Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 28, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SHENANDOAH TELECOMMUNICATIONS CO/VA/ | |
Entity Central Index Key | 354,963 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 48,913,327 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 40,571 | $ 76,812 |
Restricted cash | 2,167 | 0 |
Accounts receivable, net | 77,392 | 29,778 |
Income taxes receivable | 0 | 7,694 |
Inventory, net | 19,419 | 4,183 |
Prepaid expenses and other | 18,562 | 8,573 |
Deferred income taxes | 0 | 907 |
Total current assets | 158,111 | 127,947 |
Investments, including $2,784 and $2,654 carried at fair value | 12,526 | 10,679 |
Building held for sale | 4,950 | 0 |
Property, plant and equipment, net | 653,523 | 410,018 |
Other Assets | ||
Intangible assets, net | 464,146 | 66,993 |
Goodwill | 151,730 | 10 |
Deferred charges and other assets, net | 10,855 | 11,504 |
Other assets, net | 626,731 | 78,507 |
Total assets | 1,455,841 | 627,151 |
Current Liabilities | ||
Current maturities of long-term debt, net of unamortized loan fees | 20,147 | 22,492 |
Accounts payable | 27,951 | 13,009 |
Advanced billings and customer deposits | 23,024 | 11,674 |
Accrued compensation | 6,020 | 5,915 |
Income taxes payable | 29,717 | 0 |
Accrued liabilities and other | 31,615 | 7,639 |
Total current liabilities | 138,474 | 60,729 |
Long-term debt, less current maturities, net of unamortized loan fees | 795,426 | 177,169 |
Other Long-Term Liabilities | ||
Deferred income taxes | 142,181 | 74,868 |
Deferred lease payable | 9,370 | 8,142 |
Asset retirement obligations | 15,769 | 7,266 |
Other liabilities | 50,514 | 9,039 |
Total other long-term liabilities | 217,834 | 99,315 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Common stock | 44,344 | 32,776 |
Retained earnings | 263,633 | 256,747 |
Accumulated other comprehensive income (loss), net of taxes | (3,870) | 415 |
Total shareholders' equity | 304,107 | 289,938 |
Total liabilities and shareholders' equity | $ 1,455,841 | $ 627,151 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Investments at fair value | $ 2,784 | $ 2,654 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract] | ||||
Operating revenues | $ 130,309 | $ 85,701 | $ 222,880 | $ 169,989 |
Operating expenses: | ||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | 50,296 | 30,280 | 82,057 | 60,970 |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 33,694 | 18,606 | 55,120 | 36,718 |
Integration and acquisition expenses | 20,054 | 402 | 20,386 | 1,024 |
Depreciation and amortization | 32,415 | 17,663 | 50,154 | 34,001 |
Total operating expenses | 136,459 | 66,951 | 207,717 | 132,713 |
Operating income (loss) | (6,150) | 18,750 | 15,163 | 37,276 |
Other income (expense): | ||||
Interest expense | (5,904) | (1,940) | (7,524) | (3,855) |
Gain on investments, net | 21 | 98 | 109 | 200 |
Non-operating income, net | 146 | 442 | 614 | 874 |
Income (loss) before income taxes | (11,887) | 17,350 | 8,362 | 34,495 |
Income tax expense (benefit) | (4,892) | 6,876 | 1,477 | 13,735 |
Net income (loss) | (6,995) | 10,474 | 6,885 | 20,760 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on interest rate hedge, net of tax | (3,238) | 326 | (4,285) | (581) |
Comprehensive income (loss) | $ (10,233) | $ 10,800 | $ 2,600 | $ 20,179 |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ (0.14) | $ 0.22 | $ 0.14 | $ 0.43 |
Diluted (in dollars per share) | $ (0.14) | $ 0.21 | $ 0.14 | $ 0.42 |
Weighted average shares outstanding, basic (in shares) | 48,830 | 48,380 | 48,696 | 48,343 |
Weighted average shares outstanding, diluted (in shares) | 48,830 | 49,004 | 49,415 | 48,927 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss), Net of Tax [Member] | Total |
Balance at Dec. 31, 2014 | $ 29,712 | $ 227,512 | $ 1,122 | $ 258,346 |
Balance (in shares) at Dec. 31, 2014 | 48,265 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | $ 0 | 40,864 | 0 | 40,864 |
Other comprehensive loss, net of tax | 0 | 0 | (707) | (707) |
Dividends declared ($0.24 per share) | 0 | (11,629) | 0 | (11,629) |
Dividends reinvested in common stock | $ 544 | 0 | 0 | 544 |
Dividends reinvested in common stock (in shares) | 22 | |||
Stock based compensation | $ 2,719 | 0 | 0 | 2,719 |
Stock options exercised | $ 996 | 0 | 0 | 996 |
Stock options exercised (in shares) | 87 | |||
Common stock issued for share awards | $ 0 | 0 | 0 | 0 |
Common stock issued for share awards (in shares) | 212 | |||
Common stock issued | $ 11 | 0 | 0 | 11 |
Common stock issued (in shares) | 1 | |||
Common stock repurchased | $ (1,885) | 0 | 0 | (1,885) |
Common stock repurchased (in shares) | (111) | |||
Net excess tax benefit from stock options exercised | $ 679 | 0 | 0 | 679 |
Balance at Dec. 31, 2015 | $ 32,776 | 256,747 | 415 | 289,938 |
Balance (in shares) at Dec. 31, 2015 | 48,475 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | $ 0 | 6,885 | 0 | 6,885 |
Other comprehensive loss, net of tax | 0 | 0 | (4,285) | (4,285) |
Stock based compensation | 2,404 | 0 | 0 | 2,404 |
Stock options exercised | $ 2,942 | 0 | 0 | 2,942 |
Stock options exercised (in shares) | 319 | |||
Common stock issued for share awards | $ 0 | 0 | 0 | 0 |
Common stock issued for share awards (in shares) | 188 | |||
Common stock issued | $ 5 | 0 | 0 | 5 |
Common stock issued (in shares) | 1 | |||
Common stock issued to acquire non-controlling interests of nTelos | $ 10,400 | 0 | 0 | 10,400 |
Common stock issued to acquire non-controlling interests of nTelos (in shares) | 76 | |||
Common stock repurchased | $ (4,183) | 0 | 0 | (4,183) |
Common stock repurchased (in shares) | (177) | |||
Balance at Jun. 30, 2016 | $ 44,344 | $ 263,633 | $ (3,870) | $ 304,107 |
Balance (in shares) at Jun. 30, 2016 | 48,883 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2015$ / shares | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract] | |
Dividends declared per share (in dollars per share) | $ 0.24 |
UNAUDITED CONDENSED CONSOLIDAT7
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flows From Operating Activities | ||
Net income | $ 6,885 | $ 20,760 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 42,753 | 33,189 |
Amortization reflected as operating expense | 7,401 | 812 |
Amortization reflected as contra revenue | 3,290 | 0 |
Provision for bad debt | 752 | 905 |
Straight line adjustment to reduce management fee revenue | 3,406 | 0 |
Stock based compensation expense | 1,957 | 1,430 |
Excess tax benefits on stock awards | 0 | (450) |
Deferred income taxes | (53,238) | (3,656) |
Net loss on disposal of equipment | 12 | 227 |
Unrealized (gain) on investments | (83) | (54) |
Net gains from patronage and equity investments | (315) | (385) |
Amortization of long term debt issuance costs | 1,205 | 289 |
Other | 2,120 | 647 |
(Increase) decrease in: | ||
Accounts receivable | (4,332) | (339) |
Inventory, net | (11,424) | (414) |
Income taxes receivable | 7,694 | 14,752 |
Other assets | 2,066 | (3,421) |
Increase (decrease) in: | ||
Accounts payable | 5,529 | (2,911) |
Income taxes payable | 34,195 | 499 |
Deferred lease payable | 1,228 | 506 |
Other deferrals and accruals | 9,692 | (2,116) |
Net cash provided by operating activities | 60,793 | 60,270 |
Cash Flows From Investing Activities | ||
Acquisition of property, plant and equipment | (60,123) | (25,135) |
Proceeds from sale of equipment | 185 | 52 |
Cash distributions from investments | 53 | 3 |
Cash disbursed for acquisition, net of cash acquired | (654,832) | 0 |
Net cash used in investing activities | (714,717) | (25,080) |
Cash Flows From Financing Activities | ||
Principal payments on long-term debt | (201,257) | (11,500) |
Amounts borrowed under debt agreements | 835,000 | 0 |
Cash paid for debt issuance costs | (14,825) | 0 |
Excess tax benefits on stock awards | 0 | 450 |
Repurchases of common stock | (4,183) | (1,450) |
Proceeds from issuances of common stock | 2,948 | 530 |
Net cash provided by/(used in) financing activities | 617,683 | (11,970) |
Net increase (decrease) in cash and cash equivalents | (36,241) | 23,220 |
Cash and cash equivalents: | ||
Beginning | 76,812 | 68,917 |
Ending | 40,571 | 92,137 |
Cash payments for: | ||
Interest | 6,659 | 3,782 |
Income taxes paid, net of refunds received | $ 12,796 | $ 2,139 |
UNAUDITED CONDENSED CONSOLIDAT8
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Other cash flow information: | ||
Capital expenditures | $ 5,200 | $ 1,200 |
Common stock issued to acquire non-controlling interests of nTelos | 10,400 | |
Unamortized loan allocation to long-term debt current maturities | $ 4,300 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The interim condensed In connection with the nTelos acquisition and exchange transaction with Sprint (see Note 2), the Company has added the following significant accounting policies: Revenue Recognition Under the Company’s amended affiliate agreement, Sprint agreed to waive the management fee, which is historically presented as a contra-revenue by the Company, for a period of approximately six years. The impact of Sprint’s waiver of the management fee over the approximate six-year period is reflected as an increase in revenue, offset by the non-cash adjustment to recognize this impact on a straight-line basis over the contract term of approximately 14 years. Goodwill Goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates that impairment is more likely than not to have occurred. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The Company conducts its annual impairment testing of goodwill as of October 1. Pension Benefits and Retirement Benefits Other Than Pensions Through the Company’s acquisition of nTelos, the Company assumed nTelos’ non-contributory defined benefit pension plan (“Pension Plan”) covering all employees who met eligibility requirements and were employed by nTelos prior to October 1, 2003. The Pension Plan was closed to nTelos employees hired on or after October 1, 2003. Pension benefits vest after five years of plan service and are based on years of service and an average of the five highest consecutive years of compensation subject to certain reductions if the employee retires before reaching age 65 and elects to receive the benefit prior to age 65. Effective December 31, 2012, nTelos froze future benefit accruals. The Company uses updated mortality tables published by the Society of Actuaries that predict increasing life expectancies in the United States. IRC Sections 412 and 430 and Sections 302 and 303 of the Employee Retirement Income Security Act of 1974, as amended establish minimum funding requirements for defined benefit pension plans. The minimum required contribution is generally equal to the target normal cost plus the shortfall amortization installments for the current plan year and each of the six preceding plan years less any calculated credit balance. If plan assets (less calculated credits) are equal to or exceed the funding target, the minimum required contribution is the target normal cost reduced by the excess funding, but not below zero. The Company’s policy is to make contributions to stay at or above the threshold required in order to prevent benefit restrictions and related additional notice requirements and is intended to provide not only for benefits based on service to date, but also for those expected to be earned in the future. The Company also assumed two qualified nonpension postretirement benefit plans that provide certain health care and life benefits for nTelos retired employees that meet eligibility requirements. The health care plan is contributory, with participants’ contributions adjusted annually. The life insurance plan also is contributory. These obligations, along with all of the pension plans and other postretirement benefit plans, are obligations assumed by the Company. Eligibility for the life insurance plan is restricted to active pension participants age 50-64 as of January 5, 1994. Neither plan is eligible to employees hired after April 1993. The accounting for the plans anticipates that the Company will maintain a consistent level of cost sharing for the benefits with the retirees. The Company’s share of the projected costs of benefits that will be paid after retirement is generally being accrued by charges to expense over the eligible employees’ service periods to the dates they are fully eligible for benefits. The Company records annual amounts relating to the Pension Plan and postretirement benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, turnover rates and healthcare cost trend rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income (loss) and amortized to net periodic cost over future periods using the corridor method. |
Acquisition of NTELOS Holdings
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint | 6 Months Ended |
Jun. 30, 2016 | |
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint [Abstract] | |
