Hawaiian Telcom Holdco (HCOM) 10-Q 5 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 05, 2016
Document and Entity Information
Entity Registrant Name	Hawaiian Telcom Holdco, Inc.
Entity Central Index Key	1,487,986
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,511,591
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Consolidated Statements of Income
Operating revenues	$ 98,794	$ 97,114
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)	42,479	40,183
Selling, general and administrative	29,865	29,732
Depreciation and amortization	21,950	21,280
Total operating expenses	94,294	91,195
Operating income	4,500	5,919
Other income (expense):
Interest expense	(4,240)	(4,337)
Interest income and other		7
Total other expense	(4,240)	(4,330)
Income before income tax provision	260	1,589
Income tax provision	106	614
Net income	$ 154	$ 975
Net income per common share -
Basic (in dollars per share)	$ 0.01	$ 0.09
Diluted (in dollars per share)	$ 0.01	$ 0.09
Weighted average shares used to compute net income per common share -
Basic (in shares)	11,475,834	10,692,198
Diluted (in shares)	11,500,308	11,272,922

Condensed Consolidated Stateme3

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Consolidated Statements of Comprehensive Income (Loss)
Net income	$ 154	$ 975
Other comprehensive income (loss):
Unrealized holding gains arising during period		2
Retirement plan gain (loss)	247	(2,018)
Income tax credit (provision) on comprehensive income	(94)	779
Other comprehensive income (loss), net of tax	153	(1,237)
Comprehensive income (loss)	$ 307	$ (262)

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets
Cash and cash equivalents	$ 20,852	$ 30,312
Receivables, net	31,490	32,736
Material and supplies	9,916	8,499
Prepaid expenses	4,244	4,068
Other current assets	3,175	2,102
Total current assets	69,677	77,717
Property, plant and equipment, net	582,271	579,107
Intangible assets, net	34,304	34,828
Goodwill	12,104	12,104
Deferred income taxes, net	89,561	89,896
Other assets	6,452	6,043
Total assets	794,369	799,695
Current liabilities
Current portion of long-term debt	3,000	3,000
Accounts payable	43,544	44,841
Accrued expenses	13,202	14,491
Advance billings and customer deposits	18,143	17,551
Other current liabilities	5,023	5,932
Total current liabilities	82,912	85,815
Long-term debt	282,775	283,046
Employee benefit obligations	102,503	104,597
Other liabilities	17,946	18,538
Total liabilities	486,136	491,996
Stockholders' equity
Common stock, par value of $0.01 per share, 245,000,000 shares authorized and 11,511,591 and 11,466,398 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively	115	115
Additional paid-in capital	178,246	178,019
Accumulated other comprehensive loss	(29,235)	(29,388)
Retained earnings	159,107	158,953
Total stockholders' equity	308,233	307,699
Total liabilities and stockholders' equity	$ 794,369	$ 799,695

Condensed Consolidated Balance5

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Condensed Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	245,000,000	245,000,000
Common stock, shares issued	11,511,591	11,466,398
Common stock, shares outstanding	11,511,591	11,466,398

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 154	$ 975
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,950	21,280
Deferred financing amortization	492	472
Employee retirement benefits	(1,846)	(1,952)
Provision for uncollectible receivables	1,039	1,248
Stock based compensation	579	375
Deferred income taxes	240	837
Changes in operating assets and liabilities:
Receivables	207	(943)
Material and supplies	(1,417)	(91)
Prepaid expenses and other current assets	(1,249)	(121)
Accounts payable and accrued expenses	965	(3,782)
Advance billings and customer deposits	592	484
Other current liabilities	(278)	(185)
Other	(512)	336
Net cash provided by operating activities	20,916	18,933
Cash flows from investing activities:
Capital expenditures	(28,139)	(29,172)
Net cash used in investing activities	(28,139)	(29,172)
Cash flows from financing activities:
Repayment of debt	(750)	(750)
Proceeds from installment financing		354
Repayment of capital lease and installment financing	(1,135)	(1,382)
Taxes paid related to net share settlement of equity awards	(352)	(928)
Net cash used in financing activities	(2,237)	(2,706)
Net change in cash and cash equivalents	(9,460)	(12,945)
Cash and cash equivalents, beginning of period	30,312	39,885
Cash and cash equivalents, end of period	20,852	26,940
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized	$ 2,492	$ 3,953

Condensed Consolidated Stateme7

Condensed Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
Balance at Dec. 31, 2014	$ 107	$ 170,521	$ (23,947)	$ 157,853	$ 304,534
Balance (in shares) at Dec. 31, 2014	10,673,292
Increase (Decrease) in Stockholders' Equity
Stock based compensation		375			$ 375
Exercise of warrant agreement (in shares)	12,300				12,300
Common stock issued for stock compensation plans, net of shares withheld and withholding paid for employee taxes	$ 1	(929)			$ (928)
Common stock issued for stock compensation plans, net of shares withheld and withholding paid for employee taxes (in shares)	72,074
Net income				975	975
Other comprehensive income (loss), net of tax			(1,237)		(1,237)
Balance at Mar. 31, 2015	$ 108	169,967	(25,184)	158,828	303,719
Balance (in shares) at Mar. 31, 2015	10,757,666
Balance at Dec. 31, 2015	$ 115	178,019	(29,388)	158,953	307,699
Balance (in shares) at Dec. 31, 2015	11,466,398
Increase (Decrease) in Stockholders' Equity
Stock based compensation		579			579
Common stock issued for stock compensation plans, net of shares withheld and withholding paid for employee taxes		(352)			(352)
Common stock issued for stock compensation plans, net of shares withheld and withholding paid for employee taxes (in shares)	45,193
Net income				154	154
Other comprehensive income (loss), net of tax			153		153
Balance at Mar. 31, 2016	$ 115	$ 178,246	$ (29,235)	$ 159,107	$ 308,233
Balance (in shares) at Mar. 31, 2016	11,511,591

