Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Lumos Networks Corp. | |
Entity Central Index Key | 1,520,744 | |
Trading Symbol | LMOS | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,917,350 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 43,582 | $ 33,575 |
Marketable securities | 38,081 | |
Accounts receivable, net of allowance of $1,295 ($942 in 2016) | 22,424 | 22,609 |
Other receivables | 559 | 753 |
Income tax receivable | 30 | 459 |
Prepaid expenses and other | 6,804 | 5,028 |
Total Current Assets | 73,399 | 100,505 |
Securities and Investments | 1,643 | 1,479 |
Property, Plant and Equipment | ||
Land and buildings | 25,667 | 24,867 |
Network plant and equipment | 770,594 | 733,154 |
Furniture, fixtures and other equipment | 55,190 | 52,030 |
Total in service | 851,451 | 810,051 |
Under construction | 19,682 | 22,678 |
Property, plant and equipment, gross | 871,133 | 832,729 |
Less accumulated depreciation and amortization | 336,193 | 296,441 |
Total Property, Plant and Equipment, net | 534,940 | 536,288 |
Other Assets | ||
Goodwill | 125,667 | 100,297 |
Other intangibles, less accumulated amortization of $101,008 ($97,467 in 2016) | 18,092 | 8,503 |
Deferred charges and other assets | 5,273 | 6,300 |
Total Other Assets | 149,032 | 115,100 |
Total Assets | 759,014 | 753,372 |
Current Liabilities | ||
Current portion of long-term debt | 73,825 | 13,530 |
Accounts payable | 7,076 | 8,607 |
Advance billings and customer deposits | 14,275 | 14,140 |
Accrued compensation | 1,665 | 1,491 |
Accrued operating taxes | 5,999 | 4,518 |
Other accrued liabilities | 10,034 | 5,000 |
Total Current Liabilities | 112,874 | 47,286 |
Long-term Liabilities | ||
Long-term debt, net of unamortized discount and debt issuance costs, excluding current portion | 388,027 | 454,885 |
Retirement benefits | 15,227 | 16,029 |
Deferred income taxes, net | 93,624 | 96,988 |
Other long-term liabilities | 8,468 | 2,124 |
Total Long-term Liabilities | 505,346 | 570,026 |
Commitments and Contingencies | ||
Equity | ||
Preferred stock, par value $0.01 per share, authorized 100 shares, none issued | ||
Common stock, par value $0.01 per share, authorized 55,000 shares; 24,059 shares issued and 23,936 shares outstanding (23,607 shares issued and 23,605 shares outstanding in 2016) | 241 | 236 |
Additional paid-in capital | 184,930 | 175,008 |
Treasury stock, 123 shares at cost (2 shares in 2016) | (2,178) | (2) |
Accumulated deficit | (32,725) | (29,064) |
Accumulated other comprehensive loss, net of tax | (10,399) | (11,004) |
Total Lumos Networks Corp. Stockholders' Equity | 139,869 | 135,174 |
Noncontrolling Interests | 925 | 886 |
Total Equity | 140,794 | 136,060 |
Total Liabilities and Equity | $ 759,014 | $ 753,372 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets [Abstract] | ||
Accounts receivable, allowance | $ 1,295 | $ 942 |
Other intangibles, accumulated amortization | $ 101,008 | $ 97,467 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 55,000,000 | 55,000,000 |
Common stock, shares issued | 24,059,000 | 23,607,000 |
Common stock, shares outstanding | 23,936,000 | 23,605,000 |
Treasury stock, shares | 123,000 | 2,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements Of Operations [Abstract] | ||||
Operating Revenues | $ 55,610 | $ 51,771 | $ 166,892 | $ 155,013 |
Operating Expenses | ||||
Cost of Revenue, exclusive of depreciation and amortization shown separately below | 10,042 | 9,657 | 30,978 | 29,948 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 23,369 | 20,505 | 76,394 | 64,056 |
Depreciation and amortization | 14,456 | 12,739 | 43,640 | 37,028 |
Accretion of asset retirement obligations | 27 | 23 | 76 | 91 |
Restructuring charges | (384) | 34 | 1,823 | |
Change in fair value of contingent consideration obligations | 100 | 700 | ||
Total Operating Expenses | 47,994 | 42,540 | 151,822 | 132,946 |
Operating Income | 7,616 | 9,231 | 15,070 | 22,067 |
Other Income (Expenses) | ||||
Interest expense | (7,771) | (7,164) | (22,756) | (21,165) |
Other income, net | 8 | 48 | 647 | 320 |
Total Other Expenses, net | (7,763) | (7,116) | (22,109) | (20,845) |
(Loss) Income Before Income Taxes | (147) | 2,115 | (7,039) | 1,222 |
Income Tax Expense (Benefit) | 335 | 1,046 | (1,838) | 1,712 |
Net (Loss) Income | (482) | 1,069 | (5,201) | (490) |
Net Loss (Income) Attributable to Noncontrolling Interests | 29 | (46) | (39) | (137) |
Net (Loss) Income Attributable to Lumos Networks Corp. | $ (453) | $ 1,023 | $ (5,240) | $ (627) |
Basic and Diluted (Loss) Earnings per Common Share Attributable to Lumos Networks Corp. Stockholders | ||||
Basic and diluted (loss) earnings per share | $ (0.02) | $ 0.04 | $ (0.23) | $ (0.03) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements Of Comprehensive (Loss) Income [Abstract] | ||||
Net (Loss) Income | $ (482) | $ 1,069 | $ (5,201) | $ (490) |
Other Comprehensive Income: | ||||
Reclassification adjustment for amortization of actuarial loss from defined benefit plans included in net (loss) income (see Note 2) | 326 | 338 | 977 | 1,013 |
Unrealized holding (loss) gain on available-for-sale marketable securities | (1) | (11) | 8 | 27 |
Income Taxes | (126) | (128) | (380) | (406) |
Other Comprehensive Income, Net of Tax | 199 | 199 | 605 | 634 |
Total Comprehensive (Loss) Income | (283) | 1,268 | (4,596) | 144 |
Less: Comprehensive Loss (Income) Attributable to Noncontrolling Interests | 29 | (46) | (39) | (137) |
Comprehensive (Loss) Income Attributable to Lumos Networks Corp. | $ (254) | $ 1,222 | $ (4,635) | $ 7 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net Loss | $ (5,201) | $ (490) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 40,099 | 35,097 |
Amortization | 3,541 | 1,931 |
Accretion of asset retirement obligations | 76 | 91 |
Change in fair value of contingent consideration obligations | 700 | |
Deferred income taxes | (1,838) | 1,374 |
Equity-based compensation expense | 9,152 | 8,477 |
Amortization of debt discount and issuance costs | 3,586 | 3,345 |
Retirement benefits, net of cash contributions and distributions | 175 | 340 |
Other | 347 | 649 |
Changes in assets and liabilities from operations: | ||
Decrease (increase) in accounts receivable | 1,758 | (3,732) |
Increase in other assets | (416) | (3,728) |
Changes in income taxes | 429 | 28 |
Increase in accounts payable | 163 | 436 |
Increase in other current liabilities | 397 | 1,299 |
Increase in deferred revenues | 1,365 | 670 |
Net Cash Provided by Operating Activities | 54,333 | 45,787 |
Cash Flows from Investing Activities: | ||
Purchases of property, plant and equipment | (36,947) | (65,280) |
Purchases of available-for-sale marketable securities | (4,000) | (57,142) |
Proceeds from sale or maturity of available-for-sale marketable securities | 42,096 | 107,075 |
Net Cash Used in Investing Activities | (32,340) | (15,347) |
Cash Flows from Financing Activities: | ||
Principal payments on senior secured term loans | (9,774) | (6,024) |
Capital distribution to noncontrolling interests | (232) | |
Principal payments under capital lease obligations | (377) | (2,551) |
Proceeds from stock option exercises and employee stock purchase plan | 1,057 | 630 |
Repurchases of common stock to settle tax withholding obligations on employee stock awards | (2,892) | (2,354) |
Net Cash Used in Financing Activities | (11,986) | (10,531) |
Increase in cash and cash equivalents | 10,007 | 19,909 |
Cash and Cash Equivalents: | ||
Beginning of Period | 33,575 | 13,267 |
End of Period | 43,582 | 33,176 |
Data [Member] | ||
Cash Flows from Investing Activities: | ||
Purchases of property, plant and equipment | (30,755) | (60,379) |
R&SB [Member] | ||
Cash Flows from Investing Activities: | ||
Purchases of property, plant and equipment | (5,259) | (6,988) |
Corporate (Unallocated) [Member] | ||
Cash Flows from Investing Activities: | ||
Purchases of property, plant and equipment | (933) | $ 2,087 |
Clarity Communications, LLC [Member] | ||
Cash Flows from Operating Activities: | ||
Net Loss | 200 | |
Cash Flows from Investing Activities: | ||
Payments for acquisitions, net of cash acquired | (9,961) | |
DC74 LLC [Member] | ||
Cash Flows from Operating Activities: | ||
Net Loss | 200 | |
Cash Flows from Investing Activities: | ||
Payments for acquisitions, net of cash acquired | $ (23,528) |
Organization
Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization [Abstract] | |
Organization | Note 1. Organization Lumos Networks Corp. (“Lumos Networks” or the “Company”) is a fiber-based bandwidth infrastructure and service provider in the Mid-Atlantic region with a network of long-haul fiber, metro Ethernet and Ethernet rings offering end-to-end connectivity in 26 markets in Virginia, West Virginia, North Carolina, Pennsylvania, Maryland, Ohio and Kentucky . The Company serves carrier, enterprise and residential customers over its fiber network offering data, voice and IP services. The Company’s principal products and services include Multiprotocol Label Switching (“MPLS”) based Ethernet, Metro Ethernet (“Metro E”), Fiber to the Cell (“FTTC”) wireless backhaul and fiber transport services, wavelength transport services, IP services and other voice services. In January 2017, the Company completed its acquisitions of Clarity Communications, LLC and DC74, LLC, for total consideration of up to approximately $15 million and $29.5 million, respectively, which expanded the Company’s operations into additional states in the southeastern region of the United States. See Note 4. Business Acquisitions for more information. On February 18, 2017, the Company entered into a definitive agreement (“Merger Agreement”) by and among the Company, MTN Infrastructure TopCo, Inc. (“Parent”) and MTN Infrastructure BidCo, Inc. (“Merger Sub”), pursuant to which the Company will be acquired by EQT Infrastructure i nvestment s trategy (“EQT Infrastructure”), subject to stockholder approval, regulatory approval and other customary closing conditions (“the Merger” or “EQT Merger”). Pursuant to the Merger Agreement, each outstanding share of common stock of the Company immediately prior to the effective time of the Merger shall be automatically converted into the right to receive $18.00 in cash. See Note 3. EQT Merger for more information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of the Company, Lumos Networks Operating Company, a wholly-owned subsidiary of the Company, and all of Lumos Networks Operating Company’s wholly-owned subsidiaries and those limited liability corporations where Lumos Networks Operating Company or certain of its subsidiaries, as managing member, exercise control. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2017 and 2016 contain all adjustments necessary to present fairly in all material respects the Company’s financial position and the results of operations and cash flows for all periods presented on the respective condensed consolidated financial statements included herein. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Accounting Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the allowance for doubtful accounts and customer credits, the valuation of deferred tax assets and/or liabilities , asset retirement obligations, stock warrants and equity-based compensation, goodwill impairment assessments, contingent consideration obligations, reserves for employee benefit obligations and income tax uncertainties. Changes in Accounting Principle T he Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718) (“ASU 2016-09”) in January 2017, which simplifies the accounting for share-based payment transactions and is effective for public companies for annual reporting periods beginning after December 15, 2016. Among other things, ASU 2016-09 provides for (i) the simplification of accounting presentation of excess tax benefits and tax deficiencies, (ii) an accounting policy election regarding forfeitures to use an estimate or account for when incurred, and (iii) simplification of cash flow presentation for statutory tax rate withholding. The adoption of ASU 2016-09, which resulted in the recognition of excess tax benefits through the condensed consolidated statement of operations and an accounting policy election made by the Company to eliminate the use of a forfeiture estimate and recognize forfeitures as they occur, resulted in the recognition of a cumulative effect adjustment with a $1.6 million impact to accumulated deficit and a $1.9 million total impact to stockholders’ equity and deferred income taxes. There was no material impact on the Company’s condensed consolidated statement of cash flows, the condensed consolidated statement of operations, or net income (loss) or earnings (loss) per share. The adoption of the accounting policy election to record forfeitures as incurred and the recognition of excess tax benefits in the condensed consolidated statement of operations may increase the volatility of net income (loss) in future periods . Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, services are rendered or products are delivered, installed and functional, as applicable, the price to the buyer is fixed or determinable and collectability is reasonably assured. Certain services of the Company require payment in advance of service performance. In such cases, the Company records a service liability at the time of billing and subsequently recognizes revenue ratably over the service period. The Company bills customers certain transactional taxes on service revenues. These transactional taxes are not included in reported revenues as they are recognized as liabilities at the time customers are billed. The Company earns revenue by providing services through access to and usage of its networks. Local service revenues are recognized as services are provided. Carrier data revenues are earned by providing switched access and other switched and dedicated services to other carriers. Cash Equivalents and Marketable Securities The Company considers its investment in all highly liquid debt instruments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents or other marketable securities as of September 30, 2017. The Company’s marketable securities at December 31, 2016 consist of debt securities not classified as cash equivalents , which were classified as available-for-sale securities as of December 31, 2016 . Trade Accounts Receivable The Company sells its services to other communication carriers and to enterprise and residential customers primarily in Virginia and West Virginia and portions of other states in the Mid-Atlantic region of the United States. The Company has credit and collection policies to maximize collection of trade receivables and requires advance payment for certain services. The Company estimates an allowance for doubtful accounts based on a review of specific customers with large receivable balances and for the remaining customer receivables the Company uses historical results, current and expected trends and changes in credit policies. Management believes the allowance adequately covers all anticipated losses with respect to trade receivables. Actual credit losses could differ from such estimates. The Company includes bad debt expense in selling, general and administrative in the condensed consolidated statements of operations. Bad debt expense for the three months ended September 30, 2017 and 2016 was $0. 1 million and less than $0.1 million, respectively. Bad debt expense for the nine months ended September 30, 2017 and 2016 was $0.3 million and $0.2 million, respectively. The Company’s allowance for doubtful accounts and customer credits was $1.3 million and $0.9 million as of September 30, 2017 and December 31, 2016 , respectively . The following table presents a roll-forward of the Company’s allowance for doubtful accounts and customer credits from December 31, 2016 to September 30, 2017 : Additions (In thousands) December 31, 2016 Charged to Expense Charged to Other Accounts Deductions September 30, 2017 Allowance for doubtful accounts and customer credits $ 942 $ 329 $ 254 $ (230) $ 1,295 Property, Plant and Equipment and Other Long-Lived Assets (Excluding Goodwill and Indefinite-Lived Intangible Assets) Property, plant and equipment, finite-lived intangible assets and long-term deferred charges are recorded at cost and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount should be evaluated pursuant to the subsequent measurement guidance described in FASB Accounting Standards Codification (“ASC”) 360-10-35. Impairment is determined by comparing the carrying value of these long-lived assets to management’s best estimate of future undiscounted cash flows expected to result from the use of the assets. If the carrying value exceeds the estimated undiscounted cash flows, the excess of the asset’s carrying value over the estimated fair value is recorded as an impairment charge. The Company believes that no impairment indicators exist as of September 30, 2017 that would require the Company to perform impairment testing for long-lived assets, including property, plant and equipment, long-term deferred charges and finite-lived intangible assets to be held and used. Depreciation of property, plant and equipment is recorded on a straight-line basis over the estimated useful lives of the assets, which the Company reviews and updates based on historical experiences and future expectations. Plant and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Amortization of assets held under capital leases, including an indefeasible right of use agreement, is included with depreciation expense. Intangibles with a finite life are classified as other intangibles on the condensed consolidated balance sheets. At September 30, 2017 and December 31, 2016 , other intangibles were comprised of the following: September 30, 2017 December 31, 2016 (Dollars in thousands) Estimated Life Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Customer relationships 6 to 15 yrs $ 115,808 $ (98,794) $ 103,108 $ (95,463) Trademarks and franchise rights 4 to 15 yrs 3,262 (2,206) 2,862 (2,004) Non-compete Agreements 2 to 3 yrs 30 (8) - - Total $ 119,100 $ (101,008) $ 105,970 $ (97,467) Included in the above amounts are indefinite-lived intangible assets of $0.3 million, which are not subject to amortization. The Company amortizes its finite-lived intangible assets using the straight-line method unless it determines that another systematic method is more appropriate. The Company generally amortizes certain customer relationship intangibles and some acquired trademarks using an accelerated amortization method based on the pattern of estimated earnings from these assets. The estimated life of amortizable intangible assets is determined from the unique factors specific to each asset, and the Company periodically reviews and updates estimated lives based on current events and future expectations. The Company capitalizes costs incurred to renew or extend the term of a recognized intangible asset and amortizes such costs over the remaining life of the asset. No such costs were incurred during the three or nine months ended September 30, 2017 . Amortization expense for the three months ended September 30, 2017 and 2016 was $ 1.2 million and $ 0 .6 million, respectively, and amortization expense for the nine months ended September 30, 2017 and 2016 was $ 3 . 5 million and $1. 