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint | 2. Acquisition of NTELOS Holdings Corp. and Exchange with Sprint On May 6, 2016, the Company completed its previously announced acquisition of NTELOS Holdings Corp. (“nTelos”) for $663.7 million in cash, net of cash acquired. The purchase price was financed by a credit facility arranged by CoBank, ACB (see Note 14). The Company has included the operations of nTelos for financial reporting purposes for the period subsequent to the acquisition. The Company has accounted for the acquisition of nTelos under the acquisition method of accounting, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations”, and will account for any measurement period adjustments under Accounting Standards Update (“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 acquisition based on their estimated fair values. The preliminary allocation of the purchase price was based upon management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed of nTelos, with the excess recorded as goodwill. (in thousands): Accounts receivable $ 48,476 Inventory 3,810 Restricted cash 2,167 Investments 1,501 Prepaids expenses and other assets 14,835 Building held for sale 4,950 Property, plant and equipment 223,900 Spectrum licenses 198,200 Customer based contract rights 198,200 Contract based intangible assets 11,000 Goodwill 151,627 Other long term assets 10,288 Total assets acquired $ 868,954 Accounts payable $ 8,648 Advanced billings and customer deposits 12,477 Accrued expenses 25,230 Capital lease liability 418 Deferred tax liabilities 124,964 Retirement benefits 19,461 Other long-term liabilities 14,056 Total liabilities assumed 205,254 Net assets acquired $ 663,700 Finalization of the purchase price allocations is dependent on final review and acceptance of the independent appraiser’s valuation report. Immediately after acquiring nTelos, Shenandoah Personal Communications, LLC, (“PCS”) a wholly-owned subsidiary of the Company, completed its previously announced transaction with SprintCom, Inc., an affiliate of Sprint Corporation (“Sprint”). Pursuant to this transaction, among other things, the Company exchanged spectrum licenses valued at $198.2 million and customer based contract rights, valued at $198.2 million, acquired from nTelos with Sprint, and received an expansion of its affiliate service territory to include most of the service area served by nTelos, valued at $258.1 million, as well as additional customer based contract rights, valued at $138.3 million, relating to nTelos’ and Sprint’s legacy customers in the Company’s affiliate service territory. These exchanges were accounted for in accordance with ASC 845, “Nonmonetary Transactions”. The value of the affiliate agreement expansion is based on changes to the amended affiliate agreement that include: ● an increase in the price to be paid by Sprint from 80% to 90% of the entire business value of PCS if the affiliate agreement is not renewed; ● extension of the affiliate agreement with Sprint by five years to 2029; ● expanded territory in the nTelos service area; ● rights to serve all future Sprint customers in the affiliate service territory; ● the Company’s commitment to upgrade certain coverage and capacity in its newly acquired service area; and ● a reduction of the management fee charged by Sprint under the amended affiliate agreement; not to exceed $4.2 million in an individual month until the total waived fee equals $251.8 million, as well as an additional waiver of the management fee charged with respect to the former nTelos customers until the earlier of migration to the Sprint back-office billing and related systems or six months following the acquisition; not to exceed $5.0 million. Intangible assets resulting from the acquisition of nTelos and the Sprint exchange, both described above, are noted below (dollars in thousands): Useful Life Basis Affiliate contract agreement 14 years $ 258,100 Customer based contract rights 4-10 years 138,300 Contract based intangible assets 3-19 years 11,000 The affiliate contract agreement intangible asset will be amortized on a straight-line basis and recorded as a contra-revenue over the 14 year contract term. The other contract based intangible assets will be amortized on a straight-line basis and recorded through amortization expense. The customer based contract rights will be amortized over the life of the customers, gradually decreasing over the expected life of this asset, and recorded through amortization expense. The Company has recorded goodwill in its Wireless segment as a result of the nTelos acquisition. This goodwill is not amortizable for tax purposes, as the Company acquired the common stock of nTelos. Prior to the acquisition, nTelos was eligible to receive up to $5.0 million in connection with its winning bid in the Connect America Fund's Mobility Fund Phase I Auction ("Auction 901"). Pursuant to the terms of Auction 901, nTelos obtained a Letter of Credit (“LOC”) in the amount of $2.2 million for the benefit of the Universal Service Administrative Company (“USAC”) to cover each disbursement plus the amount of the performance default penalty (10% of the total eligible award). In accordance with the terms of the LOC, nTelos deposited $2.2 million into a separate account at the issuing bank to serve as cash collateral and is presented as restricted cash. Such funds will be released to the Company when the LOC is terminated without being drawn upon by USAC. At the time of the acquisition, certain third party investors held a non-controlling interest in one of nTelos’ subsidiaries. Immediately after the acquisition of nTelos, the Company acquired these interests in exchange for 380,000 shares of Company common stock, to be paid in five equal installments, with the first installment paid immediately and the remaining four to be paid over the next four years. This transaction was valued at $10.4 million. In connection with the acquisition, at closing, the Company borrowed $810.0 million in term loans with a weighted average effective interest rate of approximately 3.84%. The proceeds were used to finance in part the acquisition, including the repayment of the Company’s term loan of $195.5 million, and the repayment of nTelos’ term loans at the outstanding principal amount of $519.7 million, without penalty. Following are the unaudited pro forma results of the Company for the three and six months ended June 30, 2016 and 2015 as if the acquisition of nTelos had occurred at the beginning of each of the periods presented (in millions): Three Months Ended June 30, 2016 2015 Operating revenues $ 161.1 $ 170.1 Income (loss) before income taxes $ (7.5 ) $ 13.6 Six Months Ended June 30, 2016 2015 Operating revenues $ 334.4 $ 342.8 Income before income taxes $ 9.4 $ 37.1 The pro forma disclosures shown above are based upon estimated preliminary valuations of the assets acquired and liabilities assumed as well as preliminary estimates of depreciation and amortization charges thereon, that may differ from the final fair values of the acquired assets and assumed liabilities and the resulting depreciation and amortization charges thereon. Other pro forma adjustments include the following: ● changes in nTelos’ reported revenues from cancelling nTelos’ wholesale contract with Sprint; ● the incorporation of the Sprint-homed customers formerly serviced under the wholesale agreement into the Company’s affiliate service territory under the Company’s affiliate agreement with Sprint; ● the effect of other changes to revenues and expenses due to various provisions of the affiliate agreement, including fees charged under the affiliate agreement on revenues from former nTelos customers, a reduction of the net service fee charged by Sprint, the straight-line impact of the waived management fee, and the amortization of the affiliate agreement expansion intangible asset; and the elimination of non-recurring transaction related expenses incurred by the Company and nTelos; ● the elimination of certain nTelos operating costs associated with billing and care that are covered under the fees charged by Sprint under the affiliate agreement; ● historical depreciation expense was reduced for the fair value adjustment decreasing the basis of property, plant and equipment; this decrease was offset by a shorter estimated useful life to conform to the Company’s standard policy and the acceleration of depreciation on certain equipment; and ● incremental amortization due to the customer-based contract rights associated with acquired customers. In connection with these transactions, the Company committed to Sprint to migrate the former nTelos customers to devices which can interact with the Sprint billing and network systems and to maintain the nTelos billing, customer care and switching systems until the migration is complete, and expects to incur a total of between $106 million and $126 million of integration and acquisition expenses associated with this transaction, excluding approximately $24 million of debt issuance costs. These costs include the nTelos back office staff and support functions until the nTelos legacy customers are migrated to the Sprint billing platform; cost of handsets to be provided to nTelos legacy customers as they migrate to the Sprint billing platform; severance costs for back office and other former nTelos employees who will not be retained permanently; and transaction related fees. The Company has incurred $22.4 million and $22.7 million of these costs in the three months and six months ended June 30, 2016, respectively, including $0.3 million reflected in cost of goods and services and $2.0 million reflected in selling, general and administrative costs in both the three and six month periods ended June 30, 2016. The amounts of operating revenue and income or loss before income taxes related to the former nTelos entity are not readily determinable due to intercompany transactions, allocations and integration activities that have occurred in connection with the operations of the combined company. Former nTelos stockholders who held approximately one million shares of nTelos’ common stock have exercised their appraisal rights under Delaware law with respect to the merger consideration of $9.25 per share paid pursuant to the nTelos acquisition. The Company has recorded a payable for the $9.3 million aggregate remaining purchase price due based upon the terms of the merger agreement with nTelos. At this time, the Company is unable to determine an estimate of any final outcome of the appraisal action or the expected timing of resolving the appraisal action. Under Delaware law, the former nTelos stockholders will be entitled to interest at the rate of 6.1% per annum on the unpaid amount when the appraisal action is resolved. |
Intangible assets
Intangible assets | 6 Months Ended |
Jun. 30, 2016 | |
Intangible assets [Abstract] | |
Intangible assets | 3. Intangible assets Intangible assets consisted of the following (in thousands): June 30, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizing intangibles: Cable franchise rights $ 64,374 $ - $ 64,374 $ 64,098 $ - $ 64,098 Finite-lived intangibles: Affiliate contract expansion rights $ 258,100 $ (3,290 ) $ 254,810 $ - $ - $ - Acquired subscribers – wireless 138,300 (6,647 ) 131,653 - - - Favorable leases – wireless 11,000 (183 ) 10,817 - - - Acquired subscribers – cable 25,265 (24,246 ) 1,019 25,326 (23,805 ) 1,521 Other intangibles 2,168 (695 ) 1,473 1,938 (564 ) 1,374 Total finite-lived intangibles $ 434,833 $ (35,061 ) $ 399,772 $ 27,264 $ (24,369 ) 2,895 Total intangible assets $ 499,207 $ (35,061 ) $ 464,146 $ 91,362 $ (24,369 ) $ 66,993 Aggregate amortization expense for intangible assets for the periods shown is expected to be as follows: Year Ending December 31, Amount (in thousands) 2016 Remaining $ 26,061 2017 48,574 2018 41,377 2019 36,619 2020 33,363 2021 30,116 thereafter 183,662 Total $ 399,772 Changes in the carrying amount of goodwill during the six months ended June 30, 2016 are shown below (in thousands): Goodwill as of December 31, 2015, Wireline segment $ 10 Goodwill recorded January 2016, Cable segment, Colane acquisition 93 Goodwill recorded May 2016, Wireless segment, nTelos acquisition 151,627 Goodwill as of June 30, 2016 $ 151,730 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 4. Property, Plant and Equipment Property, plant and equipment consisted of the following (in thousands): June 30, 2016 December 31, 2015 Plant in service $ 964,601 $ 718,503 Plant under construction 75,949 36,600 1,040,550 755,103 Less accumulated amortization and depreciation 387,027 345,085 Net property, plant and equipment $ 653,523 $ 410,018 |
Earnings (loss) per share
Earnings (loss) per share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings (loss) per share [Abstract] | |
Earnings (loss) per share | 5. Earnings (loss) per share Basic net income (loss) per share was computed on the weighted average number of shares outstanding. Diluted net income per share was computed under the treasury stock method, assuming the conversion as of the beginning of the period, for all dilutive stock options. Of thousand and thousand shares and options outstanding at , respectively, 22 thousand and 79 thousand were anti-dilutive, respectively. These shares and options have been excluded from the computations of diluted earnings per share for the six months ended June 30, 2016, and the three and six month periods ended June 30, 2015. Due to the net loss for the three months ended June 30, 2016, no adjustment was made to basic shares, as such adjustment would have been anti-dilutive. There were no adjustments to net income for either period. |