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2016
Description of Business
Description of Business	1. Description of Business Business Description Hawaiian Telcom Holdco, Inc. and subsidiaries (the “Company”) is the incumbent local exchange carrier for the State of Hawaii with an integrated telecommunications network. The Company offers a variety of telecommunication services to residential and business customers in Hawaii including local telephone, network access and data transport, television, Internet, long distance and wireless phone service. The Company also provides communications equipment sales and maintenance, data center colocation and network managed services. Organization The Company has one direct wholly-owned subsidiary, Hawaiian Telcom Communications, Inc. which has two direct wholly-owned subsidiaries – Hawaiian Telcom, Inc. and Hawaiian Telcom Services Company, Inc. Hawaiian Telcom, Inc. operates the regulated local exchange carrier and Hawaiian Telcom Services Company, Inc. operates all other businesses.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Basis of Presentation
Basis of Presentation	2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America and pursuant to rules and regulations of the U.S. Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted and condensed. In the opinion of the Company’s management, all adjustments (consisting of only normal and recurring accruals) have been made to present fairly the results of operations, comprehensive income, financial position and cash flows for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. Although the Company believes that the disclosures are adequate to make the information presented not misleading, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2015. Cash and Cash Equivalents Cash and cash equivalents include cash and money market accounts with maturities at acquisition of three months or less. The majority of cash balances at March 31, 2016 are held in one bank in demand deposit accounts. Supplemental Non-Cash Investing and Financing Activities Accounts payable included $17.0 million and $1 5.2 million at March 31, 2016 and 2015, respectively, for additions to property, plant and equipment. Taxes Collected from Customers The Company presents taxes collected from customers and remitted to governmental authorities on a gross basis, including such amounts in the Company’s reported operating revenues. Such amounts represent primarily Hawaii state general excise taxes and Hawaii Public Utility Commission fees. Such taxes and fees amounted to $2.2 million and $2.0 million for the three months ended March 31, 2016 and 2015, respectively. Earnings per Share Basic earnings per share is based on the weighted effect of all common shares issued and outstanding, and is calculated by dividing earnings by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing earnings, adjusted for the effect, if any, from assumed conversion of all potentially dilutive common shares outstanding, by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. The denominator used to compute basic and diluted earnings per share was as follows: Three Months Ended March 31, 2016 2015 Basic earnings per share - weighted average shares Effect of dilutive securities: Employee and director restricted stock units Warrants — Diluted earnings per share - weighted average shares The computation of weighted average dilutive shares outstanding excluded grants of restricted stock units convertible into 135,906 shares of common stock for the three months ended March 31, 2016. The unrecognized compensation on a per unit basis for these restricted stock units was greater than the average market price of the Company’s common stock for the period presented. For the three months ended March 31, 2015, there were no restricted stock units that were anti-dilutive to earnings per share. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new accounting standard which provides guidance for revenue recognition which was amended in July 2015 and in March 2016. The most recent amendment provides revised guidance on when to record revenue gross as the principal or net as the agent in accordance with the new revenue standard’s control principal. The new standard, along with the amendments which must be adopted at the same time as the new standard, is effective for the Company in the first quarter of 2018 with either full retrospective or modified retrospective adoption permitted. Early adoption is allowed from the first quarter of 2017. The Company is currently evaluating the impact of the adoption of this accounting standard on the Company’s financial position, results of operations and cash flows, and financial statement disclosures. As this process is still ongoing, the effect of adoption is not yet known. In February 2016, the FASB issued a new standard for accounting for leases. The new standard requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. The updated standard is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. The Company is currently evaluating the effect that the new standard will have on the Company’s consolidated financial statements and financial statement disclosures. In March 2016, the FASB issued a new standard that simplifies the accounting for employee share-based payment transactions. The new standard impacts the accounting for related income taxes, forfeitures and statutory tax withholding requirements as well as the classification of certain related payments in the statement of cash flows. The new accounting guidance is effective for the Company in the first quarter of 2017 with early adoption permitted. The Company is evaluating the effect of the new guidance on the Company’s consolidated financial statements and financial statement disclosures.

Receivables

Receivables	3 Months Ended
	Mar. 31, 2016
Receivables
Receivables	3. Receivables Receivables consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Customers and other $ $ Allowance for doubtful accounts $ $

Long-Lived Assets

Long-Lived Assets	3 Months Ended
	Mar. 31, 2016
Long-Lived Assets
Long-Lived Assets	4. Long-Lived Assets Property, plant and equipment consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Property, plant and equipment cost $ $ Less accumulated depreciation $ $ Depreciation expense amounted to $21.4 million and $20.7 million for the three months ended March 31, 2016 and 2015, respectively. The gross carrying amount and accumulated amortization of identifiable intangible assets are as follows (dollars in thousands): March 31, 2016 December 31, 2015 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Value Amortization Value Value Amortization Value Subject to amortization: Customer relationships $ $ $ $ $ $ Trade name and other Not subject to amortization: Brand name — — — — $ $ $ $ $ $ Amortization expense amounted to $0.5 million and $0.6 million for the three months ended March 31, 2016 and 2015, respectively. Estimated amortization expense for the next five years and thereafter is as follows (dollars in thousands): Year ended December 31, 2016 (remaining months) $ 2017 2018 2019 2020 Thereafter $

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	3 Months Ended
	Mar. 31, 2016
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities	5. Accrued Expenses and Other Current Liabilities Accrued expenses consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Salaries and benefits $ $ Interest Other taxes $ $ Other current liabilities consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Other postretirement benefits, current $ $ Installment financing contracts, current Other $ $

