Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 30, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
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 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 | |
Title of 12(b) Security | Common Stock - $0.01 par value | |
Trading Symbol | CNSL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 118,477,091 | |
Entity Central Index Key | 0001304421 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net revenues | $ 268,709 | $ 275,162 | $ 543,384 | $ 551,288 |
Operating expense: | ||||
Cost of services and products (exclusive of depreciation and amortization) | 114,006 | 126,967 | 227,465 | 258,905 |
Selling, general and administrative expenses | 93,288 | 83,565 | 177,243 | 164,849 |
Transaction costs | 3,175 | 6,100 | ||
Loss on impairment of assets held for sale | 77,755 | 77,755 | ||
Loss on disposal of assets | 2,384 | 5,688 | ||
Depreciation and amortization | 79,809 | 79,538 | 160,442 | 157,237 |
Loss from operations | (21,569) | (95,047) | (27,866) | (113,146) |
Other income (expense): | ||||
Interest expense, net of interest income | (44,132) | (36,903) | (86,583) | (70,763) |
Other, net | 292 | 5,410 | 1,885 | 8,168 |
Loss before income taxes | (65,409) | (126,540) | (112,564) | (175,741) |
Income tax benefit | (10,581) | (18,448) | (22,353) | (30,688) |
Net loss | (54,828) | (108,092) | (90,211) | (145,053) |
Less: dividends on Series A preferred stock | 11,692 | 10,704 | 23,379 | 21,291 |
Less: net income attributable to noncontrolling interest | 145 | 161 | 258 | 304 |
Net loss attributable to common shareholders | $ (66,665) | $ (118,957) | $ (113,848) | $ (166,648) |
Net loss per basic common shares attributable to common shareholders | $ (0.58) | $ (1.05) | $ (1) | $ (1.47) |
Net loss per diluted common shares attributable to common shareholders | $ (0.58) | $ (1.05) | $ (1) | $ (1.47) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net loss | $ (54,828) | $ (108,092) | $ (90,211) | $ (145,053) |
Pension and post-retirement obligations: | ||||
Amortization of actuarial loss (gain) and prior service cost (credit) to earnings, net of tax | (456) | (999) | (911) | (1,998) |
Derivative instruments designated as cash flow hedges: | ||||
Change in fair value of derivatives, net of tax | 395 | 3,089 | 8,335 | 3,055 |
Reclassification of realized gain to earnings, net of tax | (1,291) | (2,387) | (2,595) | (4,366) |
Comprehensive loss | (56,180) | (108,389) | (85,382) | (148,362) |
Less: comprehensive income attributable to noncontrolling interest | 145 | 161 | 258 | 304 |
Total comprehensive loss attributable to common shareholders | $ (56,325) | $ (108,550) | $ (85,640) | $ (148,666) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 5,327 | $ 4,765 |
Accounts receivable, net of allowance for credit losses | 127,359 | 121,194 |
Income tax receivable | 3,470 | 2,880 |
Prepaid expenses and other current assets | 57,321 | 56,843 |
Assets held for sale | 70,473 | |
Total current assets | 193,477 | 256,155 |
Property, plant and equipment, net | 2,494,789 | 2,449,009 |
Investments | 8,628 | 8,887 |
Goodwill | 814,624 | 814,624 |
Customer relationships, net | 10,470 | 18,616 |
Other intangible assets | 10,557 | 10,557 |
Other assets | 77,771 | 70,578 |
Total assets | 3,610,316 | 3,628,426 |
Current liabilities: | ||
Accounts payable | 39,820 | 60,073 |
Advance billings and customer deposits | 48,539 | 44,478 |
Accrued compensation | 56,243 | 58,151 |
Accrued interest | 19,931 | 18,694 |
Accrued expense | 83,645 | 114,022 |
Current portion of long-term debt and finance lease obligations | 20,601 | 18,425 |
Liabilities held for sale | 3,402 | |
Total current liabilities | 268,779 | 317,245 |
Long-term debt and finance lease obligations | 2,268,663 | 2,134,916 |
Deferred income taxes | 189,987 | 210,648 |
Pension and other post-retirement obligations | 135,488 | 137,616 |
Other long-term liabilities | 49,350 | 48,637 |
Total liabilities | 2,912,267 | 2,849,062 |
Commitments and contingencies (Note 15) | ||
Series A preferred stock, par value $0.01 per share; 10,000,000 shares authorized, 434,266 shares outstanding as of June 30, 2024 and December 31, 2023; liquidation preference of $544,335 and $520,957 as of June 30, 2024 and December 31, 2023, respectively | 395,969 | 372,590 |
Shareholders' equity: | ||
Common stock, par value $0.01 per share; 150,000,000 shares authorized, 118,477,091 and 116,172,568 shares outstanding as of June 30, 2024 and December 31, 2023, respectively | 1,185 | 1,162 |
Additional paid-in capital | 662,422 | 681,757 |
Retained earnings (accumulated deficit) | (352,849) | (262,380) |
Accumulated other comprehensive loss, net | (17,043) | (21,872) |
Noncontrolling interest | 8,365 | 8,107 |
Total shareholders' equity | 302,080 | 406,774 |
Total liabilities, mezzanine equity and shareholders' equity | $ 3,610,316 | $ 3,628,426 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
CONDENSED 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 | 434,266 | 434,266 |
Temporary equity, liquidation preference | $ 544,335 | $ 520,957 |
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 | 118,477,091 | 116,172,568 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Preferred Stock | Additional Paid-in Capital | Retained Earnings [Member] | Accumulated Other Comprehensive Loss, net | Non-controlling Interest | Total |
Balance at Dec. 31, 2022 | $ 328,680 | ||||||
Balance (in shares) at Dec. 31, 2022 | 456,000 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Series A preferred stock issued (in shares) | 21,000 | ||||||
Dividends on Series A preferred stock accrued | $ 10,587 | ||||||
Balance at Mar. 31, 2023 | $ 339,267 | ||||||
Balance (in shares) at Mar. 31, 2023 | 477,000 | ||||||
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 | ||||||
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) | 1,738,000 | ||||||
Dividends on Series A preferred stock accrued | (10,587) | (10,587) | |||||
Non-cash, share-based compensation | 799 | 799 | |||||
Purchase and retirement of common stock | $ (2) | (1,034) | (1,036) | ||||
Purchase and retirement of common stock (in shares) | (256,000) | ||||||
Other comprehensive income (loss) | (3,012) | (3,012) | |||||
Net income (loss) | (37,104) | 143 | (36,961) | ||||
Balance at Mar. 31, 2023 | $ 1,167 | 709,603 | (48,970) | (3,622) | 7,794 | 665,972 | |
Balance (in shares) at Mar. 31, 2023 | 116,649,000 | ||||||
Balance at Dec. 31, 2022 | $ 328,680 | ||||||
Balance (in shares) at Dec. 31, 2022 | 456,000 | ||||||
Balance at Jun. 30, 2023 | $ 349,971 | ||||||
Balance (in shares) at Jun. 30, 2023 | 477,000 | ||||||
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 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (145,053) | ||||||
Balance at Jun. 30, 2023 | $ 1,167 | 701,287 | (157,223) | (3,919) | 7,955 | 549,267 | |
Balance (in shares) at Jun. 30, 2023 | 116,610,000 | ||||||
Balance at Mar. 31, 2023 | $ 339,267 | ||||||
Balance (in shares) at Mar. 31, 2023 | 477,000 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Dividends on Series A preferred stock accrued | $ 10,704 | ||||||
Balance at Jun. 30, 2023 | $ 349,971 | ||||||
Balance (in shares) at Jun. 30, 2023 | 477,000 | ||||||
Balance at Mar. 31, 2023 | $ 1,167 | 709,603 | (48,970) | (3,622) | 7,794 | 665,972 | |
Balance (in shares) at Mar. 31, 2023 | 116,649,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Shares issued under employee plan, net of forfeitures (in shares) | (39,000) | ||||||
Dividends on Series A preferred stock accrued | (10,704) | (10,704) | |||||
Non-cash, share-based compensation | 2,388 | 2,388 | |||||
Other comprehensive income (loss) | (297) | (297) | |||||
Net income (loss) | (108,253) | 161 | (108,092) | ||||
Balance at Jun. 30, 2023 | $ 1,167 | 701,287 | (157,223) | (3,919) | 7,955 | $ 549,267 | |
Balance (in shares) at Jun. 30, 2023 | 116,610,000 | ||||||
Balance at Dec. 31, 2023 | $ 372,590 | ||||||
Balance (in shares) at Dec. 31, 2023 | 434,000 | 434,266 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Accrued Series A preferred stock liquidation preference as paid-in-kind dividends | $ 11,687 | ||||||
Balance at Mar. 31, 2024 | $ 384,277 | ||||||
Balance (in shares) at Mar. 31, 2024 | 434,000 | ||||||
Balance at Dec. 31, 2023 | $ 1,162 | 681,757 | (262,380) | (21,872) | 8,107 | $ 406,774 | |
Balance (in shares) at Dec. 31, 2023 | 116,172,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Shares issued under employee plan, net of forfeitures | $ 23 | (23) | |||||
Shares issued under employee plan, net of forfeitures (in shares) | 2,368,000 | ||||||
Accrued Series A preferred stock liquidation preference as paid-in-kind dividends | (11,687) | (11,687) | |||||
Non-cash, share-based compensation | 1,681 | 1,681 | |||||
Purchase and retirement of common stock | $ (1) | (487) | (488) | ||||
Purchase and retirement of common stock (in shares) | (111,000) | ||||||
Other comprehensive income (loss) | 6,181 | 6,181 | |||||
Net income (loss) | (35,496) | 113 | (35,383) | ||||
Balance at Mar. 31, 2024 | $ 1,184 | 671,241 | (297,876) | (15,691) | 8,220 | $ 367,078 | |
Balance (in shares) at Mar. 31, 2024 | 118,429,000 | ||||||
Balance at Dec. 31, 2023 | $ 372,590 | ||||||
Balance (in shares) at Dec. 31, 2023 | 434,000 | 434,266 | |||||
Balance at Jun. 30, 2024 | $ 395,969 | ||||||
Balance (in shares) at Jun. 30, 2024 | 434,000 | 434,266 | |||||
Balance at Dec. 31, 2023 | $ 1,162 | 681,757 | (262,380) | (21,872) | 8,107 | $ 406,774 | |
Balance (in shares) at Dec. 31, 2023 | 116,172,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive income (loss) | 4,829 | ||||||
Net income (loss) | (90,211) | ||||||
Balance at Jun. 30, 2024 | $ 1,185 | 662,422 | (352,849) | (17,043) | 8,365 | $ 302,080 | |
Balance (in shares) at Jun. 30, 2024 | 118,477,000 | ||||||
Balance at Mar. 31, 2024 | $ 384,277 | ||||||
Balance (in shares) at Mar. 31, 2024 | 434,000 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Accrued Series A preferred stock liquidation preference as paid-in-kind dividends | $ 11,692 | ||||||
Balance at Jun. 30, 2024 | $ 395,969 | ||||||
Balance (in shares) at Jun. 30, 2024 | 434,000 | 434,266 | |||||
Balance at Mar. 31, 2024 | $ 1,184 | 671,241 | (297,876) | (15,691) | 8,220 | $ 367,078 | |
Balance (in shares) at Mar. 31, 2024 | 118,429,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Shares issued under employee plan, net of forfeitures | $ 1 | (1) | |||||
Shares issued under employee plan, net of forfeitures (in shares) | 84,000 | ||||||
Accrued Series A preferred stock liquidation preference as paid-in-kind dividends | (11,692) | (11,692) | |||||
Non-cash, share-based compensation | 3,030 | 3,030 | |||||
Purchase and retirement of common stock | (156) | (156) | |||||
Purchase and retirement of common stock (in shares) | (36,000) | ||||||
Other comprehensive income (loss) | (1,352) | (1,352) | |||||
Net income (loss) | (54,973) | 145 | (54,828) | ||||
Balance at Jun. 30, 2024 | $ 1,185 | $ 662,422 | $ (352,849) | $ (17,043) | $ 8,365 | $ 302,080 | |
Balance (in shares) at Jun. 30, 2024 | 118,477,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (90,211) | $ (145,053) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 160,442 | 157,237 |
Deferred income tax expense (benefit) | (22,371) | (31,259) |
Pension and post-retirement contributions in excess of expense | (3,279) | (5,537) |
Stock-based compensation expense | 4,711 | 3,187 |
Amortization of deferred financing costs and discounts | 3,942 | 3,721 |
Loss on impairment of assets held for sale | 77,755 | |
