Hawaiian Telcom Holdco (HCOM) 10-Q 9 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 09, 2017
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, 2017
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		11,587,963
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Condensed Consolidated Statements of Income (Loss)
Operating revenues	$ 94,510	$ 98,794
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)	41,191	42,479
Selling, general and administrative	31,395	29,865
Depreciation and amortization	21,269	21,950
Total operating expenses	93,855	94,294
Operating income	655	4,500
Other income (expense):
Interest expense	(3,993)	(4,240)
Total other expense	(3,993)	(4,240)
Income (loss) before income tax provision (benefit)	(3,338)	260
Income tax provision (benefit)	(1,386)	106
Net income (loss)	$ (1,952)	$ 154
Net income (loss) per common share -
Basic (in dollars per share)	$ (0.17)	$ 0.01
Diluted (in dollars per share)	$ (0.17)	$ 0.01
Weighted average shares used to compute net income (loss) per common share -
Basic (in shares)	11,529,046	11,475,834
Diluted (in shares)	11,529,046	11,500,308

Condensed Consolidated Stateme3

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Condensed Consolidated Statements of Comprehensive Income
Net income (loss)	$ (1,952)	$ 154
Other comprehensive income
Retirement plan gain	21,142	247
Income tax provision on other comprehensive income	(8,080)	(94)
Other comprehensive income, net of tax	13,062	153
Comprehensive income	$ 11,110	$ 307

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 10,479	$ 15,821
Receivables, net	31,377	33,377
Material and supplies	7,471	8,090
Prepaid expenses	3,901	4,093
Other current assets	7,638	7,229
Total current assets	60,866	68,610
Property, plant and equipment, net	598,798	595,997
Intangible assets, net	32,303	32,728
Goodwill	12,104	12,104
Deferred income taxes, net	85,891	92,171
Other assets	4,354	2,311
Total assets	794,316	803,921
Current liabilities
Current portion of long-term debt	3,000	3,000
Accounts payable	47,713	53,506
Accrued expenses	13,310	15,293
Advance billings and customer deposits	15,967	15,013
Other current liabilities	5,948	6,327
Total current liabilities	85,938	93,139
Long-term debt	287,466	281,699
Employee benefit obligations	86,198	105,930
Other liabilities	17,668	18,239
Total liabilities	477,270	499,007
Commitments and contingencies (Note 11)
Stockholders' equity
Common stock, par value of $0.01 per share, 245,000,000 shares authorized and 11,587,963 and 11,513,279 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	116	115
Additional paid-in capital	180,429	179,958
Accumulated other comprehensive loss	(22,156)	(35,218)
Retained earnings	158,657	160,059
Total stockholders' equity	317,046	304,914
Total liabilities and stockholders' equity	$ 794,316	$ 803,921

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
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	11,587,963	11,513,279
Common stock, shares outstanding	11,587,963	11,513,279

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income (loss)	$ (1,952)	$ 154
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	21,269	21,950
Deferred financing amortization	529	492
Employee retirement benefits	1,410	(1,846)
Provision for uncollectible receivables	950	1,039
Stock based compensation	567	579
Deferred income taxes	(1,251)	240
Changes in operating assets and liabilities:
Receivables	1,050	207
Material and supplies	619	(1,417)
Prepaid expenses and other current assets	(217)	(1,249)
Accounts payable and accrued expenses	(3,162)	965
Advance billings and customer deposits	954	592
Other current liabilities	340	(278)
Other	(839)	(512)
Net cash provided by operating activities	20,267	20,916
Cash flows from investing activities:
Capital expenditures	(27,242)	(28,139)
Net cash used in investing activities	(27,242)	(28,139)
Cash flows from financing activities:
Proceeds from borrowing	6,000
Repayment of capital lease and installment financing	(1,051)	(1,135)
Repayment of debt	(750)	(750)
Refinancing costs	(2,071)
Taxes paid related to net share settlement of equity awards	(495)	(352)
Net cash provided by (used in) financing activities	1,633	(2,237)
Net change in cash, cash equivalents and restricted cash	(5,342)	(9,460)
Cash, cash equivalents and restricted cash, beginning of period	21,146	34,137
Cash, cash equivalents and restricted cash, end of period	$ 15,804	$ 24,677

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, 2015	$ 115	$ 178,019	$ (29,388)	$ 158,953	$ 307,699
Balance (in shares) at Dec. 31, 2015	11,466,398
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 (loss)				154	154
Other comprehensive income, 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
Balance at Dec. 31, 2016	$ 115	179,958	(35,218)	160,059	304,914
Balance (in shares) at Dec. 31, 2016	11,513,279
Cumulative effect of adoption of new accounting standard for stock compensation				550	550
Stock based compensation		567			567
Common stock issued for stock compensation plans, net of shares withheld and withholding paid for employee taxes	$ 1	(96)			(95)
Common stock issued for stock compensation plans, net of shares withheld and withholding paid for employee taxes (in shares)	74,684
Net income (loss)				(1,952)	(1,952)
Other comprehensive income, net of tax			13,062		13,062
Balance at Mar. 31, 2017	$ 116	$ 180,429	$ (22,156)	$ 158,657	$ 317,046
Balance (in shares) at Mar. 31, 2017	11,587,963