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2016
Long-Term Debt
Long-Term Debt	6. Long-Term Debt Long-term debt consisted of the following (dollars in thousands): Interest Rate at March 31, Final March 31, December 31, 2016 Maturity 2016 2015 Term loan % June 6, 2019 $ $ Debt issue costs and original issue discount Current Noncurrent $ $ The term loan outstanding at March 31, 2016 provides for interest at the Alternate Base Rate, a rate which is indexed to the prime rate with certain adjustments as defined, plus a margin of 3.00% or a Eurocurrency rate on deposits of one , two, three or six months but no less than 1.00% per annum plus a margin of 4.00% . The Company has selected the Eurocurrency rate as of March 31, 2016 resulting in an interest rate currently at 5.00% . The term loan provides for interest payments no less than quarterly. In addition, quarterly principal payments of $0.8 million are required. The balance of the loan is due at maturity on June 6, 2019. The Company must prepay, generally within three months after year end, 50% or 25% of excess cash flow, as defined. The percent of excess cash flow required is dependent on the Company’s leverage ratio. The re was no excess cash flow payment due for the year ended December 31, 2015. The Company must also make prepayments on loans in the case of certain events such as large asset sales. In May 2016, the Company amended the term loan allowing for a revised leverage ratio financial covenant. The amendment modifies the maximum allowed leverage ratio, as defined, for the four consecutive fiscal quarters ended from June 30, 2016 to September 30, 2017 to 3.00 :1:00, from December 31, 2017 to September 30, 2018 to 2.75 :1:00 and from December 31, 2018 and each subsequent quarter to 2.50 :1.00 . In conjunction therewith, the Company agreed to an increase in the interest rate margin of 0.25% and modification to the prepayment requirement of up to 75% of excess cash flow. The interest rate margin is subject to a further increase of 0.25% for a decline in the debt rating, as defined. The Company also has a revolving credit facility which matures on December 6, 2018. The facility has an available balance of $30.0 million with no amounts drawn as of or for the periods ended March 31, 2016 and 2015. A commitment fee is payable quarterly to the lender under the facility. Interest on amounts outstanding is based on, at the Company’s option, the bank prime rate plus a margin of 3.0% to 6.0% or the Eurocurrency rate for one , two , three or six month periods plus a margin of 4.0% to 5.5% . The margin is dependent on the Company’s leverage, as defined in the agreement, at the time of the borrowing. Maturities The annual requirements for principal payments on long-term debt as of March 31, 2016 are as follows (dollars in thousands): Year ended December 31, 2016 (remaining months) $ 2017 2018 2019 $ Capitalized Interest Interest capitalized by the Company amounted to $0.3 million and $0.3 million for the three months ended March 31, 2016 and 2015, respectively.

Employee Benefit Plans

Employee Benefit Plans	3 Months Ended
	Mar. 31, 2016
Employee Benefit Plans
Employee Benefit Plans	7. Employee Benefit Plans The Company sponsors a defined benefit pension plan, with benefits frozen as of March 1, 2012, and postretirement health and life insurance benefits for union employees. The Company also sponsors a cash balance pension plan for nonunion employees, with benefits frozen as of April 1, 2007, and certain management employees receive postretirement health and life insurance under grandfathered provisions of a terminated plan. The following provides the components of benefit costs (income) for the three months ended March 31, 2016 and 2015 (dollars in thousands): Pension Three Months Ended March 31, 2016 2015 Interest cost $ $ Expected asset return Amortization of loss Net periodic benefit income Settlement loss — Total benefit income $ $ Other Postretirement Benefits Three Months Ended March 31, 2016 2015 Service cost $ $ Interest cost Amortization of loss Total benefit cost $ $ During the three months ended March 31, 2015, the Company’s pension plan for union employees paid lump-sum benefits to plan participants in full settlement of obligations due amounting to $6.0 million. During the three months ended March 31, 2015, the Company’s pension plan for management employees paid lump sum benefits in full settlement amounting to $0.6 million. This resulted in the recognition of a loss on settlement for both pension plans amounting to $0.9 million for the three months ended March 31, 2015. Because of the settlements, the Company measured its union and management pension plan obligations and plan assets as of March 31, 2015. The Company used a discount rate of 3.54% as of March 31, 2015 to measure the union pension plan obligations. The Company used a discount rate of 3.57% to measure the management plan obligations as of March 31, 2015. The new measurements resulted in a retirement plan loss which was charged to other comprehensive loss of $2.2 million for the three months ended March 31, 2015. For the three months ended March 31, 2016, lump sum benefits paid did not exceed the threshold requiring settlement accounting. The Company previously disclosed in its consolidated financial statements for the year ended December 31, 2015 that it expected to contribute $9.3 million to its pension plan in 2016. As of March 31, 2016, the Company has contributed $1.9 million. The Company presently expects to contribute the full amount during the remainder of 2016.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Taxes
Income Taxes	8. Income Taxes The income tax provision differs from the amounts determined by applying the statutory federal income tax rate of 34% to the income before income tax provision for the following reasons (dollars in thousands): Three Months Ended March 31, 2016 2015 Income tax at federal rate $ $ Increase (decrease) resulting from: State income taxes, net of federal income tax Permanent difference for compensation limitation — Expense reflected in tax basis — Other permanent differences Capital goods excise tax credit Total income tax provision $ $ The Company evaluates its tax positions for liability recognition. As of March 31, 2016, the Company had no unrecognized tax benefits. No interest or penalties related to tax assessments were recognized in the Company’s condensed consolidated statements of income for the three months ended March 31, 2016 and 2015. All tax years from 2012 remain open for both federal and Hawaii state tax purposes.