Investments Carried at Fair Val
Investments Carried at Fair Value | 6 Months Ended |
Jun. 30, 2016 | |
Investments Carried at Fair Value [Abstract] | |
Investments Carried at Fair Value | 6. Investments Carried at Fair Value Investments include $2.8 million and $2.7 million of investments carried at fair value as of June 30, 2016 and December 31, 2015, respectively, consisting of equity, bond and money market mutual funds. Investments carried at fair value were acquired under a rabbi trust arrangement related to the Company’s nonqualified Supplemental Executive Retirement Plan (the “SERP”). The Company purchases investments in the trust to mirror the investment elections of participants in the SERP; gains and losses on the investments in the trust are reflected as increases or decreases in the liability owed to the participants. During the six months ended June 30, 2016, the Company recognized $153 thousand in dividend and interest income from investments, and recorded net unrealized gains of $83 thousand on these investments. Fair values for these investments held under the rabbi trust were determined by Level 1 quoted market prices for the underlying mutual funds. |
Equipment Installment Plan Rece
Equipment Installment Plan Receivables | 6 Months Ended |
Jun. 30, 2016 | |
Equipment Installment Plan Receivables [Abstract] | |
Equipment Installment Plan Receivables | 7. Equipment Installment Plan Receivables As part of the acquisition of nTelos, the Company assumed the accounts receivable associated with nTelos’ the timing of the trade-in. Immediately following the acquisition, the Company terminated the EIP offering but has continued to service the with ASC 805, “Business Combinations”. There was $26.0 million of EIP receivables as of June 30, 2016. The short term portion of $19.5 million is included accounts receivable, net. The long term portion of $6.5 million is included in deferred charges and other assets, net. As of June 30, 2016, the liability associated with the trade-in right was $5.3 million, and is reflected in accrued |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Financial Instruments [Abstract] | |
Financial Instruments | 8. Financial Instruments Financial instruments on the consolidated balance sheets that approximate fair value include: cash and cash equivalents, receivables, investments carried at fair value, payables, accrued liabilities, interest rate swaps and variable rate long-term debt. |
Derivative Instruments, Hedging
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Loss) | 9. and Accumulated Other Comprehensive Income (Loss) The Company’s objectives in using interest rate derivatives are to add stability to cash flows and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps (both those designated as cash flow hedges as well as those not designated as cash flow hedges) involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company entered into a pay-fixed, receive-variable interest rate swap of $174.6 million of notional principal in September 2012. This interest rate swap was designated as a cash flow hedge. The total outstanding notional amount of the cash flow hedge million as of June 30, 2016. The outstanding notional amount decreases as the Company makes scheduled principal payments on the debt. In May 2016, the Company entered into a pay-fixed, receive-variable interest rate swap of $256.6 million of notional principal with three counterparties. This interest rate swap was designated as a cash flow hedge. The total outstanding notional amount of the cash flow hedge million as of June 30, 2016. The outstanding notional amount increases with each expected draw on the term debt and decreases as the Company makes scheduled principal payments on the debt. In combination with the swap entered into in 2012 described above, the Company is hedging approximately 50% of the expected outstanding debt (including expected draws under the delayed draw term loan) associated with the nTelos acquisition. The effective portion of changes in the fair value of interest rate swaps designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company uses its derivatives to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivative is recognized directly in earnings through interest expense. No hedge ineffectiveness was recognized during any of the periods presented. Amounts reported in accumulated other comprehensive income (loss) related to the interest rate swaps designated and qualified as a cash flow hedge, are reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of June 30, 2016, the Company estimates that $ million will be reclassified as an to interest expense during the next twelve months due to the interest rate swaps since the hedge interest rate exceeds the variable interest rate on the debt. The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the condensed consolidated balance sheet as of June 30, 2016 and December 31, 2015 (in thousands): Derivatives Fair Value as of Balance Sheet Location June 30, 2016 December 31, 2015 Derivatives designated as hedging instruments: Interest rate swap Accrued liabilities and other $ (3,016 ) $ (682 ) Other liabilities (3,502 ) - Deferred charges and other assets, net - 1,370 Total derivatives designated as hedging instruments $ (6,518 ) $ 688 The fair value of interest rate swaps is determined using a pricing model with inputs that are observable in the market (level 2 fair value inputs). The table below presents change in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2016 (in thousands): Gains and (Losses) on Cash Flow Hedges Income Tax (Expense) Benefit Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2015 $ 688 $ (273 ) $ 415 Other comprehensive loss before reclassifications (7,997 ) 3,243 (4,754 ) Amounts reclassified from accumulated other comprehensive income (to interest expense) 791 (322 ) 469 Net current period other comprehensive loss (7,206 ) 2,921 (4,285 ) Balance as of June 30, 2016 $ (6,518 ) $ 2,648 $ (3,870 ) |
Other Liabilities
Other Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Other Liabilities [Abstract] | |
Other Liabilities | 10. Other liabilities Other liabilities include the following (in thousands): June 30, 2016 December 31, 2015 Retirement plan obligations $ 21,982 $ 2,654 Due to dissenting shareholder 9,436 - Non-current portion of deferred revenues 8,968 4,156 Other 10,128 2,229 Other liabilities $ 50,514 $ 9,039 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Information [Abstract] | |
Segment Information | 11. Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker. The Company has three reportable segments, which the Company operates and manages as strategic business units organized by lines of business: (1) Wireless, (2) Cable, and (3) Wireline. A fourth segment, Other, primarily includes Shenandoah Telecommunications Company, the parent holding company. The Wireless segment has provided digital wireless service to a portion of a four-state area covering the region from Harrisburg, York and Altoona, Pennsylvania, to Harrisonburg, Virginia, as a Sprint PCS Affiliate. With the recent acquisition of nTelos (see Note 2), the Company’s wireless service area has expanded to include south-central and western Virginia, West Virginia, and small portions of Kentucky and Ohio. This segment also owns cell site towers built on leased land, and leases space on these towers to both affiliates and non-affiliated service providers. The Cable segment provides video, internet and voice services in Virginia, West Virginia and Maryland, and leases fiber optic facilities throughout southern Virginia and West Virginia. It does not include video, internet and voice services provided to customers in Shenandoah County, Virginia. The Wireline segment provides regulated and unregulated voice services, DSL internet access, and long distance access services throughout Shenandoah County and portions of Rockingham, Frederick, Warren and Augusta counties, Virginia. The segment also provides video and cable modem services in portions of Shenandoah County, and leases fiber optic facilities throughout the northern Shenandoah Valley of Virginia, northern Virginia and adjacent areas along the Interstate 81 corridor through West Virginia, Maryland and portions of central and southern Pennsylvania. Three months ended June 30, 2016 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 86,873 $ 24,167 $ 4,820 $ - $ - $ 115,860 Other 6,280 1,923 6,246 - - 14,449 Total external revenues 93,153 26,090 11,066 - - 130,309 Internal revenues 1,141 311 7,525 - (8,977 ) - Total operating revenues 94,294 26,401 18,591 - (8,977 ) 130,309 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 35,236 14,564 8,808 - (8,312 ) 50,296 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 23,010 4,794 1,670 4,885 (665 ) 33,694 Integration and acquisition expenses 5,276 - - 14,778 - 20,054 Depreciation and amortization 23,495 5,879 2,933 108 - 32,415 Total operating expenses 87,017 25,237 13,411 19,771 (8,977 ) 136,459 Operating income (loss) $ 7,277 $ 1,164 $ 5,180 $ (19,771 ) $ - $ (6,150 ) Three months ended June 30, 2015 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 48,749 $ 22,117 $ 4,889 $ - $ - $ 75,755 Other 2,848 1,850 5,248 - - 9,946 Total external revenues 51,597 23,967 10,137 - - 85,701 Internal revenues 1,105 186 6,326 - (7,617 ) - Total operating revenues 52,702 24,153 16,463 - (7,617 ) 85,701 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 15,903 13,635 7,677 (16 ) (6,919 ) 30,280 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 8,917 5,084 1,736 3,567 (698 ) 18,606 Integration and acquisition expenses - - - 402 - 402 Depreciation and amortization 8,612 5,859 3,083 109 - 17,663 Total operating expenses 33,432 24,578 12,496 4,062 (7,617 ) 66,951 Operating income (loss) $ 19,270 $ (425 ) $ 3,967 $ (4,062 ) $ - $ 18,750 Six months ended June 30, 2016 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 139,052 $ 48,507 $ 9,779 $ - $ - $ 197,338 Other 9,484 3,768 12,290 - - 25,542 Total external revenues 148,536 52,275 22,069 - - 222,880 Internal revenues 2,276 572 14,901 - (17,749 ) - Total operating revenues 150,812 52,847 36,970 - (17,749 ) 222,880 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 51,815 29,210 17,450 - (16,418 ) 82,057 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 34,524 9,902 3,275 8,750 (1,331 ) 55,120 Integration and acquisition expenses 5,276 - - 15,110 20,386 Depreciation and amortization 31,988 11,974 5,967 225 - 50,154 Total operating expenses 123,603 51,086 26,692 24,085 (17,749 ) 207,717 Operating income (loss) $ 27,209 $ 1,761 $ 10,278 $ (24,085 ) $ - $ 15,163 Six months ended June 30, 2015 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 97,124 $ 43,518 $ 9,639 $ - $ - $ 150,281 Other 5,878 3,613 10,217 - - 19,708 Total external revenues 103,002 47,131 19,856 - - 169,989 Internal revenues 2,209 334 12,192 - (14,735 ) - Total operating revenues 105,211 47,465 32,048 - (14,735 ) 169,989 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 32,090 27,253 15,011 - (13,384 ) 60,970 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 17,969 9,976 3,234 6,890 (1,351 ) 36,718 Integration and acquisition expenses - - - 1,024 1,024 Depreciation and amortization 16,444 11,338 6,007 212 - 34,001 Total operating expenses 66,503 48,567 24,252 8,126 (14,735 ) 132,713 Operating income (loss) 38,708 (1,102 ) 7,796 (8,126 ) - 37,276 A reconciliation of the total of the reportable segments’ operating income (loss) to consolidated income (loss) before taxes is as follows: Three Months Ended June 30, (in thousands) 2016 2015 Total consolidated operating income (loss) $ (6,150 ) $ 18,750 Interest expense (5,904 ) (1,940 ) Non-operating income, net 167 540 Income (loss) before income taxes $ (11,887 ) $ 17,350 Six Months Ended June 30, 2016 2015 Total consolidated operating income (loss) $ 15,163 $ 37,276 Interest expense (7,524 ) (3,855 ) Non-operating income, net 723 1,074 Income before income taxes $ 8,362 $ 34,495 The Company’s assets by segment are as follows: (in thousands) June 30, 2016 December 31, 2015 Wireless $ 1,142,459 $ 205,718 Cable 210,542 209,132 Wireline 111,728 105,369 Other 1,083,152 463,390 Combined totals 2,547,881 983,609 Inter-segment eliminations (1,092,040 ) (356,458 ) Consolidated totals $ 1,455,841 $ 627,151 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes [Abstract] | |
Income Taxes | 12. Income Taxes The Company files U.S. federal income tax returns and various state and local income tax returns. With few exceptions, years prior to 2012 are no longer subject to examination. The Company is not subject to any state or federal income tax audits as of June 30, 2016. |
Adoption of New Accounting Prin
Adoption of New Accounting Principles | 6 Months Ended |
Jun. 30, 2016 | |
Adoption of New Accounting Principles [Abstract] | |