Loss on disposal of assets | 5,688 | |
Other, net | (113) | (2,861) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (6,232) | 10,874 |
Income tax receivable | (590) | (5,141) |
Prepaid expenses and other assets | (6,580) | (3,930) |
Accounts payable | (22,215) | 2,748 |
Accrued expenses and other liabilities | (20,036) | (110) |
Net cash provided by (used in) operating activities | (2,532) | 67,319 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment, net | (183,577) | (280,860) |
Proceeds from sale and maturity of investments | 714 | 91,623 |
Proceeds from sale of assets | 232 | 6,801 |
Proceeds from business dispositions | 67,458 | |
Net cash used in investing activities | (115,173) | (182,436) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 130,000 | |
Payment of finance lease obligations | (10,154) | (7,121) |
Payment of financing costs | (934) | |
Share repurchases for minimum tax withholding | (645) | (1,036) |
Net cash provided by (used in) financing activities | 118,267 | (8,157) |
Change in cash and cash equivalents | 562 | (123,274) |
Cash and cash equivalents at beginning of period | 4,765 | 325,852 |
Cash and cash equivalents at end of period | $ 5,327 | $ 202,578 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. 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 63,000 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. In the opinion of management, the accompanying unaudited condensed consolidated balance sheets and related condensed consolidated statements of operations, comprehensive income (loss), mezzanine equity and shareholders’ equity and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States (“US GAAP” or “GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed consolidated financial statements through the date of issuance. Management believes that the disclosures made are adequate to make the information presented not misleading. Interim results are not necessarily indicative of results for a full year. The information presented in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and the accompanying notes to the financial statements (“Notes”) thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. Recent Developments Merger Agreement On October 15, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Condor Holdings LLC, a Delaware limited liability company (“Parent”) affiliated with certain funds managed by affiliates of Searchlight Capital Partners, L.P. (“Searchlight”), and Condor Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions thereof, Merger Sub will merge with and into the Company (the “Merger”) with the Company continuing as the surviving corporation and a wholly owned subsidiary of an affiliate of Searchlight. British Columbia Investment Management Corporation (“BCI”) and certain affiliates of Searchlight have committed to provide equity financing to Parent to fund the transactions contemplated by the Merger Agreement. Searchlight is currently the beneficial owner of approximately 33% of the Company’s outstanding shares of common stock and is the holder of 100% of the Company’s outstanding Series A perpetual preferred stock. Refer to Note 4 for a more complete discussion of the strategic investment with Searchlight. Subject to the terms and conditions set forth in the Merger Agreement, upon the consummation of the Merger, each share of the Company’s common stock, par value $0.01 per share (other than shares of the Company’s common stock (i) held directly or indirectly by Parent, Merger Sub or any subsidiary of the Company, (ii) held by the Company as treasury shares or (iii) held by any person who properly exercises appraisal rights under Delaware law) will be converted into the right to receive an amount in cash equal to $4.70 per share, without interest (the “Merger Consideration”), subject to any withholding of taxes required by applicable law. In addition, pursuant to the Merger Agreement, upon the consummation of the Merger, (i) Company restricted share awards (“Company RSAs”) held by non-employee directors or by certain affiliates of Searchlight will vest and be canceled in exchange for the Merger Consideration and (ii) all other Company RSAs will be converted into restricted cash awards based on the Merger Consideration and subject to the same terms and conditions, including time- and performance-based vesting conditions, as the corresponding Company RSA (except that the relative total shareholder return modifier shall be deemed to be achieved at the target level). The Merger Agreement has, unanimously by the directors present, been approved by the board of directors of the Company (the “Board”), acting upon the unanimous recommendation of a special committee consisting of only independent and disinterested directors of the Company (the “Special Committee”). On January 31, 2024, the Company held a virtual special meeting of stockholders (the “Special Meeting”) to consider three proposals with respect to the Merger Agreement. The first proposal, to adopt the Merger Agreement, was approved by (i) holders of a majority of the voting power represented by the issued and outstanding shares of our common stock that were entitled to vote thereon and (ii) holders of a majority of the voting power represented by the issued and outstanding shares of our common stock that were entitled to vote thereon and held by Unaffiliated Stockholders (as defined in the Merger Agreement). The second proposal, to approve by advisory (non-binding) vote the compensation that may be paid or become payable to the named executive officers of the Company in connection with the consummation of the Merger, was approved by the requisite vote of the Company’s stockholders. The third proposal, to approve any adjournment of the Special Meeting, if necessary, to solicit additional proxies if there were insufficient votes in favor of the Merger Agreement proposal, was also approved by the requisite vote of the Company’s stockholders. Because the Merger Agreement proposal was approved by the requisite vote, no adjournment to solicit additional proxies was necessary. The proposed transaction constitutes a “going-private transaction” under the rules of the SEC and is expected to close in late fourth quarter 2024 or early first quarter 2025. The closing of the Merger is subject to various conditions, including (i) the expiration or termination of the applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”); (ii) the receipt of certain required consents or approvals from (a) the Federal Communications Commission, (b) the Committee on Foreign Investment in the United States, (c) state public utility commissions and (d) local regulators in connection with the provision of telecommunications and media services; (iii) the absence of any order, injunction or decree restraining, enjoining or otherwise prohibiting or making illegal the consummation of the Merger or the other transactions contemplated by the Merger Agreement; and (iv) the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, as of the date of the Merger Agreement and the date of closing, and performance in all material respects of the covenants and agreements contained in the Merger Agreement. The transaction is not subject to a financing condition. The waiting period under the HSR Act expired on May 9, 2024 at 11:59 p.m. This satisfied the closing condition related to the U.S. antitrust clearance of the transaction. We are awaiting the other required regulatory approvals in order to execute the Merger. Following the closing of the transaction, shares of our common stock will no longer be traded or listed on any public securities exchange. 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 ACL for the six months ended June 30, 2024 and 2023: Six Months Ended June 30, (In thousands) 2024 2023 Balance at beginning of year $ 13,469 $ 11,470 Provision charged to expense 4,129 4,140 Write-offs, less recoveries (3,903) (3,190) Balance at end of year $ 13,695 $ 12,420 Accounts Receivable - Other We may be awarded grants from federal and state governments to assist in the deployment of broadband in order to support access to high-speed broadband services in underserved or unserved areas. The awards may include a number of regulatory requirements including the completion of construction by certain dates. Funding from the grants may be received in advance, upon completion of the project or when certain milestones are achieved. The grants are accounted for as a contribution in aid of construction given the nature of the arrangement and are recorded as a reduction to property, plant and equipment as the projects are completed. At June 30, 2024 and December 31, 2023, AR included amounts due to the Company of $17.4 million and $7.0 million, respectively, related to grant funding or other special construction projects. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update No. 2023-07 (“ASU 2023-07”), Improvements to Reportable Segment Disclosures In December 2023, the FASB issued the Accounting Standards Update No. 2023-09 (“ASU 2023-09”), Improvements to Income Tax Disclosures |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2024 | |
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 three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Operating Revenues Consumer: Broadband (Data and VoIP) $ 81,405 $ 71,339 $ 161,287 $ 139,300 Voice services 27,965 31,352 56,301 63,615 Video services 3,312 9,362 9,938 18,956 112,682 112,053 227,526 221,871 Commercial: Data services (includes VoIP) 54,571 53,230 109,252 106,364 Voice services 30,509 32,236 61,220 64,867 Other 8,295 10,378 17,259 20,134 93,375 95,844 187,731 191,365 Carrier: Data and transport services 30,263 31,224 61,311 64,147 Voice services 3,610 4,263 7,404 8,630 Other 284 313 519 663 34,157 35,800 69,234 73,440 Subsidies 6,373 7,072 13,179 14,108 Network access 21,143 22,747 43,611 47,191 Other products and services 979 1,646 2,103 3,313 Total operating revenues $ 268,709 $ 275,162 $ 543,384 $ 551,288 Contract Assets and Liabilities The following table provides information about receivables, contract assets and contract liabilities from our revenue contracts with customers: June 30, (In thousands) 2024 2023 Accounts receivable, net $ 127,359 $ 100,827 Contract assets 46,152 30,071 Contract liabilities 61,543 56,963 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 and certain contract fulfillment costs. 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 three months ended June 30, 2024 and 2023, the Company recognized expense of $4.2 million and $3.2 million, respectively, related to deferred contract acquisition costs. During the six months ended June 30, 2024 and 2023, the Company recognized expense of $8.2 million and $6.7 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 three months ended June 30, 2024 and 2023, the Company recognized previously deferred revenues of $115.3 million and $100.8 million, respectively. For the six months ended June 30, 2024 and 2023, the Company recognized previously deferred revenues of $228.9 million and $221.5 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 Topic 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 (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