9 million, respectively. Amortization expense for the remainder of 2017 and for the next five years is expected to be as follows: (In thousands) Customer Relationships Trademarks and Franchise Rights Non-compete Agreements Total Remainder of 2017 $ 1,154 $ 68 $ 4 $ 1,226 2018 3,727 270 12 4,009 2019 3,443 247 6 3,696 2020 2,922 115 - 3,037 2021 2,531 25 - 2,556 2022 1,195 - - 1,195 Goodwill and Indefinite-Lived Intangible Assets Goodwill and certain trademarks are considered to be indefinite-lived intangible assets. Indefinite-lived intangible assets are not subject to amortization but are instead tested for impairment annually or more frequently if an event indicates that the asset might be impaired. The Company’s policy is to assess the recoverability of indefinite-lived intangible assets annually with a measurement date of October 1 and whenever adverse events or changes in circumstances indicate that impairment may have occurred. The Company believes there have been no events or circumstances to cause it to evaluate the carrying amount of goodwill or indefinite-lived intangible assets during the nine months ended September 30, 2017 . Pension Benefits and Retirement Benefits Other Than Pensions The Company sponsors a non-contributory defined benefit pension plan (the “Pension Plan”) covering all employees who meet eligibility requirements and were employed prior to October 1, 2003. The Company froze the Pension Plan effective December 31, 2012. As such, no further benefits are being accrued by participants for services rendered beyond that date. For the three and nine months ended September 30, 2017 and 2016 , the components of the Company’s net periodic benefit (income) cost for the Pension Plan were as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2017 2016 2017 2016 Service cost $ - $ - $ - $ - Interest cost 648 674 1,944 2,022 Expected return on plan assets (912) (884) (2,736) (2,652) Amortization of loss 236 262 708 786 Net periodic benefit (income) cost $ (28) $ 52 $ (84) $ 156 Pension Plan assets were valu ed at $57. 2 million an d $55.6 million at September 30, 2017 and December 31, 2016 , respectively. No funding contributions were made during the three or nine months ended September 30, 2017 , and the Company does not expect to make a funding contribution during the remainder of 2017. The Company also provides life insurance benefits for retired employees who meet eligibility requirements through two postretirement welfare benefit plans (the “Other Postretirement Benefit Plans”). The Company had provided retiree medical benefits under these plans until those benefits were terminated effective December 31, 201 4. The Company did not incur any significant costs associated with these plans during the three or nine months ended September 30, 2017 or 2016 . The Company recognized expense for certain nonqualified pension plans for each of the three months ended September 30, 2017 and 2016 of $0.1 million , and less than $0.1 million of this expense for each of these periods relates to the amortization of actuarial loss. Expense for nonqualified pension plans for each of the nine months ended September 30, 2017 and 2016 was $0.4 million, and $0.3 million and $0.2 million of this expense, respectively, relates to the amortization of actuarial loss. The gross amount reclassified out of accumulated other comprehensive loss related to amortization of actuarial losses for retirement plans for each of the three months ended September 30, 2017 and 2016 was $ 0 .3 million, and $ 1 . 0 million for each of the nine months ended September 30, 2017 and 2016 , all of which has been reclassified to selling, general and administrative on the condensed consolidated statements of operations. Income taxes associated with these reclassifications were $0.1 million for each of the three months ended September 30, 2017 and 2016 and $0.4 million for each of the nine months ended September 30, 2017 and 2016 . Equity-based Compensation The Company accounts for share-based employee compensation plans under FASB ASC 718, Stock Compensation . Equity-based compensation expense from share-based equity awards is recorded with an offsetting increase to additional paid-in capital on the condensed consolidated balance sheets. For equity awards with only service conditions, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award. Total equity-based compensation expense related to all of the share-based awards, annual employee bonuses paid in the form of immediately vested shares and the Company’s 401(k) matching contributions was $ 1.2 million and $ 1. 7 million for the three months ended September 30, 2017 and 2016 , respectively, and $ 9 . 2 million and $ 8.5 million for the nine months ended September 30, 2017 and 2016 , respectively, which amounts are included in selling, general and administrative expenses on the condensed consolidated statements of operations. Future charges for equity-based compensation related to instruments outstanding at September 30, 2017 are estimated to be $1.1 million for the remainder of 2017, $ 2.1 million in 2018, $ 0.7 million in 2019 and less than $ 0.1 million in 2020 and thereafter. Fair Value Measurements Fair value is defined as the amount 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. When determining the fair value measurements for assets and liabilities required to be recorded at fair value or for certain financial instruments for which disclosure of fair value is required, the Company uses fair value techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, available observable and unobservable inputs. GAAP establishes a fair value hierarchy with three levels of inputs that may be used to measure fair value: · Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs other than quoted prices that are observable for the asset or liability. · Level 3 – Unobservable inputs for the asset or liability. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for public business entities from annual reporting periods beginning after December 15, 2016, to annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Gross versus Net) (“ASU 2016-08”), which clarifies implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), which addresses narrow-scope improvements to the guidance on collectability, noncash consideration, and completed contracts at transition. Additionally, the amendments in ASU 2016-12 provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. Finally, in December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with customers, which makes minor corrections or improvements to ASU 2014-09. The Company has completed its initial impact assessment and is in the process of developing an implementation plan to include any potential process or system changes. Although the full assessment of the impact to the Company’s results of operations, financial position and cash flows as a result of this guidance is ongoing, the Company expects that changes in the timing of and method of recognition for certain non-recurring charges received from customers and allocations of certain contract revenues to products and services may result in additional contract assets and liabilities in the consolidated balance sheet. In addition, the requirement to defer incremental contract acquisition costs, including sales commissions, and recognize such costs over the contract period or expected customer life may result in the recognition of a deferred charge within the consolidated balance sheets and could have the impact of deferring operating expenses. The Company will adopt this new standard as of January 1, 2018 and currently expects to apply the modified retrospective method, which may result in a cumulative effect adjustment as of the date of adoption. Both the Company’s initial assessment and its selected transition method may change depending on the results of the Company’s final assessment of the impact to its consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. The Company does not expect the future adoption of ASU 2016-01 to have a material impact on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which will replace most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires an entity to recognize most leases, including operating leases, on the consolidated balance sheets of the lessee. ASU 2016-02 is effective for public business entities for annual reporting periods beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 requires the use of a modified retrospective transition method with elective reliefs. The Company is still evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) (“ASU 2016-15”), which addresses eight classification issues related to the statement of cash flows presentation, with the objective of reducing diversity in practice. The amendments in this ASU provide guidance on the following cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for annual reporting periods beginning after December 31, 2017, with early adoption permitted. Although the Company is still evaluating the effect that ASU 2016-15 will have on its statement of cash flow and disclosures, the Company expects the standard will primarily impact the presentation of the earnouts associated with the business acquisitions completed in January 2017. Under ASU 2016-15, the earnouts would be presented in the statement of cash flows as cash outflows for financing activities up to the amount of the original contingent consideration liability and the excess would be classified as cash outflows for operating activities. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the accounting for goodwill impairment by eliminating Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under 2017-04, goodwill will be measured using the difference between the fair value and carrying value of the reporting unit. ASU 2017-04 is effective for public business entities for annual and interim reporting periods beginning after December 31, 2019, with early adoption permitted for goodwill impairment tests with measurement dates after January 1, 2017. The Company does not expect the future adoption of ASU 2017-04 to have a material impact on its consolidated financial statements and disclosures. In March 2 017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Periodic Postretirement Benefit Cost (“ASU 2017-07”), which requires the service cost component of net benefit cost to be reported in the same line item as compensation cost on the consolidated statements of operations. Under ASU 2017-07 all other components of net benefit cost will be reported outside of operating income. ASU 2017-07 is effective for public business entities for annual and interim reporting periods beginning after December 15, 2017 and retrospective application of the change in income statement presentation is required. Based on current actuarial estimates, the Company estimates the future adoption of ASU 2017-07 would increase operating income by less than $0.5 million for the annual period. However, the calculation of post retirement benefit cost is subject to significant estimates and assumptions and changes in these estimates could result in changes to the impact of ASU 2017-07 on the Company’s operating income when adopted. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which amends the scope of modification accounting for share-based payment arrangements and requires that a description of significant modifications for each period for which an income statement is presented along with the related increase or decrease in expense due to these modifications. ASU 2017-09 is effective for all public business entities for annual and interim periods beginning after December 15, 2017 and early adoption is permitted at the beginning of an annual period for which interim or annual financial statements have not been issued. The Company does not expect the future adoption of ASU 2017-09 to have a material impact on its consolidated financial statements and disclosures . . T |
EQT Merger
EQT Merger | 9 Months Ended |
Sep. 30, 2017 | |
EQT Merger [Abstract] | |
EQT Merger | Note 3. EQT Merger On February 18, 2017, the Company entered into the Merger Agreement by and among the Company, Parent and Merger Sub, pursuant to which the Company will be acquired by EQT Infrastructure. Upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of the Parent. As a result of the Merger, Lumos Networks will cease to be a publicly traded company, and the directors of Merger Sub will continue as the directors of the surviving corporation. At the effective time of the EQT Merger, each outstanding share of the Company’s common stock will be converted automatically into the right to receive $18.00 in cash, which amount the Company refers to as the “Merger Consideration,” without interest and less any applicable withholding taxes. The completion of the EQT Merger, which is expected to close before the end of November 2017 , is subject to the satisfaction or waiver of certain conditions, including (i) the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of common stock of the Company, (ii) the approval of the transaction by the Federal Communications Commission (the “FCC”), (iii) the filing of a voluntary notice with CFIUS and investigative procedures as deemed necessary by the agency, (iv) the provision of all required notices to applicable state public utility commissions and approval in return as required, (v) the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), as amended, (vi) the absence of any proceeding, order or law enjoining or prohibiting the EQT Merger or the other transactions contemplated by the Merger Agreement, (vii) each party’s material performance of its obligations and compliance with its covenants, (viii) the accuracy of each party’s representations and warranties, subject to customary materiality qualifiers, and (ix) the absence of a material adverse effect on the Company. The HSR Act waiting period expired on April 3, 2017. The Company’s stockholders voted to approve the adoption of the Merger Agreement at the Company’s annual meeting of stockholders on May 24, 2017. The Company has received all required regulatory approvals for the EQT Merger. The consummation of the EQT Merger is not subject to a financing condition, although the funding of the equity financing and the debt financing is subject to the satisfaction of the conditions set forth in the applicable commitment letter under which such financing will be provided. Under the Merger Agreement, if the Merger Agreement is terminated by the Company under specific circumstances, the Company may be required to pay Parent a termination fee of approximately $16.1 million and if the Merger Agreement is terminated by Parent under specific circumstances, the Parent may be required to pay a termination fee of approximately $32.1 million to the Company. During the three and nine months ended September 30, 2017 , the Company incurred $0.5 million and $3.7 million, respectively, in transaction related charges associated with the EQT Merger, which consist primarily of professional fees incurred from legal and investment banking services, which are included in selling, general and administrative expenses in the condensed consolidated statement of operations. |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combination, Separately Recognized Transactions [Abstract] | |
Business Acquisitions | Note 4. Business Acquisitions On January 4, 2017 , the Company acquired 100% of the membership interests in Clarity Communications, LLC, (“Clarity”), a North Carolina based fiber bandwidth provider, for a total purchase price of up to approximately $15 million, approximately $10 million of which was paid in cash upon closing with the remaining $5 million subject to certain earnout provisions over a two year period following the closing date, which would be accelerated upon a change in control . The earnout provisions are based upon achievement of certain monthly recurring revenue targets within the two year measurement period and are presented within other long-term liabilities in the Company’s condensed consolidated balance sheets. Clarity operates a 730 mile fiber network with 75 on-net locations, a majority of which are located in North Carolina, with additional operations in South Carolina, Alabama, Tennessee, and Georgia. The acquisition of Clarity was funded using cash on hand and was considered an asset purchase for tax purposes. On January 31, 2017 , the Company acquired 100% of the membership interests in DC74 LLC, (“DC74”), a Charlotte, North Carolina based data center and managed services provider, for a total purchase price of up to $29.5 million, consisting of approximately $23.5 million paid in cash upon closing and up to $6 million subject to certain earnout provisions over a 12-month period following the closing date, which would vest upon a change in control. The earnout provisions are based upon achievement of certain monthly recurring revenue targets within the one year measurement period and are presented within other accrued liabilities in the Company’s condensed consolidated balance sheets. DC74 provides co-location, bandwidth and cross-connect services in addition to managed services and managed hosting at its three data centers. The acquisition of DC74 was funded using cash on hand and was considered an asset purchase for tax purposes. The Company has accounted for the acquisitions of Clarity and DC74 under the acquisition method of accounting, in accordance with FASB ASC 805, Business Combinations, and will account for any measurement period adjustments under ASU 2015-16, Simplifying the Accounting for Measurement Period Adjustments. Under the acquisition method of accounting, the total purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed in connection with the acquisitions based on their estimated fair values. In the first quarter of 2017, the Company initially recognized the assets acquired and liabilities assumed from the aforementioned acquisitions based on preliminary estimates of their acquisition date fair values. As additional information regarding the acquired assets and assumed liabilities becomes known, management may make additional adjustments to the opening balance sheets of the acquired companies up to the end of the measurement period, which is no longer than a one-year period following the acquisition date. The determination of the fair values of the acquired assets and assumed liabilities (and the related determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment. No material adjustments were made to these estimates during the three or nine months ended September 30, 2017. Furthermore, a s of September 30, 2017, the Company had not completed its fair value analyses and calculations in sufficient detail necessary to arrive at the final estimates of the fair value of certain working capital and non-working capital acquired assets and assumed liabilities, including, but not limited to, the allocations to goodwill and intangible assets, tangible fixed assets and contingent consideration obligations related to its acquisitions of Clarity and DC74. All information presented with respect to working capital and non-working capital acquired assets and assumed liabilities as it relates to these acquisitions is preliminary and subject to revision pending the completion of the fair value analyses. The preliminary fair values of the assets acquired and liabilities assumed were determined using the income, cost, and market approaches. The cost and market approaches were used in combination to determine the fair value of the real and personal property and derivations of the income approach were predominantly used in valuing the intangible assets and contingent consideration obligations associated with the earnout provisions. The weighted average useful life for all acquired assets was 8.9 years and the weighted average useful life by category was 9.0 years for customer relationships, 4.5 years for trademarks and 2.7 years for non-compete agreements. The following table summarizes the Company's preliminary estimates of the acquisition date fair values of the assets acquired and liabilities assumed from its Clarity and DC74 acquisitions: (In thousands) Clarity Communications, LLC January 4, 2017 DC74, LLC January 31, 2017 Assets acquired Cash $ 625 $ 493 Other Current Assets 1,318 380 Property, Plant and Equipment 2,819 1,684 Goodwill 6,723 18,647 Intangible assets subject to amortization Customer relationship intangible 4,300 8,400 Trademark intangible 200 200 Non-compete agreement intangible 20 10 Total intangible assets subject to amortization 4,520 8,610 Other Assets 34 47 Total assets acquired 16,039 29,861 Liabilities assumed Current liabilities 853 445 Long-term liabilities - 495 Total liabilities assumed 853 940 Net assets acquired 15,186 28,921 Less cash acquired (625) (493) Net consideration paid 14,561 28,428 Less contingent consideration obligations (4,600) (4,900) Net cash consideration paid at closing $ 9,961 $ 23,528 The preliminary goodwill resulting from these acquisitions in the amount of $6.7 million from Clarity and $18.6 million from DC74 are the result of the added network diversity, access to new markets and prospective data customers, operational synergies and the assembled workforce. Substantially all of the goodwill is expected to be deductible for tax purposes in future periods. For segment reporting purposes, all of this goodwill was allocated to the Data operating segment. A roll-forward of the preliminary segmented goodwill from December 31, 2016 to September 30, 2017 is as follows: (In thousands) December 31, 2016 Acquisition Additions September 30, 2017 Data $ 90,561 $ 25,370 $ 115,931 R&SB 9,736 - 9,736 RLEC Access - - - Total goodwill $ 100,297 $ 25,370 $ 125,667 The amounts of Clarity revenue and net loss included in the Company’s condensed consolidated statement of operations for the period January 4, 2017 through September 30, 2017 are $4.9 million and $0.2 million, respectively , and $1. 