Adoption of New Accounting Principles | 13. Adoption of New Accounting Principles During 2016, the Company adopted four recent accounting principles: Accounting Standards Update 2015-03, “Interest – Imputation of Interest” (ASU 2015-03), ASU 2015-17, “Balance Sheet Classification of Deferred Taxes”, ASU 2016-09, “Improvements to Employee Share-based Payment Accounting,” and ASU 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments.” ASU 2015-03 requires that premiums, discounts, and loan fees and costs associated with long term debt be reflected as a reduction of the outstanding debt balance. Previous guidance had treated such loan fees and costs as a deferred charge on the balance sheet. As a result of implementing ASU 2015-03, the Company reclassified $1.6 million of unamortized loan fees and costs included in deferred charges and other assets as of December 31, 2015 to long-term debt. Approximately $0.5 million was allocated to current maturities of long-term debt, and $1.1 million to long term debt. Total assets, as well as total liabilities and shareholders’ equity, were also reduced by the same $1.6 million. In addition, the Company reclassified $4.3 million of unamortized loan fees and costs included in deferred charges and other assets to long term debt in connection with the new Term loan A-1 and A-2 borrowing related to the acquisition of nTelos. Total assets, as well as total liabilities and shareholders’ equity, were also reduced by the same $4.3 million. There was no impact on the statements of income or cash flows. ASU 2015-17 simplifies accounting for deferred taxes by eliminating the requirement to present deferred tax assets and liabilities as current and non-current in a classified balance sheet. Due to the immaterial balance of current deferred tax assets ($0.9 million as of December 31, 2015), the Company has elected to apply this guidance prospectively, and thus prior periods have not been retrospectively adjusted. ASU 2016-09 simplifies certain provisions related to the accounting for the tax effects of stock-based compensation transactions. In particular for the Company, it eliminates the requirement to determine for each award whether the difference between book compensation and tax compensation results in an excess tax benefit or a tax deficiency, which generally speaking, result in an entry to additional paid-in-capital. Under the new guidance, all tax effects for exercised or vested awards are recognized as discrete items in income tax expense. The new guidance also allows an employer to withhold shares to cover more than the minimum statutory withholding taxes (but not more than the maximum statutory withholding requirements) without causing an equity-classified award to become a liability classified award. The other provisions of the new guidance are either not applicable or have no significant impact on the Company’s accounting for stock-based compensation transactions. The Company has elected to early adopt the new guidance and apply it prospectively to tax effects on share-based compensation transactions. ASU 2015-16 |
Long-term Debt and Revolving Li
Long-term Debt and Revolving Line of Credit | 6 Months Ended |
Jun. 30, 2016 | |
Long-term debt and revolving line of credit [Abstract] | |
Long-term debt and revolving line of credit | 14. Long-term Debt and Revolving Line of Credit Total debt consists of the following: (In thousands) June 30, 2016 December 31, 2015 Term loan A $ - $ 201,250 Term loan A-1 485,000 - Term loan A-2 350,000 - Capital lease outstanding 413 - 835,413 201,250 Less: unamortized loan fees 19,840 1,589 Total debt, net of unamortized loan fees $ 815,573 $ 199,661 Current maturities, net of unamortized loan fees $ 20,147 $ 22,492 Long-term debt, net of unamortized loan fees $ 795,426 $ 177,169 As previously disclosed, on December 18, 2015, the Company entered into a Credit Agreement (as amended, the “2016 credit agreement”) with various banks and other financial institutions party thereto and CoBank, ACB, as administrative agent for the lenders, providing for three facilities: (i) a five year revolving credit facility of up to $75 million; (ii) a five-year term loan facility of up to $485 million (Term Loan A-1”); and (iii) a seven-year term loan facility of up to $400 million (“Term Loan A-2”). In connection with the closing of the nTelos acquisition, the Company borrowed (i) $485 million under Term Loan A-1 and (ii) $325 million under Term Loan A-2, which amounts were used to, among other things, fund the payment of the nTelos merger consideration, to refinance, in full, all indebtedness under the Company’s existing credit agreement, to repay existing long-term indebtedness of nTelos and to pay fees and expenses in connection with the foregoing. In connection with the consummation of the nTelos acquisition, nTelos and its subsidiaries became guarantors under the 2016 credit agreement and pledged their assets as security for the obligations under the 2016 credit agreement. The 2016 credit agreement also includes $75 million available under the Term Loan A-2 as a “delayed draw term loan,” and in June 2016, the Company drew $25 million under this portion of the agreement. Finally, the 2016 credit agreement also includes a $75 million revolver facility. As of June 30, 2016, the Company’s indebtedness totaled $815.6 million, net of unamortized loan fees of $19.8 million, with an annualized overall weighted average interest rate of approximately 3.84%. The Term Loan A-1 bears interest at one-month LIBOR plus a margin of 2.75%, while the Term Loan A-2 bears interest at one-month LIBOR plus a margin of 3.00%. LIBOR resets monthly. These loans are more fully described below. The Term Loan A-1 requires quarterly principal repayments of $6.1 million beginning on September 30, 2016 through June 30, 2017, increasing to $12.1 million quarterly thereafter through June 30, 2021, with the remaining expected balance of approximately $242.5 million due September 30, 2021. The Term Loan A-2 requires quarterly principal repayments of $10.0 million beginning on September 30, 2018 through March 31, 2023, with the remaining expected balance of approximately $210 million due June 30, 2023. The 2016 credit agreement also required the Company to enter into one or more hedge agreements to manage its exposure to interest rate movements. The Company elected to hedge the minimum required under the 2016 credit agreement, and entered into a pay fixed, receive variable swap on 50% of the aggregate principal balance of the term loans outstanding for at least three years from the closing date. The Company will receive one month LIBOR and pay a fixed rate of 1.16%, in addition to the 2.75% initial spread on Term Loan A-1 and the 3.00% initial spread on Term Loan A-2. The 2016 credit agreement contains affirmative and negative covenants customary to secured credit facilities, including covenants restricting the ability of the Company and its subsidiaries, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments, and change the nature of the Company’s and its subsidiaries’ businesses. Indebtedness outstanding under any of the facilities may be accelerated by an Event of Default, as defined in the 2016 credit agreement. The Facilities are secured by a pledge by the Company of its stock in its subsidiaries, a guarantee by the Company’s subsidiaries other than Shenandoah Telephone Company, and a security interest in substantially all of the assets of the Company and the guarantors. The Company is subject to certain financial covenants to be measured on a trailing twelve month basis each calendar quarter unless otherwise specified. These covenants include: ● a limitation on the Company’s total leverage ratio, defined as indebtedness divided by earnings before interest, taxes, depreciation and amortization, or EBITDA, of less than or equal to 3.75 to 1.00 from the closing date through December 30, 2018, then 3.25 to 1.00 through December 30, 2019, and 3.00 to 1.00 thereafter; ● a minimum debt service coverage ratio, defined as EBITDA minus certain cash taxes divided by the sum of all scheduled principal payments on the Term Loans and scheduled principal payments on other indebtedness plus cash interest expense, greater than 2.00 to 1.0; ● the Company must maintain a minimum liquidity balance, defined as availability under the revolver facility plus unrestricted cash and cash equivalents on deposit in a deposit account for which a control agreement has been delivered to the administrative agent under the 2016 credit agreement, of greater than $25 million at all times. These ratios are generally less restrictive than the covenant ratios the Company had been required to comply with under its previously existing debt arrangements. As of June 30, 2016, the Company was in compliance with the covenants in the 2016 credit agreement. Future maturities of long-term debt principal are as follows (in thousands): 2016 $ 12,238 2017 36,714 2018 68,593 2019 88,593 2020 100,625 Thereafter 528,650 Total $ 835,413 |
Pension Plan and Other Postreti
Pension Plan and Other Postretirement Benefits | 6 Months Ended |
Jun. 30, 2016 | |
Pension Plan and Other Postretirement Benefits [Abstract] | |
Pension Plan and Other Postretirement Benefits | 15. Pension Plan and Other Postretirement Benefits The Company assumed, through its acquisition of nTelos, a qualified pension plan and other postretirement benefit plans. The following tables provide the benefit obligations, fair value of assets and a statement of the funded status as of the acquisition date: Defined Benefit Pension Plan Other Postretirement Benefit Plans (In thousands) 2016 2016 Benefit obligations, at acquisition $ 37,443 $ 4,568 Fair value of plan assets, at acquisition $ 22,813 $ — Funded status: Total liability, at acquisition $ (14,630 ) $ (4,568 ) The accumulated benefit obligation for the defined benefit pension plan at May 6, 2016 was $37.4 million. The accumulated benefit obligation represents the present value of pension benefits based on service and salary earned to date. The defined benefit plan was frozen for future benefit accruals as of December 31, 2012. Accordingly, the accumulated benefit obligation is equal to the projected benefit obligation. The following table provides the components of net periodic benefit cost for the plans for the period from acquisition date to December 31, 2016: Defined Benefit Pension Plan Other Postretirement Benefit Plans (In thousands) 2016 2016 Components of net periodic benefit cost: Service cost $ - $ 18 Interest cost 956 108 Recognized net actuarial loss - - Expected return on plan assets (1,018 ) - Net periodic benefit cost $ (62 ) $ 126 Prior service costs assumed by the Company are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants. The net periodic benefit cost from the defined benefit plans was $0.0 million for the period from acquisition through June 30, 2016. The total amount reclassified out of accumulated other comprehensive loss related to actuarial losses from the defined benefit plans was $0.0 million for the period from acquisition through June 30, 2016. The assumptions used in the measurements of the Company’s benefit obligations at May 6, 2016 for the plans are shown in the following table: Defined Benefit Pension Plan Other Postretirement Benefit Plans 2016 2016 Discount rate 3.85 % 3.85 % The assumptions used in the measurements of the Company’s net cost for the consolidated statement of operations for the period from acquisition date through December 31, 2016 are: Defined Benefit Pension Plan Other Postretirement Benefit Plans 2016 2016 Discount rate 3.85 % 3.85 % Expected return on plan assets 6.75 % — Rate of compensation increase — — The Company reviews the assumptions noted in the above table annually or more frequently to reflect anticipated future changes in the underlying economic factors used to determine these assumptions. The discount rates assumed reflect the rate at which the Company could invest in high quality corporate bonds in order to settle future obligations. The Company uses updated mortality tables published by the Society of Actuaries that predict increasing life expectancies in the United States. For measurement purposes, an 8.