Stock Compensation

Stock Compensation	3 Months Ended
	Mar. 31, 2016
Stock Compensation
Stock Compensation	9. Stock Compensation The Company has an equity incentive plan. The Compensation Committee of the Company’s Board of Directors may grant awards under the plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The maximum number of shares issuable under the equity incentive plan is 1,400,000 shares with 632,000 shares remaining to be issued at March 31, 2016. All grants under the equity incentive plan will be issued to acquire shares at the fair value on date of grant. As of March 31, 2016, all awards were restricted stock units. Activity with respect to outstanding restricted stock units for the three months ended March 31, 2016 and 2015 was as follows: Weighted- Average Grant-Date Shares Fair Value 2016 Nonvested at January 1, 2016 $ Granted Vested Nonvested at March 31, 2016 $ 2015 Nonvested at January 1, 2015 $ Granted Vested Forfeited Nonvested at March 31, 2015 $ The Company recognized compensation expense of $0.6 million and $0.4 million for the three months ended March 31, 2016 and 2015, respectively. The fair value as of the vesting date for the restricted stock units that vested during the three months ended March 31, 2016 and 2015 was $0.9 million and $2.5 million, respectively. Upon vesting, unit holders have the option to net share-settle to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. The total shares withheld were 15,234 and 35,714 for the three months ended March 31, 2016 and 2015, respectively, and were based on the value of the restricted stock units as determined by the Company’s closing stock price on the date of vesting. Total payments for the employees’ tax obligations to the tax authorities amounted to $0.4 million and $0.9 million for the three months ended March 31, 2016 and 2015, respectively. Other than reimbursements for tax withholdings, there was no cash received under all share-based arrangements. The Company also has a performance based compensation plan. The incentive compensation is settled in March of each year for the prior year services and is based on Company performance relative to certain metrics. The Company recognizes the expense during the performance period based on the expected compensation amount. The compensation for the performance period ended December 31, 2015 was settled in cash in March 2016. Beginning for the 2016 performance period, a specified portion of the compensation amount for certain employees will be settled in Company shares based on the share price at the date of settlement. Upon settlement, employees may have the option to net share-settle to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. The estimated performance based compensation to be settled in stock amounted to $0.2 million for the three months ended March 31, 2016.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2016
Stockholders' Equity
Stockholders' Equity	10. Stockholders’ Equity Warrants In 2010, the Company issued warrants to purchase 1,481,055 shares of common stock for $14.00 per share. The warrants to purchase shares were exercisable anytime from January 26, 2011 to the maturity on October 28, 2015. The warrants could be exercised on a cashless basis whereby a portion of the exercised warrants were tendered in lieu of payment for the exercise price. During the three months ended March 31, 2015, warrants were exercised on a cashless basis resulting in the issuance of 12,300 shares of common stock . Accumulated Other Comprehensive Income (Loss) The changes in components of accumulated other comprehensive income (loss) are as follows (dollars in thousands): Unrealized Gain (Loss) on Retirement Investments Plans Total Three Months Ended March 31, 2016 January 1, 2016 $ — $ $ Other comprehensive income (loss) for 2016 — March 31, 2016 $ — $ $ Three Months Ended March 31, 2015 January 1, 2015 $ $ $ Other comprehensive income (loss) for 2015 March 31, 2015 $ $ $ Reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2016 and 2015 were as follows (dollars in thousands): Three Months Ended March 31, 2016 2015 Retirement plans Amortization of loss and settlement loss $ $ Income tax charge on comprehensive income Total $ $ The amortization of loss and settlement loss was recognized primarily in selling, general and administrative expense for the periods ended March 31, 2016 and 2015.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Trans-Pacific Submarine Cable In August 2014 , the Company joined several other telecommunication companies to build and operate a trans-Pacific submarine cable system. The total system cost is expected to be $235 million and is primarily composed of a supply contract with the lead contractor. The Company will contribute $25 million over the multi-year construction period in exchange for a fractional ownership in the system. The Company will recognize its fractional share of the cost. In addition, the Company will construct a cable landing station in Hawaii and provide cable landing services. The system is expected to be completed in the first half of 2017. As of March 31, 2016, the Company had incurred costs of $6.3 million primarily to the cable contractor for construction with all such costs capitalized to telephone plant under construction. The Company will have excess capacity on its share of the trans-Pacific cable that it will make available to other carriers for a fee. The Company is in the process of contracting with other carriers for long-term indefeasible right of use, or IRU, agreements for fiber circuit capacity. The Company may receive up-front payments for services to be delivered over a period of up to 25 years. The Company has entered into agreements for the sale of capacity for $27.0 million plus fees to activate assigned capacity, and for operations and maintenance. As of March 31, 2016, the Company had received up-front payments of $5.7 million. As provided for in one of the agreements, funds of $3.5 million were held in escrow. The funds in escrow will be released to the Company when the trans-Pacific cable is ready for service. The restricted cash is reflected in other assets in the condensed consolidated balance sheet. A liability to provide services in the future for all up-front payments is included in other liabilities. The Company will recognize revenue for the circuit, beginning upon activation of the services, on a straight-line basis over the contract term which is generally up to 25 years. Connect America Fund Phase II In conjunction with reforming the Universal Service Fund, the Federal Communications Commission (“FCC”) established the Connect America Fund (“CAF”) which provides incremental support to broadband service providers. CAF Phase II is the long-term component of the program. In August 2015, the Company notified the FCC that it was accepting CAF Phase II support which amounts to $4.4 million in annual funding. Support is retroactive through the beginning of 2015, net of certain other receipts from the Universal Service Fund, and will continue for six years. Under the terms of the CAF Phase II, the Company will offer broadband service at 10 Mbps downstream and 1 Mbps upstream or better to approximately 11,000 eligible locations in high-cost areas in the State of Hawaii and will provide voice and broadband services at reasonable rates. For the three months ended March 31, 2016, the Company recognized $1.1 million in CAF Phase II funding as revenue. Collective Bargaining Agreement The Company has a collective bargaining agreement with the International Brotherhood of Electrical Workers Local 1357 (“IBEW”) that expires on December 31, 2017. The agreement covers approximately half of the Company’s work force. Third Party Claims In the normal course of conducting its business, the Company is involved in various disputes with third parties, including vendors and customers. The outcome of such disputes is generally uncertain and subject to commercial negotiations. The Company periodically assesses its liabilities in connection with these matters and records reserves for those matters where it is probable that a loss has been incurred and the loss can be reasonably estimated. Based on management’s most recent assessment, the Company believes that the risk of loss in excess of liabilities recorded is not material for all outstanding claims and disputes and the ultimate outcome of such matters will not have a material adverse effect on the Company’s results of operations, cash flows or financial position. Litigation The Company is involved in litigation arising in the normal course of business. The outcome of litigation is not expected to have a material adverse impact on the Company’s condensed consolidated financial statements.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2016
Fair Value of Financial Instruments
Fair Value of Financial Instruments	12. Fair Value of Financial Instruments The following method and assumptions were used to estimate the fair value of each class of financial instruments for which it is practical to estimate the fair value. Cash and cash equivalents, accounts receivable and accounts payable – The carrying amount approximates fair value. The valuation is based on settlements of similar financial instruments all of which are short-term in nature and generally settled at or near cost. Cash and cash equivalents is measured at Level 1. Debt – The fair value of debt is based on the value at which the debt is trading among holders. The estimated fair value of financial instruments is as follows (dollars in thousands): Carrying Fair Value Value March 31, 2016 Liabilities - long-term debt (carried at cost) December 31, 2015 Liabilities - long-term debt (carried at cost) Fair Value Measurements Fair value for accounting purposes is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Accounting standards establish a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Liabilities carried at amortized cost with fair value disclosure on a recurring basis represent long-term debt. A summary is as follows (dollars in thousands): March 31, December 31, 2016 2015 Liability value measurements using: Quoted prices in active markets for identical liabilities (Level 1) $ — $ — Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) — — $ $

