Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-09881 | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 54-1162807 | |
Entity Address, Address Line One | 500 Shentel Way | |
Entity Address, City or Town | Edinburg | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22824 | |
City Area Code | 540 | |
Local Phone Number | 984-4141 | |
Title of 12(b) Security | Common Stock (No Par Value) | |
Trading Symbol | SHEN | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 49,857,142 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Registrant Name | SHENANDOAH TELECOMMUNICATIONS COMPANY | |
Entity Central Index Key | 0000354963 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 97,415 | $ 85,086 |
Accounts receivable, net of allowance for doubtful accounts of $563 and $534, respectively | 60,084 | 54,407 |
Income taxes receivable | 2,983 | 5,282 |
Inventory, net of allowances of $196 and $113, respectively | 4,561 | 5,265 |
Prepaid expenses and other | 56,597 | 60,162 |
Total current assets | 221,640 | 210,202 |
Investments | 11,851 | 10,788 |
Property, plant and equipment, net | 688,516 | 701,359 |
Intangible assets, net | 328,831 | 366,029 |
Goodwill | 149,070 | 146,497 |
Operating lease right-of-use assets | 400,489 | 0 |
Deferred charges and other assets | 50,469 | 49,891 |
Total assets | 1,850,866 | 1,484,766 |
Current liabilities: | ||
Current maturities of long-term debt, net of unamortized loan fees | 31,634 | 20,618 |
Accounts payable | 26,470 | 35,987 |
Advanced billings and customer deposits | 8,127 | 7,919 |
Accrued compensation | 6,915 | 9,452 |
Current operating lease liabilities | 44,178 | 0 |
Accrued liabilities and other | 14,731 | 14,563 |
Total current liabilities | 132,055 | 88,539 |
Long-term debt, less current maturities, net of unamortized loan fees | 696,378 | 749,624 |
Other long-term liabilities: | ||
Deferred income taxes | 129,651 | 127,453 |
Deferred lease | 0 | 22,436 |
Asset retirement obligations | 29,956 | 28,584 |
Retirement plan obligations | 10,311 | 11,519 |
Noncurrent operating lease liabilities | 359,985 | 0 |
Other liabilities | 16,676 | 14,364 |
Total other long-term liabilities | 546,579 | 204,356 |
Shareholders’ equity: | ||
Common stock, no par value, authorized 96,000; 49,857 and 49,630 issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 0 | 0 |
Additional paid in capital | 48,083 | 47,456 |
Retained earnings | 427,925 | 386,511 |
Accumulated other comprehensive income (loss), net of taxes | (154) | 8,280 |
Total shareholders’ equity | 475,854 | 442,247 |
Total liabilities and shareholders’ equity | $ 1,850,866 | $ 1,484,766 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 563 | $ 534 |
Inventory reserve | $ 196 | $ 113 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 96,000 | 96,000 |
Common stock, shares issued (in shares) | 49,857 | 49,630 |
Common stock, shares outstanding (in shares) | 49,857 | 49,630 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating revenue: | ||||
Operating revenues | $ 155,152 | $ 158,731 | $ 472,909 | $ 469,370 |
Operating expenses: | ||||
Selling, general and administrative | 27,178 | 27,452 | 83,070 | 86,117 |
Depreciation and amortization | 36,626 | 40,028 | 120,158 | 124,632 |
Total operating expenses | 129,793 | 130,402 | 398,743 | 403,118 |
Operating income | 25,359 | 28,329 | 74,166 | 66,252 |
Other income (expense): | ||||
Interest expense | (7,505) | (9,001) | (22,981) | (27,184) |
Other | 1,099 | 1,054 | 3,562 | 2,882 |
Income before income taxes | 18,953 | 20,382 | 54,747 | 41,950 |
Income tax expense | 4,599 | 4,848 | 13,333 | 10,207 |
Net income | 14,354 | 15,534 | 41,414 | 31,743 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on interest rate hedge, net of tax | (1,494) | (8,434) | ||
Unrealized gain (loss) on interest rate hedge, net of tax | 465 | 4,360 | ||
Comprehensive income | $ 12,860 | $ 15,999 | $ 32,980 | $ 36,103 |
Net income per share, basic and diluted: | ||||
Basic net income per share (in dollars per share) | $ 0.29 | $ 0.31 | $ 0.83 | $ 0.64 |
Diluted net income per share (in dollars per share) | $ 0.29 | $ 0.31 | $ 0.83 | $ 0.63 |
Weighted average shares outstanding, basic (in shares) | 49,857 | 49,559 | 49,827 | 49,527 |
Weighted average shares outstanding, diluted (in shares) | 50,129 | 50,117 | 50,110 | 50,044 |
Service revenue and other | ||||
Operating revenue: | ||||
Operating revenues | $ 138,832 | $ 142,768 | $ 424,122 | $ 419,819 |
Equipment revenue | ||||
Operating revenue: | ||||
Operating revenues | 16,320 | 15,963 | 48,787 | 49,551 |
Cost of services | ||||
Operating expenses: | ||||
Cost of services | 50,164 | 47,886 | 149,179 | 146,362 |
Cost of goods sold | ||||
Operating expenses: | ||||
Cost of services | $ 15,825 | $ 15,036 | $ 46,336 | $ 46,007 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Shares of Common Stock (no par value) | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2017 | 49,328 | ||||
Beginning balance at Dec. 31, 2017 | $ 350,222 | $ 44,787 | $ 297,205 | $ 8,230 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 31,743 | 31,743 | |||
Other comprehensive gain (loss), net of tax | 4,360 | 4,360 | |||
Stock based compensation (in shares) | 206 | ||||
Stock based compensation | 4,578 | 4,578 | |||
Stock options exercised (in shares) | 15 | ||||
Stock options exercised | 104 | 104 | |||
Common stock issued | 18 | 18 | |||
Shares retired for settlement of employee taxes upon issuance of vested equity awards (in shares) | (66) | ||||
Shares retired for settlement of employee taxes upon issuance of vested equity awards | $ (2,137) | (2,137) | |||
Common stock issued to acquire non-controlling interests of nTelos (in shares) | 76 | ||||
Ending balance (in shares) at Sep. 30, 2018 | 49,559 | ||||
Ending balance at Sep. 30, 2018 | $ 444,985 | 47,350 | 385,045 | 12,590 | |
Beginning balance (in shares) at Jun. 30, 2018 | 49,558 | ||||
Beginning balance at Jun. 30, 2018 | 427,808 | 46,172 | 369,511 | 12,125 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 15,534 | 15,534 | |||
Other comprehensive gain (loss), net of tax | 465 | 465 | |||
Stock based compensation (in shares) | 1 | ||||
Stock based compensation | 1,171 | 1,171 | |||
Common stock issued | 8 | 8 | |||
Shares retired for settlement of employee taxes upon issuance of vested equity awards (in shares) | 0 | ||||
Shares retired for settlement of employee taxes upon issuance of vested equity awards | (1) | (1) | |||
Ending balance (in shares) at Sep. 30, 2018 | 49,559 | ||||
Ending balance at Sep. 30, 2018 | $ 444,985 | 47,350 | 385,045 | 12,590 | |
Beginning balance (in shares) at Dec. 31, 2018 | 49,630 | 49,630 | |||
Beginning balance at Dec. 31, 2018 | $ 442,247 | 47,456 | 386,511 | 8,280 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 41,414 | 41,414 | |||
Other comprehensive gain (loss), net of tax | (8,434) | (8,434) | |||
Stock based compensation (in shares) | 184 | ||||
Stock based compensation | 3,433 | 3,433 | |||
Stock options exercised (in shares) | 29 | ||||
Stock options exercised | 81 | 81 | |||
Common stock issued | 25 | 25 | |||
Shares retired for settlement of employee taxes upon issuance of vested equity awards (in shares) | (62) | ||||
Shares retired for settlement of employee taxes upon issuance of vested equity awards | $ (2,912) | (2,912) | |||