6 million and $0.3 million for the three months ended September 30, 2017, respectively . The amounts of DC74 revenue and net loss included in the Company’s condensed consolidated statement of operations for the period January 31, 2017 through September 30, 2017 are $ 4 . 5 mi llion and $0. 2 million, respectively , and $1.7 million and $0.3 million for the three months ended September 30, 2017, respectively . The pro forma results of the combined operations of the Company and Clarity and DC74 are not materially different from the Company’s presented statement of operations for the three and nine months ended September 30, 2017 and 2016 . In connection with the acquisitions of Clarity and DC74, the Company incurred certain professional fees (i.e., legal, accounting, regulatory, etc.), which have been included in selling, general and administrative expenses in the condensed consolidated statements of operations and in cash flows from operating activities in the condensed consolidated statement of cash flows. The Company incurred no transaction costs for each acquisition during the three months ended September 30 , 2017 and less than $0.1 million and $0.2 million, for the nine months ended September 30, 2017 in connection with the Clarity and DC74 acquisitions, respectively. |
Cash Equivalents And Marketable
Cash Equivalents And Marketable Securities | 9 Months Ended |
Sep. 30, 2017 | |
Cash Equivalents And Marketable Securities [Abstract] | |
Cash Equivalents And Marketable Securities | Note 5. Cash Equivalents and Marketable Securities As of September 30, 2017, the Company held no cash equivalents or other marketable securities. The Company’s cash equivalents and available-for-sale marketable securities reported at fair value as of December 31, 2016 are summarized below: (In thousands) December 31, 2016 Cash equivalents: Money market mutual funds $ 6,742 Corporate debt securities 413 Total cash equivalents 7,155 Marketable securities: Variable rate demand notes 13,995 Commercial paper 7,370 Corporate debt securities 16,716 Total marketable securities, available-for-sale 38,081 Total cash equivalents and marketable securities $ 45,236 At December 31, 2016 , the carrying values of the investments included in cash and cash equivalents approximated fair value. The aggregate amortized cost of the available-for-sale securities was not materially different from the aggregate fair value. The Company received total proceeds of $ 4.5 million and $ 32.3 million from the sale or maturity of available-for-sale marketable securities during the three months ended September 30, 2017 and 2016, respectively, and $42.1 million and $107.1 mi llion during the nine months ended September 30, 2017 and 2016, respectively . The Company did not recognize any material realized net gains or losses and net unrealized holding gains or losses on available-for-sale marketable securities were less than $0.1 million for each of the three and nine months ended September 30, 2017 and 2016 . Unrealized holding gains or losses are included in accumulated other comprehensive loss on the condensed consolidated balance sheets. |
Disclosures About Segments Of A
Disclosures About Segments Of An Enterprise And Related Information | 9 Months Ended |
Sep. 30, 2017 | |
Disclosures About Segments Of An Enterprise And Related Information [Abstract] | |
Disclosures About Segments Of An Enterprise And Related Information | Note 6. Disclosures About Segments of an Enterprise and Related Information The Company’s operating segments generally align with its major product and service offerings and coincide with the way that the Company’s chief operating decision makers measure performance and allocate resources. The Company’s chief operating decision makers are its Chief Executive Officer and its Chief Financial Officer (collectively, the “CODMs”). The Company’s current reportable operating segments are data, residential and small business (“R&SB”) and RLEC access. A general description of the products and services offered and the customers served by each of these segments is as follows: · Data: This segment includes the Company’s enterprise data (metro Ethernet, dedicated Internet, voice over IP (“VoIP”), data center and private line), transport, and FTTC product and service groups. These businesses primarily serve enterprise and carrier customers utilizing the Company’s network of long-haul fiber, metro Ethernet and Ethernet rings located primarily in Virginia and West Virginia, and portions of other states in the Mid-Atlantic region of the United States. · R&SB: This segment includes the following voice products: local lines, primary rate interface (“PRI”), long distance, toll and directory advertising and other voice services (excluding VoIP which are typically provided to enterprise customers and are included in the Company’s data segment) and the following IP services products: fiber-to-the-premise broadband XL, DSL, integrated access and video. These products are sold to residential and small business customers on the Company’s network and within the Company’s footprint. This segment also provides carrier customers access to the Company’s network located in competitive markets. · RLEC Access: This segment provides carrier customers access to the Company’s network within the Company’s RLEC footprint and primarily includes switched access services. Summarized financial information concerning the Company’s reportable segments is presented in the following table: (In thousands) Data R&SB RLEC Access Corporate (Unallocated) Total For the three months ended September 30, 2017: Operating revenues $ 35,998 $ 14,632 $ 4,980 $ - $ 55,610 Cost of revenue 5,562 4,480 - - 10,042 Gross profit 30,436 10,152 4,980 - N/A Direct operating and selling costs 2,454 1,091 155 - 3,700 Indirect operating costs 7,881 2,307 51 - 10,239 Corporate general and administrative costs 5,188 1,604 465 2,173 9,430 Adjusted EBITDA (1) 14,913 5,150 4,309 - N/A Capital expenditures 10,069 1,355 - 1,326 12,750 For the nine months ended September 30, 2017: Operating revenues $ 106,119 $ 45,327 $ 15,446 $ - $ 166,892 Cost of revenue 16,643 14,335 - - 30,978 Gross profit 89,476 30,992 15,446 - N/A Direct operating and selling costs 6,940 3,337 472 - 10,749 Indirect operating costs 24,000 7,030 154 - 31,184 Corporate general and administrative costs 14,211 4,694 1,341 14,215 34,461 Adjusted EBITDA (1) 44,325 15,931 13,479 - N/A Capital expenditures 30,755 5,259 - 933 36,947 (In thousands) Data R&SB RLEC Access Corporate (Unallocated) Total For the three months ended September 30, 2016: Operating revenues $ 31,373 $ 15,863 $ 4,535 $ - $ 51,771 Cost of revenue 4,537 5,120 - - 9,657 Gross profit 26,836 10,743 4,535 - N/A Direct operating and selling costs 2,014 1,227 175 - 3,416 Indirect operating costs 6,717 2,354 50 - 9,121 Corporate general and administrative costs 3,538 1,439 340 2,651 7,968 Adjusted EBITDA (1) 14,567 5,723 3,970 - N/A Capital expenditures 18,197 2,565 - (673) 20,089 For the nine months ended September 30, 2016: Operating revenues $ 91,958 $ 47,840 $ 15,215 $ - $ 155,013 Cost of revenue 13,669 16,279 - - 29,948 Gross profit 78,289 31,561 15,215 - N/A Direct operating and selling costs 5,600 3,509 492 - 9,601 Indirect operating costs 19,470 7,031 156 - 26,657 Corporate general and administrative costs 11,512 4,810 1,334 10,142 27,798 Adjusted EBITDA (1) 41,707 16,211 13,233 - N/A Capital expenditures 60,379 6,988 - (2,087) 65,280 (1) Adjusted EBITDA is used by the Company’s CODMs to evaluate performance. Adjusted EBITDA, as defined by the Company, is net income or loss attributable to Lumos Networks Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other income or expenses, equity-based compensation charges, amortization of actuarial losses on retirement plans, restructuring charges, transaction related charges and changes in the fair value of contingent consideration obligations . N/A – Not Applicable (as totals are not presented in the condensed consolidated statements of operations) The Company’s CODMs do not currently review total assets by segment since the assets are centrally managed and some of the asse ts are shared by the segments. Management does review capital expenditures using success-based metrics that allow the Company to determine which segment product groups are driving investment in the network. Depreciation and amortization expense and certain corporate expenses that are excluded from the measurement of segment profit or loss are not allocated to the operating segments. The following table provides a reconciliation of the total of the Company’s reportable segments measure of profit to the Company’s consolidated income ( loss ) before income taxes for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2017 2016 2017 2016 Data Adjusted EBITDA $ 14,913 $ 14,567 $ 44,325 $ 41,707 R&SB Adjusted EBITDA 5,150 5,723 15,931 16,211 RLEC Access Adjusted EBITDA 4,309 3,970 13,479 13,233 Total reportable segments measure of profit 24,372 24,260 73,735 71,151 Interest expense (7,771) (7,164) (22,756) (21,165) Other income, net 8 48 647 320 Depreciation and amortization and accretion of asset retirement obligations (14,483) (12,762) (43,716) (37,119) Amortization of actuarial losses (326) (338) (977) (1,013) Equity-based compensation (1,156) (1,661) (9,152) (8,477) Restructuring charges - 384 (34) (1,823) Changes in fair value of contingent consideration obligations (100) - (700) - Transaction related charges (691) (652) (4,086) (652) (Loss) income before income taxes $ (147) $ 2,115 $ (7,039) $ 1,222 No single customer individually accounted for more than 10% of the Company’s total operating revenues for the three and nine months ended September 30, 2017 and 2016 . The Company’s five largest carrier customers, in the aggregate, accounted for 29% and 32% of the Company’s total operating revenues for the three months ended September 30, 2017 and 2016 , respectively , and 30% an d 32% for the nine months ended September 30, 2017 and 2016 , respectively . Revenues from these carrier customers were derived primarily from network access, data transport and FTTC services. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 7. Long-Term Debt As of September 30, 2017 and December 31, 2016 , the Company’s outstanding long-term debt consisted of the following: September 30, 2017 December 31, 2016 (In thousands) Principal Unamortized Discount and Debt Issuance Costs Principal Unamortized Discount and Debt Issuance Costs Credit Facility $ 330,613 $ 2,266 $ 340,385 $ 3,283 8% Notes 150,000 23,960 150,000 26,529 Capital lease obligations 7,465 - 7,842 - Long-term debt 488,078 26,226 498,227 29,812 Less: Current portion of long-term debt 73,825 - 13,530 - Long-term debt, excluding current portion $ 414,253 $ 26,226 $ 484,697 $ 29,812 Credit Facility On April 30, 2013, Lumos Networks Operating Company, a wholly-owned subsidiary of the Company, entered into a $425 million credit facility (the “Credit Facility”). The Credit Facility consists of a $100 million senior secured five -year term loan (“Term Loan A”), a $275 million senior secured six -year term loan (“Term Loan B”); a $28 million senior secured incremental term loan, which was added through an amendment to the Credit Facility dated January 2, 2015, (“Term Loan C”); and a $50 million senior secured five -year revolving credit facility (the “Revolver”). The proceeds from Term Loan A and Term Loan B were used to retire the prior first lien credit facility outstanding amount of approximately $ 311 million and to pay closing costs and other expenses related to the transaction, with the remaining proceeds available for normal course capital expenditures and working capital purposes. The Company used the net proceeds from Term Loan C to fund new FTTC projects. As of September 30, 2017 , no borrowings were outstanding under the Revolver. On August 6, 2015, the Company prepaid $40.0 million of the outstanding principal of the Credit Facility, which was allocated ratably to Term Loans A, B and C. The Company used proceeds from the issuance of the 8% Notes, discussed below, to fund these prepayments. Pricing of the amended Credit Facility is LIBOR plus 3.00% for the Revolver and Term Loan A and LIBOR plus 3.25% for Term Loan B and C . The Credit Facility does not require a minimum LIBOR rate. Term Loan A matures in September 2018 with quarterly payments of 2.50% per annum. Term Loan B matures in 2019 with quarterly payments of 1% per annum. Term Loan C matures in 2019 with quarterly payments of 1% per annum. The Revolver matures in full in September 2018. The Credit Facility is secured by a first priority pledge of substantially all property and assets of Lumos Networks Operating Company and all material subsidiaries, as guarantors, excluding the RLECs. The amended Credit Facility includes various restrictions and conditions, including a maximum leverage ratio of 4.50 :1.00 through December 31, 2017, 4.25 :1.00 through December 31, 2018, and 4.00 :1.00 thereafter. The amended Credit Facility also sets a minimum interest coverage ratio of 3.25 :1.00. At September 30, 2017 , the Company’s leverage ratio was 3.48 : 1.00 and its interest coverage ratio was 7.0 0 :1.00. The Company was in compliance with its debt covenants as of September 30, 2017 . The Company’s effective interest rate on its Credit Facility for the nine months ended September 30, 2017 was 4. 28 %. 8% Notes due 2022 On August 6, 2015, the Company issued $150 million in unsecured promissory notes (the “8% Notes”) to an affiliate of Pamplona Capital Management LLC (“Pamplona”). The net proceeds of the 8% Notes, after a $1.5 million purchasers discount and payment of $ 7.1 million of closing costs, were used to prepay $40.0 million of the Company’s existing Credit Facility with the remainder to be used for general corporate purposes, including to fund future growth opportunities. The 8% Notes bear interest at an annual fixed rate of 8.00% and mature on August 15, 2022. Interest is payable in arrears on a quarterly basis on August 15, November 15, February 15, and May 15 of each year. Interest is payable in cash or, at the election of the Company, through the issuance of additional notes or by adding the amount of the accrued interest to the unpaid principal amount of the 8% Notes outstanding at that time. The 8% Notes were also issued with 5,500,000 warrants for no additional consideration to purchase shares of the Company’s common stock (the “Warrants”). The Company allocated the net proceeds received from the debt issuance to the 8% Notes and the equity-classified Warrants based on the relative fair value of the instruments. As a result, the Company recognized a total discount on the 8% Notes of $24.8 million of which $23.5 million represents the value assigned to the Warrants, and $1.3 million represents the allocated portion of the aforementioned $1.5 million purchasers discount. The discount on the 8% Notes is being amortized to interest expense over the life of the debt using the effective interest method. See Note 12 for additional details regarding the Warrants. The Company’s effective interest rate on the 8% Notes for the nine months ended September 30, 2017 was 12.55% , which represents the contractual rate adjusted for discount and deferred debt issuance costs. Debt Issuance Costs In connection with the issuance of the 8% Notes in August 2015 and the Term Loan C financing in January 2015, the Company deferred an additional $ 6.0 million and $0.9 million, respectively, in debt issuance costs. Total unamortized debt issuance costs associated with the 8% Notes and Credit Facility are included in the table above, which amounts are included as a reduction of long-term debt in the condensed consolidated balance sheets in accordance with ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs . These costs are being amortized to interest expense over the life of the debt using the effective interest method. Amortization of debt issuance costs was $ 1. 2 million and $1.1 million for the three months ended September 30, 2017 and 2016, respectively , and $3.6 million and $3.3 million for the nine months ended September 30, 2017 and 2016 , respectively . CoBank Patronage Credits The Company receives patronage credits from CoBank and certain other of the Farm Credit System lending institutions (collectively referred to as “patronage banks”) which are not reflected in the interest rates above. The patronage banks hold a portion of the credit facility and are cooperative banks that are required to distribute their profits to their members. Patronage credits are calculated based on the patronage banks’ ownership percentage of the credit facility and are received by the Company as either a cash distribution or as equity in the patronage banks. These credits are recorded in the condensed consolidated statements of operations as an offset to interest expense. The Patronage credits were $0.2 million and $0.3 million for the three months ended September 30, 2017 and 2016, respectivel y, and $0.7 million and $0.8 million for the nine months ended September 30, 2017 and 2016, respectively. Debt Maturities The aggregate maturities of Term Loan A, Term Loan B and Term Loan C under the Credit Facility are $ 3.2 million in the remainder of 2017, $ 70.9 million in 2018 and $ 256.5 million in 2019. The Revolver under the Credit Facility, under which no borrowings are outstanding as of September 30, 2017 , matures in full in 2018. The 8% Notes mature for $150.0 million in 2022. Capital lease obligations In addition to the long-term debt discussed above, the Company has capital leases on vehicles with original lease terms of four to five years. The Company also has a fiber indefeasible right of use (“IRU”) classified as a capital lease, which was entered into in January 2016. The IRU network capacity arrangement extends through 2035 with payments due monthly. As of September 30, 2017 , the combined total net present value of the Company’s future minimum lease payments is $ 7. 5 million and the principal portion of these capital lease obligations is due as follows: $ 0. 1 million in the remainder of 2017, $ 0.5 million in 2018, $ 0. 5 million in 2019, $ 0.4 million in 2020, $0.4 million in 2021 and $ 5.6 million thereafter. The historical cost and accumulated amortization for each of the related assets associated with the capital leases is as follows as of September 30, 2017 : September 30, 2017 (In thousands) Historical Cost Accumulated Amortization Vehicles $ 2,657 $ (1,945) Network capacity IRU 8,871 (776) Total $ 11,528 $ (2,721) |
