Supplemental Financial Information | 9 Months Ended |
Sep. 30, 2013 |
Supplemental Financial Information [Abstract] | ' |
Supplemental Financial Information | ' |
Supplemental Financial Information |
Cash |
The Company’s cash was held in market rate savings accounts and non-interest bearing deposit accounts. The total held in the market rate savings accounts at September 30, 2013 and December 31, 2012 was $64.5 million and $9.7 million, respectively. The remaining $46.4 million and $66.5 million of cash at September 30, 2013 and December 31, 2012, respectively, was held in non-interest bearing deposit accounts. |
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Restricted Cash |
The Company is eligible to receive up to $5.0 million in connection with its winning bid in the Connect America Fund's Mobility Fund Phase I Auction ("Auction 901"). Pursuant to the terms of Auction 901, the Company was required to obtain a Letter of Credit (“LOC”) for the benefit of the Universal Service Administrative Company (“USAC”) to cover each disbursement plus the amount of the performance default penalty (10% of the total eligible award). USAC may draw upon the LOC in the event the Company fails to demonstrate the required coverage by the applicable deadline in 2016. The Company obtained the first LOC in the amount of $2.2 million, representing the first disbursement of $1.7 million received in September 2013, plus the performance default penalty of $0.5 million. In accordance with the terms of the LOC, the Company deposited $2.2 million into a separate account at the issuing bank to serve as cash collateral. Such funds will be released when the LOC is terminated without being drawn upon by USAC. |
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Allowance for Doubtful Accounts |
The Company includes bad debt expense in customer operations expense in the unaudited condensed consolidated statements of operations. Bad debt expense for the three months ended September 30, 2013 and 2012 was $3.9 million and $2.2 million, respectively. Bad debt expense for the nine months ended September 30, 2013 and 2012 was $11.1 million and $6.3 million, respectively. The Company’s allowance for doubtful accounts was $6.3 million and $4.8 million at September 30, 2013 and December 31, 2012, respectively. |
Accrued Expenses and Other Current Liabilities |
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(In thousands) | 30-Sep-13 | | 31-Dec-12 | | | | | | | | |
Advance payments and customer deposits | $ | 13,270 | | | $ | 12,085 | | | | | | | | | |
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Accrued interest | 4,595 | | | 300 | | | | | | | | | |
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Accrued payroll | 4,523 | | | 4,056 | | | | | | | | | |
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Accrued taxes | 4,138 | | | 3,318 | | | | | | | | | |
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Other * | 4,094 | | | 14,698 | | | | | | | | | |
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Total | $ | 30,620 | | | $ | 34,457 | | | | | | | | | |
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* Included in this category is an accrual of $10.0 million at December 31, 2012 relating to disputes associated with the Strategic Network Alliance which were settled in September 2013. See Note 12. |
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Pension Benefits and Retirement Benefits Other Than Pensions |
For the three and nine months ended September 30, 2013 and 2012, the components of the Company’s net periodic benefit cost for its defined benefit pension plan were as follows: |
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| Three months ended September 30, | | Nine months ended September 30, |
(In thousands) | 2013 | | 2012 | | 2013 | | 2012 |
Service cost | $ | — | | | $ | 460 | | | $ | — | | | $ | 1,380 | |
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Interest cost | 331 | | | 372 | | | 994 | | | 1,116 | |
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Recognized net actuarial loss | 76 | | | 183 | | | 228 | | | 549 | |
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Expected return on plan assets | (399 | ) | | (323 | ) | | (1,196 | ) | | (969 | ) |
Net periodic benefit cost | $ | 8 | | | $ | 692 | | | $ | 26 | | | $ | 2,076 | |
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Pension plan assets were valued at $23.2 million at September 30, 2013, which included funding contributions for the nine months ended September 30, 2013 of less than $0.1 million, and $20.8 million at December 31, 2012. As of December 31, 2012, the Company froze future benefit accruals, resulting in the elimination of service cost for the three and nine months ended September 30, 2013. |
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For the three and nine months ended September 30, 2013 and 2012, the components of the Company’s net periodic benefit cost for its other postretirement benefit plans were as follows: |
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| Three months ended September 30, | | Nine months ended September 30, |
(In thousands) | 2013 | | 2012 | | 2013 | | 2012 |
Service cost | $ | 14 | | | $ | 23 | | | $ | 41 | | | $ | 73 | |
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Interest cost | 21 | | | 16 | | | 63 | | | 52 | |
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Recognized net actuarial loss | 4 | | | — | | | 12 | | | — | |
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Net periodic benefit cost | $ | 39 | | | $ | 39 | | | $ | 116 | | | $ | 125 | |
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The total expense recognized for the Company’s nonqualified pension plans was $0.1 million for the three months ended September 30, 2013 and 2012, and $0.2 million and $0.3 million for the nine months ended September 30, 2013 and 2012, respectively, a portion of which related to the amortization of unrealized loss. |
The total amount reclassified out of accumulated other comprehensive income related to actuarial losses from the defined benefit plans was $0.1 million and $0.2 million for the three months ended September 30, 2013 and 2012, respectively, and $0.2 million and $0.5 million for the nine months ended September 30, 2013 and 2012, respectively, all of which has been reclassified to cost of sales and services, customer operations, and corporate operations on the unaudited condensed consolidated statement of income for the respective periods. |
The Company also sponsors a contributory defined contribution plan under Internal Revenue Code (“IRC”) Section 401(k) for substantially all employees. The Company’s current policy is to make matching contributions in shares of the Company’s common stock. |
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Equity-Based Compensation |
The Company accounts for equity-based compensation plans under FASB Accounting Standards Codification (“ASC”) 718, Stock Compensation. Equity-based compensation expense from stock-based awards is recorded with an offsetting increase to additional paid in capital on the unaudited condensed consolidated balance sheet. The Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award. |
Total equity-based compensation expense related to all of the Company’s stock-based equity awards for the three and nine months ended September 30, 2013 and 2012 and the Company’s 401(k) matching contributions was allocated as follows: |
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| Three months ended September 30, | | Nine months ended September 30, |
(In thousands) | 2013 | | 2012 | | 2013 | | 2012 |
Cost of sales and services | $ | 167 | | | $ | 300 | | | $ | 482 | | | $ | 955 | |
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Customer operations | 287 | | | 250 | | | 851 | | | 794 | |
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Corporate operations | 963 | | | 928 | | | 2,890 | | | 2,934 | |
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Equity-based compensation expense | $ | 1,417 | | | $ | 1,478 | | | $ | 4,223 | | | $ | 4,683 | |
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Future charges for equity-based compensation related to securities outstanding at September 30, 2013 for the remainder of 2013 and for the years 2014 through 2017 are estimated to be $1.0 million, $3.3 million, $2.3 million, $0.5 million and $0.1 million, respectively. |
Sale of Intangible Assets |
During the nine months ended September 30, 2013, the Company completed the sale of certain intangible assets for approximately $4.6 million. This amount, less fees and expenses of sale, is recorded as a gain of $4.4 million in the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2013. |