Common stock issued to acquire non-controlling interests of nTelos (in shares) | 76 | ||||
Ending balance (in shares) at Sep. 30, 2019 | 49,857 | 49,857 | |||
Ending balance at Sep. 30, 2019 | $ 475,854 | 48,083 | 427,925 | (154) | |
Beginning balance (in shares) at Jun. 30, 2019 | 49,857 | ||||
Beginning balance at Jun. 30, 2019 | 462,049 | 47,138 | 413,571 | 1,340 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 14,354 | 14,354 | |||
Other comprehensive gain (loss), net of tax | (1,494) | (1,494) | |||
Stock based compensation | 936 | 936 | |||
Common stock issued | $ 9 | 9 | |||
Ending balance (in shares) at Sep. 30, 2019 | 49,857 | 49,857 | |||
Ending balance at Sep. 30, 2019 | $ 475,854 | $ 48,083 | $ 427,925 | $ (154) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows From Operating Activities | ||
Net income | $ 41,414 | $ 31,743 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 104,503 | 106,002 |
Amortization | 15,655 | 18,630 |
Accretion of asset retirement obligations | 1,093 | 710 |
Bad debt expense | 1,215 | 1,362 |
Stock based compensation expense, net of amount capitalized | 3,158 | 4,578 |
Deferred income taxes | 4,999 | (1,989) |
Net gain from patronage and investments | (3,035) | (2,412) |
Amortization of long-term debt issuance costs | 2,596 | 3,472 |
Changes in assets and liabilities: | ||
Accounts receivable | (4,894) | (5,492) |
Inventory, net | 704 | 741 |
Current income taxes | 2,299 | 14,932 |
Waived management fee | 29,016 | 28,164 |
Other assets | (15,073) | (13,393) |
Operating lease right-of-use assets | 38,262 | |
Lease liabilities | (32,173) | |
Accounts payable | 7,023 | (1,913) |
Deferred lease | 0 | 4,159 |
Other deferrals and accruals | (3,303) | (494) |
Net cash provided by operating activities | 193,459 | 188,800 |
Cash flows from investing activities: | ||
Capital expenditures | (107,038) | (92,309) |
Cash disbursed for acquisitions | (10,000) | (52,000) |
Cash disbursed for FCC spectrum licenses | (16,742) | 0 |
Proceeds from sale of assets and other | 156 | 539 |
Net cash used in investing activities | (133,624) | (143,770) |
Cash flows from financing activities: | ||
Principal payments on long-term debt | (44,666) | (46,375) |
Proceeds from revolving credit facility borrowings | 0 | 15,000 |
Principal payments on revolving credit facility | 0 | (15,000) |
Proceeds from exercises of stock options | 81 | 0 |
Taxes paid for equity award issuances | (2,912) | (2,033) |
Other | (9) | 0 |
Net cash used in financing activities | (47,506) | (48,408) |
Net increase (decrease) in cash and cash equivalents | 12,329 | (3,378) |
Cash and cash equivalents, beginning of period | 85,086 | 78,585 |
Cash and cash equivalents, end of period | $ 97,415 | $ 75,207 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim condensed consolidated financial statements of Shenandoah Telecommunications Company and Subsidiaries (collectively, the “Company”) are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the interim results have been reflected therein in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The information contained herein should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 . Adoption of New Accounting Principles There have been no developments related to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company's unaudited condensed consolidated financial statements and note disclosures, from those disclosed in the Company's 2018 Annual Report on Form 10-K, that would be expected to impact the Company except for the following: The Company adopted ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), as of January 1, 2019. The Company elected not to reclassify stranded income tax effects from accumulated other comprehensive income (OCI) to retained earnings and has implemented this election as its accounting policy as of January 1, 2019. The Company utilizes the portfolio approach as its policy to release the income tax effects from accumulated OCI as the entire portfolio is liquidated, sold, or extinguished. The Company adopted ASU No. 2016-02, Leases (“ Topic 842 ” or “ the new lease standard |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases various cell sites, warehouses, retail stores, and office facilities for use in our business. These agreements include fixed rental payments as well as variable rental payments, such as those based on relevant inflation indices. The accounting lease term includes optional renewal periods that we are reasonably certain to exercise based on our assessment of relevant contractual and economic factors. The related lease payments are discounted at lease commencement using the Company's incremental borrowing rate in order to measure the lease liability and ROU asset. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. Under the new lease standard, leases are remeasured upon the occurrence of certain events or modifications. Adoption of the new lease standard did not materially impact the Company's consolidated net earnings, cash flows, liquidity, or loan covenants. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard were as follows: (in thousands) December 31, 2018 As Previously Reported Effect of the Adoption of ASC Topic 842 (Leases) January 1, 2019 As Adjusted Assets Prepaid expenses and other $ 60,162 $ (11,580 ) $ 48,582 Property, plant and equipment, net 701,359 1,789 703,148 Operating lease right-of-use assets — 369,344 369,344 Intangible assets, net 366,029 (13,828 ) 352,201 Liabilities Current operating lease liabilities — 38,773 38,773 Accrued liabilities and other 14,563 (412 ) 14,151 Deferred Lease 22,436 (22,436 ) — Noncurrent operating lease liabilities — 328,156 328,156 Other liabilities 14,364 1,644 16,008 In addition to recognizing the operating lease liabilities and right-of-use assets, Topic 842 also reclassified prepaid and deferred rent balances, off-market leases, and lease incentives into the right-of-use assets. The following table shows the components of lease income and costs: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Lease income from operating leases - fixed $ 2,149 $ 6,219 Operating lease expense 18,151 51,811 Amortization of finance lease assets 158 399 Interest on finance lease liabilities 14 59 Subtotal finance lease cost 172 458 Total lease expense $ 18,323 $ 52,269 Substantially all of the Company's sublease income from operating leases relates to fixed lease payments. All operating lease expenses, including short-term and variable lease expenses, are split between cost of service and selling, general and administrative expense in the condensed consolidated statements of operations based on the use of the facility that the rent is being paid on. Operating lease expense includes variable lease payments and short-term lease expense, both of which are immaterial. Variable lease expenses represent payments that are dependent on a rate or index, or on usage of the asset. The following table summarizes other information related to operating and finance leases: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating cash flows used by leases $ 16,002 $ 46,546 Leased assets obtained in exchange for new operating lease liabilities 43,647 69,407 The following