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2016 for the obligation as of December 31, 2015. The rate was assumed to decrease one-half percent per year to a rate of 5.0% for 2022 and remain at that level thereafter. Assumed health care cost trend rates may have a significant effect on the amounts reported for the health care plans. The effect of a 1% change on the medical trend rate per future year, while holding all other assumptions constant, to the service and interest cost components of net periodic postretirement health care benefit costs and accumulated postretirement benefit obligation would be a $0.1 million increase and a $0.6 million increase, respectively, for a 1% increase in medical trend rate and a $0.1 million decrease and a $0.5 million decrease, respectively, for a 1% decrease in medical trend rate. In developing the expected long-term rate of return assumption for the assets of the Defined Benefit Pension Plan, the Company evaluated input from its third-party pension plan administrator, including its review of asset class return expectations and long-term inflation assumptions. The average actual asset allocations by asset category and the fair value by asset category as of May 6, 2016 were as follows: Actual Allocation as of Fair Value as of May 6, Asset Category (dollars in thousands) May 6, 2016 2016 Large Cap Value 32 % $ 7,244 Mid Cap Blend 9 % 2,026 Small Cap Blend 5 % 1,151 Foreign Stock – Large Cap 30 % 6,867 Bond 20 % 4,611 Cash and cash equivalents 4 % 914 Total 100 % $ 22,813 The actual and target allocation for plan assets is broadly defined and measured as follows: Asset Category Actual Allocation Target Allocation Equity securities 76 % 65-75 % Bond securities and cash equivalents 24 % 25-35 % Total 100 % 100 % It is the Company’s policy to invest pension plan assets in a diversified portfolio consisting of an array of asset classes. The investment risk of the assets is limited by appropriate diversification both within and between asset classes. The assets are primarily invested in investment funds that invest in a broad mix of publicly traded equities, bonds and cash equivalents (and fair value is based on quoted market prices (“Level 1” input)). The allocation between equity and bonds is reset quarterly to the target allocations. Updates to the allocation are considered in the normal course and changes may be made when appropriate. The bond holdings consist of two bond funds split relatively evenly between these funds at May 6, 2016. The maximum holdings of any one asset within these funds is under 4% of this fund and thus is well under 1% of the total portfolio. At May 6, 2016, the Company believes that there are no material concentrations of risk within the portfolio of plan assets. The assumed long-term return noted above is the target long-term return. Overall return, risk adjusted return, and management fees are assessed against a peer group and benchmark indices. There are minimum performance standards that must be attained within the investment portfolio. Reporting on asset performance is provided quarterly and review meetings are held semi-annually. In addition to normal rebalancing to maintain an adequate cash reserve, projected cash flow needs of the plan are reviewed at least annually to ensure liquidity is properly managed. The Company does not expect to contribute to the pension plan in 2016. The Company expects the net periodic benefit cost for the defined benefit pension plan in 2016 to be $0.1 million and expects the periodic benefit cost for the other postretirement benefit plans in 2016 to be $0.1 million. The following estimated future pension benefit payments and other postretirement benefit plan payments which reflect expected future service, as appropriate, are expected to be paid in the years indicated: (In thousands) Defined Benefit Pension Plan Other Postretirement Benefit Plans 2016 $ 371 $ 96 2017 700 136 2018 720 131 2019 768 134 2020 868 142 Aggregate of next five years 6,219 977 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation [Abstract] | |
Revenue Recognition | Revenue Recognition Under the Company’s amended affiliate agreement, Sprint agreed to waive the management fee, which is historically presented as a contra-revenue by the Company, for a period of approximately six years. The impact of Sprint’s waiver of the management fee over the approximate six-year period is reflected as an increase in revenue, offset by the non-cash adjustment to recognize this impact on a straight-line basis over the contract term of approximately 14 years. |
Goodwill | Goodwill Goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates that impairment is more likely than not to have occurred. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The Company conducts its annual impairment testing of goodwill as of October 1. |
Pension Benefits and Retirement Benefits Other Than Pensions | Pension Benefits and Retirement Benefits Other Than Pensions Through the Company’s acquisition of nTelos, the Company assumed nTelos’ non-contributory defined benefit pension plan (“Pension Plan”) covering all employees who met eligibility requirements and were employed by nTelos prior to October 1, 2003. The Pension Plan was closed to nTelos employees hired on or after October 1, 2003. Pension benefits vest after five years of plan service and are based on years of service and an average of the five highest consecutive years of compensation subject to certain reductions if the employee retires before reaching age 65 and elects to receive the benefit prior to age 65. Effective December 31, 2012, nTelos froze future benefit accruals. The Company uses updated mortality tables published by the Society of Actuaries that predict increasing life expectancies in the United States. IRC Sections 412 and 430 and Sections 302 and 303 of the Employee Retirement Income Security Act of 1974, as amended establish minimum funding requirements for defined benefit pension plans. The minimum required contribution is generally equal to the target normal cost plus the shortfall amortization installments for the current plan year and each of the six preceding plan years less any calculated credit balance. If plan assets (less calculated credits) are equal to or exceed the funding target, the minimum required contribution is the target normal cost reduced by the excess funding, but not below zero. The Company’s policy is to make contributions to stay at or above the threshold required in order to prevent benefit restrictions and related additional notice requirements and is intended to provide not only for benefits based on service to date, but also for those expected to be earned in the future. The Company also assumed two qualified nonpension postretirement benefit plans that provide certain health care and life benefits for nTelos retired employees that meet eligibility requirements. The health care plan is contributory, with participants’ contributions adjusted annually. The life insurance plan also is contributory. These obligations, along with all of the pension plans and other postretirement benefit plans, are obligations assumed by the Company. Eligibility for the life insurance plan is restricted to active pension participants age 50-64 as of January 5, 1994. Neither plan is eligible to employees hired after April 1993. The accounting for the plans anticipates that the Company will maintain a consistent level of cost sharing for the benefits with the retirees. The Company’s share of the projected costs of benefits that will be paid after retirement is generally being accrued by charges to expense over the eligible employees’ service periods to the dates they are fully eligible for benefits. The Company records annual amounts relating to the Pension Plan and postretirement benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, turnover rates and healthcare cost trend rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income (loss) and amortized to net periodic cost over future periods using the corridor method. |
Acquisition of NTELOS Holding25
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary allocation of the purchase price was based upon management’s preliminary valuation of the fair value of tangible and intangible assets acquired and liabilities assumed of nTelos, with the excess recorded as goodwill. (in thousands): Accounts receivable $ 48,476 Inventory 3,810 Restricted cash 2,167 Investments 1,501 Prepaids expenses and other assets 14,835 Building held for sale 4,950 Property, plant and equipment 223,900 Spectrum licenses 198,200 Customer based contract rights 198,200 Contract based intangible assets 11,000 Goodwill 151,627 Other long term assets 10,288 Total assets acquired $ 868,954 Accounts payable $ 8,648 Advanced billings and customer deposits 12,477 Accrued expenses 25,230 Capital lease liability 418 Deferred tax liabilities 124,964 Retirement benefits 19,461 Other long-term liabilities 14,056 Total liabilities assumed 205,254 Net assets acquired $ 663,700 |
Intangible Assets Resulting from Acquisition | Intangible assets resulting from the acquisition of nTelos and the Sprint exchange, both described above, are noted below (dollars in thousands): Useful Life Basis Affiliate contract agreement 14 years $ 258,100 Customer based contract rights 4-10 years 138,300 Contract based intangible assets 3-19 years 11,000 |
Unaudited Pro forma Results of the Company | Following are the unaudited pro forma results of the Company for the three and six months ended June 30, 2016 and 2015 as if the acquisition of nTelos had occurred at the beginning of each of the periods presented (in millions): Three Months Ended June 30, 2016 2015 Operating revenues $ 161.1 $ 170.1 Income (loss) before income taxes $ (7.5 ) $ 13.6 Six Months Ended June 30, 2016 2015 Operating revenues $ 334.4 $ 342.8 Income before income taxes $ 9.4 $ 37.1 |
Intangible assets (Tables)
Intangible assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Intangible assets [Abstract] | |
Intangible Assets | Intangible assets consisted of the following (in thousands): June 30, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Non-amortizing intangibles: Cable franchise rights $ 64,374 $ - $ 64,374 $ 64,098 $ - $ 64,098 Finite-lived intangibles: Affiliate contract expansion rights $ 258,100 $ (3,290 ) $ 254,810 $ - $ - $ - Acquired subscribers – wireless 138,300 (6,647 ) 131,653 - - - Favorable leases – wireless 11,000 (183 ) 10,817 - - - Acquired subscribers – cable 25,265 (24,246 ) 1,019 25,326 (23,805 ) 1,521 Other intangibles 2,168 (695 ) 1,473 1,938 (564 ) 1,374 Total finite-lived intangibles $ 434,833 $ (35,061 ) $ 399,772 $ 27,264 $ (24,369 ) 2,895 Total intangible assets $ 499,207 $ (35,061 ) $ 464,146 $ 91,362 $ (24,369 ) $ 66,993 |
Amortization Expense for Intangible Assets | Aggregate amortization expense for intangible assets for the periods shown is expected to be as follows: Year Ending December 31, Amount (in thousands) 2016 Remaining $ 26,061 2017 48,574 2018 41,377 2019 36,619 2020 33,363 2021 30,116 thereafter 183,662 Total $ 399,772 |
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill during the six months ended June 30, 2016 are shown below (in thousands): Goodwill as of December 31, 2015, Wireline segment $ 10 Goodwill recorded January 2016, Cable segment, Colane acquisition 93 Goodwill recorded May 2016, Wireless segment, nTelos acquisition 151,627 Goodwill as of June 30, 2016 $ 151,730 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consisted of the following (in thousands): June 30, 2016 December 31, 2015 Plant in service $ 964,601 $ 718,503 Plant under construction 75,949 36,600 1,040,550 755,103 Less accumulated amortization and depreciation 387,027 345,085 Net property, plant and equipment $ 653,523 $ 410,018 |
Derivative Instruments, Hedgi28
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Loss) [Abstract] | |
Schedule of Derivative Financial Instrument as Well as its Classification on the Consolidated Balance Sheet | The table below presents the fair value of the Company’s derivative financial instrument as well as its classification on the condensed consolidated balance sheet as of June 30, 2016 and December 31, 2015 (in thousands): Derivatives Fair Value as of Balance Sheet Location June 30, 2016 December 31, 2015 Derivatives designated as hedging instruments: Interest rate swap Accrued liabilities and other $ (3,016 ) $ (682 ) Other liabilities (3,502 ) - Deferred charges and other assets, net - 1,370 Total derivatives designated as hedging instruments $ (6,518 ) $ 688 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents change in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2016 (in thousands): Gains and (Losses) on Cash Flow Hedges Income Tax (Expense) Benefit Accumulated Other Comprehensive Income (Loss) Balance as of December 31, 2015 $ 688 $ (273 ) $ 415 Other comprehensive loss before reclassifications (7,997 ) 3,243 (4,754 ) Amounts reclassified from accumulated other comprehensive income (to interest expense) 791 (322 ) 469 Net current period other comprehensive loss (7,206 ) 2,921 (4,285 ) Balance as of June 30, 2016 $ (6,518 ) $ 2,648 $ (3,870 ) |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Other Liabilities [Abstract] | |
Summary of Other Liabilities | Other liabilities include the following (in thousands): June 30, 2016 December 31, 2015 Retirement plan obligations $ 21,982 $ 2,654 Due to dissenting shareholder 9,436 - Non-current portion of deferred revenues 8,968 4,156 Other 10,128 2,229 Other liabilities $ 50,514 $ 9,039 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Information [Abstract] | |