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2016
Segment Information
Segment Information	13. Segment Information The Company operates in two reportable segments of telecommunications and data center colocation. This conclusion is based on how resources are allocated and performance is assessed by the Chief Executive Officer, the Company’s chief operating decision maker. The telecommunications segment provides local voice services, video, high-speed internet and long distance voice services. In addition, the segment provides network access which includes data transport. Various related telephony services are provided including equipment and managed services. The data center colocation segment provides physical colocation, virtual colocation and various related telephony services. The following table provides operating financial information for the Company’s reportable segments for the three months ended March 31, 2016 and 2015 (dollars in thousands): Tele- Data Center Intersegment communications Colocation Elimination Total Three Months Ended March 31, 2016 Operating revenues $ $ $ $ Depreciation and amortization — Operating income (loss) — Capital expenditures — Three Months Ended March 31, 2015 Operating revenues $ $ $ $ Depreciation and amortization — Operating income (loss) — Capital expenditures — Intersegment revenue represents primarily network access services provided by the telecommunications segment for data center colocation. For the three months ended March 31, 2016 and 2015, total operating income above reconciles to the condensed consolidated statement of income as follows (dollars in thousands): Three Months Ended March 31, 2016 2015 Operating income $ $ Corporate other expense Income before income tax provision $ $ The following table provides information on the Company’s revenue, net of intersegment eliminations, by product group (dollars in thousands): Three Months Ended March 31, 2016 2015 Local voice and other retail services $ $ Wholesale carrier data services Data center colocation $ $

Basis of Presentation (Policies

Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2016
Basis of Presentation
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include cash and money market accounts with maturities at acquisition of three months or less. The majority of cash balances at March 31, 2016 are held in one bank in demand deposit accounts.
Supplemental Non-Cash Investing and Financing Activities	Supplemental Non-Cash Investing and Financing Activities Accounts payable included $17.0 million and $1 5.2 million at March 31, 2016 and 2015, respectively, for additions to property, plant and equipment.
Taxes Collected from Customers	Taxes Collected from Customers The Company presents taxes collected from customers and remitted to governmental authorities on a gross basis, including such amounts in the Company’s reported operating revenues. Such amounts represent primarily Hawaii state general excise taxes and Hawaii Public Utility Commission fees. Such taxes and fees amounted to $2.2 million and $2.0 million for the three months ended March 31, 2016 and 2015, respectively.
Earnings per Share	Earnings per Share Basic earnings per share is based on the weighted effect of all common shares issued and outstanding, and is calculated by dividing earnings by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing earnings, adjusted for the effect, if any, from assumed conversion of all potentially dilutive common shares outstanding, by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive common shares outstanding. The denominator used to compute basic and diluted earnings per share was as follows: Three Months Ended March 31, 2016 2015 Basic earnings per share - weighted average shares Effect of dilutive securities: Employee and director restricted stock units Warrants — Diluted earnings per share - weighted average shares The computation of weighted average dilutive shares outstanding excluded grants of restricted stock units convertible into 135,906 shares of common stock for the three months ended March 31, 2016. The unrecognized compensation on a per unit basis for these restricted stock units was greater than the average market price of the Company’s common stock for the period presented. For the three months ended March 31, 2015, there were no restricted stock units that were anti-dilutive to earnings per share.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new accounting standard which provides guidance for revenue recognition which was amended in July 2015 and in March 2016. The most recent amendment provides revised guidance on when to record revenue gross as the principal or net as the agent in accordance with the new revenue standard’s control principal. The new standard, along with the amendments which must be adopted at the same time as the new standard, is effective for the Company in the first quarter of 2018 with either full retrospective or modified retrospective adoption permitted. Early adoption is allowed from the first quarter of 2017. The Company is currently evaluating the impact of the adoption of this accounting standard on the Company’s financial position, results of operations and cash flows, and financial statement disclosures. As this process is still ongoing, the effect of adoption is not yet known. In February 2016, the FASB issued a new standard for accounting for leases. The new standard requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. The updated standard is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. The Company is currently evaluating the effect that the new standard will have on the Company’s consolidated financial statements and financial statement disclosures. In March 2016, the FASB issued a new standard that simplifies the accounting for employee share-based payment transactions. The new standard impacts the accounting for related income taxes, forfeitures and statutory tax withholding requirements as well as the classification of certain related payments in the statement of cash flows. The new accounting guidance is effective for the Company in the first quarter of 2017 with early adoption permitted. The Company is evaluating the effect of the new guidance on the Company’s consolidated financial statements and financial statement disclosures.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	3 Months Ended
	Mar. 31, 2016
Basis of Presentation
Schedule of denominator used to compute basic and diluted earnings per share	Three Months Ended March 31, 2016 2015 Basic earnings per share - weighted average shares Effect of dilutive securities: Employee and director restricted stock units Warrants — Diluted earnings per share - weighted average shares

Receivables (Tables)

Receivables (Tables)	3 Months Ended
	Mar. 31, 2016
Receivables
Schedule of receivables	Receivables consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Customers and other $ $ Allowance for doubtful accounts $ $

Long-Lived Assets (Tables)

Long-Lived Assets (Tables)	3 Months Ended
	Mar. 31, 2016
Long-Lived Assets
Schedule of property, plant and equipment	Property, plant and equipment consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Property, plant and equipment cost $ $ Less accumulated depreciation $ $
Schedule of identifiable intangible assets	The gross carrying amount and accumulated amortization of identifiable intangible assets are as follows (dollars in thousands): March 31, 2016 December 31, 2015 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Value Amortization Value Value Amortization Value Subject to amortization: Customer relationships $ $ $ $ $ $ Trade name and other Not subject to amortization: Brand name — — — — $ $ $ $ $ $
Schedule of estimated amortization expense	Estimated amortization expense for the next five years and thereafter is as follows (dollars in thousands): Year ended December 31, 2016 (remaining months) $ 2017 2018 2019 2020 Thereafter $