table summarizes the lease terms and discount rates: September 30, Weighted-average remaining lease term (years) Operating leases 8 Finance leases 16 Weighted-average discount rate Operating leases 4.6 % Finance leases 5.2 % The following table summarizes the expected maturity of lease liabilities at September 30, 2019 : (in thousands) Operating Leases Finance Leases Total 2019 $ 12,742 $ 63 $ 12,805 2020 64,474 174 64,648 2021 65,087 174 65,261 2022 63,341 174 63,515 2023 59,885 174 60,059 2024 and thereafter 242,115 1,704 243,819 Total lease payments 507,644 2,463 510,107 Less: Interest 103,481 748 104,229 Present value of lease liabilities $ 404,163 $ 1,715 $ 405,878 The Company's finance lease liabilities are presented in the accrued liabilities and other and the other liabilities lines of the unaudited condensed consolidated balance sheets. The related finance lease assets are included in the property, plant and equipment line. Our commitments under leases existing as of December 31, 2018 were approximately $55.1 million for the year ending December 31, 2019, $104.4 million in total for the years ending December 31, 2020 and 2021, $97.6 million in total for the years ending December 31, 2022 and 2023 and $168.5 million in total for years thereafter. The Company is also the lessor on agreements to lease assets such as collocation space at cell sites and dedicated fiber-optic strands to third parties. These agreements have been accounted for as operating leases both before and after adoption of the new lease standard. The new lease standard did not have a significant impact on the recognition of lease revenue associated with these agreements. The following table summarizes the total minimum rental receipts under lease agreements at September 30, 2019 : (in thousands) Operating Leases 2019 $ 1,774 2020 6,621 2021 4,526 2022 3,432 2023 1,801 2024 and thereafter 4,978 Total lease income $ 23,132 |
Leases | Leases The Company leases various cell sites, warehouses, retail stores, and office facilities for use in our business. These agreements include fixed rental payments as well as variable rental payments, such as those based on relevant inflation indices. The accounting lease term includes optional renewal periods that we are reasonably certain to exercise based on our assessment of relevant contractual and economic factors. The related lease payments are discounted at lease commencement using the Company's incremental borrowing rate in order to measure the lease liability and ROU asset. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. Under the new lease standard, leases are remeasured upon the occurrence of certain events or modifications. Adoption of the new lease standard did not materially impact the Company's consolidated net earnings, cash flows, liquidity, or loan covenants. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard were as follows: (in thousands) December 31, 2018 As Previously Reported Effect of the Adoption of ASC Topic 842 (Leases) January 1, 2019 As Adjusted Assets Prepaid expenses and other $ 60,162 $ (11,580 ) $ 48,582 Property, plant and equipment, net 701,359 1,789 703,148 Operating lease right-of-use assets — 369,344 369,344 Intangible assets, net 366,029 (13,828 ) 352,201 Liabilities Current operating lease liabilities — 38,773 38,773 Accrued liabilities and other 14,563 (412 ) 14,151 Deferred Lease 22,436 (22,436 ) — Noncurrent operating lease liabilities — 328,156 328,156 Other liabilities 14,364 1,644 16,008 In addition to recognizing the operating lease liabilities and right-of-use assets, Topic 842 also reclassified prepaid and deferred rent balances, off-market leases, and lease incentives into the right-of-use assets. The following table shows the components of lease income and costs: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Lease income from operating leases - fixed $ 2,149 $ 6,219 Operating lease expense 18,151 51,811 Amortization of finance lease assets 158 399 Interest on finance lease liabilities 14 59 Subtotal finance lease cost 172 458 Total lease expense $ 18,323 $ 52,269 Substantially all of the Company's sublease income from operating leases relates to fixed lease payments. All operating lease expenses, including short-term and variable lease expenses, are split between cost of service and selling, general and administrative expense in the condensed consolidated statements of operations based on the use of the facility that the rent is being paid on. Operating lease expense includes variable lease payments and short-term lease expense, both of which are immaterial. Variable lease expenses represent payments that are dependent on a rate or index, or on usage of the asset. The following table summarizes other information related to operating and finance leases: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating cash flows used by leases $ 16,002 $ 46,546 Leased assets obtained in exchange for new operating lease liabilities 43,647 69,407 The following table summarizes the lease terms and discount rates: September 30, Weighted-average remaining lease term (years) Operating leases 8 Finance leases 16 Weighted-average discount rate Operating leases 4.6 % Finance leases 5.2 % The following table summarizes the expected maturity of lease liabilities at September 30, 2019 : (in thousands) Operating Leases Finance Leases Total 2019 $ 12,742 $ 63 $ 12,805 2020 64,474 174 64,648 2021 65,087 174 65,261 2022 63,341 174 63,515 2023 59,885 174 60,059 2024 and thereafter 242,115 1,704 243,819 Total lease payments 507,644 2,463 510,107 Less: Interest 103,481 748 104,229 Present value of lease liabilities $ 404,163 $ 1,715 $ 405,878 The Company's finance lease liabilities are presented in the accrued liabilities and other and the other liabilities lines of the unaudited condensed consolidated balance sheets. The related finance lease assets are included in the property, plant and equipment line. Our commitments under leases existing as of December 31, 2018 were approximately $55.1 million for the year ending December 31, 2019, $104.4 million in total for the years ending December 31, 2020 and 2021, $97.6 million in total for the years ending December 31, 2022 and 2023 and $168.5 million in total for years thereafter. The Company is also the lessor on agreements to lease assets such as collocation space at cell sites and dedicated fiber-optic strands to third parties. These agreements have been accounted for as operating leases both before and after adoption of the new lease standard. The new lease standard did not have a significant impact on the recognition of lease revenue associated with these agreements. The following table summarizes the total minimum rental receipts under lease agreements at September 30, 2019 : (in thousands) Operating Leases 2019 $ 1,774 2020 6,621 2021 4,526 2022 3,432 2023 1,801 2024 and thereafter 4,978 Total lease income $ 23,132 |