Selected Financial Data for Segments | The segment also provides video and cable modem services in portions of Shenandoah County, and leases fiber optic facilities throughout the northern Shenandoah Valley of Virginia, northern Virginia and adjacent areas along the Interstate 81 corridor through West Virginia, Maryland and portions of central and southern Pennsylvania. Three months ended June 30, 2016 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 86,873 $ 24,167 $ 4,820 $ - $ - $ 115,860 Other 6,280 1,923 6,246 - - 14,449 Total external revenues 93,153 26,090 11,066 - - 130,309 Internal revenues 1,141 311 7,525 - (8,977 ) - Total operating revenues 94,294 26,401 18,591 - (8,977 ) 130,309 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 35,236 14,564 8,808 - (8,312 ) 50,296 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 23,010 4,794 1,670 4,885 (665 ) 33,694 Integration and acquisition expenses 5,276 - - 14,778 - 20,054 Depreciation and amortization 23,495 5,879 2,933 108 - 32,415 Total operating expenses 87,017 25,237 13,411 19,771 (8,977 ) 136,459 Operating income (loss) $ 7,277 $ 1,164 $ 5,180 $ (19,771 ) $ - $ (6,150 ) Three months ended June 30, 2015 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 48,749 $ 22,117 $ 4,889 $ - $ - $ 75,755 Other 2,848 1,850 5,248 - - 9,946 Total external revenues 51,597 23,967 10,137 - - 85,701 Internal revenues 1,105 186 6,326 - (7,617 ) - Total operating revenues 52,702 24,153 16,463 - (7,617 ) 85,701 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 15,903 13,635 7,677 (16 ) (6,919 ) 30,280 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 8,917 5,084 1,736 3,567 (698 ) 18,606 Integration and acquisition expenses - - - 402 - 402 Depreciation and amortization 8,612 5,859 3,083 109 - 17,663 Total operating expenses 33,432 24,578 12,496 4,062 (7,617 ) 66,951 Operating income (loss) $ 19,270 $ (425 ) $ 3,967 $ (4,062 ) $ - $ 18,750 Six months ended June 30, 2016 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 139,052 $ 48,507 $ 9,779 $ - $ - $ 197,338 Other 9,484 3,768 12,290 - - 25,542 Total external revenues 148,536 52,275 22,069 - - 222,880 Internal revenues 2,276 572 14,901 - (17,749 ) - Total operating revenues 150,812 52,847 36,970 - (17,749 ) 222,880 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 51,815 29,210 17,450 - (16,418 ) 82,057 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 34,524 9,902 3,275 8,750 (1,331 ) 55,120 Integration and acquisition expenses 5,276 - - 15,110 20,386 Depreciation and amortization 31,988 11,974 5,967 225 - 50,154 Total operating expenses 123,603 51,086 26,692 24,085 (17,749 ) 207,717 Operating income (loss) $ 27,209 $ 1,761 $ 10,278 $ (24,085 ) $ - $ 15,163 Six months ended June 30, 2015 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated Totals External revenues Service revenues $ 97,124 $ 43,518 $ 9,639 $ - $ - $ 150,281 Other 5,878 3,613 10,217 - - 19,708 Total external revenues 103,002 47,131 19,856 - - 169,989 Internal revenues 2,209 334 12,192 - (14,735 ) - Total operating revenues 105,211 47,465 32,048 - (14,735 ) 169,989 Operating expenses Costs of goods and services, exclusive of depreciation and amortization shown separately below 32,090 27,253 15,011 - (13,384 ) 60,970 Selling, general and administrative, exclusive of depreciation and amortization shown separately below 17,969 9,976 3,234 6,890 (1,351 ) 36,718 Integration and acquisition expenses - - - 1,024 1,024 Depreciation and amortization 16,444 11,338 6,007 212 - 34,001 Total operating expenses 66,503 48,567 24,252 8,126 (14,735 ) 132,713 Operating income (loss) 38,708 (1,102 ) 7,796 (8,126 ) - 37,276 |
Reconciliation of Income from Continuing Operations from Segments to Consolidated | A reconciliation of the total of the reportable segments’ operating income (loss) to consolidated income (loss) before taxes is as follows: Three Months Ended June 30, (in thousands) 2016 2015 Total consolidated operating income (loss) $ (6,150 ) $ 18,750 Interest expense (5,904 ) (1,940 ) Non-operating income, net 167 540 Income (loss) before income taxes $ (11,887 ) $ 17,350 Six Months Ended June 30, 2016 2015 Total consolidated operating income (loss) $ 15,163 $ 37,276 Interest expense (7,524 ) (3,855 ) Non-operating income, net 723 1,074 Income before income taxes $ 8,362 $ 34,495 |
Assets by Segment | The Company’s assets by segment are as follows: (in thousands) June 30, 2016 December 31, 2015 Wireless $ 1,142,459 $ 205,718 Cable 210,542 209,132 Wireline 111,728 105,369 Other 1,083,152 463,390 Combined totals 2,547,881 983,609 Inter-segment eliminations (1,092,040 ) (356,458 ) Consolidated totals $ 1,455,841 $ 627,151 |
Long-Term Debt and Revolving 31
Long-Term Debt and Revolving Lines of Credit (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Long-term debt and revolving line of credit [Abstract] | |
Long-term Debt | Total debt consists of the following: (In thousands) June 30, 2016 December 31, 2015 Term loan A $ - $ 201,250 Term loan A-1 485,000 - Term loan A-2 350,000 - Capital lease outstanding 413 - 835,413 201,250 Less: unamortized loan fees 19,840 1,589 Total debt, net of unamortized loan fees $ 815,573 $ 199,661 Current maturities, net of unamortized loan fees $ 20,147 $ 22,492 Long-term debt, net of unamortized loan fees $ 795,426 $ 177,169 |
Maturities of Long-term Debt | Future maturities of long-term debt principal are as follows (in thousands): 2016 $ 12,238 2017 36,714 2018 68,593 2019 88,593 2020 100,625 Thereafter 528,650 Total $ 835,413 |
Pension Plan and Other Postre32
Pension Plan and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Pension Plan and Other Postretirement Benefits [Abstract] | |
Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | The following tables provide the benefit obligations, fair value of assets and a statement of the funded status as of the acquisition date: Defined Benefit Pension Plan Other Postretirement Benefit Plans (In thousands) 2016 2016 Benefit obligations, at acquisition $ 37,443 $ 4,568 Fair value of plan assets, at acquisition $ 22,813 $ — Funded status: Total liability, at acquisition $ (14,630 ) $ (4,568 ) |
Components of Net Periodic Benefit Costs | The following table provides the components of net periodic benefit cost for the plans for the period from acquisition date to December 31, 2016: Defined Benefit Pension Plan Other Postretirement Benefit Plans (In thousands) 2016 2016 Components of net periodic benefit cost: Service cost $ - $ 18 Interest cost 956 108 Recognized net actuarial loss - - Expected return on plan assets (1,018 ) - Net periodic benefit cost $ (62 ) $ 126 |
Assumptions Used to Determine Net Periodic Cost and Benefit Obligations | The assumptions used in the measurements of the Company’s benefit obligations at May 6, 2016 for the plans are shown in the following table: Defined Benefit Pension Plan Other Postretirement Benefit Plans 2016 2016 Discount rate 3.85 % 3.85 % The assumptions used in the measurements of the Company’s net cost for the consolidated statement of operations for the period from acquisition date through December 31, 2016 are: Defined Benefit Pension Plan Other Postretirement Benefit Plans 2016 2016 Discount rate 3.85 % 3.85 % Expected return on plan assets 6.75 % — Rate of compensation increase — — |
Actual and Target Allocation for Plan assets | The average actual asset allocations by asset category and the fair value by asset category as of May 6, 2016 were as follows: Actual Allocation as of Fair Value as of May 6, Asset Category (dollars in thousands) May 6, 2016 2016 Large Cap Value 32 % $ 7,244 Mid Cap Blend 9 % 2,026 Small Cap Blend 5 % 1,151 Foreign Stock – Large Cap 30 % 6,867 Bond 20 % 4,611 Cash and cash equivalents 4 % 914 Total 100 % $ 22,813 The actual and target allocation for plan assets is broadly defined and measured as follows: Asset Category Actual Allocation Target Allocation Equity securities 76 % 65-75 % Bond securities and cash equivalents 24 % 25-35 % Total 100 % 100 % |
Estimated Future Pension Benefit Payments and Other Postretirement Benefit Plan Payments | The following estimated future pension benefit payments and other postretirement benefit plan payments which reflect expected future service, as appropriate, are expected to be paid in the years indicated: (In thousands) Defined Benefit Pension Plan Other Postretirement Benefit Plans 2016 $ 371 $ 96 2017 700 136 2018 720 131 2019 768 134 2020 868 142 Aggregate of next five years 6,219 977 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2016Plan | |
Revenue Recognition [Abstract] | |
Period for sprint's waiver of the management fee | 6 years |
Contract term | 14 years |
Pension Benefits and Retirement Benefits Other Than Pensions [Abstract] | |
Vesting period of pension benefits | 5 years |
Number of consecutive years considered for pension benefits | 5 years |
Employee retires before reaching the age, elect to receive the benefit | 65 years |
Number of preceding plan years | 6 years |
Number of qualified nonpension postretirement benefit plans | 2 |
Minimum [Member] | |
Pension Benefits and Retirement Benefits Other Than Pensions [Abstract] | |
Eligibility for the life insurance plan is restricted to active pension participants | 50 years |
Maximum [Member] | |
Pension Benefits and Retirement Benefits Other Than Pensions [Abstract] | |
Eligibility for the life insurance plan is restricted to active pension participants | 64 years |
Acquisition of NTELOS Holding34
Acquisition of NTELOS Holdings Corp. and Exchange with Sprint (Details) $ / shares in Units, $ in Thousands | May 06, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)Installment | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Schedule of recognized identified assets acquired and liabilities assumed [Abstract] | ||||||
Goodwill | $ 151,730 | $ 151,730 | $ 10 | |||
Intangible assets resulting from acquisition [Abstract] | ||||||
Borrowing amount | 835,413 | 835,413 | $ 201,250 | |||
Repayment of borrowing amount | 201,257 | $ 11,500 | ||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Integration and acquisition expenses | 20,054 | $ 402 | $ 20,386 | 1,024 | ||
Term Loan [Member] | ||||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Repayment of borrowing amount | $ 195,500 | |||||
NTELOS Holdings Corp. [Member] | ||||||
Schedule of recognized identified assets acquired and liabilities assumed [Abstract] | ||||||
Accounts receivable | 48,476 | |||||
Inventory | 3,810 | |||||
Restricted cash | 2,167 | |||||
Investments | 1,501 | |||||
Prepaid expenses and other assets | 14,835 | |||||
Building held for sale | 4,950 | |||||
Property, plant and equipment | 223,900 | |||||
Spectrum licenses | 198,200 | |||||
Customer based contract rights | 198,200 | |||||
Contract based intangible assets | 11,000 | |||||
Goodwill | 151,627 | |||||
Other long term assets | 10,288 | |||||
Total assets acquired | 868,954 | |||||
Accounts payable | 8,648 | |||||
Advanced billings and customer deposits | 12,477 | |||||
Accrued expenses | 25,230 | |||||
Capital lease liability | 418 | |||||
Deferred tax liabilities | 124,964 | |||||
Retirement benefits | 19,461 | |||||
Other long-term liabilities | 14,056 | |||||
Total liabilities assumed | 205,254 | |||||
Net assets acquired | 663,700 | |||||
Extension in term of affiliate relationship agreement with sprint | 5 years | |||||
Limit of waived fee under affiliate agreement | 251,800 | |||||
Period for additional waiver of management fee | 6 months | |||||
Letters of credit | 2,200 | $ 2,200 | ||||
Percentage of amount to cover each disbursement and performance default penalty of total eligible awards | 10.00% | |||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Basis | $ 11,000 | |||||
Business acquisition, number of shares issued (in shares) | shares | 380,000 | |||||
Number of installment | Installment | 5 | |||||
Number of pending installment | Installment | 4 | |||||
Remaining period for payment of shares acquired value | 4 years | |||||
Business acquisition, shares issued value | $ 10,400 | |||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Operating revenues | 161,100 | 170,100 | $ 334,400 | 342,800 | ||
Income (loss) before income taxes | (7,500) | $ 13,600 | 9,400 | $ 37,100 | ||
Debt issuance cost | $ 24,000 | |||||
Severance costs | 22,400 | 22,700 | ||||
Number of shares held by former stockholders (in shares) | shares | 1,000,000 | |||||
Common stock exercised per share (in dollars per share) | $ / shares | $ 9.25 | |||||
Aggregate purchase price | $ 9,300 | |||||
Interest rate on unpaid amount | 6.10% | |||||
NTELOS Holdings Corp. [Member] | Cost of Goods and Services [Member] | ||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Severance costs | 300 | 300 | ||||
NTELOS Holdings Corp. [Member] | Selling, General and Administrative Costs [Member] | ||||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Severance costs | $ 2,000 | $ 2,000 | ||||
NTELOS Holdings Corp. [Member] | Term Loan [Member] | ||||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Borrowing amount | $ 810,000 | |||||
Average effective interest rate | 3.84% | |||||
Repayment of borrowing amount | $ 519,700 | |||||
NTELOS Holdings Corp. [Member] | Minimum [Member] | ||||||
Schedule of recognized identified assets acquired and liabilities assumed [Abstract] | ||||||
Before amendment right or obligation to sell business | 80.00% | |||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Integration and acquisition expenses | 106,000 | |||||
NTELOS Holdings Corp. [Member] | Maximum [Member] | ||||||
Schedule of recognized identified assets acquired and liabilities assumed [Abstract] | ||||||
After amendment right or obligation to sell business | 90.00% | |||||
Management fee charge by Sprint | 4,200 | |||||
Additional waiver of management fee | 5,000 | |||||
Winning bid eligible to receive, amount | $ 5,000 | |||||
Business Acquisition, Pro Forma Information [Abstract] | ||||||
Integration and acquisition expenses | 126,000 | |||||
NTELOS Holdings Corp. [Member] | Affiliate Contract Agreement [Member] | ||||||
Schedule of recognized identified assets acquired and liabilities assumed [Abstract] | ||||||
Contract based intangible assets | $ 258,100 | |||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Useful life | 14 years | |||||
