by the auditors | 4.6 | |||||
Consolidated Communications of Pennsylvania Company LLC (CCPA) | Tax Year 2019 and 2020 | ||||||
Litigation and Contingencies | ||||||
Total additional tax liability calculated by the auditors | 0.8 | |||||
Consolidated Communications Enterprise Services Inc. (CCES) | ||||||
Litigation and Contingencies | ||||||
Litigation amount accrued | $ 1.6 | 1.6 | ||||
Consolidated Communications Enterprise Services Inc. (CCES) | Tax Year 2008 Through 2013 | ||||||
Litigation and Contingencies | ||||||
Total additional tax liability calculated by the auditors | 4 | |||||
Consolidated Communications Enterprise Services Inc. (CCES) | Tax Year 2014 Through 2018 | ||||||
Litigation and Contingencies | ||||||
Total additional tax liability calculated by the auditors | $ 2.6 | |||||
Assessment by Commonwealth of Pennsylvania Department of Revenue | Maximum | ||||||
Litigation and Contingencies | ||||||
Potential liability amount guaranteed | $ 5 |
QUARTERLY FINANCIAL INFORMATI_3
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net revenues | $ 295,976 | $ 296,619 | $ 298,390 | $ 300,278 | $ 318,480 | $ 318,584 | $ 320,403 | $ 324,766 | $ 1,191,263 | $ 1,282,233 | $ 1,304,028 | |
Operating income (loss) | (20,721) | 20,852 | 14,449 | (107,742) | 34,329 | 32,508 | 30,015 | 38,326 | (93,162) | 135,178 | 135,513 | |
Income (loss) from continuing operations | (40,760) | (7,257) | (10,591) | (119,096) | 7,415 | (13,100) | (55,138) | (78,304) | (177,704) | (139,127) | 5,874 | |
Income from discontinued operations | 5,793 | 299,934 | 9,079 | 3,547 | 7,545 | 8,619 | 49 | 16,221 | 318,353 | 32,434 | 31,428 | |
Net income (loss) attributable to common shareholders | $ (45,490) | $ 282,250 | $ (11,517) | $ (125,262) | $ 12,414 | $ (4,721) | $ (55,356) | $ (62,099) | $ 99,981 | $ (109,762) | $ 36,977 | |
Income (loss) from continuing operations - Basic | $ (0.46) | $ (0.15) | $ (0.18) | $ (1.15) | $ 0.05 | $ (0.14) | $ (0.71) | $ (1) | $ (1.90) | $ (1.63) | $ 0.07 | |
Income (loss) from continuing operations - Diluted | (0.46) | (0.15) | (0.18) | (1.15) | 0.05 | (0.14) | (0.71) | (1) | (1.90) | (1.63) | 0.07 | |
Income from discontinued operations - Basic | 0.05 | 2.60 | 0.08 | 0.03 | 0.07 | 0.09 | 0.20 | 2.77 | 0.37 | 0.40 | ||
Income from discontinued operations - Diluted | 0.05 | 2.60 | 0.08 | 0.03 | 0.07 | 0.09 | 0.20 | 2.77 | 0.37 | 0.40 | ||
Basic earnings (loss) per share | (0.41) | 2.45 | (0.10) | (1.12) | 0.12 | (0.05) | (0.71) | (0.80) | 0.87 | (1.26) | 0.47 | |
Diluted earnings (loss) per share | $ (0.41) | $ 2.45 | $ (0.10) | $ (1.12) | $ 0.12 | $ (0.05) | $ (0.71) | $ (0.80) | $ 0.87 | $ (1.26) | $ 0.47 | |
Impairment loss on assets held for sale | $ (131,698) | $ (5,704) | ||||||||||
Gain (loss) on disposal of assets | (4,233) | |||||||||||
Settlement loss | $ (5,900) | |||||||||||
Change in fair value of contingent payment rights | (86,476) | $ 23,802 | ||||||||||
Loss from sale of poles | $ (8,300) | $ (1,900) | (8,300) | |||||||||
Tower Assets | ||||||||||||
Gain (loss) on disposal of assets | 1,600 | $ 19,200 | 20,800 | |||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Kansas City operations | ||||||||||||
Impairment loss on assets held for sale | $ (5,200) | $ (126,500) | (131,700) | |||||||||
Loss on disposal | $ (16,800) | $ (16,800) | ||||||||||
Searchlight | ||||||||||||
Change in fair value of contingent payment rights | $ 13,100 | $ (86,500) | $ 23,500 |