Accrued Expenses and Other Cu25

Accrued Expenses and Other Current Liabilities (Tables)	3 Months Ended
	Mar. 31, 2016
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses	Accrued expenses consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Salaries and benefits $ $ Interest Other taxes $ $
Other current liabilities	Other current liabilities consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Other postretirement benefits, current $ $ Installment financing contracts, current Other $ $

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2016
Long-Term Debt
Schedule of long-term debt	Long-term debt consisted of the following (dollars in thousands): Interest Rate at March 31, Final March 31, December 31, 2016 Maturity 2016 2015 Term loan % June 6, 2019 $ $ Debt issue costs and original issue discount Current Noncurrent $ $
Schedule of annual requirements for principal payments on long-term debt	The annual requirements for principal payments on long-term debt as of March 31, 2016 are as follows (dollars in thousands): Year ended December 31, 2016 (remaining months) $ 2017 2018 2019 $

Employee Benefit Plans (Tables)

Employee Benefit Plans (Tables)	3 Months Ended
	Mar. 31, 2016
Pension
Employee Benefit Plans
Schedule of components of benefit costs (income)	The following provides the components of benefit costs (income) for the three months ended March 31, 2016 and 2015 (dollars in thousands): Pension Three Months Ended March 31, 2016 2015 Interest cost $ $ Expected asset return Amortization of loss Net periodic benefit income Settlement loss — Total benefit income $ $
Other Postretirement Benefits
Employee Benefit Plans
Schedule of components of benefit costs (income)	Other Postretirement Benefits Three Months Ended March 31, 2016 2015 Service cost $ $ Interest cost Amortization of loss Total benefit cost $ $

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2016
Income Taxes
Schedule of reconciliation of income tax expense	The income tax provision differs from the amounts determined by applying the statutory federal income tax rate of 34% to the income before income tax provision for the following reasons (dollars in thousands): Three Months Ended March 31, 2016 2015 Income tax at federal rate $ $ Increase (decrease) resulting from: State income taxes, net of federal income tax Permanent difference for compensation limitation — Expense reflected in tax basis — Other permanent differences Capital goods excise tax credit Total income tax provision $ $

Stock Compensation (Tables)

Stock Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Stock Compensation
Schedule of restricted stock units	Weighted- Average Grant-Date Shares Fair Value 2016 Nonvested at January 1, 2016 $ Granted Vested Nonvested at March 31, 2016 $ 2015 Nonvested at January 1, 2015 $ Granted Vested Forfeited Nonvested at March 31, 2015 $

Stockholder's Equity (Tables)

Stockholder's Equity (Tables)	3 Months Ended
	Mar. 31, 2016
Stockholders' Equity
Schedule of changes in components of accumulated other comprehensive income (loss)	The changes in components of accumulated other comprehensive income (loss) are as follows (dollars in thousands): Unrealized Gain (Loss) on Retirement Investments Plans Total Three Months Ended March 31, 2016 January 1, 2016 $ — $ $ Other comprehensive income (loss) for 2016 — March 31, 2016 $ — $ $ Three Months Ended March 31, 2015 January 1, 2015 $ $ $ Other comprehensive income (loss) for 2015 March 31, 2015 $ $ $
Schedule of reclassifications out of accumulated other comprehensive income (loss)	Reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2016 and 2015 were as follows (dollars in thousands): Three Months Ended March 31, 2016 2015 Retirement plans Amortization of loss and settlement loss $ $ Income tax charge on comprehensive income Total $ $

Fair Value of Financial Instr31

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value of Financial Instruments
Schedule of estimated fair value of financial instruments	The estimated fair value of financial instruments is as follows (dollars in thousands): Carrying Fair Value Value March 31, 2016 Liabilities - long-term debt (carried at cost) December 31, 2015 Liabilities - long-term debt (carried at cost)
Schedule of liabilities measured at fair value on a recurring basis	A summary is as follows (dollars in thousands): March 31, December 31, 2016 2015 Liability value measurements using: Quoted prices in active markets for identical liabilities (Level 1) $ — $ — Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) — — $ $

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Information
Schedule of operating financial information of segments	The following table provides operating financial information for the Company’s reportable segments for the three months ended March 31, 2016 and 2015 (dollars in thousands): Tele- Data Center Intersegment communications Colocation Elimination Total Three Months Ended March 31, 2016 Operating revenues $ $ $ $ Depreciation and amortization — Operating income (loss) — Capital expenditures — Three Months Ended March 31, 2015 Operating revenues $ $ $ $ Depreciation and amortization — Operating income (loss) — Capital expenditures —
Reconciliation of total operating income to the consolidated statement of income	For the three months ended March 31, 2016 and 2015, total operating income above reconciles to the condensed consolidated statement of income as follows (dollars in thousands): Three Months Ended March 31, 2016 2015 Operating income $ $ Corporate other expense Income before income tax provision $ $
Schedule of revenue, net of intersegment eliminations, by product group	The following table provides information on the Company’s revenue, net of intersegment eliminations, by product group (dollars in thousands): Three Months Ended March 31, 2016 2015 Local voice and other retail services $ $ Wholesale carrier data services Data center colocation $ $

Description of Business (Detail

Description of Business (Details)	3 Months Ended
	Mar. 31, 2016subsidiary
Description of Business
Number of subsidiaries owned by company	1
Number of subsidiaries owned by subsidiary	2

Basis of Presentation (Details)