Supplementary Disclosures Of Ca
Supplementary Disclosures Of Cash Flow Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplementary Disclosures Of Cash Flow Information [Abstract] | |
Supplementary Disclosures Of Cash Flow Information | Note 8. Supplementary Disclosures of Cash Flow Information The following information is presented as supplementary disclosures for the condensed consolidated statements of cash flows for the nine months ended September 30, 2017 and 2016 : Nine Months Ended September 30, (In thousands) 2017 2016 Cash payments for: Interest (net of amounts capitalized) $ 19,222 $ 17,634 Income taxes - 304 Cash receipts for: Income tax refunds 283 - Supplemental investing and financing activities: Additions to property, plant and equipment included in accounts payable 1,130 2,930 Obligations incurred under capital leases - 7,936 Cash payments for interest for the nine months ended September 30, 2017 and 2016 in the table above are net of $0.7 million and $0.8 million, respectively, of cash received from CoBank for patronage credits (Note 7). The amount of interest capitalized was $0.4 million and $0. 8 million for the nine months ended September 30, 2017 and 2016 , respectively. |
Fair Value Of Financial Instrum
Fair Value Of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Of Financial Instruments [Abstract] | |
Fair Value Of Financial Instruments | Note 9. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable, accounts payable, capital lease obligations (including the current portion), accrued liabilities, contingent consideration obligations, the Credit Facility (including the current portion) and the 8% Notes as of September 30, 2017 and December 31, 2016 . The carrying values of cash and cash equivalents, accounts receivable, accounts payable, capital lease obligations and accrued liabilities approximated their fair values at September 30, 2017 and December 31, 2016 . Marketable securities are recorded in the condensed consolidated balance sheets at fair value (see Note 5). The following tables present the placement in the fair value hierarchy of financial assets and liabilities that are measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016 : Fair Value Measurements at September 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Fair Value Financial Liabilities: Contingent consideration obligations $ - $ - $ 10,200 $ 10,200 Total financial liabilities $ - $ - $ 10,200 $ 10,200 Fair Value Measurements at December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Cash equivalents: Money market mutual funds $ 6,742 $ - $ - $ 6,742 Corporate debt securities - 413 - 413 Total cash equivalents 6,742 413 - 7,155 Marketable securities: Variable rate demand notes - 13,995 - 13,995 Commercial paper - 7,370 - 7,370 Corporate debt securities - 16,716 - 16,716 Total marketable securities - 38,081 - 38,081 Total financial assets $ 6,742 $ 38,494 $ - $ 45,236 The fair value of commercial paper, variable rate demand notes and corporate, municipal and U.S. government debt securities are provided by a third-party pricing service and are estimated using pricing models. The underlying inputs to the pricing models are directly observable from active markets. However, the pricing models used do entail a certain amount of subjectivity and therefore differing judgments in how the underlying inputs are modeled could result in different estimates of fair value. As such, the Company classifies these fair value measurements as Level 2 within the fair value hierarchy. Additionally, through the business acquisitions of Clarity and DC74, the Company recognized contingent consideration obligations associated with the earnout provisions contained in the agreements. The fair value of the contingent consideration obligations was estimated using a discounted cash flow analysis that schedules out probability-weighted cash flows and adjusts for other factors such as estimated changes in market conditions and credit risk. The fair values of the contingent consideration obligations as of September 30, 2017 for Clarity and DC74 were $ 5 . 0 million and $5. 2 million, respectively. The fair value technique applied utilizes certain Level 3 inputs. The following table summarizes the carrying amounts and estimated fair values of the components included in the Company’s long-term debt, including the current portion. September 30, 2017 December 31, 2016 (In thousands) Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Credit Facility $ 328,347 $ 297,196 $ 337,102 $ 304,571 8% Notes 126,040 135,556 123,471 133,965 Capital Lease Obligations 7,465 7,465 7,842 7,842 The respective fair values of the Credit Facility and the 8% Notes were estimated based on an internal discounted cash flows analysis that schedules out the estimated cash flows for the future debt and interest repayments and applies a discount factor that is adjusted to reflect estimated changes in market conditions and credit factors. The Company also has certain non-marketable long-term investments for which it is not practicable to estimate fair value with total carrying values of $1. 6 million and $1.5 million as of September 30, 2017 and December 31, 2016 , respectively of which $1.5 million and $1.4 million, respectively, represents the Company’s investment in CoBank. This investment is primarily related to patronage distributions of restricted equity and is a required investment related to the portion of the Credit Facility held by CoBank. This investment is carried under the cost method. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Equity | Note 10. Equity Below is a summary of the activity and status of equity as of and for the nine months ended September 30, 2017 : (In thousands, except per share amounts) Common Shares Treasury Shares Common Stock Additional Paid-in Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss, net of tax Total Lumos Networks Corp. Stockholders' Equity Noncontrolling Interests Total Equity Balance, December 31, 2016 23,607 2 $ 236 $ 175,008 $ (2) $ (29,064) $ (11,004) $ 135,174 $ 886 $ 136,060 Cumulative effect adjustment of adoption of ASU 2016-09 - - - 329 - 1,579 - 1,908 - 1,908 Balance, January 1, 2017 23,607 2 236 175,337 (2) (27,485) (11,004) 137,082 886 137,968 Net loss attributable to Lumos Networks Corp. - - - - - (5,240) - (5,240) - (5,240) Other comprehensive income, net of tax - - - - - - 605 605 - 605 Equity-based compensation expense - - - 9,152 - - - 9,152 - 9,152 Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares) 410 162 5 101 (2,872) - - (2,766) - (2,766) Stock option exercises 42 (41) - 340 696 - - 1,036 - 1,036 Net income attributable to noncontrolling interests - - - - - - - - 39 39 Balance, September 30, 2017 24,059 123 $ 241 $ 184,930 $ (2,178) $ (32,725) $ (10,399) $ 139,869 $ 925 $ 140,794 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings (Loss) Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 11. Earnings (Loss) per Share The Company computes basic earnings (loss) per share by dividing net income (loss) attributable to Lumos Networks Corp. applicable to common shares by the weighted average number of common shares outstanding during the period. The impact on earnings (loss) per share of nonvested restricted shares outstanding that contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares is included in the computation of basic earnings per share pursuant to the two-class method. The Company issues restricted shares from time to time with vesting terms that are based on achievement of certain stock price performance conditions. These nonvested restricted shares are excluded from the computation of basic and diluted weighted average shares until the period in which the applicable performance or market conditions are attained. The Company uses the treasury stock method to determine the number of potentially dilutive common shares from stock options and nonvested restricted shares during the period. The computations of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2017 and 2016 are detailed in the following table. Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share amounts) 2017 2016 2017 2016 Numerator: Net (loss) income attributable to Lumos Networks Corp. $ (453) $ 1,023 $ (5,240) $ (627) Less: net income attributable to Lumos Networks Corp. allocable to participating securities - (36) - - Numerator for basic and diluted (loss) earnings per common share (453) 987 (5,240) (627) Denominator: Weighted average basic shares outstanding 23,940 23,463 23,723 23,300 Less: weighted average participating securities and nonvested performance-based restricted shares (751) (846) (803) (804) Denominator for basic (loss) earnings per common share 23,189 22,617 22,920 22,496 Plus: potentially dilutive restricted shares and stock options - 237 - - Denominator for diluted (loss) earnings per common share 23,189 22,854 22,920 22,496 Basic and diluted (loss) earnings per share $ (0.02) $ 0.04 $ (0.23) $ (0.03) For the three and nine months ended September 30, 2017 and the nine months ended 2016 , the denominator for diluted loss per common share is equivalent to the denominator for basic loss per common share because the addition of stock options and unvested restricted stock would be antidil utive for the period s . For the three months ended September 30, 2017, the denominator for diluted loss per common share excluded 499,442 and 530,991 shares, related to stock options and nonvested restricted stock, respectively. T he earnings per share calculation for the three months ended September 30, 2016 exclude d 772,146 and 345,439 shares, related to stock options and nonvested restricted stock, respectively. For the nine months ended September 30, 2017 and 2016 , the denominator for diluted loss per common share excluded 478,767 and 515,995 and 1, 00 8, 939 and 469,509 shares, resp ectively, related to stock options and nonveste d restricted stock, respectively . The denominator for diluted loss per share for the three and nine months ended September 30, 2017 also excluded 1,202,464 and 1,097,281 shares, respectively, associated with the 8% Notes warrants, which are anti-dilutive for each period. The earnings (loss) per share calculations for the three and nine months ended September 30, 2016 exclude the 5,500,000 outstanding stock warrants described in Note 12 as they would be antidilutive for each period. |
Stock Options, Restricted Stock
Stock Options, Restricted Stock and Stock Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Stock Options, Restricted Stock and Stock Warrants [Abstract] | |
Stock Options, Restricted Stock and Stock Warrants | Note 12. Stock Options, Restricted Stock and Stock Warrants Stock Options and Restricted Stock The Company has an Equity and Cash Incentive Plan administered by the Compensation Committee of the Company’s board of directors, which permits the grant of long-term incentives to employees and non-employee directors, including stock options, stock appreciation rights, restricted stock awards, restricted stock units, incentive awards, other stock-based awards and dividend equivalents. As of September 30, 2017 , the maximum number of shares of common stock available for awards under the Equity and Cash Incentive Plan was 5,500,000 and 533,114 securities remained available for issuance under the plan. Upon the exercise of stock options or upon the grant of restricted stock under the Equity and Cash Incentive Plan, new common shares are issued or treasury stock is reissued. The Company issued no stock options and 89, 067 shares of restricted stock under the Equity and Cash Incentive Plan during the nine months ended September 30, 2017 . Restricted shares generally cliff vest on the third anniversary of the grant date for employees and generally cliff vest on the first anniversary of the grant date for non-employee directors. Some of the outstanding restricted stock awards vest on a graded vesting schedule over a five year period. A summary of the activity and status of the Company’s stock options for the nine months ended September 30, 2017, is as follows: (In thousands, except per share amounts) Shares Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Stock options outstanding at December 31, 2016 1,749 $ 12.35 Granted during the period - - Exercised during the period (105) 13.66 Forfeited during the period - - Expired during the period (29) 19.44 Stock options outstanding at September 30, 2017 1,615 $ 12.14 4.8 years $ 9,451 Stock options exercisable at September 30, 2017 1,280 $ 11.98 4.7 years $ 7,707 Total stock options outstanding, vested and expected to vest at September 30, 2017 1,615 $ 12.14 $ 9,451 The total fair value of options that vested during the nine months ended September 30, 2017 was $ 0. 4 million. As of September 30, 2017 , there was $ 0. 4 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 0 . 8 years. A summary of the activity and status of the Company’s restricted stock for the nine months ended September 30, 2017 , is as follows: (In thousands, except per share amounts) Shares Weighted-Average Grant Date Fair Value per Share Restricted stock outstanding at December 31, 2016 849 $ 13.85 Granted during the period 89 16.43 Vested during the period (202) 13.57 Forfeited during the period - - Restricted stock outstanding at September 30, 2017 736 $ 14.24 As of September 30, 2017 , there was $ 3.4 million of total unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over a weighted-average period of 1.4 years. Immediately prior to the effective time of the EQT Merger, the Company’s outstanding stock options (whether or not vested and exercisable) will automatically vest and be cancelled and entitle the option holder to receive an amount in cash equal to the product of (i) the total number of shares subject to the option and (ii) the amount, if any, of excess of $18.00 and the applicable exercise price per share underlying the option (less any applicable withholding taxes). Additionally, immediately prior to the effective time of the Merger, the Company’s outstanding restricted stock will automatically vest and the restrictions thereon will lapse and entitle the holder of such share of Company restricted stock to receive $18.00 in cash (less any applicable withholding taxes). Stock Warrants A summary of the activity and status of the Company’s stock warrants for the nine months ended September 30, 2017 , is as follows: (In thousands, except per share amounts) Shares Weighted Average Exercise Price per Share Stock warrants outstanding at December 31, 2016 5,500 $ 13.99 Granted during the period - - Exercised during the period - - Expired during the period - - Stock warrants outstanding at September 30, 2017 5,500 $ 13.99 Outstanding warrants consist of those issued on August 6, 2015 in conjunction with the 8% Notes issuance discussed in Note 7 (the “Warrants”). The Warrants are fully vested and exercisable and may be net-share settled on a cashless basis only until they expire on August 6, 2022. A portion of the net proceeds from the 8% Notes issuance was allocated to the equity-classified Warrants based on the relative fair value of the instruments. Lumos Investment Holdings, Ltd., an affiliate of Pamplona Capital Management, the holder of the Warrants has agreed, subject to the effectiveness of the EQT Merger, to exercise the Warrant. Upon exercise, Pamplona will receiv e 1,225,278 shares of common stock that will be exchanged for $18.00 per share in cash in the EQT Merger. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 13. Income Taxes Income tax expense for the three months ended September 30, 2017 and 2016 was $0.3 million and $1.0 million, respectively, income tax benefit for the nine months ended September 30, 2017 was $1.8 million and income tax expense for the nine months ended September 30, 2016 was $1.7 million, which represents the federal statutory tax rate applied to pre-tax income (loss) and the effects of state income taxes and certain non-deductible charges for each period. The Company’s recurring non-deductible expenses relate primarily to certain non-cash equity-based compensation and non-deductible interest on the 8% Notes, which are treated as applicable high yield discount obligations (“AHYDO”) within the meaning of Section 163(i)(1) of the Internal Revenue Code, as amended. The Company also incurred certain transaction costs during the three and nine months ended September 30, 2017 and 2016 that would be considered capitalized costs for income tax purposes, primarily associated with the Merger. While management believes the Company has adequately provided for all significant tax positions, amounts asserted by taxing authorities could be greater than its accrued position. Accordingly, additional provisions could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved. In general, tax years 2013 and thereafter remain open and subject to federal and state audit examinations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14. Related Party Transactions ValleyNet, an equity method investee of the Company, resells capacity on the Company’s fiber network under an operating lease agreement. Facility lease revenue from ValleyNet was approximately $1. 0 million and $1. 3 million for three months ended September 30, 2017 and 2016 , respectively, and $3.1 million and $3.7 million for the nine months ended September 30, 2017 and 2016, respectively, which is presented in the Company’s data segment revenues. The Company had accounts receivable from ValleyNet of $0. 