Basis | $ 258,100 | |||||
NTELOS Holdings Corp. [Member] | Customer Based Contract Rights [Member] | ||||||
Schedule of recognized identified assets acquired and liabilities assumed [Abstract] | ||||||
Contract based intangible assets | 138,300 | |||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Basis | $ 138,300 | |||||
NTELOS Holdings Corp. [Member] | Customer Based Contract Rights [Member] | Minimum [Member] | ||||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Useful life | 4 years | |||||
NTELOS Holdings Corp. [Member] | Customer Based Contract Rights [Member] | Maximum [Member] | ||||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Useful life | 10 years | |||||
NTELOS Holdings Corp. [Member] | Contract Based Intangible Assets [Member] | ||||||
Schedule of recognized identified assets acquired and liabilities assumed [Abstract] | ||||||
Contract based intangible assets | $ 11,000 | |||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Basis | $ 11,000 | |||||
NTELOS Holdings Corp. [Member] | Contract Based Intangible Assets [Member] | Minimum [Member] | ||||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Useful life | 3 years | |||||
NTELOS Holdings Corp. [Member] | Contract Based Intangible Assets [Member] | Maximum [Member] | ||||||
Intangible assets resulting from acquisition [Abstract] | ||||||
Useful life | 19 years |
Intangible assets (Details)
Intangible assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 434,833 | $ 27,264 |
Accumulated amortization | (35,061) | (24,369) |
Net | 399,772 | 2,895 |
Intangible assets, gross | 499,207 | 91,362 |
Intangible assets, net | 464,146 | 66,993 |
Amortization expense for intangible assets [Abstract] | ||
2016 Remaining | 26,061 | |
2,017 | 48,574 | |
2,018 | 41,377 | |
2,019 | 36,619 | |
2,020 | 33,363 | |
2,021 | 30,116 | |
thereafter | 183,662 | |
Total | 399,772 | 2,895 |
Goodwill [Line Items] | ||
Goodwill as of December 31, 2015 | 10 | |
Goodwill as of June 30, 2016 | 151,730 | |
Wireless [Member] | ||
Goodwill [Line Items] | ||
Goodwill as of December 31, 2015 | 10 | |
Wireless [Member] | NTELOS Holdings Corp. [Member] | ||
Goodwill [Line Items] | ||
Goodwill recorded | 151,627 | |
Cable [Member] | Colane [Member] | ||
Goodwill [Line Items] | ||
Goodwill recorded | 93 | |
Cable Franchise Rights [Member] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 64,374 | 64,098 |
Net | 64,374 | 64,098 |
Affiliate Contract Expansion Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 258,100 | 0 |
Accumulated amortization | (3,290) | 0 |
Net | 254,810 | 0 |
Amortization expense for intangible assets [Abstract] | ||
Total | 254,810 | 0 |
Acquired Subscribers - Wireless [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 138,300 | 0 |
Accumulated amortization | (6,647) | 0 |
Net | 131,653 | 0 |
Amortization expense for intangible assets [Abstract] | ||
Total | 131,653 | 0 |
Favorable Leases - Wireless [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 11,000 | 0 |
Accumulated amortization | (183) | 0 |
Net | 10,817 | 0 |
Amortization expense for intangible assets [Abstract] | ||
Total | 10,817 | 0 |
Acquired Subscribers - Cable [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 25,265 | 25,326 |
Accumulated amortization | (24,246) | (23,805) |
Net | 1,019 | 1,521 |
Amortization expense for intangible assets [Abstract] | ||
Total | 1,019 | 1,521 |
Other Intangible [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 2,168 | 1,938 |
Accumulated amortization | (695) | (564) |
Net | 1,473 | 1,374 |
Amortization expense for intangible assets [Abstract] | ||
Total | $ 1,473 | $ 1,374 |
Property, Plant and Equipment36
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 1,040,550 | $ 755,103 |
Less accumulated amortization and depreciation | 387,027 | 345,085 |
Net property, plant and equipment | 653,523 | 410,018 |
Plant in Service [Member] | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | 964,601 | 718,503 |
Plant under Construction [Member] | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 75,949 | $ 36,600 |
Earnings (loss) per share (Deta
Earnings (loss) per share (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings (loss) per share [Abstract] | ||
Shares and options outstanding (in shares) | 964 | 696 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 22 | 79 |
Investments Carried at Fair V38
Investments Carried at Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Investments Carried at Fair Value [Abstract] | |||
Investments at fair value | $ 2,784 | $ 2,654 | |
Dividend and interest income from investments | 153 | ||
Net unrealized gains recognized | $ 83 | $ 54 |
Equipment Installment Plan Re39
Equipment Installment Plan Receivables (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net | $ 77,392 | $ 29,778 |
Deferred charges and other assets, net | $ 10,855 | $ 11,504 |
NTELOS Holdings Corp. [Member] | Equipment Installment Plan Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Installment period | 24 months | |
Equipment installment plan receivables | $ 26,000 | |
Accounts receivable, net | 19,500 | |
Deferred charges and other assets, net | 6,500 | |
Trade-in-right liabilities | $ 5,300 | |
NTELOS Holdings Corp. [Member] | Minimum [Member] | Equipment Installment Plan Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Estimated interest rate on receivable | 5.00% | |
NTELOS Holdings Corp. [Member] | Maximum [Member] | Equipment Installment Plan Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Estimated interest rate on receivable | 10.00% |
Derivative Instruments, Hedgi40
Derivative Instruments, Hedging Activities and Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2016USD ($) | May 31, 2016USD ($)Counterparty | Dec. 31, 2015USD ($) | Sep. 30, 2012USD ($) | |
Derivatives, Fair Value [Line Items] | ||||
Percentage of expected outstanding debt | 50.00% | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Accumulated Other Comprehensive Income (Loss), net of tax | $ 415 | |||
Accumulated Other Comprehensive Income (Loss), net of tax | (3,870) | |||
Cash Flow Hedge [Member] | Interest Rate Swap [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional amount of cash flow hedges | 144,100 | |||
Amount of notional principal interest rate swap | $ 174,600 | |||
Cash Flow Hedge [Member] | Interest Rate Swap [Member] | Three Counterparties [Member] | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional amount of cash flow hedges | 273,400 | |||
Amount of notional principal interest rate swap | $ 256,600 | |||
Number of counterparties | Counterparty | 3 | |||
Gains and (Losses) on Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive Income Loss Before Tax [Abstract] | ||||
Accumulated Other Comprehensive Income (Loss), before Tax | 688 | |||
Other comprehensive loss before reclassifications, before tax | (7,997) | |||
Amounts reclassified from accumulated other comprehensive income (to interest expense), before tax | 791 | |||
Net current period other comprehensive loss, before tax | (7,206) | |||
Accumulated Other Comprehensive Income (Loss), before Tax | (6,518) | |||
Accumulated Other Comprehensive Income Loss, Tax [Abstract] | ||||
Accumulated Other Comprehensive Income (Loss), tax | (273) | |||
Other comprehensive income before reclassifications, tax | 3,243 | |||
Amounts reclassified From accumulated other comprehensive income (to interest expense), tax | (322) | |||
Net current period other comprehensive loss | 2,921 | |||
Accumulated Other Comprehensive Income (Loss), tax | 2,648 | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Accumulated Other Comprehensive Income (Loss), net of tax | 415 | |||
Other comprehensive income before reclassifications, net of tax | (4,754) | |||
Amounts reclassified from accumulated other comprehensive income (to interest expense), net of tax | 469 | |||
Net current period other comprehensive loss, net of tax | (4,285) | |||
Accumulated Other Comprehensive Income (Loss), net of tax | (3,870) | |||
Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified as an increase to interest expense during next twelve months | 3,000 | |||
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||||
Derivative financial instrument as well as its classification on the consolidated balance sheet [Abstract] | ||||
Derivative Assets (Liabilities), at Fair Value, Net | (6,518) | $ 688 | ||
Designated as Hedging Instrument [Member] | Accrued Liabilities and Other [Member] | Interest Rate Swap [Member] | ||||
Derivative financial instrument as well as its classification on the consolidated balance sheet [Abstract] | ||||
Derivatives Liabilities, Fair Value | (3,016) | (682) | ||
Designated as Hedging Instrument [Member] | Other Liabilities [Member] | Interest Rate Swap [Member] | ||||
Derivative financial instrument as well as its classification on the consolidated balance sheet [Abstract] | ||||
Derivatives Liabilities, Fair Value | (3,502) | 0 | ||
Designated as Hedging Instrument [Member] | Deferred Charges and Other Assets, Net [Member] | Interest Rate Swap [Member] | ||||
Derivative financial instrument as well as its classification on the consolidated balance sheet [Abstract] | ||||
Derivative Assets, Fair Value | $ 0 | $ 1,370 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Other Liabilities [Abstract] | ||
Retirement plan obligations | $ 21,982 | $ 2,654 |
Due to dissenting shareholder | 9,436 | 0 |
Non-current portion of deferred revenues | 8,968 | 4,156 |
Other | 10,128 | 2,229 |
Other liabilities | $ 50,514 | $ 9,039 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($)State | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)SegmentState | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Information [Abstract] | |||||
Number of reportable segments | Segment | 3 | ||||
Non Sprint operations, number of states | State | 4 | 4 | |||
External revenues [Abstract] | |||||
Service revenues | $ 115,860 | $ 75,755 | $ 197,338 | $ 150,281 | |
Other | 14,449 | 9,946 | 25,542 | 19,708 | |
Total external revenues | 130,309 | 85,701 | 222,880 | 169,989 | |
Internal revenues | 0 | 0 | 0 | 0 | |
Total operating revenues | 130,309 | 85,701 | 222,880 | 169,989 | |
Operating expenses [Abstract] | |||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | 50,296 | 30,280 | 82,057 | 60,970 | |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 33,694 | 18,606 | 55,120 | 36,718 | |
Integration and acquisition expenses | 20,054 | 402 | 20,386 | 1,024 | |
Depreciation and amortization | 32,415 | 17,663 | 50,154 | 34,001 | |
Total operating expenses | 136,459 | 66,951 | 207,717 | 132,713 | |
Operating income (loss) | (6,150) | 18,750 | 15,163 | 37,276 | |
Reconciliation of income from continuing operations from segments to consolidated [Abstract] | |||||
Total consolidated operating income (loss) | (6,150) | 18,750 | 15,163 | 37,276 | |
Interest expense | (5,904) | (1,940) | (7,524) | (3,855) | |
Non-operating income, net | 167 | 540 | 723 | 1,074 | |
Income (loss) before income taxes | (11,887) | 17,350 | 8,362 | 34,495 | |
Assets by segment [Abstract] | |||||
Assets | 1,455,841 | 1,455,841 | $ 627,151 | ||
Other [Member] | |||||
Assets by segment [Abstract] | |||||
Assets | 1,083,152 | 1,083,152 | 463,390 | ||
Total Segments [Member] | |||||
Assets by segment [Abstract] | |||||
Assets | 2,547,881 | 2,547,881 | 983,609 | ||
Reportable Segments [Member] | Wireless [Member] | |||||
External revenues [Abstract] | |||||
Service revenues | 86,873 | 48,749 | 139,052 | 97,124 | |
Other | 6,280 | 2,848 | 9,484 | 5,878 | |
Total external revenues | 93,153 | 51,597 | 148,536 | 103,002 | |
Internal revenues | 1,141 | 1,105 | 2,276 | 2,209 | |
Total operating revenues | 94,294 | 52,702 | 150,812 | 105,211 | |
Operating expenses [Abstract] | |||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | 35,236 | 15,903 | 51,815 | 32,090 | |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 23,010 | 8,917 | 34,524 | 17,969 | |
Integration and acquisition expenses | 5,276 | 0 | 5,276 | 0 | |
Depreciation and amortization | 23,495 | 8,612 | 31,988 | 16,444 | |
Total operating expenses | 87,017 | 33,432 | 123,603 | 66,503 | |
Operating income (loss) | 7,277 | 19,270 | 27,209 | 38,708 | |
Reconciliation of income from continuing operations from segments to consolidated [Abstract] | |||||
Total consolidated operating income (loss) | 7,277 | 19,270 | 27,209 | 38,708 | |
Assets by segment [Abstract] | |||||
Assets | 1,142,459 | 1,142,459 | 205,718 | ||
Reportable Segments [Member] | Cable [Member] | |||||
External revenues [Abstract] | |||||
Service revenues | 24,167 | 22,117 | 48,507 | 43,518 | |
Other | 1,923 | 1,850 | 3,768 | 3,613 | |
Total external revenues | 26,090 | 23,967 | 52,275 | 47,131 | |
Internal revenues | 311 | 186 | 572 | 334 | |
Total operating revenues | 26,401 | 24,153 | 52,847 | 47,465 | |
Operating expenses [Abstract] | |||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | 14,564 | 13,635 | 29,210 | 27,253 | |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 4,794 | 5,084 | 9,902 | 9,976 | |
Integration and acquisition expenses | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 5,879 | 5,859 | 11,974 | 11,338 | |
Total operating expenses | 25,237 | 24,578 | 51,086 | 48,567 | |
Operating income (loss) | 1,164 | (425) | 1,761 | (1,102) | |