EARNINGS (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | 3. EARNINGS (LOSS) 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: Three Months Ended Six Months Ended June 30, June 30, (In thousands, except per share amounts) 2024 2023 2024 2023 Net loss $ (54,828) $ (108,092) $ (90,211) $ (145,053) Less: dividends on Series A preferred stock 11,692 10,704 23,379 21,291 Less: net income attributable to noncontrolling interest 145 161 258 304 Loss attributable to common shareholders $ (66,665) $ (118,957) $ (113,848) $ (166,648) Weighted-average number of common shares outstanding 114,255 113,050 114,195 112,995 Net loss per common share attributable to common shareholders - basic and diluted $ (0.58) $ (1.05) $ (1.00) $ (1.47) Diluted EPS attributable to common shareholders for the three months ended June 30, 2024 and 2023 excludes 4.2 million and 3.6 million potential common shares related to our share-based compensation plan, respectively, because the inclusion of the potential common shares would have an antidilutive effect. For the six months ended June 30, 2024 and 2023, diluted EPS attributable to common shareholders excludes 3.4 million and 3.0 million potential common shares, respectively. |
SEARCHLIGHT INVESTMENT
SEARCHLIGHT INVESTMENT | 6 Months Ended |
Jun. 30, 2024 | |
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 was 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 June 30, 2024 and December 31, 2023, the total shares of common stock issued to Searchlight represent approximately 33% and 34% of the Company’s outstanding common stock, respectively. 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 an initial 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. The liquidation preference per share is adjusted to include any paid-in-kind dividends. See Note 11 for more information on the terms of the Series A Preferred Stock. With the strategic investment from Searchlight, we have enhanced our fiber infrastructure and accelerated the investment in our network, which will include the upgrade of approximately 1.6 million passings across select service areas to enable multi-Gig capable services to these homes and small businesses. |
DIVESTITURES
DIVESTITURES | 6 Months Ended |
Jun. 30, 2024 | |
DIVESTITURES | |
DIVESTITURES | 5. DIVESTITURES Washington Operations On July 10, 2023, we entered into a definitive agreement to sell all of the issued and outstanding stock of our business located in Washington, Consolidated Communications of Comerco Company (“CCCC”), which directly owns all of the issued and outstanding shares of Consolidated Communications of Washington Company (“CCWC” and together with CCCC”, the “Washington operations”), for gross cash proceeds of approximately $73.0 million, subject to customary working capital adjustments and other post-closing purchase price adjustments. The sale closed on May 1, 2024. The sale of the Washington operations aligns with our ongoing strategic asset review and focus on our fiber expansion plans in our core broadband regions. The major classes of assets and liabilities sold consisted of the following: (In thousands) Current assets $ 1,177 Property, plant and equipment 31,062 Goodwill 114,946 Other long-term assets 1,640 Impairment to net realizable value (77,755) Total assets $ 71,070 Current liabilities $ 1,730 Other long-term liabilities 1,120 Total liabilities $ 2,850 During the three months ended June 30, 2023, the carrying value of the net assets to be sold were reduced to their estimated fair value, 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 $77.8 million during the three and six months ended June 30, 2023. During the three and six months ended June 30, 2024, we recognized an additional loss on the sale of $0.5 million, which is included in selling, general and administrative expense in the condensed consolidated statement of operations as a result of changes in estimated working capital adjustments and selling costs. 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 provide data, voice and video services to customers within the Kansas City metropolitan area and surrounding counties. 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. During the six months ended June 30, 2023, we recognized an additional loss on sale of $2.1 million as a result of expected purchase price adjustments and changes in working capital. The loss on the sale of the Kansas City Operations is included in loss on disposal of assets in the condensed consolidated statement of operations. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2024 | |
INVESTMENTS | |
INVESTMENTS | 6. INVESTMENTS Our investments are as follows: June 30, December 31, (In thousands) 2024 2023 Long-term investments: Cash surrender value of life insurance policies $ 3,187 $ 2,860 CoBank, ACB Stock 5,168 5,755 Other 273 272 $ 8,628 $ 8,887 Long-Term Investments CoBank, ACB (“CoBank”) is a cooperative bank owned by its customers. On an annual basis, 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2024 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. FAIR VALUE MEASUREMENTS 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 as of June 30, 2024 and December 31, 2023 were as follows: As of June 30, 2024 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 assets $ 5,353 $ — $ 5,353 $ — As of December 31, 2023 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 $ (2,421) $ — $ (2,421) $ — 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, 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 June 30, 2024 and December 31, 2023. As of June 30, 2024 As of December 31, 2023 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding finance leases $ 2,273,727 $ 2,055,134 $ 2,142,858 $ 1,903,831 Investments Our investments as of June 30, 2024 and December 31, 2023 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 | 6 Months Ended |
Jun. 30, 2024 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | 8. LONG-TERM DEBT Long-term debt, presented net of unamortized discounts, consisted of the following: June 30, December 31, (In thousands) 2024 2023 Senior secured credit facility: Term loans, net of discounts of $6,148 and $7,017 at June 30, 2024 and December 31, 2023, respectively $ 993,727 $ 992,858 Revolving loans 130,000 — 6.50% Senior notes due 2028 750,000 750,000 5.00% Senior notes due 2028 400,000 400,000 Finance leases 42,155 39,240 2,315,882 2,182,098 Less: current portion of long-term debt and finance leases (20,601) (18,425) Less: deferred debt issuance costs (26,618) (28,757) Total long-term debt $ 2,268,663 $ 2,134,916 Credit Agreement On October 2, 2020, the Company, through certain of its wholly-owned subsidiaries, entered into a Credit Agreement with various financial institutions (as amended, the “Credit Agreement”) to replace the Company’s previous credit agreement in its entirety. The Credit Agreement consisted of term loans in an original aggregate amount of $1,250.0 million (the “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 have a maturity date of October 2, 2027 and bear interest at a rate of 3.50% plus Secured Overnight Financing Rate (“SOFR”) (subject to a 0.75% SOFR floor) plus a SOFR adjustment. As part of the replacement to SOFR-benchmark rates in 2023, borrowings will include an adjustment of 0.11%, 0.26% and 0.43% for borrowings of one, three and six month loans, respectively. On March 18, 2021, the Company repaid $397.0 million of the then 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. The revolving credit facility has a maturity date of 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) 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 June 30, 2024, borrowings of $130.0 million were outstanding under our revolving credit facility. At December 31, 2023, there were no borrowings outstanding under the revolving credit facility. Stand-by letters of credit of $44.8 million were outstanding under our revolving credit facility as of June 30, 2024. The stand-by letters of credit are renewable annually and reduce the borrowing availability under the revolving credit facility. As of June 30, 2024, $75.2 million was available for borrowing under the revolving credit facility, subject to certain covenants. As allowed for under the credit agreement under permitted indebtedness, on March 29, 2024 and June 24, 2024, the Company entered into term sheets to facilitate loans of up to an aggregate amount of $140.0 million, contingent upon satisfaction of certain conditions including a successful fund raising by the lender. The weighted-average interest rate on outstanding borrowings under our credit facility was 9.00% and 8.96% as of June 30, 2024 and December 31, 2023, 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 7.75:1.00 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 June 30, 2024, the testing threshold was met and our consolidated first lien leverage ratio under the Credit Agreement was below 7.75:1.00. As of June 30, 2024, we were in compliance with the Credit Agreement covenants. On October 15, 2023, the Company entered into Amendment No. 5 to the Credit Agreement (the “Fifth Amendment”) to, among other things, increase the maximum consolidated first lien leverage ratio (the “Step-Up”) permitted under the Credit Agreement to (i) 7.75 to 1.00, from October 15, 2023 to and including December 31, 2024, (ii) 7.50 to 1.00, from and including January 1, 2025 to and including March 31, 2025, (iii) 7.25 to 1.00, from and including April 1, 2025 to and including June 30, 2025, (iv) 7.00 to 1.00, from and including July 1, 2025 to and including September 30, 2025, (v) 6.75 to 1.00 from and including October 1, 2025 to and including December 31, 2025, (vi) 6.50 to 1.00, from and including January 1, 2026 to and including March 31, 2026, (vii) 6.25 to 1.00, from and including April 1, 2026 to and including June 30, 2026, (viii) 6.00 to 1.00, from and including July 1, 2026 to and including September 30, 2026, and (ix) 5.85 to 1.00 from and including October 1, 2026 and thereafter (the “Step-Up Period”). While the Step-Up is in effect, the Company will be subject to additional restrictions on its ability to make certain investments and restricted payments (the “Restrictions”). The Step-Up Period and the Restrictions will end and the maximum Consolidated First Lien Leverage Ratio will revert to the levels set forth in the Credit Agreement on the earlier of (a) the Company’s election and (b) August 1, 2025, to the extent $300.0 million in cash proceeds have not been received by the Company from equity contributed to its capital by such date. If the proposed Merger is not completed by August 1, 2025, the increase in the maximum consolidated first lien leverage ratio as permitted in the Fifth Amendment to the Credit Agreement to provide interim financial covenant relief will end and the maximum consolidated first lien leverage ratio will revert to 5.85 to 1.00. Searchlight Term Loan On March 21, 2024, the Company, through certain of its wholly-owned subsidiaries, and Searchlight, as lender entered into a Term Loan Agreement (the “Loan Agreement”), which consists of delayed draw term loans in the aggregate amount of $80.0 million (the “Loan”). The Loan Agreement provides us with the ability to borrow on the Loan in the event either (a) the aggregate amount of available loans to be drawn under the revolving credit facility is less than $25.0 million or (b) drawing under the revolving credit facility would trigger the financial maintenance covenant thereunder and we would not be in compliance with such covenant on a pro forma basis, in each case subject to the satisfaction of certain other customary conditions. In the event the Loan is ever drawn, we intend to apply the proceeds from the Loan to directly or indirectly fund capital expenditures for our fiber broadband expansion plan. The Loan Agreement is unsecured and the Loan will mature on April 2, 2027. Drawn amounts on the Loan bear interest at a rate per annum equal to an applicable rate ranging from 12.0% per annum, which applies prior to the date that is 18 months after the initial borrowing date (unless the Merger Agreement is terminated pursuant to the Company’s breach thereof), to the amount required for Searchlight to realize a multiple on invested capital of 1.75x on the Loan, which applies on and after the earlier of (i) the date that the Merger Agreement is terminated pursuant to the Company’s breach thereof and (ii) the date that is 18 months after the initial borrowing date. The Loan Agreement contains various affirmative, negative, and financial covenants consistent with the Company’s existing credit agreement. The Loan Agreement requires, in the event the Merger Agreement is terminated and any amounts in respect of the Loan remain outstanding, for the Company to maintain a maximum consolidated first lien leverage ratio. The Loan Agreement also contains customary events of default, including, but not limited to, nonpayment, material inaccuracy of representations and warranties, violations of covenants, nonpayment of other material debts, certain bankruptcy and liquidations, certain material judgments, and certain events related to the Employee Retirement Income Security Act of 1974, as amended. 