3 million and $0.4 million at September 30, 2017 and December 31, 2016, respectively. The Company also leases and resells capacity from ValleyNet. The total lease expense was $0.2 mill ion and $0.3 million for the three months ended September 30, 2017 and 2016, respectively, a nd $0.8 million and $0.9 million for the nine months ended September 30, 2017 and 2016, respectively . |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Note 15. Restructuring Charges In 2016, the Company completed an employee reduction-in-force and incurred restructuring costs, consisting of employee severance and termination benefits . The Company incurred less than $0.1 million of restructuring costs during the three and nine months ended September 30, 2017. Restructuring costs of $1.8 million were recognized during the nine months ended September 30, 2016. This amount is net of an adjustment of $0.4 million recorded as income in the three months ended September 30, 2016 to reduce previously accrued amounts to reflect changes in estimated severance obligations. A liability for restructuri ng charges in the amount of $0.1 million is included in the Company’s condensed consolidated balance sheet as of September 30, 2017 , related to employee termination costs accrued, but not yet paid. Below is a summary of the restructuring liability balance as of September 30, 2017 : (In thousands) Employee Severance and Termination Benefits Total Beginning balance at December 31, 2016 $ 398 $ 398 Additions, net of adjustments 34 34 Payments (379) (379) Ending balance at September 30, 2017 $ 53 $ 53 |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | Note 16. Commitments and Contingencies Customer Disputes and Routine Matters The Company periodically makes claims or receives disputes and is involved in legal actions related to billings to other carriers for access to the Company’s network. The Company does not recognize revenue related to such matters until collection of the claims is reasonably assured. In addition to this, the Company periodically disputes access charges that are assessed by other companies with which the Company interconnects and is involved in other disputes and legal and tax proceedings and filings arising from normal business activities. The Company is involved in routine litigation and disputes in the ordinary course of its business. While the results of litigation and disputes are inherently unpredictable, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows, and believes that adequate provision for any probable and estimable losses has been made in the Company’s condensed consolidated financial statements. The Company has purchase commitments relating to capital projects totaling $ 1. 1 million as of September 30, 2017 , which are expected to be satisfied during the remainder of 2017. Litigation Related to the EQT Merger On April 4, 2017 and April 11, 2017, two putative class action lawsuits were filed in the United States District Court for the District of Delaware (the “Court”) against the Company’s directors, EQT Partners Inc., Parent and Merger Sub. The plaintiffs in the actions alleged that the Company’s disclosures in its preliminary proxy statement filed by the Company with the SEC on March 31, 2017 contained false and misleading statements and omitted material information and further that the individual defendants are liable for those alleged misstatements and omissions. The actions sought, among other things, to enjoin the Merger or, if the Merger has been consummated, to rescind the Merger or an award of damages, and an award of attorneys’ and experts’ fees and costs. Following the Company’s filing of its definitive proxy, the plaintiffs in the actions filed stipulations of voluntary dismissal asserting that their claims had been rendered moot. On June 12, 2017, the Court issued a Stipulation of Dismissal and Withdrawal Order for each action, in which the Court retained jurisdiction over the action solely for purposes of further proceedings related to the adjudication of the plaintiffs’ fee and expense application. Subsequently, the parties reached agreement with respect to payment of plaintiff’s fees and expenses and on August 29, 2017 the Court issued Orders closing and terminating each action. The Company’s fees and expenses relating to these actions were immaterial. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles Of Consolidation And Basis Of Presentation | Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of the Company, Lumos Networks Operating Company, a wholly-owned subsidiary of the Company, and all of Lumos Networks Operating Company’s wholly-owned subsidiaries and those limited liability corporations where Lumos Networks Operating Company or certain of its subsidiaries, as managing member, exercise control. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2017 and 2016 contain all adjustments necessary to present fairly in all material respects the Company’s financial position and the results of operations and cash flows for all periods presented on the respective condensed consolidated financial statements included herein. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited consolidated financial statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . |
Accounting Estimates | Accounting Estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the allowance for doubtful accounts and customer credits, the valuation of deferred tax assets and/or liabilities , asset retirement obligations, stock warrants and equity-based compensation, goodwill impairment assessments, contingent consideration obligations, reserves for employee benefit obligations and income tax uncertainties. |
Changes in Accounting Principle | Changes in Accounting Principle T he Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718) (“ASU 2016-09”) in January 2017, which simplifies the accounting for share-based payment transactions and is effective for public companies for annual reporting periods beginning after December 15, 2016. Among other things, ASU 2016-09 provides for (i) the simplification of accounting presentation of excess tax benefits and tax deficiencies, (ii) an accounting policy election regarding forfeitures to use an estimate or account for when incurred, and (iii) simplification of cash flow presentation for statutory tax rate withholding. The adoption of ASU 2016-09, which resulted in the recognition of excess tax benefits through the condensed consolidated statement of operations and an accounting policy election made by the Company to eliminate the use of a forfeiture estimate and recognize forfeitures as they occur, resulted in the recognition of a cumulative effect adjustment with a $1.6 million impact to accumulated deficit and a $1.9 million total impact to stockholders’ equity and deferred income taxes. There was no material impact on the Company’s condensed consolidated statement of cash flows, the condensed consolidated statement of operations, or net income (loss) or earnings (loss) per share. The adoption of the accounting policy election to record forfeitures as incurred and the recognition of excess tax benefits in the condensed consolidated statement of operations may increase the volatility of net income (loss) in future periods . |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, services are rendered or products are delivered, installed and functional, as applicable, the price to the buyer is fixed or determinable and collectability is reasonably assured. Certain services of the Company require payment in advance of service performance. In such cases, the Company records a service liability at the time of billing and subsequently recognizes revenue ratably over the service period. The Company bills customers certain transactional taxes on service revenues. These transactional taxes are not included in reported revenues as they are recognized as liabilities at the time customers are billed. The Company earns revenue by providing services through access to and usage of its networks. Local service revenues are recognized as services are provided. Carrier data revenues are earned by providing switched access and other switched and dedicated services to other carriers. |
Cash Equivalents And Marketable Securities | Cash Equivalents and Marketable Securities The Company considers its investment in all highly liquid debt instruments with an original maturity of three months or less, when purchased, to be cash equivalents. The Company did not have any cash equivalents or other marketable securities as of September 30, 2017. The Company’s marketable securities at December 31, 2016 consist of debt securities not classified as cash equivalents , which were classified as available-for-sale securities as of December 31, 2016 . |
Trade Accounts Receivable | Trade Accounts Receivable The Company sells its services to other communication carriers and to enterprise and residential customers primarily in Virginia and West Virginia and portions of other states in the Mid-Atlantic region of the United States. The Company has credit and collection policies to maximize collection of trade receivables and requires advance payment for certain services. The Company estimates an allowance for doubtful accounts based on a review of specific customers with large receivable balances and for the remaining customer receivables the Company uses historical results, current and expected trends and changes in credit policies. Management believes the allowance adequately covers all anticipated losses with respect to trade receivables. Actual credit losses could differ from such estimates. The Company includes bad debt expense in selling, general and administrative in the condensed consolidated statements of operations. Bad debt expense for the three months ended September 30, 2017 and 2016 was $0. 1 million and less than $0.1 million, respectively. Bad debt expense for the nine months ended September 30, 2017 and 2016 was $0.3 million and $0.2 million, respectively. The Company’s allowance for doubtful accounts and customer credits was $1.3 million and $0.9 million as of September 30, 2017 and December 31, 2016 , respectively . The following table presents a roll-forward of the Company’s allowance for doubtful accounts and customer credits from December 31, 2016 to September 30, 2017 : Additions (In thousands) December 31, 2016 Charged to Expense Charged to Other Accounts Deductions September 30, 2017 Allowance for doubtful accounts and customer credits $ 942 $ 329 $ 254 $ (230) $ 1,295 |
Property, Plant and Equipment and Other Long-Lived Assets (Excluding Goodwill and Indefinite-Lived Intangible Assets) | Property, Plant and Equipment and Other Long-Lived Assets (Excluding Goodwill and Indefinite-Lived Intangible Assets) Property, plant and equipment, finite-lived intangible assets and long-term deferred charges are recorded at cost and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount should be evaluated pursuant to the subsequent measurement guidance described in FASB Accounting Standards Codification (“ASC”) 360-10-35. Impairment is determined by comparing the carrying value of these long-lived assets to management’s best estimate of future undiscounted cash flows expected to result from the use of the assets. If the carrying value exceeds the estimated undiscounted cash flows, the excess of the asset’s carrying value over the estimated fair value is recorded as an impairment charge. The Company believes that no impairment indicators exist as of September 30, 2017 that would require the Company to perform impairment testing for long-lived assets, including property, plant and equipment, long-term deferred charges and finite-lived intangible assets to be held and used. Depreciation of property, plant and equipment is recorded on a straight-line basis over the estimated useful lives of the assets, which the Company reviews and updates based on historical experiences and future expectations. Plant and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Amortization of assets held under capital leases, including an indefeasible right of use agreement, is included with depreciation expense. Intangibles with a finite life are classified as other intangibles on the condensed consolidated balance sheets. At September 30, 2017 and December 31, 2016 , other intangibles were comprised of the following: September 30, 2017 December 31, 2016 (Dollars in thousands) Estimated Life Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Customer relationships 6 to 15 yrs $ 115,808 $ (98,794) $ 103,108 $ (95,463) Trademarks and franchise rights 4 to 15 yrs 3,262 (2,206) 2,862 (2,004) Non-compete Agreements 2 to 3 yrs 30 (8) - - Total $ 119,100 $ (101,008) $ 105,970 $ (97,467) Included in the above amounts are indefinite-lived intangible assets of $0.3 million, which are not subject to amortization. The Company amortizes its finite-lived intangible assets using the straight-line method unless it determines that another systematic method is more appropriate. The Company generally amortizes certain customer relationship intangibles and some acquired trademarks using an accelerated amortization method based on the pattern of estimated earnings from these assets. The estimated life of amortizable intangible assets is determined from the unique factors specific to each asset, and the Company periodically reviews and updates estimated lives based on current events and future expectations. The Company capitalizes costs incurred to renew or extend the term of a recognized intangible asset and amortizes such costs over the remaining life of the asset. No such costs were incurred during the three or nine months ended September 30, 2017 . Amortization expense for the three months ended September 30, 2017 and 2016 was $ 1.2 million and $ 0 .6 million, respectively, and amortization expense for the nine months ended September 30, 2017 and 2016 was $ 3 . 5 million and $1. 9 million, respectively. Amortization expense for the remainder of 2017 and for the next five years is expected to be as follows: (In thousands) Customer Relationships Trademarks and Franchise Rights Non-compete Agreements Total Remainder of 2017 $ 1,154 $ 68 $ 4 $ 1,226 2018 3,727 270 12 4,009 2019 3,443 247 6 3,696 2020 2,922 115 - 3,037 2021 2,531 25 - 2,556 2022 1,195 - - 1,195 |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill and certain trademarks are considered to be indefinite-lived intangible assets. Indefinite-lived intangible assets are not subject to amortization but are instead tested for impairment annually or more frequently if an event indicates that the asset might be impaired. The Company’s policy is to assess the recoverability of indefinite-lived intangible assets annually with a measurement date of October 1 and whenever adverse events or changes in circumstances indicate that impairment may have occurred. The Company believes there have been no events or circumstances to cause it to evaluate the carrying amount of goodwill or indefinite-lived intangible assets during the nine months ended September 30, 2017 . |
Pension Benefits and Retirement Benefits Other Than Pensions | Pension Benefits and Retirement Benefits Other Than Pensions The Company sponsors a non-contributory defined benefit pension plan (the “Pension Plan”) covering all employees who meet eligibility requirements and were employed prior to October 1, 2003. The Company froze the Pension Plan effective December 31, 2012. As such, no further benefits are being accrued by participants for services rendered beyond that date. For the three and nine months ended September 30, 2017 and 2016 , the components of the Company’s net periodic benefit (income) cost for the Pension Plan were as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2017 2016 2017 2016 Service cost $ - $ - $ - $ - Interest cost 648 674 1,944 2,022 Expected return on plan assets (912) (884) (2,736) (2,652) Amortization of loss 236 262 708 786 Net periodic benefit (income) cost $ (28) $ 52 $ (84) $ 156 Pension Plan assets were valu ed at $57. 2 million an d $55.6 million at September 30, 2017 and December 31, 2016 , respectively. No funding contributions were made during the three or nine months ended September 30, 2017 , and the Company does not expect to make a funding contribution during the remainder of 2017. The Company also provides life insurance benefits for retired employees who meet eligibility requirements through two postretirement welfare benefit plans (the “Other Postretirement Benefit Plans”). The Company had provided retiree medical benefits under these plans until those benefits were terminated effective December 31, 201 4. The Company did not incur any significant costs associated with these plans during the three or nine months ended September 30, 2017 or 2016 . The Company recognized expense for certain nonqualified pension plans for each of the three months ended September 30, 2017 and 2016 of $0.1 million , and less than $0.1 million of this expense for each of these periods relates to the amortization of actuarial loss. Expense for nonqualified pension plans for each of the nine months ended September 30, 2017 and 2016 was $0.4 million, and $0.3 million and $0.2 million of this expense, respectively, relates to the amortization of actuarial loss. The gross amount reclassified out of accumulated other comprehensive loss related to amortization of actuarial losses for retirement plans for each of the three months ended September 30, 2017 and 2016 was $ 0 .3 million, and $ 1 . 0 million for each of the nine months ended September 30, 2017 and 2016 , all of which has been reclassified to selling, general and administrative on the condensed consolidated statements of operations. Income taxes associated with these reclassifications were $0.1 million for each of the three months ended September 30, 2017 and 2016 and $0.4 million for each of the nine months ended September 30, 2017 and 2016 . |
Equity-based Compensation | Equity-based Compensation The Company accounts for share-based employee compensation plans under FASB ASC 718, Stock Compensation . Equity-based compensation expense from share-based equity awards is recorded with an offsetting increase to additional paid-in capital on the condensed consolidated balance sheets. For equity awards with only service conditions, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award. Total equity-based compensation expense related to all of the share-based awards, annual employee bonuses paid in the form of immediately vested shares and the Company’s 401(k) matching contributions was $ 1.2 million and $ 1. 7 million for the three months ended September 30, 2017 and 2016 , respectively, and $ 9 . 2 million and $ 8.5 million for the nine months ended September 30, 2017 and 2016 , respectively, which amounts are included in selling, general and administrative expenses on the condensed consolidated statements of operations. Future charges for equity-based compensation related to instruments outstanding at September 30, 2017 are estimated to be $1.1 million for the remainder of 2017, $ 2.1 million in 2018, $ 0.7 million in 2019 and less than $ 0.1 million in 2020 and thereafter. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the amount 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. When determining the fair value measurements for assets and liabilities required to be recorded at fair value or for certain financial instruments for which disclosure of fair value is required, the Company uses fair value techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances, including expected cash flows and appropriately risk-adjusted discount rates, available observable and unobservable inputs. GAAP establishes a fair value hierarchy with three levels of inputs that may be used to measure fair value: · Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs other than quoted prices that are observable for the asset or liability. Level 3 – Unobservable inputs for the asset or liability. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for public business entities from annual reporting periods beginning after December 15, 2016, to annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Gross versus Net) (“ASU 2016-08”), which clarifies implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), which addresses narrow-scope improvements to the guidance on collectability, noncash consideration, and completed contracts at transition. Additionally, the amendments in ASU 2016-12 provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. Finally, in December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with customers, which makes minor corrections or improvements to ASU 2014-09. The Company has completed its initial impact assessment and is in the process of developing an implementation plan to include any potential process or system changes. Although the full assessment of the impact to the Company’s results of operations, financial position and cash flows as a result of this guidance is ongoing, the Company expects that changes in the timing of and method of recognition for certain non-recurring charges received from customers and allocations of certain contract revenues to products and services may result in additional contract assets and liabilities in the consolidated balance sheet. In addition, the requirement to defer incremental contract acquisition costs, including sales commissions, and recognize such costs over the contract period or expected customer life may result in the recognition of a deferred charge within the consolidated balance sheets and could have the impact of deferring operating expenses. The Company will adopt this new standard as of January 1, 2018 and currently expects to apply the modified retrospective method, which may result in a cumulative effect adjustment as of the date of adoption. Both the Company’s initial assessment and its selected transition method may change depending on the results of the Company’s final assessment of the impact to its consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. The Company does not expect the future adoption of ASU 2016-01 to have a material impact on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which will replace most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires an entity to recognize most leases, including operating leases, on the consolidated balance sheets of the lessee. ASU 2016-02 is effective for public business entities for annual reporting periods beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 requires the use of a modified retrospective transition method with elective reliefs. The Company is still evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) (“ASU 2016-15”), which addresses eight classification issues related to the statement of cash flows presentation, with the objective of reducing diversity in practice. The amendments in this ASU provide guidance on the following cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for annual reporting periods beginning after December 31, 2017, with early adoption permitted. Although the Company is still evaluating the effect that ASU 2016-15 will have on its statement of cash flow and disclosures, the Company expects the standard will primarily impact the presentation of the earnouts associated with the business acquisitions completed in January 2017. Under ASU 2016-15, the earnouts would be presented in the statement of cash flows as cash outflows for financing activities up to the amount of the original contingent consideration liability and the excess would be classified as cash outflows for operating activities. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the accounting for goodwill impairment by eliminating Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under 2017-04, goodwill will be measured using the difference between the fair value and carrying value of the reporting unit. ASU 2017-04 is effective for public business entities for annual and interim reporting periods beginning after December 31, 2019, with early adoption permitted for goodwill impairment tests with measurement dates after January 1, 2017. The Company does not expect the future adoption of ASU 2017-04 to have a material impact on its consolidated financial statements and disclosures. In March 2 017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Periodic Postretirement Benefit Cost (“ASU 2017-07”), which requires the service cost component of net benefit cost to be reported in the same line item as compensation cost on the consolidated statements of operations. Under ASU 2017-07 all other components of net benefit cost will be reported outside of operating income. ASU 2017-07 is effective for public business entities for annual and interim reporting periods beginning after December 15, 2017 and retrospective application of the change in income statement presentation is required. Based on current actuarial estimates, the Company estimates the future adoption of ASU 2017-07 would increase operating income by less than $0.5 million for the annual period. However, the calculation of post retirement benefit cost is subject to significant estimates and assumptions and changes in these estimates could result in changes to the impact of ASU 2017-07 on the Company’s operating income when adopted. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which amends the scope of modification accounting for share-based payment arrangements and requires that a description of significant modifications for each period for which an income statement is presented along with the related increase or decrease in expense due to these modifications. ASU 2017-09 is effective for all public business entities for annual and interim periods beginning after December 15, 2017 and early adoption is permitted at the beginning of an annual period for which interim or annual financial statements have not been issued. The Company does not expect the future adoption of ASU 2017-09 to have a material impact on its consolidated financial statements and disclosures . |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Allowance for Doubtful Accounts | Additions (In thousands) December 31, 2016 Charged to Expense Charged to Other Accounts Deductions September 30, 2017 Allowance for doubtful accounts and customer credits $ 942 $ 329 $ 254 $ (230) $ 1,295 |
Finite-Lived Intangibles Assets | September 30, 2017 December 31, 2016 (Dollars in thousands) Estimated Life Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Customer relationships 6 to 15 yrs $ 115,808 $ (98,794) $ 103,108 $ (95,463) Trademarks and franchise rights 4 to 15 yrs 3,262 (2,206) 2,862 (2,004) Non-compete Agreements 2 to 3 yrs 30 (8) - - Total $ 119,100 $ (101,008) $ 105,970 $ (97,467) |
Schedule Of Future Amortization Expense | (In thousands) Customer Relationships Trademarks and Franchise Rights Non-compete Agreements Total Remainder of 2017 $ 1,154 $ 68 $ 4 $ 1,226 2018 3,727 270 12 4,009 2019 3,443 247 6 3,696 2020 2,922 115 - 3,037 2021 2,531 25 - 2,556 2022 1,195 - - 1,195 |
Schedule of Net Benefit Cost (Income) | Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2017 2016 2017 2016 Service cost $ - $ - $ - $ - Interest cost 648 674 1,944 2,022 Expected return on plan assets (912) (884) (2,736) (2,652) Amortization of loss 236 262 708 786 Net periodic benefit (income) cost $ (28) $ 52 $ (84) $ 156 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combination, Separately Recognized Transactions [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | (In thousands) Clarity Communications, LLC January 4, 2017 DC74, LLC January 31, 2017 Assets acquired Cash $ 625 $ 493 Other Current Assets 1,318 380 Property, Plant and Equipment 2,819 1,684 Goodwill 6,723 18,647 Intangible assets subject to amortization Customer relationship intangible 4,300 8,400 Trademark intangible 200 200 Non-compete agreement intangible 20 10 Total intangible assets subject to amortization 4,520 8,610 Other Assets 34 47 Total assets acquired 16,039 29,861 Liabilities assumed Current liabilities 853 445 Long-term liabilities - 495 Total liabilities assumed 853 940 Net assets acquired 15,186 28,921 Less cash acquired (625) (493) Net consideration paid 14,561 28,428 Less contingent consideration obligations (4,600) (4,900) Net cash consideration paid at closing $ 9,961 $ 23,528 |
Schedule of Goodwill | (In thousands) December 31, 2016 Acquisition Additions September 30, 2017 Data $ 90,561 $ 25,370 $ 115,931 R&SB 9,736 - 9,736 RLEC Access - - - Total goodwill $ 100,297 $ 25,370 $ 125,667 |
Cash Equivalents And Marketab26
Cash Equivalents And Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Cash Equivalents And Marketable Securities [Abstract] | |
Schedule Of Cash Equivalents And Available-For-Sale Securities Reported At Fair Value | (In thousands) December 31, 2016 Cash equivalents: Money market mutual funds $ 6,742 Corporate debt securities 413 Total cash equivalents 7,155 Marketable securities: Variable rate demand notes 13,995 Commercial paper 7,370 Corporate debt securities 16,716 Total marketable securities, available-for-sale 38,081 Total cash equivalents and marketable securities $ 45,236 |
Disclosures About Segments of27
Disclosures About Segments of an Enterprise and Related Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosures About Segments Of An Enterprise And Related Information [Abstract] | |
Summarized Financial Information Of Reportable Segments | (In thousands) Data R&SB RLEC Access Corporate (Unallocated) Total For the three months ended September 30, 2017: Operating revenues $ 35,998 $ 14,632 $ 4,980 $ - $ 55,610 Cost of revenue 5,562 4,480 - - 10,042 Gross profit 30,436 10,152 4,980 - N/A Direct operating and selling costs 2,454 1,091 155 - 3,700 Indirect operating costs 7,881 2,307 51 - 10,239 Corporate general and administrative costs 5,188 1,604 465 2,173 9,430 Adjusted EBITDA (1) 14,913 5,150 4,309 - N/A Capital expenditures 10,069 1,355 - 1,326 12,750 For the nine months ended September 30, 2017: Operating revenues $ 106,119 $ 45,327 $ 15,446 $ - $ 166,892 Cost of revenue 16,643 14,335 - - 30,978 Gross profit 89,476 30,992 15,446 - N/A Direct operating and selling costs 6,940 3,337 472 - 10,749 Indirect operating costs 24,000 7,030 154 - 31,184 Corporate general and administrative costs 14,211 4,694 1,341 14,215 34,461 Adjusted EBITDA (1) 44,325 15,931 13,479 - N/A Capital expenditures 30,755 5,259 - 933 36,947 (In thousands) Data R&SB RLEC Access Corporate (Unallocated) Total For the three months ended September 30, 2016: Operating revenues $ 31,373 $ 15,863 $ 4,535 $ - $ 51,771 Cost of revenue 4,537 5,120 - - 9,657 Gross profit 26,836 10,743 4,535 - N/A Direct operating and selling costs 2,014 1,227 175 - 3,416 Indirect operating costs 6,717 2,354 50 - 9,121 Corporate general and administrative costs 3,538 1,439 340 2,651 7,968 Adjusted EBITDA (1) 14,567 5,723 3,970 - N/A Capital expenditures 18,197 2,565 - (673) 20,089 For the nine months ended September 30, 2016: Operating revenues $ 91,958 $ 47,840 $ 15,215 $ - $ 155,013 Cost of revenue 13,669 16,279 - - 29,948 Gross profit 78,289 31,561 15,215 - N/A Direct operating and selling costs 5,600 3,509 492 - 9,601 Indirect operating costs 19,470 7,031 156 - 26,657 Corporate general and administrative costs 11,512 4,810 1,334 10,142 27,798 Adjusted EBITDA (1) 41,707 16,211 13,233 - N/A Capital expenditures 60,379 6,988 - (2,087) 65,280 (1) Adjusted EBITDA is used by the Company’s CODMs to evaluate performance. Adjusted EBITDA, as defined by the Company, is net income or loss attributable to Lumos Networks Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other income or expenses, equity-based compensation charges, amortization of actuarial losses on retirement plans, restructuring charges, transaction related charges and changes in the fair value of contingent consideration obligations . N/A – Not Applicable (as totals are not presented in the condensed consolidated statements of operations) |
Reconciliation of Total of Reportable Segments Measure of Profit to Consolidated Income (Loss) Before Income Taxes | Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2017 2016 2017 2016 Data Adjusted EBITDA $ 14,913 $ 14,567 $ 44,325 $ 41,707 R&SB Adjusted EBITDA 5,150 5,723 15,931 16,211 RLEC Access Adjusted EBITDA 4,309 3,970 13,479 13,233 Total reportable segments measure of profit 24,372 24,260 73,735 71,151 Interest expense (7,771) (7,164) (22,756) (21,165) Other income, net 8 48 647 320 Depreciation and amortization and accretion of asset retirement obligations (14,483) (12,762) (43,716) (37,119) Amortization of actuarial losses (326) (338) (977) (1,013) Equity-based compensation (1,156) (1,661) (9,152) (8,477) Restructuring charges - 384 (34) (1,823) Changes in fair value of contingent consideration obligations (100) - (700) - Transaction related charges (691) (652) (4,086) (652) (Loss) income before income taxes $ (147) $ 2,115 $ (7,039) $ 1,222 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-Term Debt [Abstract] | |
Schedule Of Long-Term Debt | September 30, 2017 December 31, 2016 (In thousands) Principal Unamortized Discount and Debt Issuance Costs Principal Unamortized Discount and Debt Issuance Costs Credit Facility $ 330,613 $ 2,266 $ 340,385 $ 3,283 8% Notes 150,000 23,960 150,000 26,529 Capital lease obligations 7,465 - 7,842 - Long-term debt 488,078 26,226 498,227 29,812 Less: Current portion of long-term debt 73,825 - 13,530 - Long-term debt, excluding current portion $ 414,253 $ 26,226 $ 484,697 $ 29,812 |
Schedule of Capital Leased Assets | September 30, 2017 (In thousands) Historical Cost Accumulated Amortization Vehicles $ 2,657 $ (1,945) Network capacity IRU 8,871 (776) Total $ 11,528 $ (2,721) |
Supplementary Disclosures Of 29
Supplementary Disclosures Of Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplementary Disclosures Of Cash Flow Information [Abstract] | |
Supplementary Disclosures of Cash Flow Information | Nine Months Ended September 30, (In thousands) 2017 2016 Cash payments for: Interest (net of amounts capitalized) $ 19,222 $ 17,634 Income taxes - 304 Cash receipts for: Income tax refunds 283 - Supplemental investing and financing activities: Additions to property, plant and equipment included in accounts payable 1,130 2,930 Obligations incurred under capital leases - 7,936 |
Fair Value Of Financial Instr30
Fair Value Of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Of Financial Instruments [Abstract] | |
Summary Of Financial Assets and Liabilities Measured At Fair Value | Fair Value Measurements at September 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Fair Value Financial Liabilities: Contingent consideration obligations $ - $ - $ 10,200 $ 10,200 Total financial liabilities $ - $ - $ 10,200 $ 10,200 Fair Value Measurements at December 31, 2016 (In thousands) Level 1 Level 2 Level 3 Total Fair Value Financial Assets: Cash equivalents: Money market mutual funds $ 6,742 $ - $ - $ 6,742 Corporate debt securities - 413 - 413 Total cash equivalents 6,742 413 - 7,155 Marketable securities: Variable rate demand notes - 13,995 - 13,995 Commercial paper - 7,370 - 7,370 Corporate debt securities - 16,716 - 16,716 Total marketable securities - 38,081 - 38,081 Total financial assets $ 6,742 $ 38,494 $ - $ 45,236 |
Schedule Of Carrying Amounts And Estimated Fair Values Of Long-Term Debt | September 30, 2017 December 31, 2016 (In thousands) Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Credit Facility $ 328,347 $ 297,196 $ 337,102 $ 304,571 8% Notes 126,040 135,556 123,471 133,965 Capital Lease Obligations 7,465 7,465 7,842 7,842 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Summary Of Activity And Status Of Equity | (In thousands, except per share amounts) Common Shares Treasury Shares Common Stock Additional Paid-in Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss, net of tax Total Lumos Networks Corp. Stockholders' Equity Noncontrolling Interests Total Equity Balance, December 31, 2016 23,607 2 $ 236 $ 175,008 $ (2) $ (29,064) $ (11,004) $ 135,174 $ 886 $ 136,060 Cumulative effect adjustment of adoption of ASU 2016-09 - - - 329 - 1,579 - 1,908 - 1,908 Balance, January 1, 2017 23,607 2 236 175,337 (2) (27,485) (11,004) 137,082 886 137,968 Net loss attributable to Lumos Networks Corp. - - - - - (5,240) - (5,240) - (5,240) Other comprehensive income, net of tax - - - - - - 605 605 - 605 Equity-based compensation expense - - - 9,152 - - - 9,152 - 9,152 Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares) 410 162 5 101 (2,872) - - (2,766) - (2,766) Stock option exercises 42 (41) - 340 696 - - 1,036 - 1,036 Net income attributable to noncontrolling interests - - - - - - - - 39 39 Balance, September 30, 2017 24,059 123 $ 241 $ 184,930 $ (2,178) $ (32,725) $ (10,399) $ 139,869 $ 925 $ 140,794 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings (Loss) Per Share [Abstract] | |
Schedule Of Computation Of Basic And Diluted Earnings (Loss) Per Share | Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share amounts) 2017 2016 2017 2016 Numerator: Net (loss) income attributable to Lumos Networks Corp. $ (453) $ 1,023 $ (5,240) $ (627) Less: net income attributable to Lumos Networks Corp. allocable to participating securities - (36) - - Numerator for basic and diluted (loss) earnings per common share (453) 987 (5,240) (627) Denominator: Weighted average basic shares outstanding 23,940 23,463 23,723 23,300 Less: weighted average participating securities and nonvested performance-based restricted shares (751) (846) (803) (804) Denominator for basic (loss) earnings per common share 23,189 22,617 22,920 22,496 Plus: potentially dilutive restricted shares and stock options - 237 - - Denominator for diluted (loss) earnings per common share 23,189 22,854 22,920 22,496 Basic and diluted (loss) earnings per share $ (0.02) $ 0.04 $ (0.23) $ (0.03) |
Stock Options, Restricted Sto33
Stock Options, Restricted Stock and Stock Warrants (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stock Options, Restricted Stock and Stock Warrants [Abstract] | |
Summary Of Stock Options Activity | (In thousands, except per share amounts) Shares Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Stock options outstanding at December 31, 2016 1,749 $ 12.35 Granted during the period - - Exercised during the period (105) 13.66 Forfeited during the period - - Expired during the period (29) 19.44 Stock options outstanding at September 30, 2017 1,615 $ 12.14 4.8 years $ 9,451 Stock options exercisable at September 30, 2017 1,280 $ 11.98 4.7 years $ 7,707 Total stock options outstanding, vested and expected to vest at September 30, 2017 1,615 $ 12.14 $ 9,451 |
Summary Of Restricted Stock Awards Activity | (In thousands, except per share amounts) Shares Weighted-Average Grant Date Fair Value per Share Restricted stock outstanding at December 31, 2016 849 $ 13.85 Granted during the period 89 16.43 Vested during the period (202) 13.57 Forfeited during the period - - Restricted stock outstanding at September 30, 2017 736 $ 14.24 |
Summary of Warrant Activity | (In thousands, except per share amounts) Shares Weighted Average Exercise Price per Share Stock warrants outstanding at December 31, 2016 5,500 $ 13.99 Granted during the period - - Exercised during the period - - Expired during the period - - Stock warrants outstanding at September 30, 2017 5,500 $ 13.99 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring Charges [Abstract] | |
Summary Of Restucturing Liability Balance | (In thousands) Employee Severance and Termination Benefits Total Beginning balance at December 31, 2016 $ 398 $ 398 Additions, net of adjustments 34 34 Payments (379) (379) Ending balance at September 30, 2017 $ 53 $ 53 |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2017 | Jan. 04, 2017 | Sep. 30, 2017 |
Sale of Stock, Price Per Share | $ 18 | ||
Clarity Communications, LLC [Member] | |||
Total Acquisition Cost | $ 15,000 | ||
Business Combination, Consideration Transferred | $ 14,561 | ||
DC74 LLC [Member] | |||
Total Acquisition Cost | $ 29,500 | ||
Business Combination, Consideration Transferred | $ 28,428 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 1,908 | ||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Operating Results | 500 | ||||
Bad Debt Expenses | $ 100 | 300 | $ 200 | ||
Accounts receivable, allowance | 1,295 | 1,295 | $ 942 | ||
Finite-Lived Intangible Assets, Cost Incurred to Renew or Extend | 0 | 0 | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 300 | 300 | 300 | ||
Amortization | 1,200 | $ 600 | 3,541 | 1,931 | |
Defined Benefit Plan, Contributions by Employer | 0 | 0 | |||