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2017
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, 2017
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 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, 2016. 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, 2017 are held in one bank in demand deposit accounts. Supplemental Non-Cash Investing and Financing Activities Accounts payable included $21.9 million and $17.0 million at March 31, 2017 and 2016, 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 $2.2 million for the three months ended March 31, 2017 and 2016, 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, 2017 2016 Basic earnings per share - weighted average shares 11,529,046 11,475,834 Effect of dilutive securities: Employee and director restricted stock units — 24,474 Diluted earnings per share - weighted average shares 11,529,046 11,500,308 The computation of weighted average dilutive shares outstanding excluded grants of restricted stock units convertible into 278,701 shares and 135,906 shares of common stock for the three months ended March 31, 2017 and 2016, respectively. For the three months ended March 31, 2017, the Company incurred a net loss so the restricted stock units are anti-dilutive to the computation of diluted net loss per share. 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. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (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 was effective for the Company in the first quarter of 2017. The adoption method required is specified as retrospective, modified retrospective or prospective for each of the various accounting provisions impacted by this new standard. The Company is accounting for forfeitures on its share-based transactions as they occur beginning January 1, 2017. The impact of the modified retrospective adoption of this provision was not significant. In addition, the Company began accounting for excess tax benefits and tax deductions on share-based award settlements prospectively as income tax expense or benefit in its condensed consolidated statements of income beginning January 1, 2017. Excess tax benefits that were not recognized prior to January 1, 2017 because the related tax deduction had not reduced taxes currently payable have been recognized on a modified retrospective basis through a cumulative effect adjustment which increased retained earnings as of January 1, 2017 by $0.6 million. Recently Issued Accounting Pronouncements In March 2017, the FASB issued a new standard that amends the income statement presentation of the components of net periodic benefit cost for defined benefit and other postretirement plans. The new standard requires that the current service cost component be disaggregated from the other components of net benefit cost. The other components must be presented elsewhere in the income statement outside of income from operations. In addition, only the service-cost component of net benefit cost is eligible for capitalization related to self-constructed assets. The new standard is effective for the Company beginning January 1, 2018 with early adoption permitted. The presentation requirements must be adopted on a retrospective basis and the change in capitalization methodology applied on a prospective basis. The Company currently presents the entire net benefit cost in income from operations but has disclosed the components of net benefit costs in Note 7 to the condensed consolidated financial statements. The Company is currently assessing the impact of adoption of the standard on its condensed consolidated financial statements.

Receivables

Receivables	3 Months Ended
	Mar. 31, 2017
Receivables
Receivables	3. Receivables Receivables consisted of the following (dollars in thousands): March 31, December 31, 2017 2016 Customers and other $ 35,141 $ 37,408 Allowance for doubtful accounts (3,764) (4,031) $ 31,377 $ 33,377

Long-Lived Assets

Long-Lived Assets	3 Months Ended
	Mar. 31, 2017
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, 2017 2016 Property, plant and equipment cost $ 1,058,673 $ 1,036,137 Less accumulated depreciation 459,875 440,140 $ 598,798 $ 595,997 Depreciation expense amounted to $20.8 million and $21.4 million for the three months ended March 31, 2017 and 2016, respectively. The gross carrying amount and accumulated amortization of identifiable intangible assets are as follows (dollars in thousands): March 31, 2017 December 31, 2016 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Value Amortization Value Value Amortization Value Subject to amortization: Customer relationships $ 21,709 $ 16,720 $ 4,989 $ 21,709 $ 16,299 $ 5,410 Trade name and other 320 306 14 320 302 18 22,029 17,026 5,003 22,029 16,601 5,428 Not subject to amortization: Brand name 27,300 — 27,300 27,300 — 27,300 27,300 — 27,300 27,300 — 27,300 $ 49,329 $ 17,026 $ 32,303 $ 49,329 $ 16,601 $ 32,728 As of March 31, 2017, the Company has goodwill of $12.1 million. Previously, $10.5 million of goodwill was recognized as part of the data center services segment and $1.6 million in the telecommunications segment. As further discussed in Note 14, because of recent operational, organizational and reporting changes, the Company has concluded it now has only one segment and one reporting unit. As such, the Company now classifies all goodwill in the one segment. Amortization expense amounted to $0.4 million and $0.5 million for the three months ended March 31, 2017 and 2016, respectively. Estimated amortization expense for the next five years and thereafter is as follows (dollars in thousands): Year ended December 31, 2017 (remaining months) $ 1,278 2018 1,307 2019 930 2020 574 2021 270 Thereafter 644 $ 5,003 dfjld

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	3 Months Ended
	Mar. 31, 2017
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, 2017 2016 Salaries and benefits $ 9,765 $ 11,662 Interest 2,510 2,583 Other taxes 1,035 1,048 $ 13,310 $ 15,293 Other current liabilities consisted of the following (dollars in thousands): March 31, December 31, 2017 2016 Other postretirement benefits, current $ 3,465 $ 3,332 Installment financing contracts, current 1,720 2,157 Other 763 838 $ 5,948 $ 6,327

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2017
Long-Term Debt
Long-Term Debt	6. Long-Term Debt Long-term debt consisted of the following (dollars in thousands): Average Interest Rate at March 31, Final March 31, December 31, 2017 Maturity 2017 2016 Term loan 5.25 % June 6, 2019 $ 289,388 $ 290,138 Revolving loan 5.77 December 6, 2018 6,000 — Debt issue costs and issue discount (4,922) (5,439) 290,466 284,699 Current 3,000 3,000 Noncurrent $ 287,466 $ 281,699 The term loan outstanding at March 31, 2017 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 3.25% 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 4.25%. The Company has selected the Eurocurrency rate as of March 31, 2017 resulting in an interest rate currently at 5.25%. The interest rate margin is subject to a further increase of 0.25% should there be a downgrade in the Company’s credit rating. 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, up to 75% of excess cash flow, as defined. The percent of excess cash flow required is dependent on the Company’s leverage ratio. There was no excess cash flow payment due for the year ended December 31, 2016. The Company must also make prepayments on loans in the case of certain events such as large asset sales. The Company also has a revolving credit facility which matures on December 6, 2018. The facility has an available balance of $24.0 million as of March 31, 2017. Drawings as of and for the three months ended March 31, 2017 amounted to $6.0 million due primarily to fund the construction of the SEA-US submarine cable system. There were no amounts drawn as of or for the three months ended March 31, 2016. 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. New Financing in 2017 In February 2017, the Company entered into a delayed draw credit agreement for new term loans and a new revolving credit facility. The new facility fully funded the repayment of the existing term loan and replacement of the existing revolving credit on May 4, 2017. Included in the new facility is a term loan for $90.0 million with quarterly principal payments of $1.1 million with the balance due at maturity in May 2022. Interest, payable at least quarterly, is at the Alternate Base Rate plus a margin of 2.75% or a Eurocurrency rate plus a margin of 3.75%. In addition, the facility provides for a second term loan for $230.0 million with quarterly principal payments of $1.4 million for the first eight quarters and $2.9 million per quarter thereafter with the balance due at maturity in May 2023. Interest, payable at least quarterly, is at the Alternate Base Rate plus a margin of 3.0% or a Eurocurrency rate plus a margin of 4.0%. In addition, the agreement provides for a line of credit in the amount of $30.0 million with maturity in May 2022. Interest on the line of credit is at the Alternate Base Rate plus a margin of 2.75% or a Eurocurrency rate plus a margin of 3.75%. The interest rate margins on the facility are subject to a decrease of 0.25% with a defined improvement in the Company’s leverage ratio. Maturities The annual requirements for principal payments on long-term debt as of March 31, 2017 are as follows (dollars in thousands): Year ended December 31, 2017 (remaining months) $ 2,250 2018 9,000 2019 284,138 $ 295,388 Capitalized Interest Interest capitalized by the Company amounted to $0.5 million and $0.3 million for the three months ended March 31, 2017 and 2016, respectively.