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. 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 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 offerings of the Senior Notes have 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 indentures governing the Senior Notes contain 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 indentures also contain customary events of default. As of June 30, 2024, the Company was in compliance with all terms, conditions and covenants under the indentures governing the Senior Notes. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2024 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | 9. 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. Derivative financial instruments are recorded at fair value in our condensed consolidated balance sheets. We may designate certain of our interest rate swaps as cash flow hedges of our expected future interest payments. 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 condensed consolidated statements of cash flows. The following interest rate swaps were outstanding as of June 30, 2024: Notional (In thousands) Amount 2024 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating SOFR $ 500,000 Other long-term assets $ 5,353 Our fixed to 1-month floating SOFR interest rate swap agreements, which became effective July 31, 2023, have a fixed rate of 3.941% and mature on September 30, 2026. The following interest rate swaps were outstanding as of December 31, 2023: Notional (In thousands) Amount 2023 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating SOFR $ 500,000 Other long-term liabilities $ (2,421) 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. As of June 30, 2024 and December 31, 2023, the total pre-tax unrealized gain (loss) related to our interest rate swap agreements included in AOCI was $5.4 million and $(2.4) million, respectively. From the balance in AOCI as of June 30, 2024, we expect to recognize a gain of approximately $4.7 million in earnings in the next twelve months. Information regarding our cash flow hedge transactions is as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Unrealized gain recognized in AOCI, pretax $ 535 $ 4,180 $ 11,290 $ 4,133 Deferred gain reclassified from AOCI to interest expense $ 1,749 $ 3,231 $ 3,516 $ 5,909 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2024 | |
LEASES | |
LEASES | 10. LEASES 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 three and six months ended June 30, 2024 and 2023, we did not enter into any such arrangements. |
MEZZANINE EQUITY
MEZZANINE EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
MEZZANINE EQUITY | |
MEZZANINE EQUITY | 11. MEZZANINE EQUITY Series A Preferred Stock The Company is authorized to issue up to 10,000,000 shares of Preferred Stock with a par value of $0.01 per share. The designated 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 the time of issuance is $1,000 per share, as adjusted to include any paid-in-kind dividends. 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 and be reflected as additional per share liquidation preference. 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. In accordance with ASC 480, Distinguishing Liabilities from Equity 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. As of December 31, 2023, the liquidation preference of the Series A Preferred Stock was $521.0 million, which included accrued and unpaid dividends of $22.4 million. On January 2, 2024, the Company paid dividends in-kind of $22.5 million. As of June 30, 2024, the liquidation preference of the Series A Preferred Stock was $544.3 million, which includes accrued and unpaid dividends of $23.3 million. Searchlight is the sole holder of all of the issued and outstanding shares of the Company’s Series A Preferred Stock. The Company intends to exercise the paid-in-kind dividend option on the Series A Preferred Stock through at least 2025. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 12. SHAREHOLDERS’ EQUITY Share-Based Compensation Our Board of Directors (or its Compensation Committee) may grant share-based awards from our shareholder approved Consolidated Communications Holdings, Inc. Long-Term Incentive Plan, as amended and/or 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 February 26, 2023, our Board of Directors adopted, and on May 1, 2023, the shareholders approved an amendment to the Plan to increase by 5,280,000 shares the number of shares of our common stock authorized for issuance under the Plan. With the amendment, approximately 15,330,000 shares of our common stock are authorized for issuance under the Plan, provided that in any calendar year an eligible employee may be granted no more than 300,000 stock options or 300,000 stock appreciation rights, and a non-employee director may be granted no more than 25,000 stock options or 25,000 stock appreciation rights. In addition, stock awards and stock unit awards granted to an employee in any calendar year may not cover shares having a fair market value on the date of grant that exceeds $6,000,000 ($500,000 in the case of a non-employee director). Unless terminated sooner, the Plan will continue in effect until April 30, 2028. The following table summarizes total compensation costs recognized for share-based payments during the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Restricted stock $ 1,852 $ 1,240 $ 2,791 $ 2,163 Performance shares 1,178 1,148 1,920 1,024 Total $ 3,030 $ 2,388 $ 4,711 $ 3,187 Share-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. As of June 30, 2024, total unrecognized compensation cost related to non-vested Restricted Stock Awards (“RSAs”) and Performance Share Awards (“PSAs”) was $18.1 million and will be recognized over a weighted-average period of approximately 1.7 years. The following table summarizes the RSA and PSA activity for the six-month period ended June 30, 2024: RSAs PSAs Weighted Weighted Average Grant Average Grant Shares Date Fair Value Shares Date Fair Value Non-vested shares outstanding - December 31, 2023 1,491,997 $ 3.78 690,822 $ 7.28 Shares granted 2,072,248 $ 4.31 548,075 $ 3.17 Shares vested (75,943) $ 4.03 (384,208) $ 7.66 Shares forfeited, cancelled or retired (48,084) $ 3.83 (120,236) $ 5.86 Non-vested shares outstanding - June 30, 2024 3,440,218 $ 4.09 734,453 $ 4.24 At June 30, 2024, we had 2.3 million PSAs outstanding for which performance condition achievement has not yet been determined, with a weighted average grant date fair value of $3.89. The PSAs are earned upon the achievement of predetermined goals over the performance periods, which range from one Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated other comprehensive loss, net of tax, by component for the six-month period ended June 30, 2024: Pension and Post-Retirement Derivative (In thousands) Obligations Instruments Total Balance at December 31, 2023 $ (20,084) $ (1,788) $ (21,872) Other comprehensive gain (loss) before reclassifications — 8,335 8,335 Amounts reclassified from accumulated other comprehensive loss (911) (2,595) (3,506) Net current period other comprehensive income (911) 5,740 4,829 Balance at June 30, 2024 $ (20,995) $ 3,952 $ (17,043) The following table summarizes reclassifications from accumulated other comprehensive loss for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, Affected Line Item in the (In thousands) 2024 2023 2024 2023 Statement of Operations Amortization of pension and post-retirement items: Prior service credit $ 131 $ 133 $ 261 $ 265 (a) Actuarial gain 487 1,223 974 2,446 (a) 618 1,356 1,235 2,711 Total before tax (162) (357) (324) (713) Tax expense $ 456 $ 999 $ 911 $ 1,998 Net of tax Gain on cash flow hedges: Interest rate derivatives $ 1,748 $ 3,231 $ 3,515 $ 5,909 Interest expense (457) (844) (920) (1,543) Tax expense $ 1,291 $ 2,387 $ 2,595 $ 4,366 Net of tax (a) These items are included in the components of net periodic benefit cost for our pension and other post-retirement benefit plans. See Note 13 for further discussion regarding our pension and other post-retirement benefit plans. |
PENSION PLAN AND OTHER POST-RET
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS | 6 Months Ended |
Jun. 30, 2024 | |
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS | |
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS | 13. PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS Defined Benefit Plans We sponsor 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 maintain 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 closed to all new entrants. 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 table summarizes the components of net periodic pension cost (benefit) for our Pension Plans for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Interest cost $ 6,671 $ 7,357 $ 13,342 $ 14,713 Expected return on plan assets (6,660) (7,850) (13,320) (15,700) Net amortization loss 210 72 420 144 Net prior service cost amortization 30 30 61 61 Net periodic pension cost (benefit) $ 251 $ (391) $ 503 $ (782) The components of net periodic pension cost (benefit) other than the service cost component are included in other, net within other income (expense) in the condensed consolidated statements of operations. 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 table summarizes the components of the net periodic benefit for our Post-retirement Plans for the three and six months ended June 30, 2024 and 2023: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Service cost $ 21 $ 19 $ 42 $ 38 Interest cost 693 750 1,386 1,500 Expected return on plan assets (45) (47) (91) (94) Net amortization gain (697) (1,295) (1,394) (2,590) Net prior service credit amortization (161) (163) (322) (326) Net periodic post-retirement benefit $ (189) $ (736) $ (379) $ (1,472) 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 condensed consolidated statements of operations. Contributions We elected to participate in the American Rescue Plan Act of 2021 (“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 intend to use our current pre-funded balance to satisfy the minimum contribution requirements until the balance is exhausted, which is expected to occur in late 2024. We expect to contribute approximately $0.2 million to our Pension Plans and $5.7 million to our Post-retirement Plans in 2024. As of June 30, 2024, we have contributed $3.3 million of the annual contribution to the Post-retirement Plans. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2024 | |