Defined Benefit Plan, Fair Value of Plan Assets | 57,200 | $ 57,200 | $ 55,600 | ||
Qualified Nonpension Postretirement Benefit Plans | 2 | ||||
Nonqualified Pension Plans Expense | 100 | 100 | $ 400 | 400 | |
Amortization Of Unrealized Gain Loss On Nonqualified Pension Plans | 300 | 200 | |||
Amortization of actuarial losses | (326) | (338) | (977) | (1,013) | |
Other Comprehensive (Income) Loss, Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, Tax | 100 | 100 | 400 | 400 | |
Equity-based compensation, exclusive of restructuring charges | 1,156 | 1,661 | 9,152 | 8,477 | |
Future Charges For Equity-Based Compensation 2017 | 1,100 | 1,100 | |||
Future Charges For Equity-Based Compensation 2018 | 2,100 | 2,100 | |||
Future Charges For Equity-Based Compensation 2019 | 700 | 700 | |||
Other Postretirement Benefit Plans [Member] | |||||
Defined Benefit Plan, Net Periodic Benefit Cost | 0 | 0 | 0 | 0 | |
Defined Benefit Pension Plan [Member] | |||||
Defined Benefit Plan, Net Periodic Benefit Cost | (28) | 52 | (84) | $ 156 | |
Maximum [Member] | |||||
Bad Debt Expenses | 100 | ||||
Amortization Of Unrealized Gain Loss On Nonqualified Pension Plans | 100 | $ 100 | |||
Future Charges For Equity-Based Compensation 2020 | $ 100 | $ 100 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Schedule Of Allowance For Doubtful Accounts) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Summary of Significant Accounting Policies [Abstract] | |
Allowance for doubtful accounts and customer credits, beginning | $ 942 |
Charged to Expense | 329 |
Charged to Other Accounts | 254 |
Deductions | (230) |
Allowance for doubtful accounts and customer credits, ending | $ 1,295 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Finite-Lived Intangibles Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (101,008) | $ (97,467) |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 115,808 | 103,108 |
Accumulated Amortization | (98,794) | (95,463) |
Trademarks And Franchise Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 3,262 | 2,862 |
Accumulated Amortization | (2,206) | (2,004) |
Non-Compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 30 | |
Accumulated Amortization | (8) | |
Finite-Lived Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 119,100 | 105,970 |
Accumulated Amortization | $ (101,008) | $ (97,467) |
Minimum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life | 6 years | 6 years |
Minimum [Member] | Trademarks And Franchise Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life | 4 years | 4 years |
Minimum [Member] | Non-Compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life | 2 years | 2 years |
Maximum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life | 15 years | 15 years |
Maximum [Member] | Trademarks And Franchise Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life | 15 years | 15 years |
Maximum [Member] | Non-Compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated life | 3 years | 3 years |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Schedule Of Future Amortization Expense) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2017 | $ 1,226 |
2,018 | 4,009 |
2,019 | 3,696 |
2,020 | 3,037 |
2,021 | 2,556 |
2,022 | 1,195 |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2017 | 1,154 |
2,018 | 3,727 |
2,019 | 3,443 |
2,020 | 2,922 |
2,021 | 2,531 |
2,022 | 1,195 |
Trademarks And Franchise Rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2017 | 68 |
2,018 | 270 |
2,019 | 247 |
2,020 | 115 |
2,021 | 25 |
Non-Compete Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2017 | 4 |
2,018 | 12 |
2,019 | $ 6 |
Summary Of Significant Accoun40
Summary Of Significant Accounting Policies (Schedule Of Net Periodic Benefit Cost (Income)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 648 | $ 674 | $ 1,944 | $ 2,022 |
Expected return on plan assets | (912) | (884) | (2,736) | (2,652) |
Amortization of loss | 236 | 262 | 708 | 786 |
Net periodic benefit (income) cost | (28) | 52 | (84) | 156 |
Other Postretirement Benefit Plans [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net periodic benefit (income) cost | $ 0 | $ 0 | $ 0 | $ 0 |
EQT Merger (Narrative) (Details
EQT Merger (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Sale of Stock, Price Per Share | $ 18 | $ 18 | ||
Merger Termination Payment | $ 16,100 | |||
Due from Acquirer under certain circumstances of merger termination | 32,100 | |||
Business Combination, Acquisition Related Costs | $ (691) | $ (652) | (4,086) | $ (652) |
EQT Infrastructure Investment Strategy [Member] | ||||
Business Combination, Acquisition Related Costs | $ 500 | $ 3,700 |
Business Acquisitions (Narrativ
Business Acquisitions (Narrative) (Details) - USD ($) $ in Thousands | Jan. 31, 2017 | Jan. 04, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years 10 months 24 days | ||||||
Goodwill | $ 125,667 | $ 125,667 | $ 100,297 | ||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 25,370 | 25,370 | |||||
Revenues | 55,610 | $ 51,771 | 166,892 | $ 155,013 | |||
Net Income Loss | $ (482) | $ 1,069 | $ (5,201) | $ (490) | |||
Customer Relationships [Member] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | ||||||
Trademarks [Member] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years 6 months | ||||||
Non-Compete Agreements [Member] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 8 months 12 days | ||||||
Clarity Communications, LLC [Member] | |||||||
Business Acquisition, Effective Date of Acquisition | Jan. 4, 2017 | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | |||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 9,961 | ||||||
Total Acquisition Cost | $ 15,000 | ||||||
Net consideration paid | $ 14,561 | ||||||
Business Combination, Contingent Consideration Arrangements, Description | subject to certain earnout provisions over a two year period following the closing date, which would be accelerated upon a change in control. The earnout provisions are based upon achievement of certain monthly recurring revenue targets within the two year measurement period | ||||||
Goodwill | $ 6,723 | ||||||
Revenues | $ 1,600 | $ 4,900 | |||||
Net Income Loss | 300 | $ 200 | |||||
Business Combination, Integration Related Costs | $ 0 | ||||||
DC74 LLC [Member] | |||||||
Business Acquisition, Effective Date of Acquisition | Jan. 31, 2017 | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | 100.00% | |||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 23,528 | ||||||
Total Acquisition Cost | $ 29,500 | ||||||
Net consideration paid | $ 28,428 | ||||||
Business Combination, Contingent Consideration Arrangements, Description | subject to certain earnout provisions over a 12-month period following the closing date, which would vest upon a change in control. The earnout provisions are based upon achievement of certain monthly recurring revenue targets within the one year measurement period | ||||||
Goodwill | $ 18,647 | ||||||
Revenues | $ 1,700 | $ 4,500 | |||||
Net Income Loss | 300 | 200 | |||||
Acquisition Costs, Period Cost | 200 | ||||||
Business Combination, Integration Related Costs | 0 | ||||||
Maximum [Member] | Clarity Communications, LLC [Member] | |||||||
Total Acquisition Cost | 15,000 | ||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 5,000 | 5,000 | |||||
Acquisition Costs, Period Cost | 100 | ||||||
Maximum [Member] | DC74 LLC [Member] | |||||||
Total Acquisition Cost | 29,500 | ||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 6,000 | $ 6,000 |
Business Acquisitions (Schedule
Business Acquisitions (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Jan. 31, 2017 | Jan. 04, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Goodwill | $ 125,667 | $ 100,297 | ||
Less contingent consideration obligations | (10,200) | |||
Clarity Communications, LLC [Member] | ||||
Cash | $ 625 | |||
Other Current Assets | 1,318 | |||
Property, Plant and Equipment | 2,819 | |||
Goodwill | 6,723 | |||
Intangible assets subject to amortization | 4,520 | |||
Other Assets | 34 | |||
Total assets acquired | 16,039 | |||
Current liabilities | 853 | |||
Total liabilities assumed | 853 | |||
Net assets acquired | 15,186 | |||
Less cash acquired | (625) | |||
Net consideration paid | 14,561 | |||
Less contingent consideration obligations | (4,600) | (5,000) | ||
Payments for acquisitions, net of cash acquired | 9,961 | |||
Clarity Communications, LLC [Member] | Customer Relationships [Member] | ||||
Intangible assets subject to amortization | 4,300 | |||
Clarity Communications, LLC [Member] | Trademarks [Member] | ||||
Intangible assets subject to amortization | 200 | |||
Clarity Communications, LLC [Member] | Non-Compete Agreements [Member] | ||||
Intangible assets subject to amortization | $ 20 | |||
DC74 LLC [Member] | ||||
Cash | $ 493 | |||
Other Current Assets | 380 | |||
Property, Plant and Equipment | 1,684 | |||
Goodwill | 18,647 | |||
Intangible assets subject to amortization | 8,610 | |||
Other Assets | 47 | |||
Total assets acquired | 29,861 | |||
Current liabilities | 445 | |||
Long-term liabilities | 495 | |||
Total liabilities assumed | 940 | |||
Net assets acquired | 28,921 | |||
Less cash acquired | (493) | |||
Net consideration paid | 28,428 | |||
Less contingent consideration obligations | (4,900) | (5,200) | ||
Payments for acquisitions, net of cash acquired | $ 23,528 | |||
DC74 LLC [Member] | Customer Relationships [Member] | ||||
Intangible assets subject to amortization | 8,400 | |||
DC74 LLC [Member] | Trademarks [Member] | ||||
Intangible assets subject to amortization | 200 | |||
DC74 LLC [Member] | Non-Compete Agreements [Member] | ||||
Intangible assets subject to amortization | $ 10 |
Business Acquisitions (Rollforw
Business Acquisitions (Rollforward of Goodwill by Segment) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill, December 31, 2016 | $ 100,297 |
Acquisition Additions | 25,370 |
Goodwill, September 30, 2017 | 125,667 |
Data [Member] | |
Goodwill, December 31, 2016 | 90,561 |
Acquisition Additions | 25,370 |
Goodwill, September 30, 2017 | 115,931 |
R&SB [Member] | |
Goodwill, December 31, 2016 | 9,736 |
Goodwill, September 30, 2017 | $ 9,736 |
Cash Equivalents And Marketab45
Cash Equivalents And Marketable Securities (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Total proceeds from the sale or maturity of available-for-sale marketable securities | $ 4,500,000 | $ 32,300,000 | $ 42,096,000 | $ 107,075,000 |
Net realized gains or losses on available-for-sale securities | 0 | 0 | 0 | 0 |
Maximum [Member] | ||||
Net unrealized holding gains on available-for-sale securities | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 |
Cash Equivalents And Marketab46
Cash Equivalents And Marketable Securities (Schedule Of Cash Equivalents And Available-For-Sale Marketable Securities Reported At Fair Value) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
Total cash equivalents | $ 7,155 |
Total marketable securities, available-for-sale | 38,081 |
Total cash equivalents and marketable securities | 45,236 |
Money Market Mutual Funds [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Total cash equivalents | 6,742 |
Corporate Debt Securities [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Total cash equivalents | 413 |
Commercial Paper [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Total marketable securities, available-for-sale | 7,370 |
Variable Rate Demand Obligation [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Total marketable securities, available-for-sale | 13,995 |
Corporate Debt Securities [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Total marketable securities, available-for-sale | $ 16,716 |
Disclosures About Segments of47
Disclosures About Segments of an Enterprise and Related Information (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)customer | Sep. 30, 2016USD ($)customer | Sep. 30, 2017USD ($)customer | Sep. 30, 2016USD ($)customer | ||
Segment Reporting Information [Line Items] | |||||
Number of customers that individually accounted for approximately 10% of total revenues | customer | 0 | 0 | 0 | 0 | |
Top Five Customers [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Percentage to total revenue | 29.00% | 32.00% | 30.00% | 32.00% | |
Data [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Adjusted Earnings Before Interest Taxes Depreciation And Amortization | [1] | $ 14,913 | $ 14,567 | $ 44,325 | $ 41,707 |
R&SB [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Adjusted Earnings Before Interest Taxes Depreciation And Amortization | [1] | 5,150 | 5,723 | 15,931 | 16,211 |
RLEC Access [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Adjusted Earnings Before Interest Taxes Depreciation And Amortization | [1] | $ 4,309 | $ 3,970 | $ 13,479 | $ 13,233 |
[1] | Adjusted EBITDA is used by the Company's CODMs to evaluate performance. Adjusted EBITDA, as defined by the Company, is net income or loss attributable to Lumos Networks Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other income or expenses, equity-based compensation charges, amortization of actuarial losses on retirement plans, restructuring charges, transaction related charges and changes in the fair value of contingent consideration obligations. |
Disclosures About Segments of48
Disclosures About Segments of an Enterprise and Related Information (Summarized Financial Information Of Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | $ 55,610 | $ 51,771 | $ 166,892 | $ 155,013 | |
Cost of revenue | 10,042 | 9,657 | 30,978 | 29,948 | |
Gross profit | 42,369 | 82,951 | |||
Direct operating and selling costs | 3,700 | 3,416 | 10,749 | 9,601 | |
Indirect operating costs | 10,239 | 9,121 | 31,184 | 26,657 | |
Corporate general and administrative costs | 9,430 | 7,968 | 34,461 | 27,798 | |
Capital expenditures | 12,750 | 20,089 | 36,947 | 65,280 | |
Data [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 35,998 | 31,373 | 106,119 | 91,958 | |
Cost of revenue | 5,562 | 4,537 | 16,643 | 13,669 | |
Gross profit | 30,436 | 26,836 | 89,476 | 78,289 | |
Direct operating and selling costs | 2,454 | 2,014 | 6,940 | 5,600 | |
Indirect operating costs | 7,881 | 6,717 | 24,000 | 19,470 | |
Corporate general and administrative costs | 5,188 | 3,538 | 14,211 | 11,512 | |
Adjusted EBITDA | [1] | 14,913 | 14,567 | 44,325 | 41,707 |
Capital expenditures | 10,069 | 18,197 | 30,755 | 60,379 | |
R&SB [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 14,632 | 15,863 | 45,327 | 47,840 | |
Cost of revenue | 4,480 | 5,120 | 14,335 | 16,279 | |
Gross profit | 10,152 | 10,743 | 30,992 | 31,561 | |
Direct operating and selling costs | 1,091 | 1,227 | 3,337 | 3,509 | |
Indirect operating costs | 2,307 | 2,354 | 7,030 | 7,031 | |
Corporate general and administrative costs | 1,604 | 1,439 | 4,694 | 4,810 | |
Adjusted EBITDA | [1] | 5,150 | 5,723 | 15,931 | 16,211 |
Capital expenditures | 1,355 | 2,565 | 5,259 | 6,988 | |
RLEC Access [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Revenues | 4,980 | 4,535 | 15,446 | 15,215 | |
Gross profit | 4,980 | 4,535 | 15,446 | 15,215 | |
Direct operating and selling costs | 155 | 175 | 472 | 492 | |
Indirect operating costs | 51 | 50 | 154 | 156 | |
Corporate general and administrative costs | 465 | 340 | 1,341 | 1,334 | |
Adjusted EBITDA | [1] | 4,309 | 3,970 | 13,479 | 13,233 |
Corporate (Unallocated) [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Corporate general and administrative costs | 2,173 | 2,651 | 14,215 | 10,142 | |
Capital expenditures | $ 1,326 | $ (673) | $ 933 | $ (2,087) | |
[1] | Adjusted EBITDA is used by the Company's CODMs to evaluate performance. Adjusted EBITDA, as defined by the Company, is net income or loss attributable to Lumos Networks Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other income or expenses, equity-based compensation charges, amortization of actuarial losses on retirement plans, restructuring charges, transaction related charges and changes in the fair value of contingent consideration obligations. |
Disclosures About Segments of49
Disclosures About Segments of an Enterprise and Related Information (Reconciliation of Reportable Segments Measure of Profit to Consolidated Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Total reportable segments measure of profit | $ 24,372 | $ 24,260 | $ 73,735 | $ 71,151 | |
Interest expense | (7,771) | (7,164) | (22,756) | (21,165) | |
Other income, net | 8 | 48 | 647 | 320 | |
Depreciation and amortization and accretion of asset retirement obligations | (14,483) | (12,762) | (43,716) | (37,119) | |
Amortization of actuarial losses | (326) | (338) | (977) | (1,013) | |
Equity-based compensation | (1,156) | (1,661) | (9,152) | (8,477) | |
Restructuring charges | 384 | (34) | (1,823) | ||
Change in fair value of contingent consideration obligations | (100) | (700) | |||
Transaction related charges | (691) | (652) | (4,086) | (652) | |
(Loss) Income Before Income Taxes | (147) | 2,115 | (7,039) | 1,222 | |
Data [Member] | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Adjusted EBITDA | [1] | 14,913 | 14,567 | 44,325 | 41,707 |
R&SB [Member] | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Adjusted EBITDA | [1] | 5,150 | 5,723 | 15,931 | 16,211 |
RLEC Access [Member] | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Adjusted EBITDA | [1] | $ 4,309 | $ 3,970 | $ 13,479 | $ 13,233 |
[1] | Adjusted EBITDA is used by the Company's CODMs to evaluate performance. Adjusted EBITDA, as defined by the Company, is net income or loss attributable to Lumos Networks Corp. before interest, income taxes, depreciation and amortization, accretion of asset retirement obligations, net income or loss attributable to noncontrolling interests, other income or expenses, equity-based compensation charges, amortization of actuarial losses on retirement plans, restructuring charges, transaction related charges and changes in the fair value of contingent consideration obligations. |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | Aug. 06, 2015USD ($)shares | Jan. 02, 2015USD ($) | Apr. 30, 2013USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)item | Sep. 30, 2016USD ($) |
Line of credit borrowing capacity | $ 425,000,000 | ||||||
Term of loan | 5 years | ||||||
Amount outstanding retired | $ 311,000,000 | ||||||
Principal payments on senior secured term loans | $ 9,774,000 | $ 6,024,000 | |||||
Line of credit, interest coverage ratio, minimum | item | 3.25 | ||||||
Line of credit, leverage ratio | item | 3.48 | 3.48 | |||||
Line of credit, interest coverage ratio | item | 7 | 7 | |||||
Granted during the period, shares | shares | 5,500,000 | ||||||
Amortization of debt discount and issuance costs | $ 1,200,000 | $ 1,100,000 | $ 3,586,000 | 3,345,000 | |||
Patronage credits | 200,000 | $ 300,000 | 700,000 | $ 800,000 | |||
Future minimum lease payments | 7,500,000 | 7,500,000 | |||||
Future minimum lease payments, remainder of 2017 | 100,000 | 100,000 | |||||
Future minimum lease payments, 2018 | 500,000 | 500,000 | |||||
Future minimum lease payments, 2019 | 500,000 | 500,000 | |||||
Future minimum lease payments, 2020 | 400,000 | 400,000 | |||||
Future minimum lease payments, 2021 | 400,000 | 400,000 | |||||
Future minimum lease payments, thereafter | 5,600,000 | $ 5,600,000 | |||||
January 1, 2017 Through December 31, 2017 | |||||||
Line of credit, leverage ratio, maximum | item | 4.50 | ||||||
January 1, 2018 Through December 31, 2018 | |||||||
Line of credit, leverage ratio, maximum | item | 4.25 | ||||||
After December 31, 2018 | |||||||
Line of credit, leverage ratio, maximum | item | 4 | ||||||
Revolver [Member] | |||||||
Line of credit current borrowing capacity | 50,000,000 | ||||||
Line of Credit Facility, Amount Outstanding | 0 | $ 0 | |||||