Employee Benefit Plans

Employee Benefit Plans	3 Months Ended
	Mar. 31, 2017
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, 2017 and 2016 (dollars in thousands): Pension Three Months Ended March 31, 2017 2016 Interest cost $ 1,781 $ 1,996 Expected asset return (2,656) (2,678) Amortization of loss 124 129 Net periodic benefit income (751) (553) Settlement loss 1,956 — Total benefit (income) expense $ 1,205 $ (553) Other Postretirement Benefits Three Months Ended March 31, 2017 2016 Service cost $ 254 $ 259 Interest cost 596 655 Amortization of (gain) loss (38) 119 Total benefit expense $ 812 $ 1,033 During the three months ended March 31, 2017, the Company’s pension plans for union employees and management employees paid lump-sum benefits to certain plan participants in full settlement of obligations due amounting to $10.6 million. This resulted in the recognition of a loss on settlement for both pension plans amounting to $2.0 million for the three months ended March 31, 2017. Because of the settlements, the Company measured its pension plan obligations and plan assets as of March 31, 2017. The Company used discount rates ranging from 3.81% to 3.82% as of March 31, 2017 to measure the pension plan obligations. The new measurements resulted in a retirement plan gain which was recognized in other comprehensive income of $1.6 million for the three months ended March 31, 2017. For the three months ended March 31, 2016, lump sum benefits paid did not exceed the threshold requiring settlement accounting. In January 2017, the Company amended the postretirement health benefits plan for management employees by implementing a cap on the amount of the premium subsidy at 2017 levels. This resulted in recognition of a negative plan amendment as of January 31, 2017. Because of the plan amendment, the Company measured its management postretirement benefits obligation as of January 31, 2017 using a discount rate of 4.07%. The new measurement resulted in a retirement plan gain which was recognized in other comprehensive income of $19.7 million for the three months ended March 31, 2017. The Company previously disclosed in its consolidated financial statements for the year ended December 31, 2016 that it expected to contribute $4.8 million to its pension plan in 2017. For the three months ended March 31, 2017, the Company has made no contributions to the plan. The Company presently expects to contribute the full amount during the remainder of 2017.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Taxes
Income Taxes	8. Income Taxes The income tax provision (credit) differs from the amounts determined by applying the statutory federal income tax rate of 34% to the income (loss) before income tax provision (credit) for the following reasons (dollars in thousands): Three Months Ended March 31, 2017 2016 Income tax at federal rate $ (1,135) $ 88 Increase (decrease) resulting from: State income taxes, net of federal income tax (123) 12 Expense not deductible for tax — 16 Tax credit included in taxable income 93 — Other permanent differences 52 4 Capital goods excise tax credit (273) (14) Total income tax provision (credit) $ (1,386) $ 106 The Company evaluates its tax positions for liability recognition. As of March 31, 2017, the Company had no unrecognized tax benefits. No interest or penalties related to income tax assessments were recognized in the Company’s condensed consolidated statements of income (loss) for the three months ended March 31, 2017 and 2016. All tax years from 2013 remain open for both federal and Hawaii state tax purposes.