INCOME TAXES | |
INCOME TAXES | 14. INCOME TAXES Our unrecognized tax benefits as of June 30, 2024 and December 31, 2023 were $4.9 million. The net amount of unrecognized tax benefits that, if recognized, would result in an impact to the effective tax rate is $4.7 million as of June 30, 2024 and December 31, 2023. We do not expect any material change in our unrecognized tax benefits during the remainder of 2024. 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 June 30, 2024, 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 2020 through 2022. The periods subject to examination for our state returns are years 2019 through 2022. In addition, prior tax years may be subject to examination by federal or state taxing authorities if the Company’s net operating loss carryovers from those prior years are utilized in the future. We are currently under examination by certain 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. Our effective tax rate was 16.2% and 14.6% for the three months ended June 30, 2024 and 2023, respectively and 19.9% and 17.5% for the six months ended June 30, 2024 and 2023, respectively. On July 10, 2023, we entered into a definitive agreement to sell our Washington operations and the transaction closed on May 1, 2024. As a result, we recorded an increase of $6.1 million and $14.3 million to our current tax expense for the three and six months ended June 30, 2024 and 2023, respectively, related to the write-down of noncash goodwill that is not deductible for tax purposes. The Company does not consider this sales transaction and related goodwill adjustment unusual or infrequent and therefore the corresponding tax impact is recorded through continuing operations. Exclusive of this divestiture related adjustment, our effective tax rate for the three months ended June 30, 2024 and 2023 would have been approximately 25.5% and 25.7%, respectively, and approximately 25.3% and 25.5% for the six months ended June 30, 2024 and 2023, respectively. In addition, t he effective tax rate differed from the federal and state statutory rates due to various permanent income tax differences |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES 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 (CCPA and CCES) and 2019 through 2020 (CCPA). 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. Tax liabilities calculated by the DOR for CCPA and CCES for tax years 2010 (CCPA) and 2014 through 2023 (CCPA and CCES) are approximately $5.3 million and $2.6 million, respectively. Based on the initial settlement offers for the tax years 2008 through 2013, which were subsequently settled in 2019 for $2.1 million, including interest, and the Company’s best estimate of the potential additional tax liabilities for the remaining unsettled tax years 2010 (CCPA) and 2014 through 2023 (CCPA and CCES), we have reserved $1.0 million and $2.7 million, including interest, for our CCPA and CCES subsidiaries, respectively. We expect the filings for the tax years 2014 through 2023 to be settled at a later date similar to the initial settlement. 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. 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. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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 63,000 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. In the opinion of management, the accompanying unaudited condensed consolidated balance sheets and related condensed consolidated statements of operations, comprehensive income (loss), mezzanine equity and shareholders’ equity and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States (“US GAAP” or “GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. Events subsequent to the balance sheet date have been evaluated for inclusion in the accompanying condensed consolidated financial statements through the date of issuance. Management believes that the disclosures made are adequate to make the information presented not misleading. Interim results are not necessarily indicative of results for a full year. The information presented in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and the accompanying notes to the financial statements (“Notes”) thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. |
Recent Developments | Recent Developments Merger Agreement On October 15, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Condor Holdings LLC, a Delaware limited liability company (“Parent”) affiliated with certain funds managed by affiliates of Searchlight Capital Partners, L.P. (“Searchlight”), and Condor Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the terms and conditions thereof, Merger Sub will merge with and into the Company (the “Merger”) with the Company continuing as the surviving corporation and a wholly owned subsidiary of an affiliate of Searchlight. British Columbia Investment Management Corporation (“BCI”) and certain affiliates of Searchlight have committed to provide equity financing to Parent to fund the transactions contemplated by the Merger Agreement. Searchlight is currently the beneficial owner of approximately 33% of the Company’s outstanding shares of common stock and is the holder of 100% of the Company’s outstanding Series A perpetual preferred stock. Refer to Note 4 for a more complete discussion of the strategic investment with Searchlight. Subject to the terms and conditions set forth in the Merger Agreement, upon the consummation of the Merger, each share of the Company’s common stock, par value $0.01 per share (other than shares of the Company’s common stock (i) held directly or indirectly by Parent, Merger Sub or any subsidiary of the Company, (ii) held by the Company as treasury shares or (iii) held by any person who properly exercises appraisal rights under Delaware law) will be converted into the right to receive an amount in cash equal to $4.70 per share, without interest (the “Merger Consideration”), subject to any withholding of taxes required by applicable law. In addition, pursuant to the Merger Agreement, upon the consummation of the Merger, (i) Company restricted share awards (“Company RSAs”) held by non-employee directors or by certain affiliates of Searchlight will vest and be canceled in exchange for the Merger Consideration and (ii) all other Company RSAs will be converted into restricted cash awards based on the Merger Consideration and subject to the same terms and conditions, including time- and performance-based vesting conditions, as the corresponding Company RSA (except that the relative total shareholder return modifier shall be deemed to be achieved at the target level). The Merger Agreement has, unanimously by the directors present, been approved by the board of directors of the Company (the “Board”), acting upon the unanimous recommendation of a special committee consisting of only independent and disinterested directors of the Company (the “Special Committee”). On January 31, 2024, the Company held a virtual special meeting of stockholders (the “Special Meeting”) to consider three proposals with respect to the Merger Agreement. The first proposal, to adopt the Merger Agreement, was approved by (i) holders of a majority of the voting power represented by the issued and outstanding shares of our common stock that were entitled to vote thereon and (ii) holders of a majority of the voting power represented by the issued and outstanding shares of our common stock that were entitled to vote thereon and held by Unaffiliated Stockholders (as defined in the Merger Agreement). The second proposal, to approve by advisory (non-binding) vote the compensation that may be paid or become payable to the named executive officers of the Company in connection with the consummation of the Merger, was approved by the requisite vote of the Company’s stockholders. The third proposal, to approve any adjournment of the Special Meeting, if necessary, to solicit additional proxies if there were insufficient votes in favor of the Merger Agreement proposal, was also approved by the requisite vote of the Company’s stockholders. Because the Merger Agreement proposal was approved by the requisite vote, no adjournment to solicit additional proxies was necessary. The proposed transaction constitutes a “going-private transaction” under the rules of the SEC and is expected to close in late fourth quarter 2024 or early first quarter 2025. The closing of the Merger is subject to various conditions, including (i) the expiration or termination of the applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”); (ii) the receipt of certain required consents or approvals from (a) the Federal Communications Commission, (b) the Committee on Foreign Investment in the United States, (c) state public utility commissions and (d) local regulators in connection with the provision of telecommunications and media services; (iii) the absence of any order, injunction or decree restraining, enjoining or otherwise prohibiting or making illegal the consummation of the Merger or the other transactions contemplated by the Merger Agreement; and (iv) the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, as of the date of the Merger Agreement and the date of closing, and performance in all material respects of the covenants and agreements contained in the Merger Agreement. The transaction is not subject to a financing condition. The waiting period under the HSR Act expired on May 9, 2024 at 11:59 p.m. This satisfied the closing condition related to the U.S. antitrust clearance of the transaction. We are awaiting the other required regulatory approvals in order to execute the Merger. Following the closing of the transaction, shares of our common stock will no longer be traded or listed on any public securities exchange. |
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 ACL for the six months ended June 30, 2024 and 2023: Six Months Ended June 30, (In thousands) 2024 2023 Balance at beginning of year $ 13,469 $ 11,470 Provision charged to expense 4,129 4,140 Write-offs, less recoveries (3,903) (3,190) Balance at end of year $ 13,695 $ 12,420 Accounts Receivable - Other We may be awarded grants from federal and state governments to assist in the deployment of broadband in order to support access to high-speed broadband services in underserved or unserved areas. The awards may include a number of regulatory requirements including the completion of construction by certain dates. Funding from the grants may be received in advance, upon completion of the project or when certain milestones are achieved. The grants are accounted for as a contribution in aid of construction given the nature of the arrangement and are recorded as a reduction to property, plant and equipment as the projects are completed. At June 30, 2024 and December 31, 2023, AR included amounts due to the Company of $17.4 million and $7.0 million, respectively, related to grant funding or other special construction projects. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update No. 2023-07 (“ASU 2023-07”), Improvements to Reportable Segment Disclosures In December 2023, the FASB issued the Accounting Standards Update No. 2023-09 (“ASU 2023-09”), Improvements to Income Tax Disclosures |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of activity for ACL | Six Months Ended June 30, (In thousands) 2024 2023 Balance at beginning of year $ 13,469 $ 11,470 Provision charged to expense 4,129 4,140 Write-offs, less recoveries (3,903) (3,190) Balance at end of year $ 13,695 $ 12,420 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