Leases | Leases The Company leases various cell sites, warehouses, retail stores, and office facilities for use in our business. These agreements include fixed rental payments as well as variable rental payments, such as those based on relevant inflation indices. The accounting lease term includes optional renewal periods that we are reasonably certain to exercise based on our assessment of relevant contractual and economic factors. The related lease payments are discounted at lease commencement using the Company's incremental borrowing rate in order to measure the lease liability and ROU asset. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. Under the new lease standard, leases are remeasured upon the occurrence of certain events or modifications. Adoption of the new lease standard did not materially impact the Company's consolidated net earnings, cash flows, liquidity, or loan covenants. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard were as follows: (in thousands) December 31, 2018 As Previously Reported Effect of the Adoption of ASC Topic 842 (Leases) January 1, 2019 As Adjusted Assets Prepaid expenses and other $ 60,162 $ (11,580 ) $ 48,582 Property, plant and equipment, net 701,359 1,789 703,148 Operating lease right-of-use assets — 369,344 369,344 Intangible assets, net 366,029 (13,828 ) 352,201 Liabilities Current operating lease liabilities — 38,773 38,773 Accrued liabilities and other 14,563 (412 ) 14,151 Deferred Lease 22,436 (22,436 ) — Noncurrent operating lease liabilities — 328,156 328,156 Other liabilities 14,364 1,644 16,008 In addition to recognizing the operating lease liabilities and right-of-use assets, Topic 842 also reclassified prepaid and deferred rent balances, off-market leases, and lease incentives into the right-of-use assets. The following table shows the components of lease income and costs: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Lease income from operating leases - fixed $ 2,149 $ 6,219 Operating lease expense 18,151 51,811 Amortization of finance lease assets 158 399 Interest on finance lease liabilities 14 59 Subtotal finance lease cost 172 458 Total lease expense $ 18,323 $ 52,269 Substantially all of the Company's sublease income from operating leases relates to fixed lease payments. All operating lease expenses, including short-term and variable lease expenses, are split between cost of service and selling, general and administrative expense in the condensed consolidated statements of operations based on the use of the facility that the rent is being paid on. Operating lease expense includes variable lease payments and short-term lease expense, both of which are immaterial. Variable lease expenses represent payments that are dependent on a rate or index, or on usage of the asset. The following table summarizes other information related to operating and finance leases: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating cash flows used by leases $ 16,002 $ 46,546 Leased assets obtained in exchange for new operating lease liabilities 43,647 69,407 The following table summarizes the lease terms and discount rates: September 30, Weighted-average remaining lease term (years) Operating leases 8 Finance leases 16 Weighted-average discount rate Operating leases 4.6 % Finance leases 5.2 % The following table summarizes the expected maturity of lease liabilities at September 30, 2019 : (in thousands) Operating Leases Finance Leases Total 2019 $ 12,742 $ 63 $ 12,805 2020 64,474 174 64,648 2021 65,087 174 65,261 2022 63,341 174 63,515 2023 59,885 174 60,059 2024 and thereafter 242,115 1,704 243,819 Total lease payments 507,644 2,463 510,107 Less: Interest 103,481 748 104,229 Present value of lease liabilities $ 404,163 $ 1,715 $ 405,878 The Company's finance lease liabilities are presented in the accrued liabilities and other and the other liabilities lines of the unaudited condensed consolidated balance sheets. The related finance lease assets are included in the property, plant and equipment line. Our commitments under leases existing as of December 31, 2018 were approximately $55.1 million for the year ending December 31, 2019, $104.4 million in total for the years ending December 31, 2020 and 2021, $97.6 million in total for the years ending December 31, 2022 and 2023 and $168.5 million in total for years thereafter. The Company is also the lessor on agreements to lease assets such as collocation space at cell sites and dedicated fiber-optic strands to third parties. These agreements have been accounted for as operating leases both before and after adoption of the new lease standard. The new lease standard did not have a significant impact on the recognition of lease revenue associated with these agreements. The following table summarizes the total minimum rental receipts under lease agreements at September 30, 2019 : (in thousands) Operating Leases 2019 $ 1,774 2020 6,621 2021 4,526 2022 3,432 2023 1,801 2024 and thereafter 4,978 Total lease income $ 23,132 |
Leases | Leases The Company leases various cell sites, warehouses, retail stores, and office facilities for use in our business. These agreements include fixed rental payments as well as variable rental payments, such as those based on relevant inflation indices. The accounting lease term includes optional renewal periods that we are reasonably certain to exercise based on our assessment of relevant contractual and economic factors. The related lease payments are discounted at lease commencement using the Company's incremental borrowing rate in order to measure the lease liability and ROU asset. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the observable unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. Under the new lease standard, leases are remeasured upon the occurrence of certain events or modifications. Adoption of the new lease standard did not materially impact the Company's consolidated net earnings, cash flows, liquidity, or loan covenants. The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard were as follows: (in thousands) December 31, 2018 As Previously Reported Effect of the Adoption of ASC Topic 842 (Leases) January 1, 2019 As Adjusted Assets Prepaid expenses and other $ 60,162 $ (11,580 ) $ 48,582 Property, plant and equipment, net 701,359 1,789 703,148 Operating lease right-of-use assets — 369,344 369,344 Intangible assets, net 366,029 (13,828 ) 352,201 Liabilities Current operating lease liabilities — 38,773 38,773 Accrued liabilities and other 14,563 (412 ) 14,151 Deferred Lease 22,436 (22,436 ) — Noncurrent operating lease liabilities — 328,156 328,156 Other liabilities 14,364 1,644 16,008 In addition to recognizing the operating lease liabilities and right-of-use assets, Topic 842 also reclassified prepaid and deferred rent balances, off-market leases, and lease incentives into the right-of-use assets. The following table shows the components of lease income and costs: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Lease income from operating leases - fixed $ 2,149 $ 6,219 Operating lease expense 18,151 51,811 Amortization of finance lease assets 158 399 Interest on finance lease liabilities 14 59 Subtotal finance lease cost 172 458 Total lease expense $ 18,323 $ 52,269 Substantially all of the Company's sublease income from operating leases relates to fixed lease payments. All operating lease expenses, including short-term and variable lease expenses, are split between cost of service and selling, general and administrative expense in the condensed consolidated statements of operations based on the use of the facility that the rent is