Stock Compensation

Stock Compensation	3 Months Ended
	Mar. 31, 2017
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 500,000 shares remaining to be issued at March 31, 2017. 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, 2017, all awards were restricted stock units. Activity with respect to outstanding restricted stock units for the three months ended March 31, 2017 and 2016 was as follows: Weighted- Average Grant-Date Fair Shares Value per Share 2017 Nonvested at January 1, 2017 226,690 $ 25 Granted 131,801 23 Vested (78,623) 25 Forfeited (1,167) 21 Nonvested at March 31, 2017 278,701 $ 25 2016 Nonvested at January 1, 2016 174,518 $ 26 Granted 121,724 25 Vested (60,425) 25 Nonvested at March 31, 2016 235,817 $ 25 The Company recognized compensation expense of $0.6 million and $0.6 million for the three months ended March 31, 2017 and 2016, respectively. The fair value as of the vesting date for the restricted stock units that vested during the three months ended March 31, 2017 and 2016 was $1.3 million and $0.9 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 20,996 and 15,234 for the three months ended March 31, 2017 and 2016, 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 $0.5 million and $0.4 million for the three months ended March 31, 2017 and 2016, respectively. Other than reimbursements for tax withholdings, there was no cash received under the restricted stock unit 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 company specific metrics. The Company recognizes the expense during the performance period based on the expected compensation amount. Beginning for the 2016 performance period, a specified portion of the compensation amount for certain employees are settled in Company shares based on the share price at the date of settlement. The estimated performance based compensation to be settled in stock amounted to $0.2 million and $0.2 million for the three months ended March 31, 2017 and 2016, respectively. The fair value of the shares granted under the plan in March 2017 amounted to $0.7 million. Upon grant, employees were required to net share-settle to cover the required withholding tax. Total payments for the employees’ tax obligations to the tax authorities by the Company amounted to $0.3 million. The net shares issued amounted to 17,174 shares which was based on the value of shares on the date of vesting.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	3 Months Ended
	Mar. 31, 2017
Accumulated Other Comprehensive Loss.
Accumulated Other Comprehensive Loss	10. Accumulated Other Comprehensive Loss The balance of and all of the changes in accumulated other comprehensive loss as of and for the three months ended March 31, 2017 and 2016, net of tax, are attributed to the Company’s retirement plans. Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows (dollars in thousands): Three Months Ended March 31, 2017 2016 Retirement plans Amortization of gain/loss and settlement loss $ 2,042 $ 247 Income tax provision on comprehensive income (776) (94) Total $ 1,266 $ 153 The amortization of gains and losses, and settlement loss were recognized primarily in selling, general and administrative expense for the periods ended March 31, 2017 and 2016.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
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 second half of 2017. As of March 31, 2017, the Company had incurred capital costs of $18.7 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 has contracted and expects to enter into additional contracts 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, 2017, the Company had received up-front payments of $7.2 million. As provided for in one of the agreements, funds of $5.0 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 current assets in the condensed consolidated balance sheet. A liability to provide services in the future for all up-front payments is included in advance billings and customer deposits and other liabilities. The Company will recognize revenue for the circuits, beginning upon activation of the services, on a straight-line basis over the contract term. 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 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, 2017 and 2016, the Company recognized $1.1 million and $1.1 million, respectively, 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. Joint-Owned Utility Poles Each of the electric utilities for the four counties in the State of Hawaii have separate agreements with the Company for the joint ownership and maintenance of utility poles along with other third parties, such as the State of Hawaii. The agreements set forth various circumstances requiring pole removal, installation and replacement and the sharing of costs among the joint pole owners. The agreements allow for the cost of work done by one joint pole owner to be shared by the other joint pole owners based on the apportionment of costs in the agreements. Generally, the electric utilities have maintained, replaced and installed the majority of the jointly-owned poles and have billed the other joint pole owners for their respective share of the costs. The Company has a disagreement with the common owner of the utilities in three of the counties regarding the amount the utilities are requesting for their share of the capitalized costs. For one of the three utilities referenced above, a dispute resolution process is proceeding as specified by the joint pole agreement. For another of the utilities, a complaint for payment was filed by the utility with the State court in 2016. Management of the Company believes the amount recognized in the Company’s condensed consolidated financial statements for amounts due the utilities are reflective of what is owed and a reasonable estimate of the final settlement to be reached with the utilities. 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, 2017
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, 2017 Liabilities - long-term debt (carried at cost) 290,466 294,665 December 31, 2016 Liabilities - long-term debt (carried at cost) 284,699 293,765 Fair Value Measurements The objective of the fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. 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, 2017 2016 Liability value measurements using: Quoted prices in active markets for identical liabilities (Level 1) $ — $ — Significant other observable inputs (Level 2) 294,665 293,765 Significant unobservable inputs (Level 3) — — $ 294,665 $ 293,765

Cash Flow Information

Cash Flow Information	3 Months Ended
	Mar. 31, 2017
Cash Flow Information
Cash Flow Information	13. Cash Flow Information Supplemental cash flow information is as follows: Three Months Ended March 31, 2017 2016 Cash paid during the year: Income taxes paid $ — $ — Interest paid, net of amounts capitalized 3,537 2,492 Non-cash investing activities - capital assets acquired under installment contracts 617 — Non-cash financing activities - common shares issued for performance based compensation, net of withholding taxes paid 400 — The Company includes restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the statement of cash flows effective with issuance of a new accounting standard in November 2016. Retrospective application of the new standard was required so the condensed consolidated statement of cash flows for the three months ended March 31, 2016 were revised to reflect application of the new standard. This resulted in an increase to the beginning and ending reported cash, cash equivalents and restricted cash previously reported in the condensed consolidated statements of cash flow of $3.8 million for the three months ended March 31, 2016. The following is a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheets to the total of such amounts in the condensed consolidated statements of cash flows (dollars in thousands): March 31, December 31, 2017 2016 Cash and cash equivalents $ 10,479 $ 15,821 Restricted cash included in other current assets Escrow deposits for capacity sales 5,000 5,000 Restricted cash included in other assets Other 325 325 Total cash, cash equivalents and restricted cash $ 15,804 $ 21,146 The escrow deposits for capacity sales are more fully described in Note 11. The restriction on the escrow deposits is expected to be removed in 2017 so the restricted cash amount is reflected in other current assets as of March 31, 2017 and December 31, 2016.

Segment Information and Revenue

Segment Information and Revenue by Product Group	3 Months Ended
	Mar. 31, 2017
Segment Information and Revenue by Product Group
Segment Information and Revenue by Product Group	14. Segment Information and Revenue by Product Group The Company previously operated in two reportable segments of telecommunications and data center services. This conclusion was based on how resources were allocated and assessed by the Company’s Chief Executive Officer, the Company’s chief operating decision maker. The Company had initially formed the data center colocation segment in 2013 with the expectation that the segment would operate independently and focus on colocation services. The Company’s strategy has evolved to emphasize a bundle of telecommunication services to its customers including colocation. In addition, the Company is focusing its efforts on obtaining the benefit of cross selling services and gaining efficiencies of a more integrated operation. With this change in strategy, the Company has implemented certain operational, organizational and reporting changes. Among the changes is the Chief Executive Officer is no longer provided information with which to separately evaluate the data center services segment or any other component for standalone performance or resource allocation. Hence, given the integrated nature of the Company’s telecommunication operations, including its leveraging of its primary network to provide the majority of its services, management has concluded the Company now has only one segment. The following table provides information on the Company’s revenue by product group (dollars in thousands): Three Months Ended March 31, 2017 2016 Local voice and other retail services $ 81,682 $ 85,032 Wholesale carrier data services 12,828 13,762 $ 94,510 $ 98,794