REVENUE | |
Schedule of disaggregation of revenue | Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Operating Revenues Consumer: Broadband (Data and VoIP) $ 81,405 $ 71,339 $ 161,287 $ 139,300 Voice services 27,965 31,352 56,301 63,615 Video services 3,312 9,362 9,938 18,956 112,682 112,053 227,526 221,871 Commercial: Data services (includes VoIP) 54,571 53,230 109,252 106,364 Voice services 30,509 32,236 61,220 64,867 Other 8,295 10,378 17,259 20,134 93,375 95,844 187,731 191,365 Carrier: Data and transport services 30,263 31,224 61,311 64,147 Voice services 3,610 4,263 7,404 8,630 Other 284 313 519 663 34,157 35,800 69,234 73,440 Subsidies 6,373 7,072 13,179 14,108 Network access 21,143 22,747 43,611 47,191 Other products and services 979 1,646 2,103 3,313 Total operating revenues $ 268,709 $ 275,162 $ 543,384 $ 551,288 |
Schedule of receivables, contract assets and contract liabilities | June 30, (In thousands) 2024 2023 Accounts receivable, net $ 127,359 $ 100,827 Contract assets 46,152 30,071 Contract liabilities 61,543 56,963 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
EARNINGS (LOSS) PER SHARE | |
Schedule of basic and diluted EPS | Three Months Ended Six Months Ended June 30, June 30, (In thousands, except per share amounts) 2024 2023 2024 2023 Net loss $ (54,828) $ (108,092) $ (90,211) $ (145,053) Less: dividends on Series A preferred stock 11,692 10,704 23,379 21,291 Less: net income attributable to noncontrolling interest 145 161 258 304 Loss attributable to common shareholders $ (66,665) $ (118,957) $ (113,848) $ (166,648) Weighted-average number of common shares outstanding 114,255 113,050 114,195 112,995 Net loss per common share attributable to common shareholders - basic and diluted $ (0.58) $ (1.05) $ (1.00) $ (1.47) |
DIVESTITURES (Tables)
DIVESTITURES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Consolidated Communications of Comerco Company, Washington | |
Divestitures | |
Schedule of major classes of assets and liabilities sold | (In thousands) Current assets $ 1,177 Property, plant and equipment 31,062 Goodwill 114,946 Other long-term assets 1,640 Impairment to net realizable value (77,755) Total assets $ 71,070 Current liabilities $ 1,730 Other long-term liabilities 1,120 Total liabilities $ 2,850 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
INVESTMENTS | |
Schedule of investments | June 30, December 31, (In thousands) 2024 2023 Long-term investments: Cash surrender value of life insurance policies $ 3,187 $ 2,860 CoBank, ACB Stock 5,168 5,755 Other 273 272 $ 8,628 $ 8,887 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
FAIR VALUE MEASUREMENTS | |
Schedule of interest rate swap agreements measured at fair value on a recurring basis | As of June 30, 2024 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 assets $ 5,353 $ — $ 5,353 $ — As of December 31, 2023 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 $ (2,421) $ — $ (2,421) $ — |
Schedule of other financial instruments that are not carried at fair value but which require fair value disclosure | As of June 30, 2024 As of December 31, 2023 (In thousands) Carrying Value Fair Value Carrying Value Fair Value Long-term debt, excluding finance leases $ 2,273,727 $ 2,055,134 $ 2,142,858 $ 1,903,831 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
LONG-TERM DEBT | |
Schedule of components of long-term debt, presented net of unamortized discounts | June 30, December 31, (In thousands) 2024 2023 Senior secured credit facility: Term loans, net of discounts of $6,148 and $7,017 at June 30, 2024 and December 31, 2023, respectively $ 993,727 $ 992,858 Revolving loans 130,000 — 6.50% Senior notes due 2028 750,000 750,000 5.00% Senior notes due 2028 400,000 400,000 Finance leases 42,155 39,240 2,315,882 2,182,098 Less: current portion of long-term debt and finance leases (20,601) (18,425) Less: deferred debt issuance costs (26,618) (28,757) Total long-term debt $ 2,268,663 $ 2,134,916 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of outstanding interest rate swaps | Notional (In thousands) Amount 2024 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating SOFR $ 500,000 Other long-term assets $ 5,353 Notional (In thousands) Amount 2023 Balance Sheet Location Fair Value Cash Flow Hedges: Fixed to 1-month floating SOFR $ 500,000 Other long-term liabilities $ (2,421) |
Schedule of gains on cash flow hedge transactions | Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Unrealized gain recognized in AOCI, pretax $ 535 $ 4,180 $ 11,290 $ 4,133 Deferred gain reclassified from AOCI to interest expense $ 1,749 $ 3,231 $ 3,516 $ 5,909 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
SHAREHOLDERS' EQUITY | |
Summary of total compensation costs recognized for share-based payments | Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Restricted stock $ 1,852 $ 1,240 $ 2,791 $ 2,163 Performance shares 1,178 1,148 1,920 1,024 Total $ 3,030 $ 2,388 $ 4,711 $ 3,187 |
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, 2023 1,491,997 $ 3.78 690,822 $ 7.28 Shares granted 2,072,248 $ 4.31 548,075 $ 3.17 Shares vested (75,943) $ 4.03 (384,208) $ 7.66 Shares forfeited, cancelled or retired (48,084) $ 3.83 (120,236) $ 5.86 Non-vested shares outstanding - June 30, 2024 3,440,218 $ 4.09 734,453 $ 4.24 |
Schedule of changes in accumulated other comprehensive loss, net of tax, by component | Pension and Post-Retirement Derivative (In thousands) Obligations Instruments Total Balance at December 31, 2023 $ (20,084) $ (1,788) $ (21,872) Other comprehensive gain (loss) before reclassifications — 8,335 8,335 Amounts reclassified from accumulated other comprehensive loss (911) (2,595) (3,506) Net current period other comprehensive income (911) 5,740 4,829 Balance at June 30, 2024 $ (20,995) $ 3,952 $ (17,043) |
Summary of reclassifications from accumulated other comprehensive loss | Three Months Ended June 30, Six Months Ended June 30, Affected Line Item in the (In thousands) 2024 2023 2024 2023 Statement of Operations Amortization of pension and post-retirement items: Prior service credit $ 131 $ 133 $ 261 $ 265 (a) Actuarial gain 487 1,223 974 2,446 (a) 618 1,356 1,235 2,711 Total before tax (162) (357) (324) (713) Tax expense $ 456 $ 999 $ 911 $ 1,998 Net of tax Gain on cash flow hedges: Interest rate derivatives $ 1,748 $ 3,231 $ 3,515 $ 5,909 Interest expense (457) (844) (920) (1,543) Tax expense $ 1,291 $ 2,387 $ 2,595 $ 4,366 Net of tax (a) These items are included in the components of net periodic benefit cost for our pension and other post-retirement benefit plans. See Note 13 for further discussion regarding our pension and other post-retirement benefit plans. |
PENSION PLAN AND OTHER POST-R_2
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Defined Benefit Plans | |
Post-retirement benefit obligation | |
Schedule of the components of net periodic pension cost | Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Interest cost $ 6,671 $ 7,357 $ 13,342 $ 14,713 Expected return on plan assets (6,660) (7,850) (13,320) (15,700) Net amortization loss 210 72 420 144 Net prior service cost amortization 30 30 61 61 Net periodic pension cost (benefit) $ 251 $ (391) $ 503 $ (782) |
Post-retirement Benefit Obligations | |
Post-retirement benefit obligation | |
Schedule of the components of net periodic pension cost | Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2024 2023 2024 2023 Service cost $ 21 $ 19 $ 42 $ 38 Interest cost 693 750 1,386 1,500 Expected return on plan assets (45) (47) (91) (94) Net amortization gain (697) (1,295) (1,394) (2,590) Net prior service credit amortization (161) (163) (322) (326) Net periodic post-retirement benefit $ (189) $ (736) $ (379) $ (1,472) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Business (Details) | Jun. 30, 2024 state mi |
Number of fiber route miles | mi | 63,000 |
Minimum | |
Number of states | state | 20 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Developments (Details) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 | Oct. 15, 2023 |
Investment Holdings [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Merger Agreement | Searchlight | |||
Investment Holdings [Line Items] | |||
Ownership percentage held in the company | 33% | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Cash consideration price per share | $ 4.70 | ||
Merger Agreement | Searchlight | Consolidated Communications Holdings, Inc | Series A preferred stock | |||
Investment Holdings [Line Items] | |||
Preferred stock owned (as a percent) | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Activity in the entity's accounts receivable allowance | |||
Balance at beginning of year | $ 13,469 | $ 11,470 | |
Provision charged to expense | 4,129 | 4,140 | |
Write-offs, less recoveries | (3,903) | (3,190) | |
Balance at end of year | 13,695 | $ 12,420 | |
Grant amount | $ 17,400 | $ 7,000 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 268,709 | $ 275,162 | $ 543,384 | $ 551,288 |
Receivables, contract assets and contract liabilities | ||||
Accounts receivable, net | 127,359 | 100,827 | 127,359 | 100,827 |
Contract assets | 46,152 | 30,071 | 46,152 | 30,071 |
Contract liabilities | 61,543 | 56,963 | 61,543 | 56,963 |
Recognized expenses related to deferred contract acquisition costs. | 4,200 | 3,200 | 8,200 | 6,700 |
Revenue recognized from beginning of year and current period increase in contract liability | 115,300 | 100,800 | $ 228,900 | 221,500 |
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 | 112,682 | 112,053 | $ 227,526 | 221,871 |
Consumer - Broadband (Data and VoIP) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 81,405 | 71,339 | 161,287 | 139,300 |
Consumer - Voice services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 27,965 | 31,352 | 56,301 | 63,615 |
Consumer - Video services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 3,312 | 9,362 | 9,938 | 18,956 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 93,375 | 95,844 | 187,731 | 191,365 |
Commercial - Data services (including VoIP) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 54,571 | 53,230 | 109,252 | 106,364 |
Commercial - Voice services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 30,509 | 32,236 | 61,220 | 64,867 |
Commercial - Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 8,295 | 10,378 | 17,259 | 20,134 |
Carrier | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 34,157 | 35,800 | 69,234 | 73,440 |
Carrier - Data and transport services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 30,263 | 31,224 | 61,311 | 64,147 |
Carrier - Voice services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 3,610 | 4,263 | 7,404 | 8,630 |
Carrier - Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 284 | 313 | 519 | 663 |
Subsidies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 6,373 | 7,072 | 13,179 | 14,108 |
Network access | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 21,143 | 22,747 | 43,611 | 47,191 |
Other products and services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 979 | $ 1,646 | $ 2,103 | $ 3,313 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Basic and diluted earnings per share attributable to common shareholders | ||||||