Reconciliation of income from continuing operations from segments to consolidated [Abstract] | |||||
Total consolidated operating income (loss) | 1,164 | (425) | 1,761 | (1,102) | |
Assets by segment [Abstract] | |||||
Assets | 210,542 | 210,542 | 209,132 | ||
Reportable Segments [Member] | Wireline [Member] | |||||
External revenues [Abstract] | |||||
Service revenues | 4,820 | 4,889 | 9,779 | 9,639 | |
Other | 6,246 | 5,248 | 12,290 | 10,217 | |
Total external revenues | 11,066 | 10,137 | 22,069 | 19,856 | |
Internal revenues | 7,525 | 6,326 | 14,901 | 12,192 | |
Total operating revenues | 18,591 | 16,463 | 36,970 | 32,048 | |
Operating expenses [Abstract] | |||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | 8,808 | 7,677 | 17,450 | 15,011 | |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 1,670 | 1,736 | 3,275 | 3,234 | |
Integration and acquisition expenses | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 2,933 | 3,083 | 5,967 | 6,007 | |
Total operating expenses | 13,411 | 12,496 | 26,692 | 24,252 | |
Operating income (loss) | 5,180 | 3,967 | 10,278 | 7,796 | |
Reconciliation of income from continuing operations from segments to consolidated [Abstract] | |||||
Total consolidated operating income (loss) | 5,180 | 3,967 | 10,278 | 7,796 | |
Assets by segment [Abstract] | |||||
Assets | 111,728 | 111,728 | 105,369 | ||
Reportable Segments [Member] | Other [Member] | |||||
External revenues [Abstract] | |||||
Service revenues | 0 | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | 0 | |
Total external revenues | 0 | 0 | 0 | 0 | |
Internal revenues | 0 | 0 | 0 | 0 | |
Total operating revenues | 0 | 0 | 0 | 0 | |
Operating expenses [Abstract] | |||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | 0 | (16) | 0 | 0 | |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | 4,885 | 3,567 | 8,750 | 6,890 | |
Integration and acquisition expenses | 14,778 | 402 | 15,110 | 1,024 | |
Depreciation and amortization | 108 | 109 | 225 | 212 | |
Total operating expenses | 19,771 | 4,062 | 24,085 | 8,126 | |
Operating income (loss) | (19,771) | (4,062) | (24,085) | (8,126) | |
Reconciliation of income from continuing operations from segments to consolidated [Abstract] | |||||
Total consolidated operating income (loss) | (19,771) | (4,062) | (24,085) | (8,126) | |
Eliminations [Member] | |||||
External revenues [Abstract] | |||||
Service revenues | 0 | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | 0 | |
Total external revenues | 0 | 0 | 0 | 0 | |
Internal revenues | (8,977) | (7,617) | (17,749) | (14,735) | |
Total operating revenues | (8,977) | (7,617) | (17,749) | (14,735) | |
Operating expenses [Abstract] | |||||
Cost of goods and services, exclusive of depreciation and amortization shown separately below | (8,312) | (6,919) | (16,418) | (13,384) | |
Selling, general and administrative, exclusive of depreciation and amortization shown separately below | (665) | (698) | (1,331) | (1,351) | |
Integration and acquisition expenses | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Total operating expenses | (8,977) | (7,617) | (17,749) | (14,735) | |
Operating income (loss) | 0 | 0 | 0 | 0 | |
Reconciliation of income from continuing operations from segments to consolidated [Abstract] | |||||
Total consolidated operating income (loss) | 0 | $ 0 | 0 | $ 0 | |
Assets by segment [Abstract] | |||||
Assets | $ (1,092,040) | $ (1,092,040) | $ (356,458) |
Adoption of New Accounting Pr43
Adoption of New Accounting Principles (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Adoption of New Accounting Principles [Abstract] | ||
Unamortized loan fees and costs | $ 1.6 | |
Unamortized loan allocation to long-term debt current maturities | $ 4.3 | 0.5 |
Unamortized loan allocation to long-term debt | 4.3 | 1.1 |
Reduction in total assets and liabilities and shareholders' equity | $ 4.3 | 1.6 |
Deferred tax assets | $ 0.9 |
Long-Term Debt and Revolving 44
Long-Term Debt and Revolving Lines of Credit (Details) $ in Thousands | Dec. 18, 2015USD ($) | Jun. 30, 2016USD ($)Facility | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||
Long term debt, Total | $ 835,413 | $ 201,250 | |
Less: unamortized loan fees | 19,840 | 1,589 | |
Total debt, net of unamortized loan fees | 815,573 | 199,661 | |
Current maturities, net of unamortized loan fees | 20,147 | 22,492 | |
Long-term debt, net of unamortized loan fees | $ 795,426 | 177,169 | |
Number of credit facilities | Facility | 3 | ||
Weighted average interest rate | 3.84% | ||
Variable swap rate | 50.00% | ||
Period for term loan outstanding | 3 years | ||
Total leverage ratio through December 30, 2019 | 3.25 | ||
Total leverage ratio thereafter | 3 | ||
Debt instrument covenants minimum liquidity, amount | $ 25,000 | ||
Aggregate maturities of long-term debt [Abstract] | |||
2,016 | 12,238 | ||
2,017 | 36,714 | ||
2,018 | 68,593 | ||
2,019 | 88,593 | ||
2,020 | 100,625 | ||
Thereafter | 528,650 | ||
Long term debt, Total | $ 835,413 | 201,250 | |
Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Total leverage ratio from closing date through December 30, 2018 | 3.75 | ||
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt service coverage ratio | 2 | ||
One-month LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, fixed interest rate | 1.16% | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Term of credit facility | 5 years | ||
Maximum borrowing capacity | $ 75,000 | ||
Capital Lease Obligations [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt, Total | $ 413 | 0 | |
Aggregate maturities of long-term debt [Abstract] | |||
Long term debt, Total | 413 | 0 | |
Term Loan A [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt, Total | 0 | 201,250 | |
Aggregate maturities of long-term debt [Abstract] | |||
Long term debt, Total | 0 | 201,250 | |
Term Loan A-1 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt, Total | 485,000 | 0 | |
Term of credit facility | 5 years | ||
Maximum borrowing capacity | $ 485,000 | ||
Quarterly principal payment period one | 6,100 | ||
Quarterly principal payment period two | 12,100 | ||
Remaining principal payment due | 242,500 | ||
Aggregate maturities of long-term debt [Abstract] | |||
Long term debt, Total | $ 485,000 | 0 | |
Term Loan A-1 [Member] | One-month LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, variable interest rate | 2.75% | ||
Term Loan A-1 [Member] | NTELOS Holdings Corp [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility amount borrowed | $ 485,000 | ||
Term Loan A-2 [Member] | |||
Debt Instrument [Line Items] | |||
Long term debt, Total | $ 350,000 | 0 | |
Term of credit facility | 7 years | ||
Maximum borrowing capacity | $ 400,000 | ||
Proceeds from line of credit | 25,000 | ||
Quarterly principal payment period one | 10,000 | ||
Remaining principal payment due | 210,000 | ||
Aggregate maturities of long-term debt [Abstract] | |||
Long term debt, Total | $ 350,000 | $ 0 | |
Term Loan A-2 [Member] | One-month LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, variable interest rate | 3.00% | ||
Term Loan A-2 [Member] | Delayed Draw Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility remaining borrowing capacity | 75,000 | ||
Term Loan A-2 [Member] | NTELOS Holdings Corp [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit facility amount borrowed | $ 325,000 |
Pension Plan and Other Postre45
Pension Plan and Other Postretirement Benefits, Benefit Obligation (Details) - NTELOS Holdings Corp. [Member] $ in Thousands | May 06, 2016USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Fair value of plan assets, at acquisition | $ 22,813 |
Defined Benefit Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit obligations, at acquisition | 37,443 |
Fair value of plan assets, at acquisition | 22,813 |
Funded status [Abstract] | |
Total liability, at acquisition | (14,630) |
Other Postretirement Benefit Plans [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit obligations, at acquisition | 4,568 |
Fair value of plan assets, at acquisition | 0 |
Funded status [Abstract] | |
Total liability, at acquisition | $ (4,568) |
Pension Plan and Other Postre46
Pension Plan and Other Postretirement Benefits, Net Periodic Benefit Cost (Details) - NTELOS Holdings Corp. [Member] - USD ($) $ in Thousands | 2 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Components of net periodic benefit cost [Abstract] | ||
Gains (losses) amortized in excess rate of benefit obligation and the market-related value of assets | 10.00% | |
Defined Benefit Pension Plan [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | $ 0 | |
Interest cost | 956 | |
Recognized net actuarial loss | 0 | |
Expected return on plan assets | (1,018) | |
Net periodic benefit cost | (62) | $ 100 |
Reclassification out of accumulated other comprehensive loss related to actuarial losses | 0 | |
Other Postretirement Benefit Plans [Member] | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 18 | |
Interest cost | 108 | |
Recognized net actuarial loss | 0 | |
Expected return on plan assets | 0 | |
Net periodic benefit cost | $ 126 | $ 100 |
Pension Plan and Other Postre47
Pension Plan and Other Postretirement Benefits, Assumptions (Details) - Ntelos Holding, Corp [Member] - USD ($) $ in Millions | 2 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | May 06, 2016 | |
Weighted average assumptions used in measurement of net cost [Abstract] | |||
Assumed annual rate increase in per capita cost of covered health care benefits | 8.00% | ||
Assumed annual rate decrease in per capita cost of covered health care benefits for the next five years | 0.50% | ||
Assumed annual rate per capita cost of covered health care benefits, for year 2022 and thereafter | 5.00% | ||
Effect of one percentage point increase on service and interest cost components | $ 0.1 | ||
Effect of one percentage point increase on accumulated postretirement benefit obligation | 0.6 | ||
Effect of one percentage point decrease on service and interest cost components | 0.1 | ||
Effect of one percentage point decrease on accumulated postretirement benefit obligation | $ 0.5 | ||
Defined Benefit Pension Plan [Member] | |||
Weighted average assumptions used in measurement of benefit obligations [Abstract] | |||
Discount rate | 3.85% | ||
Weighted average assumptions used in measurement of net cost [Abstract] | |||
Discount rate | 3.85% | ||
Expected return on plan assets | 6.75% | ||
Rate of compensation increase | 0.00% | ||
Other Postretirement Benefit Plans [Member] | |||
Weighted average assumptions used in measurement of benefit obligations [Abstract] | |||
Discount rate | 3.85% | ||
Weighted average assumptions used in measurement of net cost [Abstract] | |||
Discount rate | 3.85% | ||
Expected return on plan assets | 0.00% | ||
Rate of compensation increase | 0.00% |
Pension Plan and Other Postre48
Pension Plan and Other Postretirement Benefits, Asset Allocation (Details) - Ntelos Holding, Corp [Member] $ in Thousands | May 06, 2016USD ($)BondFund |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 100.00% |
Fair value of plan assets | $ 22,813 |
Target allocations | 100.00% |
Number of bond funds | BondFund | 2 |
Large Cap Value [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 32.00% |
Fair value of plan assets | $ 7,244 |
Mid Cap Blend [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 9.00% |
Fair value of plan assets | $ 2,026 |
Small Cap Blend [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 5.00% |
Fair value of plan assets | $ 1,151 |
Foreign Stock - Large Cap [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 30.00% |
Fair value of plan assets | $ 6,867 |
Bond [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 20.00% |
Fair value of plan assets | $ 4,611 |
Cash and Cash Equivalents [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 4.00% |
Fair value of plan assets | $ 914 |
Equity Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 76.00% |
Target allocations, minimum | 65.00% |
Target allocations, maximum | 75.00% |
Bond Securities and Cash Equivalents [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual allocations | 24.00% |
Target allocations, minimum | 25.00% |
Target allocations, maximum | 35.00% |
Maximum [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Holding percentage of one asset in bond fund | 4.00% |
Holding percentage of one asset in total portfolio | 1.00% |
Pension Plan and Other Postre49
Pension Plan and Other Postretirement Benefits, Future Benefit Plan Payments (Details) - Ntelos Holding, Corp [Member] $ in Thousands | 2 Months Ended | 6 Months Ended |
Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | |
Defined Benefit Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected net periodic benefit cost | $ (62) | $ 100 |
Estimated Future Benefit Payments [Abstract] | ||
2,016 | 371 | 371 |
2,017 | 700 | 700 |
2,018 | 720 | 720 |
2,019 | 768 | 768 |
2,020 | 868 | 868 |
Aggregate of next five years | 6,219 | 6,219 |
Other Postretirement Benefit Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected net periodic benefit cost | 126 | 100 |
Estimated Future Benefit Payments [Abstract] | ||
2,016 | 96 | 96 |
2,017 | 136 | 136 |
2,018 | 131 | 131 |
2,019 | 134 | 134 |
2,020 | 142 | 142 |
Aggregate of next five years | $ 977 | $ 977 |