Basis of Presentation (Policies

Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2017
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, 2017 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 $21.9 million and $17.0 million at March 31, 2017 and 2016, 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 $2.2 million for the three months ended March 31, 2017 and 2016, 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, 2017 2016 Basic earnings per share - weighted average shares 11,529,046 11,475,834 Effect of dilutive securities: Employee and director restricted stock units — 24,474 Diluted earnings per share - weighted average shares 11,529,046 11,500,308 The computation of weighted average dilutive shares outstanding excluded grants of restricted stock units convertible into 278,701 shares and 135,906 shares of common stock for the three months ended March 31, 2017 and 2016, respectively. For the three months ended March 31, 2017, the Company incurred a net loss so the restricted stock units are anti-dilutive to the computation of diluted net loss per share. 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.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (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 was effective for the Company in the first quarter of 2017. The adoption method required is specified as retrospective, modified retrospective or prospective for each of the various accounting provisions impacted by this new standard. The Company is accounting for forfeitures on its share-based transactions as they occur beginning January 1, 2017. The impact of the modified retrospective adoption of this provision was not significant. In addition, the Company began accounting for excess tax benefits and tax deductions on share-based award settlements prospectively as income tax expense or benefit in its condensed consolidated statements of income beginning January 1, 2017. Excess tax benefits that were not recognized prior to January 1, 2017 because the related tax deduction had not reduced taxes currently payable have been recognized on a modified retrospective basis through a cumulative effect adjustment which increased retained earnings as of January 1, 2017 by $0.6 million. Recently Issued Accounting Pronouncements In March 2017, the FASB issued a new standard that amends the income statement presentation of the components of net periodic benefit cost for defined benefit and other postretirement plans. The new standard requires that the current service cost component be disaggregated from the other components of net benefit cost. The other components must be presented elsewhere in the income statement outside of income from operations. In addition, only the service-cost component of net benefit cost is eligible for capitalization related to self-constructed assets. The new standard is effective for the Company beginning January 1, 2018 with early adoption permitted. The presentation requirements must be adopted on a retrospective basis and the change in capitalization methodology applied on a prospective basis. The Company currently presents the entire net benefit cost in income from operations but has disclosed the components of net benefit costs in Note 7 to the condensed consolidated financial statements. The Company is currently assessing the impact of adoption of the standard on its condensed consolidated financial statements.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	3 Months Ended
	Mar. 31, 2017
Basis of Presentation
Schedule of denominator used to compute basic and diluted earnings (loss) per share	Three Months Ended March 31, 2017 2016 Basic earnings per share - weighted average shares 11,529,046 11,475,834 Effect of dilutive securities: Employee and director restricted stock units — 24,474 Diluted earnings per share - weighted average shares 11,529,046 11,500,308

Receivables (Tables)

Receivables (Tables)	3 Months Ended
	Mar. 31, 2017
Receivables
Schedule of receivables	Receivables consisted of the following (dollars in thousands): March 31, December 31, 2017 2016 Customers and other $ 35,141 $ 37,408 Allowance for doubtful accounts (3,764) (4,031) $ 31,377 $ 33,377

Long-Lived Assets (Tables)

Long-Lived Assets (Tables)	3 Months Ended
	Mar. 31, 2017
Long-Lived Assets
Schedule of property, plant and equipment	Property, plant and equipment consisted of the following (dollars in thousands): March 31, December 31, 2017 2016 Property, plant and equipment cost $ 1,058,673 $ 1,036,137 Less accumulated depreciation 459,875 440,140 $ 598,798 $ 595,997
Schedule of identifiable intangible assets	The gross carrying amount and accumulated amortization of identifiable intangible assets are as follows (dollars in thousands): March 31, 2017 December 31, 2016 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Value Amortization Value Value Amortization Value Subject to amortization: Customer relationships $ 21,709 $ 16,720 $ 4,989 $ 21,709 $ 16,299 $ 5,410 Trade name and other 320 306 14 320 302 18 22,029 17,026 5,003 22,029 16,601 5,428 Not subject to amortization: Brand name 27,300 — 27,300 27,300 — 27,300 27,300 — 27,300 27,300 — 27,300 $ 49,329 $ 17,026 $ 32,303 $ 49,329 $ 16,601 $ 32,728
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, 2017 (remaining months) $ 1,278 2018 1,307 2019 930 2020 574 2021 270 Thereafter 644 $ 5,003

Accrued Expenses and Other Cu26

Accrued Expenses and Other Current Liabilities (Tables)	3 Months Ended
	Mar. 31, 2017
Accrued Expenses and Other Current Liabilities.
Schedule of accrued expenses	Accrued expenses consisted of the following (dollars in thousands): March 31, December 31, 2017 2016 Salaries and benefits $ 9,765 $ 11,662 Interest 2,510 2,583 Other taxes 1,035 1,048 $ 13,310 $ 15,293
Other current liabilities	Other current liabilities consisted of the following (dollars in thousands): March 31, December 31, 2017 2016 Other postretirement benefits, current $ 3,465 $ 3,332 Installment financing contracts, current 1,720 2,157 Other 763 838 $ 5,948 $ 6,327

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2017
Long-Term Debt
Schedule of long-term debt	Long-term debt consisted of the following (dollars in thousands): Average Interest Rate at March 31, Final March 31, December 31, 2017 Maturity 2017 2016 Term loan 5.25 % June 6, 2019 $ 289,388 $ 290,138 Revolving loan 5.77 December 6, 2018 6,000 — Debt issue costs and issue discount (4,922) (5,439) 290,466 284,699 Current 3,000 3,000 Noncurrent $ 287,466 $ 281,699
Schedule of maturities of long-term debt	The annual requirements for principal payments on long-term debt as of March 31, 2017 are as follows (dollars in thousands): Year ended December 31, 2017 (remaining months) $ 2,250 2018 9,000 2019 284,138 $ 295,388

Employee Benefit Plans (Tables)

Employee Benefit Plans (Tables)	3 Months Ended
	Mar. 31, 2017
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, 2017 and 2016 (dollars in thousands): Pension Three Months Ended March 31, 2017 2016 Interest cost $ 1,781 $ 1,996 Expected asset return (2,656) (2,678) Amortization of loss 124 129 Net periodic benefit income (751) (553) Settlement loss 1,956 — Total benefit (income) expense $ 1,205 $ (553)
Other Postretirement Benefits
Employee Benefit Plans
Schedule of components of benefit costs (income)	Other Postretirement Benefits Three Months Ended March 31, 2017 2016 Service cost $ 254 $ 259 Interest cost 596 655 Amortization of (gain) loss (38) 119 Total benefit expense $ 812 $ 1,033