Basis of Presentation (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)itemshares	Mar. 31, 2015USD ($)shares
Cash and Cash Equivalents
Number of banks in which the entity has its majority cash balances held in demand deposit accounts | item	1
Supplemental Non-Cash Investing and Financing Activities
Accounts payable | $	$ 17	$ 15.2
Taxes Collected from Customers
Excise taxes and Hawaii Public Utility Commission fees | $	$ 2.2	$ 2
Denominator used to compute basic and diluted earnings per share
Basic earnings per share - weighted average shares	11,475,834	10,692,198
Effect of dilutive securities:
Employee and director restricted stock units (in shares)	24,474	73,457
Warrants (in shares)		507,267
Diluted earnings per share - weighted average shares	11,500,308	11,272,922
Shares attributable to restricted stock units excluded from computation of weighted average dilutive shares	135,906	0

Receivables (Details)

Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Receivables
Customers and other	$ 35,526	$ 36,667
Allowance for doubtful accounts	(4,036)	(3,931)
Receivables, net	$ 31,490	$ 32,736

Long-Lived Assets (Details)

Long-Lived Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Property, plant and equipment
Property, plant and equipment cost	$ 961,009		$ 937,927
Less accumulated depreciation	378,738		358,820
Total property, plant and equipment, net	582,271		$ 579,107
Depreciation expense	$ 21,400	$ 20,700

Long-Lived Assets (Intangible A

Long-Lived Assets (Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Long-Lived Assets
Amortization expense	$ 500	$ 600
Subject to amortization
Gross Carrying Value	22,029		$ 22,029
Accumulated Amortization	15,025		14,501
Net Carrying Value	7,004		7,528
Not subject to amortization
Carrying Value	27,300		27,300
Total intangible assets
Gross Carrying Value	49,329		49,329
Accumulated Amortization	15,025		14,501
Net Carrying Value	34,304		34,828
Estimated amortization expense
2016 (remaining months)	1,576
2,017	1,703
2,018	1,307
2,019	930
2,020	574
Thereafter	914
Net Carrying Value	7,004		7,528
Brand name
Not subject to amortization
Carrying Value	27,300		27,300
Customer relationships
Subject to amortization
Gross Carrying Value	21,709		21,709
Accumulated Amortization	14,753		14,238
Net Carrying Value	6,956		7,471
Total intangible assets
Accumulated Amortization	14,753		14,238
Estimated amortization expense
Net Carrying Value	6,956		7,471
Trade name and other
Subject to amortization
Gross Carrying Value	320		320
Accumulated Amortization	272		263
Net Carrying Value	48		57
Total intangible assets
Accumulated Amortization	272		263
Estimated amortization expense
Net Carrying Value	$ 48		$ 57

Accrued Expenses and Other Cu38

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accrued expenses
Salaries and benefits	$ 9,639	$ 12,185
Interest	2,518	1,262
Other taxes	1,045	1,044
Accrued expenses	13,202	14,491
Other current liabilities
Other postretirement benefits, current	2,929	2,929
Installment financing contracts, current	1,016	1,849
Other	1,078	1,154
Other current liabilities	$ 5,023	$ 5,932

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	May. 31, 2016	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Long-term debt
Long-term debt		$ 292,388
Current		3,000		$ 3,000
Noncurrent		282,775		283,046
Maturities of Long-term Debt [Abstract]
2016 (remaining months)		2,250
2,017		3,000
2,018		3,000
2,019		284,138
Total		292,388
Capitalized Interest
Interest capitalized		300	$ 300
Term loan
Long-term debt
Long-term debt		$ 292,388		293,138
Interest Rate (as a percent)		5.00%
Original issue discount		$ (6,613)		(7,092)
Total		285,775		286,046
Quarterly principal payments		$ 800
Covenant, interest rate margin increase, hypothetical impact of adverse change in debt rating		0.25%
Maturities of Long-term Debt [Abstract]
Total		$ 292,388		$ 293,138
Term loan | Minimum
Long-term debt
Percentage of excess cash flow used to prepay the debt		25.00%
Term loan | Maximum
Long-term debt
Percentage of excess cash flow used to prepay the debt		50.00%
Term loan | Prime rate
Long-term debt
Variable rate basis		prime rate
Margin (as a percent)		3.00%
Term loan | Eurocurrency rate
Long-term debt
Interest Rate (as a percent)		5.00%
Variable rate basis		one, two, three or six months Eurocurrency rate
Margin (as a percent)		4.00%
Term loan | Subsequent Event
Long-term debt
Percentage of excess cash flow used to prepay the debt	75.00%
Interest rate increase (as a percent)	0.25%
Term loan | Scenario, Period One
Long-term debt
Maximum allowable leverage ratio		3
Term loan | Scenario, Period Two
Long-term debt
Maximum allowable leverage ratio		2.75
Term loan | Scenario, Period Three
Long-term debt
Maximum allowable leverage ratio		2.50
Term loan repaid | Eurocurrency rate | Minimum
Long-term debt
Variable interest rate floor (as a percent)		1.00%
Revolving credit facility
Long-term debt
Available balance under the facility		$ 30,000
Amounts drawn under the facility		$ 0	$ 0
Revolving credit facility | Prime rate | Minimum
Long-term debt
Variable rate basis		prime rate
Margin (as a percent)		3.00%
Revolving credit facility | Prime rate | Maximum
Long-term debt
Variable rate basis		prime rate
Margin (as a percent)		6.00%
Revolving credit facility | Eurocurrency rate | Minimum
Long-term debt
Variable rate basis		Eurocurrency rate for one, two, three or six month periods
Margin (as a percent)		4.00%
Revolving credit facility | Eurocurrency rate | Maximum
Long-term debt
Variable rate basis		Eurocurrency rate for one, two, three or six month periods
Margin (as a percent)		5.50%

Employee Benefit Plans (Details

Employee Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Pension and Other Postretirement Benefits
Net periodic benefit cost (income)	$ (553)	$ (1,299)
Settlement loss		$ 850
Discount rate used to measure the plan obligations (as percent)		3.57%
Other comprehensive income due to the results of fair value of plan assets		$ 2,200
Actuarial assumptions:
Discount rate (as a percent)		3.54%
Union employees
Pension and Other Postretirement Benefits
Lump-sum benefits to plan participants in full settlement of obligations		$ 6,000
Non-union employees
Pension and Other Postretirement Benefits
Lump-sum benefits to plan participants in full settlement of obligations		600
Pension
Pension and Other Postretirement Benefits
Interest cost	1,996	2,073
Expected asset return	(2,678)	(3,394)
Amortization of loss	129	22
Total benefit income	(553)	(449)
Expected company contribution			$ 9,300
Company contribution	1,900
Other Postretirement Benefits
Pension and Other Postretirement Benefits
Service cost	259	259
Interest cost	655	589
Amortization of loss	119	149
Net periodic benefit cost (income)	$ 1,033	$ 997