being paid on. Operating lease expense includes variable lease payments and short-term lease expense, both of which are immaterial. Variable lease expenses represent payments that are dependent on a rate or index, or on usage of the asset. The following table summarizes other information related to operating and finance leases: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating cash flows used by leases $ 16,002 $ 46,546 Leased assets obtained in exchange for new operating lease liabilities 43,647 69,407 The following table summarizes the lease terms and discount rates: September 30, Weighted-average remaining lease term (years) Operating leases 8 Finance leases 16 Weighted-average discount rate Operating leases 4.6 % Finance leases 5.2 % The following table summarizes the expected maturity of lease liabilities at September 30, 2019 : (in thousands) Operating Leases Finance Leases Total 2019 $ 12,742 $ 63 $ 12,805 2020 64,474 174 64,648 2021 65,087 174 65,261 2022 63,341 174 63,515 2023 59,885 174 60,059 2024 and thereafter 242,115 1,704 243,819 Total lease payments 507,644 2,463 510,107 Less: Interest 103,481 748 104,229 Present value of lease liabilities $ 404,163 $ 1,715 $ 405,878 The Company's finance lease liabilities are presented in the accrued liabilities and other and the other liabilities lines of the unaudited condensed consolidated balance sheets. The related finance lease assets are included in the property, plant and equipment line. Our commitments under leases existing as of December 31, 2018 were approximately $55.1 million for the year ending December 31, 2019, $104.4 million in total for the years ending December 31, 2020 and 2021, $97.6 million in total for the years ending December 31, 2022 and 2023 and $168.5 million in total for years thereafter. The Company is also the lessor on agreements to lease assets such as collocation space at cell sites and dedicated fiber-optic strands to third parties. These agreements have been accounted for as operating leases both before and after adoption of the new lease standard. The new lease standard did not have a significant impact on the recognition of lease revenue associated with these agreements. The following table summarizes the total minimum rental receipts under lease agreements at September 30, 2019 : (in thousands) Operating Leases 2019 $ 1,774 2020 6,621 2021 4,526 2022 3,432 2023 1,801 2024 and thereafter 4,978 Total lease income $ 23,132 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company earns revenue primarily through the sale of its wireless service. Additional revenue is earned from the sale of wireless equipment; from business, residential and enterprise services which provide video, broadband, and voice services; and from tower and other services. Refer to Note 14 , Segment Reporting , for a tabular summary of revenue for the three and nine months ended September 30, 2019 . Wireless service The Company earns revenue primarily through the sale of its wireless service by providing network access to Sprint under the affiliate agreement. Wireless service revenue is variable based on billed revenue to Sprint’s subscribers that originated in the Company's affiliate area, less applicable fees retained by Sprint. The Company's revenue related to Sprint’s postpaid customers is the amount that Sprint bills its postpaid subscribers, reduced by customer credits, estimates of bad debt, and 8% management and 8.6% service fees. The Company is also charged for the costs of subsidized handsets sold through Sprint’s national channels as well as commissions paid by Sprint to third-party resellers in the Company's service territory. The Company's revenue related to Sprint’s prepaid customers is the amount that Sprint bills its prepaid subscribers, reduced by costs to acquire and support the customers, based on national averages for Sprint’s prepaid programs, and a 6% management fee. Under our affiliate agreement with Sprint, we have historically earned and recognized monthly revenue of $1.5 million for providing service to Sprint customers who pass through our network area ("Travel Revenue"). While we continue to provide these services to Sprint, the agreed upon payments were suspended by Sprint on April 30, 2019. Accordingly, we have ceased recognizing revenue for the services provided after that date until a new prospective fee can be agreed. We have commenced final dispute resolution proceedings to settle this dispute and expect it to be settled by early 2020. The Company considers Sprint, rather than Sprint's subscribers, to be the customer and the Company's performance obligation is to provide Sprint a series of continuous network access services within the Sprint Affiliate Area. The Company determined that reimbursements to Sprint including the cost of prepaid handsets and commissions, and postpaid commissions paid by Sprint to third-party resellers, represent consideration payable to a customer. These reimbursements are initially recorded as a contract asset and are subsequently recognized as a reduction of revenue over the expected benefit period between 21 and 53 months. Contract asset balances and activity for 2019 were as follows: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Beginning balance $ 73,789 $ 57,256 $ 65,674 $ 51,103 Contract payments 20,761 16,421 56,477 44,790 Contract amortization (14,930 ) (11,861 ) (42,531 ) (34,077 ) Ending balance $ 79,620 $ 61,816 $ 79,620 $ 61,816 Wireless equipment The Company also earns revenue through the sale of wireless equipment. The Company owns and operates Sprint-branded retail stores within the Sprint Affiliate Area from which the Company sells equipment, primarily wireless handsets, and service to Sprint subscribers. The Company's equipment is predominantly sold to subscribers through Sprint's equipment financing plans. Under the equipment financing plans, Sprint purchases the equipment from the Company and resells the equipment to its subscribers. The Company is the principal in these equipment financing transactions, as it controls and bears the risk of ownership of the inventory prior to sale, and accordingly, revenue and handset costs are recorded on a gross basis, and the corresponding cost of the equipment is recorded separately to cost of goods sold. Business, residential and enterprise The Company also earns revenue in the Cable and Wireline segments from the sale of business, residential, and enterprise services to customers where the performance obligations are to provide cable, broadband, and telephone network services, sell and lease equipment and wiring services, and lease fiber-optic cable. The Company's arrangements for residential services are generally composed of contracts that are cancellable at the customer’s discretion without penalty at any time. As there are multiple performance obligations in these arrangements, the Company recognizes revenue based on the standalone selling price of each distinct good or service. The Company generally recognizes this revenue over time as customers simultaneously receive and consume the benefits of the service, with the exception of equipment sales and home wiring which are recognized as revenue at a point in time when control transfers and when installation is