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2017
Income Taxes
Schedule of reconciliation of income tax provision	The income tax provision (credit) differs from the amounts determined by applying the statutory federal income tax rate of 34% to the income (loss) before income tax provision (credit) for the following reasons (dollars in thousands): Three Months Ended March 31, 2017 2016 Income tax at federal rate $ (1,135) $ 88 Increase (decrease) resulting from: State income taxes, net of federal income tax (123) 12 Expense not deductible for tax — 16 Tax credit included in taxable income 93 — Other permanent differences 52 4 Capital goods excise tax credit (273) (14) Total income tax provision (credit) $ (1,386) $ 106

Stock Compensation (Tables)

Stock Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Stock Compensation
Schedule of activity with respect to outstanding restricted stock units	Weighted- Average Grant-Date Fair Shares Value per Share 2017 Nonvested at January 1, 2017 226,690 $ 25 Granted 131,801 23 Vested (78,623) 25 Forfeited (1,167) 21 Nonvested at March 31, 2017 278,701 $ 25 2016 Nonvested at January 1, 2016 174,518 $ 26 Granted 121,724 25 Vested (60,425) 25 Nonvested at March 31, 2016 235,817 $ 25

Accumulated Other Comprehensi31

Accumulated Other Comprehensive Loss (Tables)	3 Months Ended
	Mar. 31, 2017
Accumulated Other Comprehensive Loss.
Schedule of reclassifications out of accumulated other comprehensive (income) loss	Reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2017 and 2016 were as follows (dollars in thousands): Three Months Ended March 31, 2017 2016 Retirement plans Amortization of gain/loss and settlement loss $ 2,042 $ 247 Income tax provision on comprehensive income (776) (94) Total $ 1,266 $ 153

Fair Value of Financial Instr32

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2017
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, 2017 Liabilities - long-term debt (carried at cost) 290,466 294,665 December 31, 2016 Liabilities - long-term debt (carried at cost) 284,699 293,765
Schedule of liabilities measured at fair value on a recurring basis	A summary is as follows (dollars in thousands): March 31, December 31, 2017 2016 Liability value measurements using: Quoted prices in active markets for identical liabilities (Level 1) $ — $ — Significant other observable inputs (Level 2) 294,665 293,765 Significant unobservable inputs (Level 3) — — $ 294,665 $ 293,765

Cash Flow Information (Tables)

Cash Flow Information (Tables)	3 Months Ended
	Mar. 31, 2017
Cash Flow Information
Schedule of supplemental cash flow information	Three Months Ended March 31, 2017 2016 Cash paid during the year: Income taxes paid $ — $ — Interest paid, net of amounts capitalized 3,537 2,492 Non-cash investing activities - capital assets acquired under installment contracts 617 — Non-cash financing activities - common shares issued for performance based compensation, net of withholding taxes paid 400 —
Schedule of reconciliation of cash, cash equivalents and restricted cash	The following is a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheets to the total of such amounts in the condensed consolidated statements of cash flows (dollars in thousands): March 31, December 31, 2017 2016 Cash and cash equivalents $ 10,479 $ 15,821 Restricted cash included in other current assets Escrow deposits for capacity sales 5,000 5,000 Restricted cash included in other assets Other 325 325 Total cash, cash equivalents and restricted cash $ 15,804 $ 21,146

Segment Information and Reven34

Segment Information and Revenue by Product Group (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Information and Revenue by Product Group
Schedule of revenue, net of intersegment eliminations, by product group	The following table provides information on the Company’s revenue by product group (dollars in thousands): Three Months Ended March 31, 2017 2016 Local voice and other retail services $ 81,682 $ 85,032 Wholesale carrier data services 12,828 13,762 $ 94,510 $ 98,794

Description of Business (Detail

Description of Business (Details)	3 Months Ended
	Mar. 31, 2017subsidiary
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 Thousands	3 Months Ended
	Mar. 31, 2017USD ($)itemshares	Mar. 31, 2016USD ($)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 | $	$ 21,900	$ 17,000
Taxes Collected from Customers
Excise taxes and Hawaii Public Utility Commission fees | $	$ 2,200	$ 2,200
Denominator used to compute basic and diluted earnings per share
Basic earnings per share - weighted average shares	11,529,046	11,475,834
Effect of dilutive securities:
Employee and director restricted stock units (in shares)		24,474
Diluted earnings per share - weighted average shares	11,529,046	11,500,308
Shares attributable to restricted stock units excluded from computation of weighted average dilutive shares	278,701	135,906
Recently Adopted Accounting Pronouncements
Cumulative effect of adoption of new accounting standard for stock compensation | $	$ 550

Receivables (Details)

Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Receivables
Customers and other	$ 35,141	$ 37,408
Allowance for doubtful accounts	(3,764)	(4,031)
Receivables, net	$ 31,377	$ 33,377

Long-Lived Assets (Details)

Long-Lived Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property, plant and equipment
Property, plant and equipment cost	$ 1,058,673		$ 1,036,137
Less accumulated depreciation	459,875		440,140
Total property, plant and equipment, net	598,798		$ 595,997
Depreciation expense	$ 20,800	$ 21,400