Amount outstanding, credit facility | $ 0 | $ 0 | |||||
Basis spread on variable rate | 3.00% | ||||||
Term Loan A [Member] | |||||||
Line of credit current borrowing capacity | $ 100,000,000 | ||||||
Term of loan | 5 years | ||||||
Basis spread on variable rate | 3.00% | ||||||
Term Loan A [Member] | After December 31, 2016 [Member] | |||||||
Quarterly payments per annum | 2.50% | 2.50% | |||||
Term Loan B [Member] | |||||||
Line of credit current borrowing capacity | $ 275,000,000 | ||||||
Term of loan | 6 years | ||||||
Basis spread on variable rate | 3.25% | ||||||
Quarterly payments per annum | 1.00% | 1.00% | |||||
Term Loan A, B And C [Member] | |||||||
Principal payments on senior secured term loans | $ 40,000,000 | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.28% | 4.28% | |||||
Debt issuance costs | $ 900,000 | ||||||
Maturities of long-term debt, remainder of 2017 | $ 3,200,000 | $ 3,200,000 | |||||
Maturities of long-term debt, 2018 | 70,900,000 | 70,900,000 | |||||
Maturities of long-term debt, 2019 | $ 256,500,000 | $ 256,500,000 | |||||
Term Loan C [Member] | |||||||
Line of credit current borrowing capacity | $ 28,000,000 | ||||||
Basis spread on variable rate | 3.25% | ||||||
Quarterly payments per annum | 1.00% | 1.00% | |||||
Unsecured Debt [Member] | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 12.55% | 12.55% | |||||
Debt Instrument, Face Amount | 150,000,000 | ||||||
Payment of financing costs | 7,100,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | |||||
Debt Instrument, Unamortized Discount | 24,800,000 | ||||||
Proceeds from Issuance of Warrants | 23,500,000 | ||||||
Portion of Debt Discount offset from proceeds allocated to warrants | 1,300,000 | ||||||
Debt discount, amount offset from proceeds | 1,500,000 | ||||||
Debt issuance costs | $ 6,000,000 | ||||||
Maturities of long-term debt, thereafter | $ 150,000,000 | $ 150,000,000 | |||||
Minimum [Member] | |||||||
Term of capital leases | 4 years | ||||||
Maximum [Member] | |||||||
Term of capital leases | 5 years |
Long-Term Debt (Schedule Of Lon
Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Less: current portion of long term debt | $ 73,825 | $ 13,530 |
Long-term debt, net of unamortized discount and debt issuance costs, excluding current portion | 388,027 | 454,885 |
Long-term Debt [Member] | ||
Credit facility | 330,613 | 340,385 |
8% Notes | 150,000 | 150,000 |
Capital lease obligations | 7,465 | 7,842 |
Long-term debt | 488,078 | 498,227 |
Less: current portion of long term debt | 73,825 | 13,530 |
Long-term debt, net of unamortized discount and debt issuance costs, excluding current portion | 414,253 | 484,697 |
Unamortized Discount and Debt Issuance Costs [Member] | ||
Credit facility | 2,266 | 3,283 |
8% Notes | 23,960 | 26,529 |
Long-term debt | 26,226 | 29,812 |
Long-term debt, net of unamortized discount and debt issuance costs, excluding current portion | $ 26,226 | $ 29,812 |
Long-Term Debt (Schedule of Cap
Long-Term Debt (Schedule of Capitalized Lease Assets) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Vehicles [Member] | |
Historical cost | $ 2,657 |
Accumulated amortization | (1,945) |
Network capacity IRU [Member] | |
Historical cost | 8,871 |
Accumulated amortization | (776) |
Assets Held under Capital Leases [Member] | |
Historical cost | 11,528 |
Accumulated amortization | $ (2,721) |
Supplementary Disclosures Of 53
Supplementary Disclosures Of Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplementary Disclosures Of Cash Flow Information [Abstract] | ||
Interest (net of amounts capitalized) | $ 19,222 | $ 17,634 |
Income taxes | 304 | |
Income tax refunds | 283 | |
Additions to property, plant and equipment included in accounts payable and other accrued liabilities | 1,130 | 2,930 |
Capital lease obligations | 7,936 | |
Cash received from patronage credits | 700 | 800 |
Interest capitalized | $ 400 | $ 800 |
Fair Value Of Financial Instr54
Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jan. 31, 2017 | Jan. 04, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cost Method Investments | $ 1,643 | $ 1,479 | ||
Contingent consideration obligations | 10,200 | |||
CoBank [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term investments for which it is not practicable to estimate fair value | 1,500 | $ 1,400 | ||
Clarity Communications, LLC [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent consideration obligations | 5,000 | $ 4,600 | ||
DC74 LLC [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent consideration obligations | $ 5,200 | $ 4,900 |
Fair Value Of Financial Instr55
Fair Value Of Financial Instruments (Summary Of Financial Assets and Liabilities Measured At Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash equivalents | $ 7,155 | |
Total marketable securities | 38,081 | |
Total financial assets | 45,236 | |
Contingent consideration obligations | $ 10,200 | |
Total financial liabilities | 10,200 | |
Money Market Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 6,742 | |
Variable Rate Demand Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total marketable securities | 13,995 | |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total marketable securities | 7,370 | |
Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 413 | |
Total marketable securities | 16,716 | |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 6,742 | |
Total financial assets | 6,742 | |
Level 1 [Member] | Money Market Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 6,742 | |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 413 | |
Total marketable securities | 38,081 | |
Total financial assets | 38,494 | |
Level 2 [Member] | Variable Rate Demand Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total marketable securities | 13,995 | |
Level 2 [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total marketable securities | 7,370 | |
Level 2 [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 413 | |
Total marketable securities | $ 16,716 | |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration obligations | 10,200 | |
Total financial liabilities | $ 10,200 |
Fair Value Of Financial Instr56
Fair Value Of Financial Instruments (Schedule Of Carrying Amounts And Estimated Fair Values Of Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Capital lease obligations | $ 7,465 | $ 7,842 |
Fair Value (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Capital lease obligations | 7,465 | 7,842 |
Term Loan A, B And C [Member] | Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Credit facility | 328,347 | 337,102 |
Term Loan A, B And C [Member] | Fair Value (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Credit facility | 297,196 | 304,571 |
Unsecured Debt [Member] | Carrying Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
8% Notes | 126,040 | 123,471 |
Unsecured Debt [Member] | Fair Value (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
8% Notes | $ 135,556 | $ 133,965 |
Equity (Summary Of Activity And
Equity (Summary Of Activity And Status Of Equity) (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jan. 01, 2017 | Dec. 31, 2016 | |
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | $ 140,794 | $ 140,794 | $ 136,060 | |||
Cumulative effect adjustment of adoption of ASU 2016-09 | 1,908 | |||||
Balance, January 1, 2017 | $ 137,968 | |||||
Net Loss Attributable to Lumos Networks Corp. | (453) | $ 1,023 | (5,240) | $ (627) | ||
Other comprehensive income (loss), net of tax | 199 | $ 199 | 605 | 634 | ||
Equity-based compensation expense | 9,152 | |||||
Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares) | $ (2,766) | |||||
Stock options exercises, shares | 105 | |||||
Stock option exercises | $ 1,036 | |||||
Capital distribution to noncontrolling interests | $ (232) | |||||
Net income attributable to noncontrolling interests | 39 | |||||
Balance, September 30, 2017 | 140,794 | 140,794 | ||||
Common Stock [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | $ 241 | $ 241 | $ 236 | |||
Balance, December 31, 2016, shares | 23,607 | |||||
Balance, January 1, 2017 | $ 236 | |||||
Balance, Shares | 24,059 | 23,607 | 23,607 | 23,607 | ||
Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares) | $ 5 | |||||
Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares), shares | 410 | |||||
Stock options exercises, shares | 42 | |||||
Balance, September 30, 2017 | $ 241 | $ 241 | ||||
Balance, September 30, 2017, shares | 24,059 | 24,059 | ||||
Treasury Stock [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | $ (2,178) | $ (2,178) | $ (2) | |||
Balance, December 31, 2016, shares | 2 | |||||
Cumulative effect adjustment of adoption of ASU 2016-09 | ||||||
Balance, January 1, 2017 | $ (2) | |||||
Balance, Shares | 123 | 2 | 2 | 2 | ||
Net Loss Attributable to Lumos Networks Corp. | ||||||
Other comprehensive income (loss), net of tax | ||||||
Equity-based compensation expense | ||||||
Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares) | $ (2,872) | |||||
Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares), shares | 162 | |||||
Stock options exercises, shares | (41) | |||||
Stock option exercises | $ 696 | |||||
Net income attributable to noncontrolling interests | ||||||
Balance, September 30, 2017 | $ (2,178) | $ (2,178) | ||||
Balance, September 30, 2017, shares | 123 | 123 | ||||
Additional Paid-In Capital [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | $ 184,930 | $ 184,930 | $ 175,008 | |||
Cumulative effect adjustment of adoption of ASU 2016-09 | 329 | |||||
Balance, January 1, 2017 | $ 175,337 | |||||
Equity-based compensation expense | 9,152 | |||||
Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares) | 101 | |||||
Stock option exercises | 340 | |||||
Balance, September 30, 2017 | 184,930 | 184,930 | ||||
Accumulated Deficit [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | (32,725) | (32,725) | (29,064) | |||
Cumulative effect adjustment of adoption of ASU 2016-09 | 1,579 | |||||
Balance, January 1, 2017 | (27,485) | |||||
Net Loss Attributable to Lumos Networks Corp. | (5,240) | |||||
Balance, September 30, 2017 | (32,725) | (32,725) | ||||
Accumulated Other Comprehensive Loss [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | (10,399) | (10,399) | (11,004) | |||
Balance, January 1, 2017 | (11,004) | |||||
Other comprehensive income (loss), net of tax | 605 | |||||
Balance, September 30, 2017 | (10,399) | (10,399) | ||||
Total Lumos Networks Corp. Stockholders' Equity [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | 139,869 | 139,869 | 135,174 | |||
Cumulative effect adjustment of adoption of ASU 2016-09 | 1,908 | |||||
Balance, January 1, 2017 | 137,082 | |||||
Net Loss Attributable to Lumos Networks Corp. | (5,240) | |||||
Other comprehensive income (loss), net of tax | 605 | |||||
Equity-based compensation expense | 9,152 | |||||
Restricted shares issued, shares issued through the employee stock purchase plan and 401(k) matching contributions (net of shares reacquired through restricted stock forfeits and settlement of tax withholding obligations on vesting of shares) | (2,766) | |||||
Stock option exercises | 1,036 | |||||
Balance, September 30, 2017 | 139,869 | 139,869 | ||||
Noncontrolling Interests [Member] | ||||||
Stockholders Equity [Line Items] | ||||||
Balance, December 31, 2016 | 925 | 925 | $ 886 | |||
Balance, January 1, 2017 | $ 886 | |||||
Net income attributable to noncontrolling interests | 39 | |||||
Balance, September 30, 2017 | $ 925 | $ 925 |
Earnings (Loss) Per Share (Narr
Earnings (Loss) Per Share (Narrative) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Excluded from computation of diluted earnings per common share | 499,442 | 772,146 | 478,767 | 1,008,939 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Excluded from computation of diluted earnings per common share | 530,991 | 345,439 | 515,995 | 469,509 |
Warrants and Rights Subject to Mandatory Redemption [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Excluded from computation of diluted earnings per common share | 5,500,000 | 5,500,000 | ||
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares | 1,202,464 | 1,097,281 |
Earnings (Loss) Per Share (Sche
Earnings (Loss) Per Share (Schedule Of Computation Of Basic And Diluted Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings (Loss) Per Share [Abstract] | ||||
Net (loss) income attributable to Lumos Networks Corp. | $ (453) | $ 1,023 | $ (5,240) | $ (627) |
Less: net income attributable to Lumos Networks Corp. allocable to participating securities | (36) | |||
Numerator for basic and diluted (loss) earnings per common share | $ (453) | $ 987 | $ (5,240) | $ (627) |
Weighted average basic shares outstanding | 23,940 | 23,463 | 23,723 | 23,300 |
Less: weighted average participating securities and nonvested performance-based restricted shares | (751) | (846) | (803) | (804) |
Denominator for basic (loss) earnings per common share | 23,189 | 22,617 | 22,920 | 22,496 |
Plus: potentially dilutive restricted shares and stock options | 237 | |||
Denominator for diluted (loss) earnings per common share | 23,189 | 22,854 | 22,920 | 22,496 |
Basic and diluted (loss) earnings per share | $ (0.02) | $ 0.04 | $ (0.23) | $ (0.03) |
Stock Options, Restricted Sto60
Stock Options, Restricted Stock and Stock Warrants (Narrative) (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Securities remained available for issuance | 533,114 |
Number of stock options issued | 0 |
Stock plan vesting description | Restricted shares generally cliff vest on the third anniversary of the grant date for employees and generally cliff vest on the first anniversary of the grant date for non-employee directors. Some of the outstanding restricted stock awards vest on a graded vesting schedule over a five year period. |
Vesting schedule | 5 years |
Total fair value of options vested | $ | $ 0.4 |
Sale of Stock, Price Per Share | $ / shares | $ 18 |
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Number of Shares | 1,225,278 |
Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ | $ 0.4 |
Unrecognized compensation cost recognition period, in years | 9 months 18 days |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares issued during the period | 89,067 |
Unrecognized compensation cost | $ | $ 3.4 |
Unrecognized compensation cost recognition period, in years | 1 year 4 months 24 days |
Equity And Cash Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum number of shares of common stock available for awards | 5,500,000 |
Stock Options, Restricted Sto61
Stock Options, Restricted Stock and Stock Warrants (Summary Of Stock Options Activity) (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Stock Plans [Abstract] | |
Stock options outstanding at December 31, 2016, Shares | 1,749,000 |
Stock options outstanding at December 31, 2016, Weighted-Average Exercise Price per Share | $ / shares | $ 12.35 |
Granted during the period, Shares | 0 |
Exercised during the period, Shares | (105,000) |
Exercised during the period, Weighted-Average Exercise Price per Share | $ / shares | $ 13.66 |
Forfeited during the period, Shares | |
Forfeited during the period, Weighted-Average Exercise Price per Share | $ / shares | |
Expired during the period, Shares | (29,000) |
Expired during the period, Weighted-Average Exercise Price per Share | $ / shares | $ 19.44 |
Stock options outstanding at September 30, 2017, Shares | 1,615,000 |
Stock options outstanding at September 30, 2017, Weighted-Average Exercise Price per Share | $ / shares | $ 12.14 |
Stock options outstanding at September 30, 2017, Weighted-Average Remaining Contractual Term, in years | 4 years 9 months 18 days |
Stock options outstanding a September 30, 2017, Aggregate Intrinsic Value | $ | $ 9,451 |
Stock options exercisable at September 30, 2017, Shares | 1,280,000 |
Stock options exercisable at September 30, 2017, Weighted-Average Exercise Price per Share | $ / shares | $ 11.98 |
Stock options exercisable at September 30, 2017, Weighted-Average Remaining Contractual Term, in years | 4 years 8 months 12 days |
Stock options exercisable at September 30, 2017, Aggregate Intrinsic Value | $ | $ 7,707 |
Total stock options outstanding, vested and expected to vest at September 30, 2017, Shares | 1,615,000 |
Total stock options outstanding, vested and expected to vest at September 30, 2017, Weighted-Average Exercise Price per Share | $ / shares | $ 12.14 |
Total stock options outstanding, vested and expected to vest at September 30, 2017, Aggregate Intrinsic Value | $ | $ 9,451 |
Stock Options, Restricted Sto62
Stock Options, Restricted Stock and Stock Warrants (Summary Of Restricted Stock Awards Activity) (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock outstanding at December 31, 2016, Shares | shares | 849,000 |
Stock outstanding at December 31, 2016, Weighted Average Grant Date Fair Value per Share | $ / shares | $ 13.85 |
Granted during the period, Shares | shares | 89,067 |
Granted during the period, Weighted Average Grant Date Fair Value per Share | $ / shares | $ 16.43 |
Vested during the period, Shares | shares | (202,000) |
Vested during the period, Weighted Average Grant Date Fair Value per Share | $ / shares | $ 13.57 |
Restricted stock outstanding at September 30, 2017, Shares | shares | 736,000 |
Stock outstanding at September 30, 2017, Weighted Average Grant Date Fair Value per Share | $ / shares | $ 14.24 |
Stock Options, Restricted Sto63
Stock Options, Restricted Stock and Stock Warrants (Summary of Stock Warrant Activity) (Details) - $ / shares | Aug. 06, 2015 | Sep. 30, 2017 |
Granted during the period, shares | 5,500,000 | |
Stock Warrants [Member] | ||
Stock warrants oustanding at December 31, 2016, Shares | 5,500,000 | |
Stock warrants outstanding at December 31, 2016, weighted average exercise price per share | $ 13.99 | |
Granted during the period, shares | ||
Exercised during the period, shares | ||
Expired during the period, shares | ||
Granted during the period, weighted average exercise price | ||
Exercised during the period, Weighted Average Exercise Price Per Share | ||
Expired during the period, weighted average exercise price per share | ||
Stock warrants outstanding at June 30, 2017, Shares | 5,500,000 | |
Stock warrants outstanding at June 30, 2017, weighted average exercise price | $ 13.99 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes [Abstract] | ||||
Income Tax Expense (Benefit) | $ 335 | $ 1,046 | $ (1,838) | $ 1,712 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - Equity Method Investee [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0.2 | $ 0.3 | $ 0.8 | $ 0.9 | |
Related Party Transaction, Other Revenues from Transactions with Related Party | 1 | $ 1.3 | 3.1 | $ 3.7 | |
Due from Related Party | $ 0.3 | $ 0.3 | $ 0.4 |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Restructuring Charges [Abstract] | ||||
Restructuring charges | $ (384) | $ 34 | $ 1,823 | |
Restructuring Reserve | $ 53 | $ 398 |
Restructuring Charges (Summary
Restructuring Charges (Summary Of Restructuring Liability Balance) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance at December 31, 2016 | $ 398 |
Additions, net of adjustments | 34 |
Payments | (379) |
Ending balance at September 30, 2017 | 53 |
Employee Severance And Termination Benefits [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance at December 31, 2016 | 398 |
Additions, net of adjustments | 34 |
Payments | (379) |
Ending balance at September 30, 2017 | $ 53 |
Commitments And Contingencies (
Commitments And Contingencies (Details) $ in Millions | Sep. 30, 2017USD ($) |
Commitments And Contingencies [Abstract] | |
Purchase commitments relating to capital expenditures | $ 1.1 |