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes
Statutory federal income tax rate (as a percent)	34.00%
Income tax at federal rate	$ 88	$ 540
Increase (decrease) resulting from:
State income taxes, net of federal income tax	12	67
Permanent difference for compensation limitation		124
Expense reflected in tax basis	16
Other permanent differences	4	106
Capital goods excise tax credit	(14)	(223)
Total income tax provision	106	614
Unrecognized Tax Benefits	0
Interest or penalties related to tax assessments recognized	$ 0	$ 0

Stock Compensation (Details)

Stock Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock Option Plan
Number of shares issuable under the plan	1,400,000
Shares remaining to be issued	632,000
Compensation expense	$ 600	$ 400
Payments for employees' tax obligations	352	928
Cash received under all share-based arrangements	0
Restricted Stock Units
Stock Option Plan
Fair value of restricted stock units vested	$ 900	$ 2,500
Shares withheld to cover withholding tax of unit holders	15,234	35,714
Payments for employees' tax obligations	$ 400	$ 900
Performance Shares
Stock Option Plan
Compensation expense	$ 200

Stock Compensation (RSU Activit

Stock Compensation (RSU Activity) (Details) - Restricted Stock Units - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Shares
Nonvested at the beginning of the period (in shares)	174,518	245,752
Granted (in shares)	121,724	120,973
Vested (in shares)	(60,425)	(107,788)
Forfeited (in shares)		(17,827)
Nonvested at the end of the period (in shares)	235,817	241,110
Weighted-Average Grant-Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 26	$ 27
Granted (in dollars per share)	25	26
Vested (in dollars per share)	25	28
Forfeited (in dollars per share)		27
Nonvested at the end of the period (in dollars per share)	$ 25	$ 26

Stockholder's Equity (Details)

Stockholder's Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2010
Accumulated other comprehensive income (loss)
Warrants issued (in shares)			1,481,055
Exercise Price (in dollars per share)			$ 14
Shares of common stock issued on exercise of warrants		12,300
Components of accumulated other comprehensive income (loss)
Balance at the beginning of the period	$ (29,388)	$ (23,947)
Other comprehensive income (loss), net of tax	153	(1,237)
Balance at the end of the period	(29,235)	(25,184)
Unrealized Gain (Loss) on Investments
Components of accumulated other comprehensive income (loss)
Balance at the beginning of the period		(64)
Other comprehensive income (loss), net of tax		2
Balance at the end of the period		(62)
Retirement plans
Components of accumulated other comprehensive income (loss)
Balance at the beginning of the period	(29,388)	(23,883)
Other comprehensive income (loss), net of tax	153	(1,239)
Balance at the end of the period	$ (29,235)	$ (25,122)

Stockholder's Equity (Reclassif

Stockholder's Equity (Reclassifications out of AOCI) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax charge on comprehensive income	$ (94)	$ 779
Retirement plans | Reclassifications out of other comprehensive income (loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of loss and settlement loss	247	1,021
Income tax charge on comprehensive income	(94)	(388)
Total	$ 153	$ 633

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	1 Months Ended	3 Months Ended
	Aug. 31, 2015USD ($)	Mar. 31, 2016USD ($)item	Aug. 31, 2014USD ($)
Jointly Owned Utility Plant Interests [Line Items]
CAF annual funding	$ 4.4
Period of support service		6 years
Number Of Eligible Locations To Offer Broadband | item		11,000
Revenue recognized from CAF first year funds		$ 1.1
Jointly owned utility plant
Jointly Owned Utility Plant Interests [Line Items]
Cost of construction			$ 235
Company investment in construction costs of plant			$ 25
Paid to the cable contractor for the cable build		$ 6.3
Period of up-front payment received		25 years
Proceeds from sale of capacity		$ 27
Up Front Payment Received		5.7
Escrow deposit		$ 3.5

Fair Value of Financial Instr47

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Recurring
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	$ 290,378	$ 291,306
Significant other observable inputs (Level 2) | Recurring
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	290,378	291,306
Carrying Value
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	285,775	286,046
Fair Value
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	$ 290,378	$ 291,306

Segment Information (Details)

Segment Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)segment	Mar. 31, 2015USD ($)
Segment Information
Operating revenues	$ 98,794	$ 97,114
Depreciation and amortization	21,950	21,280
Operating income (loss)	4,500	5,919
Capital expenditures	$ 24,588	23,231
Number of reportable segments | segment	2
Tele-communications
Segment Information
Operating revenues	$ 96,185	94,836
Depreciation and amortization	21,426	20,728
Operating income (loss)	4,611	6,246
Capital expenditures	24,412	22,752
Data Center Colocation
Segment Information
Operating revenues	3,057	2,597
Depreciation and amortization	524	552
Operating income (loss)	(111)	(327)
Capital expenditures	176	479
Intersegment Elimination
Segment Information
Operating revenues	$ (448)	$ (319)

Segment Information (Operating

Segment Information (Operating Income Reconciliation ) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reconciliation of total operating income to the consolidated statement of income
Operating income	$ 4,500	$ 5,919
Income before income tax provision	260	1,589
Operating segment
Reconciliation of total operating income to the consolidated statement of income
Operating income	4,500	5,919
Corporate other expense	(4,240)	(4,330)
Income before income tax provision	$ 260	$ 1,589

Segment Information (Revenue by

Segment Information (Revenue by Product Group) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Information on revenue, net of intersegment eliminations, by product group
Revenue	$ 98,794	$ 97,114
Local voice and other retail services
Information on revenue, net of intersegment eliminations, by product group
Revenue	81,975	80,184
Wholesale carrier data services
Information on revenue, net of intersegment eliminations, by product group
Revenue	13,762	14,333
Data center colocation
Information on revenue, net of intersegment eliminations, by product group
Revenue	$ 3,057	$ 2,597