Long-Lived Assets (Intangible A

Long-Lived Assets (Intangible Assets) (Details) $ in Thousands	3 Months Ended				12 Months Ended
	Mar. 31, 2017USD ($)segment	Mar. 31, 2017USD ($)item	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	Dec. 31, 2016USD ($)item
Long-Lived Assets
Amortization expense			$ 400	$ 500
Subject to amortization
Gross Carrying Value	$ 22,029	$ 22,029	22,029		$ 22,029
Accumulated Amortization	17,026	17,026	17,026		16,601
Net Carrying Value	5,003	5,003	5,003		5,428
Not subject to amortization
Carrying Value	27,300	27,300	27,300		27,300
Total intangible assets
Gross Carrying Value	49,329	49,329	49,329		49,329
Accumulated Amortization	17,026	17,026	17,026		16,601
Net Carrying Value	32,303	32,303	32,303		32,728
Goodwill	$ 12,104	$ 12,104	12,104		$ 12,104
Number of reportable segments	1	1			2
Number of reporting units | item		1
Estimated amortization expense
2017 (remaining months)	$ 1,278	$ 1,278	1,278
2,018	1,307	1,307	1,307
2,019	930	930	930
2,020	574	574	574
2,021	270	270	270
Thereafter	644	644	644
Net Carrying Value	5,003	5,003	5,003		$ 5,428
Data Center
Total intangible assets
Goodwill					10,500
Tele-communications
Total intangible assets
Goodwill					1,600
Brand name
Not subject to amortization
Carrying Value	27,300	27,300	27,300		27,300
Customer relationships
Subject to amortization
Gross Carrying Value	21,709	21,709	21,709		21,709
Accumulated Amortization	16,720	16,720	16,720		16,299
Net Carrying Value	4,989	4,989	4,989		5,410
Total intangible assets
Accumulated Amortization	16,720	16,720	16,720		16,299
Estimated amortization expense
Net Carrying Value	4,989	4,989	4,989		5,410
Trade name and other
Subject to amortization
Gross Carrying Value	320	320	320		320
Accumulated Amortization	306	306	306		302
Net Carrying Value	14	14	14		18
Total intangible assets
Accumulated Amortization	306	306	306		302
Estimated amortization expense
Net Carrying Value	$ 14	$ 14	$ 14		$ 18

Accrued Expenses and Other Cu40

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accrued expenses
Salaries and benefits	$ 9,765	$ 11,662
Interest	2,510	2,583
Other taxes	1,035	1,048
Accrued expenses	13,310	15,293
Other current liabilities
Other postretirement benefits, current	3,465	3,332
Installment financing contracts, current	1,720	2,157
Other	763	838
Other current liabilities	$ 5,948	$ 6,327

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 28, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Long-term debt
Long-term debt		$ 295,388,000
Current		3,000,000		$ 3,000,000
Noncurrent		287,466,000		281,699,000
Maturities of Long-term Debt [Abstract]
2017 (remaining months)		2,250,000
2,018		9,000,000
2,019		284,138,000
Total		295,388,000
Capitalized Interest
Interest capitalized		500,000	$ 300,000
Line of credit | Alternate Base Rate
Long-term debt
Variable rate basis	Alternate Base Rate
Line of credit | Eurocurrency rate
Long-term debt
Variable rate basis	Eurocurrency rate
Term loan with maturity in June 2019
Long-term debt
Long-term debt		$ 289,388,000		290,138,000
Interest Rate (as a percent)		5.25%
Original issue discount		$ (4,922,000)		(5,439,000)
Total		290,466,000		284,699,000
Quarterly principal payments		$ 800,000
Excess cash flow used to prepay debt				0
Covenant, interest rate margin increase (decrease), hypothetical impact of change in debt rating or leverage ratio		0.25%
Maturities of Long-term Debt [Abstract]
Total		$ 289,388,000		$ 290,138,000
Term loan with maturity in June 2019 | Maximum
Long-term debt
Percentage of excess cash flow used to prepay the debt		75.00%
Term loan with maturity in June 2019 | Prime rate
Long-term debt
Variable rate basis		prime rate
Margin (as a percent)		3.25%
Term loan with maturity in June 2019 | Eurocurrency rate
Long-term debt
Interest Rate (as a percent)		5.25%
Variable rate basis		one, two, three or six months Eurocurrency rate
Margin (as a percent)		4.25%
Term loan with maturity in May 2022
Long-term debt
Long-term debt	$ 90,000,000
Quarterly principal payments	1,100,000
Maturities of Long-term Debt [Abstract]
Total	$ 90,000,000
Term loan with maturity in May 2022 | Alternate Base Rate
Long-term debt
Variable rate basis	Alternate Base Rate
Margin (as a percent)	2.75%
Term loan with maturity in May 2022 | Eurocurrency rate
Long-term debt
Variable rate basis	Eurocurrency rate
Margin (as a percent)	3.75%
Term loan with maturity in May 2022 | Line of credit
Long-term debt
Covenant, interest rate margin increase (decrease), hypothetical impact of change in debt rating or leverage ratio	0.25%
Available balance under the facility	$ 30,000,000
Term loan with maturity in May 2022 | Line of credit | Alternate Base Rate
Long-term debt
Margin (as a percent)	2.75%
Term loan with maturity in May 2022 | Line of credit | Eurocurrency rate
Long-term debt
Margin (as a percent)	3.75%
Term loan with maturity in May 2023
Long-term debt
Long-term debt	$ 230,000,000
Maturities of Long-term Debt [Abstract]
Total	$ 230,000,000
Term loan with maturity in May 2023 | Alternate Base Rate
Long-term debt
Variable rate basis	Alternate Base Rate
Margin (as a percent)	3.00%
Term loan with maturity in May 2023 | Eurocurrency rate
Long-term debt
Variable rate basis	Eurocurrency rate
Margin (as a percent)	4.00%
Term loan with maturity in May 2023 | First eight quarters
Long-term debt
Quarterly principal payments	$ 1,400,000
Term loan with maturity in May 2023 | After first eight quarters
Long-term debt
Quarterly principal payments	$ 2,900,000
Term loan repaid | Eurocurrency rate | Minimum
Long-term debt
Variable interest rate floor (as a percent)		1.00%
Revolving credit facility
Long-term debt
Long-term debt		$ 6,000,000
Interest Rate (as a percent)		5.77%
Available balance under the facility		$ 24,000,000
Amounts drawn under the facility		6,000,000	$ 0
Maturities of Long-term Debt [Abstract]
Total		$ 6,000,000
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, 2017	Mar. 31, 2016	Dec. 31, 2016	Jan. 31, 2017
Pension and Other Postretirement Benefits
Total benefit (income) expense	$ (751)	$ (553)
Settlement loss	1,956
Pension
Pension and Other Postretirement Benefits
Interest cost	1,781	1,996
Expected asset return	(2,656)	(2,678)
Amortization of loss	124	129
Total benefit (income) expense	1,205	(553)
Other comprehensive gain due to the results of fair value of plan assets	1,600
Expected company contribution			$ 4,800
Company contribution	0
Pension | Union employees
Pension and Other Postretirement Benefits
Lump-sum benefits to plan participants in full settlement of obligations	$ 10,600
Pension | Minimum
Pension and Other Postretirement Benefits
Discount rate used to measure the plan obligations (as percent)	3.81%
Pension | Maximum
Pension and Other Postretirement Benefits
Discount rate used to measure the plan obligations (as percent)	3.82%
Other Postretirement Benefits
Pension and Other Postretirement Benefits
Service cost	$ 254	259
Interest cost	596	655
Amortization of loss	(38)	119
Total benefit (income) expense	812	$ 1,033
Discount rate used to measure the plan obligations (as percent)				4.07%
Other comprehensive gain due to the results of fair value of plan assets	$ 19,700