Net loss | $ (54,828) | $ (35,383) | $ (108,092) | $ (36,961) | $ (90,211) | $ (145,053) |
Less: dividends on Series A preferred stock | 11,692 | 10,704 | 23,379 | 21,291 | ||
Less: net income attributable to noncontrolling interest | 145 | 161 | 258 | 304 | ||
Net loss attributable to common shareholders | $ (66,665) | $ (118,957) | $ (113,848) | $ (166,648) | ||
Weighted-average number of common shares outstanding, basic | 114,255 | 113,050 | 114,195 | 112,995 | ||
Weighted-average number of common shares outstanding, diluted | 114,255 | 113,050 | 114,195 | 112,995 | ||
Net loss per basic common shares attributable to common shareholders | $ (0.58) | $ (1.05) | $ (1) | $ (1.47) | ||
Net loss per diluted common shares attributable to common shareholders | $ (0.58) | $ (1.05) | $ (1) | $ (1.47) | ||
Common shares excluded from computation of potentially dilutive shares because of anti-dilutive effect | 4,200 | 3,600 | 3,400 | 3,000 |
SEARCHLIGHT INVESTMENT (Details
SEARCHLIGHT INVESTMENT (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Dec. 07, 2021 USD ($) $ / shares shares | Jul. 16, 2021 shares | Oct. 02, 2020 USD ($) shares | Sep. 13, 2020 USD ($) item | Jun. 30, 2024 USD ($) item $ / shares | Dec. 31, 2023 USD ($) $ / shares | |
Investment Holdings [Line Items] | ||||||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Deferred debt issuance costs | $ 26,618 | $ 28,757 | ||||
Series A preferred stock | ||||||
Investment Holdings [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 | |||||
Investment Agreement | ||||||
Investment Holdings [Line Items] | ||||||
Number of passings across select service areas | item | 1,600,000 | |||||
Investment Agreement | Searchlight | ||||||
Investment Holdings [Line Items] | ||||||
Capital commitment | $ 75,000 | |||||
Number of stages | item | 2 | |||||
Proceeds from issuance of shares | $ 350,000 | |||||
Shares exchanged in Investment Agreement | 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 | 33% | 34% | ||||
Series A preferred stock issued (in shares) | shares | 434,266 | |||||
Temporary equity, par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Aggregate principal amount | $ 395,500 | |||||
Number of homes and small businesses for plan to upgrade | item | 150,000 | |||||
Investment Agreement | Searchlight | Subordinated Debt | ||||||
Investment Holdings [Line Items] | ||||||
Series A preferred stock issued (in shares) | shares | 434,266 | |||||
Preferred stock dividend rate | 9% | |||||
Carrying value | $ 285,900 | |||||
Unamortized discount | 139,700 | |||||
Deferred debt issuance costs | $ 8,700 | |||||
Liquidation preference per share | $ / shares | $ 1,000 | |||||
Investment Agreement | Searchlight | Maximum | Subordinated Debt | ||||||
Investment Holdings [Line Items] | ||||||
Capital commitment | $ 425,000 |
DIVESTITURES - Washington Opera
DIVESTITURES - Washington Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jul. 10, 2023 | |
Divestitures | |||||
Loss on impairment of assets held for sale | $ 77,755 | $ 77,755 | |||
Selling, general and administrative expenses | $ 93,288 | 83,565 | $ 177,243 | 164,849 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Consolidated Communications of Comerco Company, Washington | |||||
Divestitures | |||||
Cash consideration | $ 73,000 | ||||
Loss on impairment of assets held for sale | $ 77,800 | $ 77,800 | |||
Gain (loss) on disposal | $ (500) | $ (500) |
DIVESTITURES - Major Classes of
DIVESTITURES - Major Classes of Assets and Liabilities (Details) - USD ($) $ in Thousands | May 01, 2024 | Dec. 31, 2023 |
Major classes of assets and liabilities | ||
Current assets | $ 70,473 | |
Current liabilities | $ 3,402 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Consolidated Communications of Comerco Company, Washington | ||
Major classes of assets and liabilities | ||
Current assets | $ 1,177 | |
Property, plant and equipment | 31,062 | |
Goodwill | 114,946 | |
Other long-term assets | 1,640 | |
Impairment to net realizable value | (77,755) | |
Total assets | 71,070 | |
Current liabilities | 1,730 | |
Other long-term liabilities | 1,120 | |
Total liabilities | $ 2,850 |
DIVESTITURES - Kansas City Oper
DIVESTITURES - Kansas City Operations (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Nov. 30, 2022 | Jun. 30, 2024 | Jun. 30, 2023 | |
Divestitures | |||
Proceeds from sale of assets | $ 232 | $ 6,801 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Kansas City operations | |||
Divestitures | |||
Proceeds from sale of assets | $ 82,100 | ||
Gain (loss) on disposal | $ (2,100) |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Investments | ||
Cash surrender value of life insurance policies | $ 3,187 | $ 2,860 |
Total | 8,628 | 8,887 |
CoBank, ACB Stock | ||
Investments | ||
Investments at cost | 5,168 | 5,755 |
Other | ||
Investments | ||
Investments at cost | $ 273 | $ 272 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value Measurements | ||
Long-term interest rate swap assets | $ 5,353 | |
Long-term interest rate swap liabilities | $ (2,421) | |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurements | ||
Long-term interest rate swap assets | $ 5,353 | |
Long-term interest rate swap liabilities | $ (2,421) |
FAIR VALUE MEASUREMENTS - Fin_2
FAIR VALUE MEASUREMENTS - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Carrying Value | ||
Fair Value Measurements | ||
Long-term debt, excluding finance leases | $ 2,273,727 | $ 2,142,858 |
Fair Value | ||
Fair Value Measurements | ||
Long-term debt, excluding finance leases | $ 2,055,134 | $ 1,903,831 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |||||
Mar. 21, 2024 USD ($) | Mar. 18, 2021 USD ($) | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) | Mar. 29, 2024 USD ($) | Oct. 15, 2023 USD ($) | Oct. 02, 2020 USD ($) | |
LONG-TERM DEBT | |||||||
Total long-term debt and finance leases | $ 2,315,882 | $ 2,182,098 | |||||
Less: current portion of long-term debt and finance leases | (20,601) | (18,425) | |||||
Less: deferred debt issuance costs | (26,618) | (28,757) | |||||
Total long-term debt | $ 2,268,663 | $ 2,134,916 | |||||
Maximum | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio for an event of default | 7.75 | ||||||
Delayed draw term loan | |||||||
LONG-TERM DEBT | |||||||
Interest rate (as a percent) | 12% | ||||||
Aggregate principal amount | $ 80,000 | ||||||
Minimum interest rate, after the initial borrowing rate | 18 months | ||||||
Multiple on invested amount of loan | 1.75 | ||||||
Senior Secured Credit Facility | |||||||
LONG-TERM DEBT | |||||||
Covenant testing threshold | 35% | ||||||
Senior Secured Credit Facility | Maximum | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 7.75 | ||||||
Senior Secured Credit Facility | Weighted average | |||||||
LONG-TERM DEBT | |||||||
Weighted average interest rate (as a percent) | 9% | 8.96% | |||||
Term Loans | |||||||
LONG-TERM DEBT | |||||||
Total long-term debt and finance leases | $ 993,727 | $ 992,858 | |||||
Unamortized discount | $ 6,148 | $ 7,017 | |||||
Aggregate principal amount | $ 1,250,000 | ||||||
Repayment of debt | $ 397,000 | ||||||
Term Loans | SOFR | |||||||
LONG-TERM DEBT | |||||||
Margin (as a percent) | 3.50% | ||||||
Variable rate floor | 0.75% | ||||||
Term Loans | One month SOFR | |||||||
LONG-TERM DEBT | |||||||
Additional rate | 0.11% | ||||||
Term Loans | Three month SOFR | |||||||
LONG-TERM DEBT | |||||||
Additional rate | 0.26% | ||||||
Term Loans | Six month SOFR | |||||||
LONG-TERM DEBT | |||||||
Additional rate | 0.43% | ||||||
Senior secured credit facility - revolving loan | |||||||
LONG-TERM DEBT | |||||||
Total long-term debt and finance leases | $ 130,000 | ||||||
Maximum borrowing capacity of credit facility | $ 250,000 | ||||||
Reduction of spread on variable rate | 0.25% | ||||||
Amounts outstanding | $ 130,000 | $ 0 | |||||
Stand-by letter of credit outstanding | 44,800 | ||||||
Available borrowing capacity | $ 75,200 | ||||||
Senior secured credit facility - revolving loan | Maximum | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio to receive interest rate reduction | 3.20 | ||||||
Available borrowing capacity | $ 25,000 | ||||||
Senior secured credit facility - revolving loan | SOFR | |||||||
LONG-TERM DEBT | |||||||
Margin (as a percent) | 4% | ||||||
Senior secured credit facility - revolving loan | Alternate base rate | |||||||
LONG-TERM DEBT | |||||||
Margin (as a percent) | 3% | ||||||
Finance leases | |||||||
LONG-TERM DEBT | |||||||
Total long-term debt and finance leases | $ 42,155 | 39,240 | |||||
Incremental Term Loan Facility | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 3.70 | ||||||
Incremental Term Loan Facility | Maximum | |||||||
LONG-TERM DEBT | |||||||
Additional borrowing capacity | $ 300,000 | ||||||
Term sheet | |||||||
LONG-TERM DEBT | |||||||
Aggregate principal amount | $ 140,000 | ||||||
6.50% senior secured notes due 2028 | |||||||
LONG-TERM DEBT | |||||||
Total long-term debt and finance leases | $ 750,000 | $ 750,000 | |||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | ||||
Aggregate principal amount | $ 750,000 | ||||||
5.00% senior secured notes due 2028 | |||||||
LONG-TERM DEBT | |||||||
Total long-term debt and finance leases | $ 400,000 | $ 400,000 | |||||
Interest rate (as a percent) | 5% | 5% | 5% | ||||
Aggregate principal amount | $ 400,000 | ||||||
Fifth Amendment | |||||||
LONG-TERM DEBT | |||||||
Future equity contribution required | $ 300,000 | ||||||
Fifth Amendment | Effective date from and including October 1, 2026 and thereafter | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 5.85 | ||||||
Fifth Amendment | Maximum | Effective date from and including the Amendment No. 5 Effective Date (as defined in the Fifth Amendment) to and including December 31, 2024 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 7.75 | ||||||
Fifth Amendment | Maximum | Effective date from and including January 1, 2025 to and including March 31, 2025 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 7.50 | ||||||
Fifth Amendment | Maximum | Effective date from and including April 1, 2025 to and including June 30, 2025 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 7.25 | ||||||
Fifth Amendment | Maximum | Effective date from and including July 1, 2025 to and including September 30, 2025 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 7 | ||||||
Fifth Amendment | Maximum | Effective date from and including October 1, 2025 to and including December 31, 2025 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 6.75 | ||||||
Fifth Amendment | Maximum | Effective date from and including January 1, 2026 to and including March 31, 2026 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 6.50 | ||||||
Fifth Amendment | Maximum | Effective date from and including April 1, 2026 to and including June 30, 2026 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 6.25 | ||||||
Fifth Amendment | Maximum | Effective date from and including July 1, 2026 to and including September 30, 2026 | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 6 | ||||||
Fifth Amendment | Maximum | Effective date from and including October 1, 2026 and thereafter | |||||||
LONG-TERM DEBT | |||||||
Leverage ratio | 5.85 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Interest Rate Swaps (Details) $ in Thousands | Jun. 30, 2024 USD ($) item | Dec. 31, 2023 USD ($) |
Derivatives | ||
Number of swap agreements that provide for the entity or the counterparties to post collateral | item | 0 | |