complete, respectively. Installation fees are allocated to services and are recognized ratably over the longer of the contract term or the period the unrecognized portion of the fee remains material to the contract, typically 10 and 11 months for Cable and Wireline customers, respectively. Additionally, the Company incurs commission and installation costs related to in-house employees and third-party vendors which are capitalized and amortized over the expected benefit period which is approximately 44 months and 72 months for Cable and Wireline, respectively. Tower and Other The Company also earns revenue from tower and other services. Tower revenue consists primarily of tower collocation space on cell towers owned by the Company accounted for under Topic 842, Leases. Other revenue includes network access-related charges for service provided to customers across the segments. Future performance obligations On September 30, 2019 , the Company had approximately $3.5 million allocated to unsatisfied performance obligations, which excludes contracts with original expected duration of one year or less. The following table summarizes the approximate amounts expected to be recognized as revenue after September 30, 2019 . Amount Expected to be Recognized as Revenue: (in thousands) 2019 $ 219 2020 850 2021 770 2022 and thereafter 1,707 Total $ 3,546 Contract acquisition costs and costs to fulfill contracts Capitalized contract costs represent contract fulfillment costs and contract acquisition costs which include commissions and installation costs in the Cable and Wireline segments. Capitalized contract assets, including commissions and installation costs, are amortized on a straight-line basis over the average customer life of 44 months and 72 months for Cable and Wireline, respectively. The Company elected to apply the practical expedient to expense contract acquisition costs when incurred, if the amortization period would be twelve months or less. The amortization of these costs is included in cost of services, and selling, general and administrative expenses. Amortized and capitalized costs for Cable and Wireline contracts were as follows: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Beginning Balance $ 10,476 $ 9,755 $ 10,091 $ 9,841 Contract payments 1,840 1,613 4,996 4,246 Contract amortization (1,399 ) (1,339 ) (4,170 ) (4,058 ) Ending Balance $ 10,917 $ 10,029 $ 10,917 $ 10,029 |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition | Acquisitions Big Sandy On February 28, 2019, the Company completed its preliminary valuation for the acquisition of the assets of Big Sandy Broadband, Inc. ("Big Sandy") for $10 million and recorded $4.6 million of property, plant and equipment; $2.8 million of subscriber relationships; and $2.6 million of goodwill which is reported in the Cable segment and was accounted for as a business combination under ASC 805, Business Combinations . The estimated remaining useful lives of the acquired property, plant and equipment were approximately 2.5 years to 12.5 years and the estimated useful lives for subscriber relationships were 7 years |
Customer Concentration
Customer Concentration | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Customer Concentration | Customer Concentration Significant Contractual Relationship In 1999, the Company executed a Management Agreement (the “Agreement”) with Sprint whereby the Company committed to construct and operate a PCS network using CDMA air interface technology. The Agreement has been amended numerous times. Under the amended Agreement, the Company is the exclusive PCS Affiliate of Sprint providing wireless mobility communications network products and services on the 800 MHz, 1900 MHz and 2.5 GHz spectrum ranges in its territory across a multi-state area covering large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, North Carolina, Kentucky, and Ohio. Effective February 1, 2018, the Company amended its Agreement with Sprint to expand its wireless service area to include certain areas in Kentucky, Pennsylvania, Virginia and West Virginia. As an exclusive PCS Affiliate of Sprint, the Company has the exclusive right to build, own and maintain its portion of Sprint’s nationwide PCS network, in the aforementioned areas, to Sprint’s specifications. The initial term of the Agreement extends through November 2029 , with two successive 10 -year renewal periods, unless terminated by either party under provisions outlined in the Agreement. Upon non-renewal by either party, the Company may cause Sprint to buy or Sprint may cause the Company to sell the business, at 90% of Entire Business Value ("EBV") as defined in the Agreement. EBV is defined as i) the fair market value of a going concern paid by a willing buyer to a willing seller; ii) valued as if the business will continue to utilize existing brands and operate under existing agreements; and, iii) valued as if Shentel has continued access to the spectrum. Determination of EBV is made by an independent appraisal process. |
Earnings Per Share (EPS)
Earnings Per Share (EPS) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (EPS) | Earnings Per Share ("EPS") Basic EPS was computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS was computed under the treasury stock method by dividing net income by the sum of the weighted average number of shares of common stock outstanding and potentially dilutive securities outstanding during the period under the treasury stock method. Potentially dilutive securities include unvested equity awards that are expected to vest and shares that the Company is contractually obligated to issue in the future. The following table indicates the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2019 2018 2019 2018 Calculation of net income per share: Net income $ 14,354 $ 15,534 $ 41,414 $ 31,743 Basic weighted average shares outstanding 49,857 49,559 49,827 49,527 Basic net income per share $ 0.29 $ 0.31 $ 0.83 $ 0.64 Effect of stock options outstanding: Basic weighted average shares outstanding 49,857 49,559 49,827 49,527 Effect from dilutive shares and options outstanding 272 558 283 517 Diluted weighted average shares outstanding 50,129 50,117 50,110 50,044 Diluted net income per share $ 0.29 $ 0.31 $ 0.83 $ 0.63 The computation of diluted EPS does not include certain unvested awards, on a weighted average basis, because their inclusion would have an anti-dilutive effect on EPS. The awards excluded because of their anti-dilutive effect were as follows: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive 93 13 109 60 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments [Abstract] | |