Income Taxes - Components of in

Income Taxes - Components of income tax provision (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Taxes
Statutory federal income tax rate (as a percent)	34.00%
Income tax at federal rate	$ (1,135)	$ 88
Increase (decrease) resulting from:
State income taxes, net of federal income tax	(123)	12
Expense not deductible for tax		16
Tax credit included in taxable income	93
Other permanent differences	52	4
Capital goods excise tax credit	(273)
Capital goods excise tax debit		(14)
Total income tax provision (credit)	(1,386)	106
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, 2017	Mar. 31, 2016
Stock Option Plan
Number of shares issuable under the plan	1,400,000
Shares remaining to be issued	500,000
Compensation expense	$ 600	$ 600
Payments for employees' tax obligations	495	352
Cash received under all share-based arrangements	0
Restricted Stock Units
Stock Option Plan
Fair value of restricted stock units vested	$ 1,300	$ 900
Shares withheld to cover withholding tax of unit holders	20,996	15,234
Payments for employees' tax obligations	$ 500	$ 400
Performance Shares
Stock Option Plan
Compensation expense	200	$ 200
Payments for employees' tax obligations	300
Fair value of the shares granted	$ 700
Issued (in shares)	17,174

Stock Compensation (RSU Activit

Stock Compensation (RSU Activity) (Details) - Restricted Stock Units - $ / shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Shares
Nonvested at the beginning of the period (in shares)	226,690	174,518
Granted (in shares)	131,801	121,724
Vested (in shares)	(78,623)	(60,425)
Forfeited (in shares)	(1,167)
Nonvested at the end of the period (in shares)	278,701	235,817
Weighted-Average Grant-Date Fair Value per Share
Nonvested at the beginning of the period (in dollars per share)	$ 25	$ 26
Granted (in dollars per share)	23	25
Vested (in dollars per share)	25	25
Forfeited (in dollars per share)	21
Nonvested at the end of the period (in dollars per share)	$ 25	$ 25

Accumulated Other Comprehensi46

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax provision on comprehensive income	$ (8,080)	$ (94)
Reclassifications out of other comprehensive income (loss) | Retirement plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Amortization of gain/loss and settlement loss	2,042	247
Income tax provision on comprehensive income	(776)	(94)
Total	$ 1,266	$ 153

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	1 Months Ended	3 Months Ended
	Aug. 31, 2015USD ($)	Mar. 31, 2017USD ($)item	Mar. 31, 2016USD ($)	Aug. 31, 2014USD ($)
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	$ 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		$ 18.7
Period of up-front payment received		25 years
Proceeds from sale of capacity		$ 27
Upfront payment received		7.2
Escrow deposit		$ 5
Minimum
Jointly Owned Utility Plant Interests [Line Items]
Downstream broadband service data transfer rate (Mbps)		10
Upstream broadband service data transfer rate (Mbps)		1

Commitments and Contingencies -

Commitments and Contingencies - Joint-Owned Utility Poles (Details) - Jointly owned utility plant	3 Months Ended
	Mar. 31, 2017item
Loss Contingencies [Line Items]
Number of counties	3
Number of joint pole owners	1
Maximum
Loss Contingencies [Line Items]
Number of counties	4
Dispute resolution process
Loss Contingencies [Line Items]
Number of utilities	1

Fair Value of Financial Instr49

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Carrying Value
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	$ 290,466	$ 284,699
Fair Value
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	294,665	293,765
Recurring
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	294,665	293,765
Significant other observable inputs (Level 2) | Recurring
Fair Value of Financial Instruments
Liabilities - long-term debt (carried at cost)	$ 294,665	$ 293,765

Cash Flow Information (Details)

Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Cash paid during the year:
Interest paid, net of amounts capitalized	$ 3,537	$ 2,492
Non-cash investing activities - capital assets acquired under installment contracts	617
Non-cash financing activities - common shares issued for performance based compensation, net of withholding taxes paid	400
Increase to the beginning and ending reported cash, cash equivalents and restricted cash	3,800
Restricted Cash and Investments [Abstract]
Cash and cash equivalents	10,479		$ 15,821
Restricted cash included in other current assets
Escrow deposits for capacity sales	5,000		5,000
Restricted cash included in other assets
Other	325		325
Total cash, cash equivalents and restricted cash	$ 15,804	$ 24,677	$ 21,146	$ 34,137

Segment Information and Reven51

Segment Information and Revenue by Product Group (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2017segment	Mar. 31, 2017item	Dec. 31, 2016item
Segment Information and Revenue by Product Group
Number of reportable segments	1	1	2

Segment Information and Reven52

Segment Information and Revenue by Product Group (Revenue by Product Group) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Information on revenue, net of intersegment eliminations, by product group
Revenue	$ 94,510	$ 98,794
Local voice and other retail services
Information on revenue, net of intersegment eliminations, by product group
Revenue	81,682	85,032
Wholesale carrier data services
Information on revenue, net of intersegment eliminations, by product group
Revenue	$ 12,828	$ 13,762