Cash flow hedges | Fixed to 1-month floating SOFR | ||
Derivatives | ||
Fixed interest rate (as a percent) | 3.941% | |
Other long-term assets | Cash flow hedges | Fixed to 1-month floating SOFR | ||
Derivatives | ||
Derivative, Notional Amount | $ 500,000 | |
Total fair value, derivative asset (liability) | $ 5,353 | |
Other long-term liabilities | Cash flow hedges | Fixed to 1-month floating SOFR | ||
Derivatives | ||
Derivative, Notional Amount | $ 500,000 | |
Total fair value, derivative asset (liability) | $ (2,421) |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Effect of Interest Rate Derivatives (Details) - Interest rate swaps - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Derivative Instruments | |||||
Derivatives | |||||
Deferred gain (loss) included in AOCI (pretax) | $ 5,400 | $ 5,400 | $ (2,400) | ||
Gain included in AOCI to be recognized in the next 12 months | 4,700 | ||||
Cash flow hedges | |||||
Derivatives | |||||
Unrealized gain recognized in AOCI, pretax | 535 | $ 4,180 | 11,290 | $ 4,133 | |
Deferred gain reclassified from AOCI to interest expense | $ 1,749 | $ 3,231 | $ 3,516 | $ 5,909 |
MEZZANINE EQUITY (Details)
MEZZANINE EQUITY (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | ||||
Jan. 02, 2024 USD ($) | Nov. 22, 2022 | Dec. 07, 2021 USD ($) shares | Jun. 30, 2024 USD ($) item Vote director $ / shares shares | Dec. 31, 2023 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 | |||
Cash payment waived duration | 2 years | ||||
Temporary equity, liquidation preference | $ 544,335 | $ 520,957 | |||
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 | ||||
Number of dividend payment periods | item | 2 | ||||
Entitlement of preferred stock holder to appoint director. | director | 2 | ||||
Series A preferred stock issued (in shares) | shares | 434,266 | ||||
Series A preferred stock issued | $ 285,900 | ||||
Temporary equity, liquidation preference | $ 544,300 | 521,000 | |||
Accrued and unpaid dividends | $ 23,300 | $ 22,400 | |||
Dividend paid in kind (Value) | $ 22,500 | ||||
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 ($) | 6 Months Ended | |
Feb. 26, 2023 | Jun. 30, 2024 | |
Stock-based compensation plans | ||
Additional shares of common stock authorized | 5,280,000 | |
Shares of common stock authorized for issuance | 15,330,000 | |
Unrecognized share-based compensation | ||
Unrecognized compensation cost | $ 18,100,000 | |
Weighted-average period of recognition | 1 year 8 months 12 days | |
Employee Stock Option | Eligible Employees | ||
Stock-based compensation plans | ||
Shares that may be granted in the form of stock options or stock appreciation rights | 300,000 | |
Employee Stock Option | Nonemployee | ||
Stock-based compensation plans | ||
Shares that may be granted in the form of stock options or stock appreciation rights | 25,000 | |
Stock Appreciation Rights (SARs) | Eligible Employees | ||
Stock-based compensation plans | ||
Shares that may be granted in the form of stock options or stock appreciation rights | 300,000 | |
Stock Appreciation Rights (SARs) | Nonemployee | ||
Stock-based compensation plans | ||
Shares that may be granted in the form of stock options or stock appreciation rights | 25,000 | |
Stock awards and stock unit awards | Eligible Employees | ||
Stock-based compensation plans | ||
Fair value of share-based awards and stock units awards that may be granted | $ 6,000,000 | |
Stock awards and stock unit awards | Nonemployee | ||
Stock-based compensation plans | ||
Fair value of share-based awards and stock units awards that may be granted | $ 500,000 | |
Restricted stock | ||
Shares | ||
Non-vested shares outstanding at the beginning of the period | 1,491,997 | |
Shares granted | 2,072,248 | |
Shares vested | (75,943) | |
Shares forfeited, cancelled or retired | (48,084) | |
Non-vested shares outstanding at the end of the period | 3,440,218 | |
Weighted Average Grant Date Fair Value | ||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 3.78 | |
Shares granted (in dollars per share) | 4.31 | |
Shares vested (in dollars per share) | 4.03 | |
Shares forfeited, cancelled or retired (in dollars per share) | 3.83 | |
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 4.09 | |
Performance shares | ||
Shares | ||
Non-vested shares outstanding at the beginning of the period | 690,822 | |
Shares granted | 548,075 | |
Shares vested | (384,208) | |
Shares forfeited, cancelled or retired | (120,236) | |
Non-vested shares outstanding at the end of the period | 734,453 | |
Weighted Average Grant Date Fair Value | ||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 7.28 | |
Shares granted (in dollars per share) | 3.17 | |
Shares vested (in dollars per share) | 7.66 | |
Shares forfeited, cancelled or retired (in dollars per share) | 5.86 | |
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 4.24 | |
Performance shares | Performance Conditions Not Met | ||
Shares | ||
Non-vested shares outstanding at the end of the period | 2,300,000 | |
Weighted Average Grant Date Fair Value | ||
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 3.89 | |
Performance shares | Performance Conditions Not Met | Minimum | ||
Stock-based compensation plans | ||
Vesting period | 1 year | |
Payout opportunity as a percentage of the target | 0% | |
Performance shares | Performance Conditions Not Met | Maximum | ||
Stock-based compensation plans | ||
Vesting period | 3 years | |
Payout opportunity as a percentage of the target | 150% |
SHAREHOLDERS' EQUITY - Compensa
SHAREHOLDERS' EQUITY - Compensation costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Stock-based compensation plans | ||||
Stock-based compensation expense | $ 3,030 | $ 2,388 | $ 4,711 | $ 3,187 |
Restricted stock | ||||
Stock-based compensation plans | ||||
Stock-based compensation expense | 1,852 | 1,240 | 2,791 | 2,163 |
Performance shares | ||||
Stock-based compensation plans | ||||
Stock-based compensation expense | $ 1,178 | $ 1,148 | $ 1,920 | $ 1,024 |
SHAREHOLDERS' EQUITY - Changes
SHAREHOLDERS' EQUITY - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | |
Accumulated other comprehensive loss, net of tax, by component | |||||
Balance at the beginning of the period | $ (21,872) | $ (21,872) | |||
Other comprehensive gain (loss) before reclassifications | 8,335 | ||||
Amounts reclassified from accumulated other comprehensive loss | (3,506) | ||||
Net current period other comprehensive income | $ (1,352) | 6,181 | $ (297) | $ (3,012) | 4,829 |
Balance at the end of the period | (17,043) | (17,043) | |||
Pension and Post-Retirement Obligations | |||||
Accumulated other comprehensive loss, net of tax, by component | |||||
Balance at the beginning of the period | (20,084) | (20,084) | |||
Amounts reclassified from accumulated other comprehensive loss | (911) | ||||
Net current period other comprehensive income | (911) | ||||
Balance at the end of the period | (20,995) | (20,995) | |||
Derivative Instruments | |||||
Accumulated other comprehensive loss, net of tax, by component | |||||
Balance at the beginning of the period | $ (1,788) | (1,788) | |||
Other comprehensive gain (loss) before reclassifications | 8,335 | ||||
Amounts reclassified from accumulated other comprehensive loss | (2,595) | ||||
Net current period other comprehensive income | 5,740 | ||||
Balance at the end of the period | $ 3,952 | $ 3,952 |
SHAREHOLDERS' EQUITY - Reclassi
SHAREHOLDERS' EQUITY - Reclassification from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
EQUITY | ||||||
Loss before income taxes | $ (65,409) | $ (126,540) | $ (112,564) | $ (175,741) | ||
Interest expense | (44,132) | (36,903) | (86,583) | (70,763) | ||
Tax expense | 10,581 | 18,448 | 22,353 | 30,688 | ||
Net loss | (54,828) | $ (35,383) | (108,092) | $ (36,961) | (90,211) | (145,053) |
Pension and Post-Retirement Obligations | ||||||
EQUITY | ||||||
Prior service credit | 131 | 133 | 261 | 265 | ||
Actuarial gain (loss) | 487 | 1,223 | 974 | 2,446 | ||
Loss before income taxes | 618 | 1,356 | 1,235 | 2,711 | ||
Tax expense | (162) | (357) | (324) | (713) | ||
Net loss | 456 | 999 | 911 | 1,998 | ||
Derivative Instruments | ||||||
EQUITY | ||||||
Interest expense | 1,748 | 3,231 | 3,515 | 5,909 | ||
Tax expense | (457) | (844) | (920) | (1,543) | ||
Net loss | $ 1,291 | $ 2,387 | $ 2,595 | $ 4,366 |
PENSION PLAN AND OTHER POST-R_3
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS - Components of net periodic pension cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Defined Benefit Plans | ||||
Components of net periodic pension costs | ||||
Interest cost | $ 6,671 | $ 7,357 | $ 13,342 | $ 14,713 |
Expected return on plan assets | (6,660) | (7,850) | (13,320) | (15,700) |
Net amortization (gain) loss | 210 | 72 | 420 | 144 |
Net prior service cost (credit) amortization | 30 | 30 | 61 | 61 |
Net periodic pension cost (benefit) | 251 | (391) | 503 | (782) |
Post-retirement Benefit Obligations | ||||
Components of net periodic pension costs | ||||
Service cost | 21 | 19 | 42 | 38 |
Interest cost | 693 | 750 | 1,386 | 1,500 |
Expected return on plan assets | (45) | (47) | (91) | (94) |
Net amortization (gain) loss | (697) | (1,295) | (1,394) | (2,590) |
Net prior service cost (credit) amortization | (161) | (163) | (322) | (326) |
Net periodic pension cost (benefit) | $ (189) | $ (736) | $ (379) | $ (1,472) |
PENSION PLAN AND OTHER POST-R_4
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS - Contributions (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) employee | |
Defined Benefit Plans | |
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS | |
New benefits accrued | $ 0 |
Expected contributions in current year | 200 |
Post-retirement Benefit Obligations | |
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS | |
Assets in unfunded plans | $ 0 |
Number of persons eligible to become a new participant | employee | 0 |
Expected contributions in current year | $ 5,700 |
Employer contributions | 3,300 |
Supplemental Plans | |
PENSION PLAN AND OTHER POST-RETIREMENT BENEFITS | |
Assets in unfunded plans | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Unrecognized tax benefits | $ 4.9 | $ 4.9 | $ 4.9 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 4.7 | $ 4.7 | $ 4.7 | ||
Effective tax rate (as a percent) | 16.20% | 14.60% | 19.90% | 17.50% | |
Effective tax rate exclusive of taxable adjustment | 25.50% | 25.70% | 25.30% | 25.50% | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Consolidated Communications of Comerco Company, Washington | |||||
Tax expense related to non deductible noncash goodwill | $ 6.1 | $ 14.3 | $ 6.1 | $ 14.3 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Litigation (Details) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 USD ($) subsidiary | Dec. 31, 2019 USD ($) | May 31, 2017 USD ($) | |
Litigation and Contingencies | |||
Number of subsidiaries that received assessment notice | subsidiary | 2 | ||
Payments to DOR | $ 2.1 | ||
Consolidated Communications of Pennsylvania Company LLC (CCPA) | |||
Litigation and Contingencies | |||
Litigation amount accrued | $ 1 | ||
Consolidated Communications of Pennsylvania Company LLC (CCPA) | Tax Year 2010, 2014 Through 2023 | |||
Litigation and Contingencies | |||
Total additional tax liability calculated by the auditors | 5.3 | ||
Consolidated Communications Enterprise Services Inc. (CCES) | |||
Litigation and Contingencies | |||
Litigation amount accrued | 2.7 | ||
Consolidated Communications Enterprise Services Inc. (CCES) | Tax Year 2014 Through 2023 | |||
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 |