Investments | Investments Investments consist of the following: (in thousands) September 30, December 31, Domestic equity funds $ 1,681 $ 1,409 International equity funds 421 370 Total investments carried at fair value 2,102 1,779 CoBank 8,368 7,705 Equity in other telecommunications partners 767 782 Total investments carried at cost 9,135 8,487 Other 614 522 Total equity method investments 614 522 Total investments $ 11,851 $ 10,788 The Company determines classification for investments at the date individual investments are acquired. The appropriateness of such classification is periodically reassessed. The Company monitors the value of all investments, and based on factors such as market conditions, financial information and industry conditions, the Company reflects impairments in values when warranted. The domestic and international equity funds are carried at their fair value as determined by using the net asset value expedient. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consisted of the following: (in thousands) Estimated Useful Lives September 30, December 31, 2018 Land $ 6,936 $ 6,723 Buildings and structures 10 - 40 years 231,962 213,657 Cable and fiber 15 - 40 years 321,963 309,928 Equipment and software 3 - 20 years 839,624 791,401 Plant in service 1,400,485 1,321,709 Plant under construction 70,674 81,409 Total property, plant and equipment 1,471,159 1,403,118 Less: accumulated amortization and depreciation 782,643 701,759 Property, plant and equipment, net $ 688,516 $ 701,359 The Company prospectively changed the estimated useful life of certain tower, antenna, and fiber assets during 2019 based on the Company's experience as well as observable examples in the industry. Depreciation expense was approximately $0.8 million lower as a result for the three and nine months ended September 30, 2019. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill by segment consisted of the following: (in thousands) September 30, December 31, 2018 Wireless $ 146,383 $ 146,383 Cable 2,677 104 Wireline 10 10 Total Goodwill $ 149,070 $ 146,497 Intangible assets consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Gross Accumulated Amortization and Other Net Gross Accumulated Amortization and Other Net Non-amortizing intangibles: Cable franchise rights $ 64,334 $ — $ 64,334 $ 64,334 $ — $ 64,334 FCC spectrum licenses 13,839 — 13,839 — — — Railroad crossing rights 141 — 141 141 — 141 Total non-amortizing intangibles 78,314 — 78,314 64,475 — 64,475 Finite-lived intangibles: Sprint affiliate contract expansion - Wireless 455,305 (212,194 ) 243,111 455,305 (167,830 ) 287,475 FCC spectrum licenses 4,659 (39 ) 4,620 — — — Favorable leases - Wireless — — — 15,743 (1,919 ) 13,824 Acquired subscribers - Cable 28,065 (25,499 ) 2,566 25,265 (25,250 ) 15 Other intangibles 463 (243 ) 220 463 (223 ) 240 Total finite-lived intangibles 488,492 (237,975 ) 250,517 496,776 (195,222 ) 301,554 Total intangible assets $ 566,806 $ (237,975 ) $ 328,831 $ 561,251 $ (195,222 ) $ 366,029 Affiliate contract expansion is amortized over the expected benefit period and is further reduced by the amount of waived management fees received from Sprint which were $9.7 million and $29.0 million for the three and nine months ended September 30, 2019 , respectively. Since May 6, 2016, the date of the non-monetary exchange, waived management fees received from Sprint have totaled $127.4 million , and the Company expects to collect another $128.2 million , up to $4.2 million per month, through 2022. FCC Spectrum Licenses During the third quarter of 2019, the Company purchased certain indefinite-lived spectrum licenses for $13.8 million . Spectrum licenses are issued by the Federal Communications Commission (“FCC”) which provide us the exclusive right to utilize designated radio frequency spectrum within specific geographic service areas to provide wireless communication services. While some spectrum licenses are issued for a fixed time (generally up to fifteen years), renewals have been granted routinely and at nominal costs. The Company believes it will be able to meet all requirements necessary to secure renewal of its spectrum licenses. Moreover, the Company has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of our spectrum licenses and as a result, we account for spectrum licenses as indefinite-lived intangible assets. During the third quarter of 2019, the Company also acquired certain definite-lived spectrum licenses for $4.7 million . These licenses are being amortized over their remaining contractual lives of approximately 20 years . |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging The Company uses derivative financial instruments to manage its exposure to interest rate risk for its long-term variable-rate debt through interest rate swaps. The Company's interest rate swaps are all designated as cash flow hedges, and involve the receipt of variable-rate amounts from counterparties in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The outstanding notional amounts of these swaps was $292.6 million and $384.0 million as of September 30, 2019 and December 31, 2018 , respectively. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the condensed consolidated balance sheets. The fair value of these instruments was estimated using an income approach and observable market inputs (Level II): (in thousands) September 30, December 31, Balance sheet location of derivative financial instruments: Prepaid expenses and other $ 1,483 $ 4,930 Deferred charges and other assets, net 536 8,323 Total derivatives designated as hedging instruments $ 2,019 $ 13,253 The table below summarizes changes in accumulated other comprehensive income (loss) by component: Nine Months Ended September 30, 2019 (in thousands) Accumulated Gains (Losses) on Income Tax Accumulated Balance as of December 31, 2018 $ 13,253 $ (4,973 ) $ 8,280 Unrealized gain (loss) (7,741 ) 1,929 (5,812 ) Amounts reclassified from accumulated other comprehensive income to interest expense (3,493 ) 871 (2,622 ) Net current period other comprehensive income (loss) (11,234 ) 2,800 (8,434 ) Balance as of September 30, 2019 $ 2,019 $ (2,173 ) $ (154 ) |
Other Assets and Accrued Liabil
Other Assets and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Assets and Accrued Liabilities | Other Assets and Accrued Liabilities Prepaid expenses and other, classified as current assets, included the following: (in thousands) September 30, December 31, 2018 Prepaid rent $ — $ 11,245 Prepaid maintenance expenses 3,788 3,981 Interest rate swaps 1,483 4,930 Wireless contract asset 41,878 33,323 Contract acquisition and fulfillment costs 4,861 4,634 Other 4,587 2,049 Prepaid expenses and other $ 56,597 $ 60,162 Deferred charges and other assets, classified as long-term assets, included the following: (in thousands) September 30, December 31, 2018 Interest rate swaps $ 536 $ 8,323 Wireless contract asset 37,742 32,351 Contract acquisition and fulfillment costs 6,056 5,457 Other 6,135 3,760 Deferred charges and other assets $ 50,469 $ 49,891 Accrued liabilities and other, classified as current liabilities, included the following: (in thousands) September 30, December 31, 2018 Sales and property taxes payable $ 4,409 $ 4,281 Asset retirement obligations 407 582 Accrued programming costs 3,125 2,886 Financing leases 89 — FCC spectrum licenses 87 — Other current liabilities 6,614 6,814 Accrued liabilities and other $ 14,731 $ 14,563 Other liabilities, classified as long-term liabilities, included the following: (in thousands) September 30, December 31, 2018 Noncurrent portion of deferred lease revenue $ 12,613 $ 12,593 FCC spectrum licenses 1,687 — Noncurrent portion of financing leases 1,627 — Other 749 1,771 Other liabilities $ 16,676 $ 14,364 Topic 842 requires the Company to include fixed payments for maintenance activities in its measurement of lease liabilities since the Company elected not to separate lease and non-lease components. Liabilities for the Company's financing leases were established with the adoption of Topic 842, as of January 1, 2019, to reflect the present value of fixed payments for maintenance activities. Refer to Note 2 , Leases , for additional information. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Total debt consisted of the following: (in thousands) September 30, December 31, 2018 Term loan A-1 $ 265,855 $ 287,699 Term loan A-2 474,715 497,537 740,570 785,236 Less: unamortized loan fees 12,558 14,994 Total debt, net of unamortized loan fees $ 728,012 $ 770,242 Current maturities of long-term debt, net of current unamortized loan fees $ 31,634 $ 20,618 Long-term debt, less current maturities, net of unamortized loan fees $ 696,378 $ 749,624 As of September 30, 2019 , the Company's indebtedness totaled approximately $728.0 million , net of unamortized loan fees of $12.6 million , with an annualized overall weighted average interest rate of approximately 3.63% . In September of 2019, the Company's interest rate decreased by 25 basis points as the net leverage ratio, as defined in the Company's credit facility, dropped below the 2.25 x threshold. As of September 30, 2019 , the Term Loan A-1 bears interest at one-month London Interbank Offered Rate ("LIBOR") plus a base rate of 1.50% , while the Term Loan A-2 bears interest at one-month LIBOR plus a base rate of 1.75% . LIBOR resets monthly. The amended Term Loan A-1 requires quarterly principal repayments of $3.6 million , which began on December 31, 2018 and continued through September 30, 2019, increasing to $7.3 million quarterly from December 31, 2019 through September 30, 2022; then increasing to $10.9 million quarterly from December 31, 2022 through September 30, 2023, with the remaining balance due November 8, 2023. The amended Term Loan A-2 requires quarterly principal repayments of $1.2 million which began on December 31, 2018 and continue through September 30, 2025 , with the remaining balance due November 8, 2025 . In addition to its required quarterly repayments, the Company paid an additional $15.0 million in the first quarter of 2019 and an additional $15.0 million in the third quarter of 2019, with no prepayment penalties. The Company's cash payments for interest were $21.6 million and $25.1 million during the nine months ended September 30, 2019 and 2018 , respectively. As shown below, as of September 30, 2019 , the Company was in compliance with the financial covenants in its credit agreement. Actual Covenant Requirement Total leverage ratio 2.38 3.50 or Lower Debt service coverage ratio 6.21 2.00 or Higher Minimum liquidity balance (in millions) $ 172.2 $25.0 or Higher |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files U.S. federal income tax returns and various state income tax returns. The Company is not subject to any state or federal income tax audits as of September 30, 2019 . The Company's returns are generally open to examination from 2015 forward and the net operating losses acquired in the acquisition of nTelos are open to examination from 2002 forward. The Company’s effective tax rate for the three months ended September 30, 2019 was approximately 24.3% , as compared with approximately 23.8% for the three months ended September 30, 2018 . The Company’s effective tax rate for the nine months ended September 30, 2019 was approximately 24.4% , which was consistent with approximately 24.3% for the nine months ended September 30, 2018 . The Company's cash payments for income taxes were $6.1 million in the nine months ended September 30, 2019 . The Company received cash refunds for income taxes of $2.7 million in the nine months ended September 30, 2018 . |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company's reportable segments, which the Company operates and manages as strategic business units that are organized according to major product and service offerings, include: Wireless, Cable, Wireline and Other. A general description of the products and services offered and the customers served by each of these segments is as follows: • Wireless provides digital wireless service as a Sprint PCS Affiliate to a portion of a multi-state area covering large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, North Carolina, Kentucky, and Ohio. In these areas, the Company is the exclusive provider of Sprint-branded wireless mobility communications network products and services on the 800 MHz, 1900 MHz and 2.5 GHz spectrum bands. • Cable provides video, broadband and voice services in the cable franchise areas in portions of Virginia, West Virginia, western Maryland, and eastern Kentucky, and leases fiber optic facilities and provides fiber transport services throughout its service area. It does not include video, broadband and voice services provided to customers in Shenandoah County, Virginia. • Wireline provides video and broadband services in the cable franchise area and regulated and unregulated voice and broadband services in Shenandoah County, Virginia, and leases fiber optic facilities and provides fiber transport services throughout portions of Virginia, West Virginia, Maryland and Pennsylvania. • Other operations are represented by Shenandoah Telecommunications Company, the parent holding company that provides investing and management services to its subsidiaries. Three Months Ended September 30, 2019 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 91,108 $ 30,829 $ 5,446 $ — $ — $ 127,383 Equipment revenue 15,975 292 53 — — 16,320 Tower revenue 1,660 — — — — 1,660 Other revenue 395 2,392 7,002 — — 9,789 Total external revenue 109,138 33,513 12,501 — — 155,152 Internal revenue 1,290 1,591 6,643 — (9,524 ) — Total operating revenue 110,428 35,104 19,144 — (9,524 ) 155,152 Operating expenses Cost of services 34,044 15,790 9,104 — (8,774 ) 50,164 Cost of goods sold 15,571 156 98 — — 15,825 Selling, general and administrative 9,882 6,636 1,938 9,472 (750 ) 27,178 Depreciation and amortization 27,200 6,226 3,077 123 — 36,626 Total operating expenses 86,697 28,808 14,217 9,595 (9,524 ) 129,793 Operating income (loss) $ 23,731 $ 6,296 $ 4,927 $ (9,595 ) $ — $ 25,359 Three Months Ended September 30, 2018 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 96,299 $ 28,578 $ 5,443 $ — $ — $ 130,320 Equipment revenue 15,666 234 63 — — 15,963 Tower revenue 1,639 — — — — 1,639 Other revenue 1,232 2,104 7,473 — — 10,809 Total external revenue 114,836 30,916 12,979 — — 158,731 Internal revenue 1,263 1,266 6,643 — (9,172 ) — Total operating revenue 116,099 32,182 19,622 — (9,172 ) 158,731 Operating expenses Cost of services 32,253 14,837 9,266 (12 ) (8,458 ) 47,886 Cost of goods sold 14,940 78 19 (1 ) — 15,036 Selling, general and administrative 11,191 5,331 1,780 9,864 (714 ) 27,452 Depreciation and amortization 30,363 6,102 3,435 128 — 40,028 Total operating expenses 88,747 26,348 14,500 9,979 (9,172 ) 130,402 Operating income (loss) $ 27,352 $ 5,834 $ 5,122 $ (9,979 ) $ — $ 28,329 Nine Months Ended September 30, 2019 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 282,533 $ 91,250 $ 16,489 $ — $ — $ 390,272 Equipment revenue 47,814 817 156 — — 48,787 Tower revenue 4,985 — — — — 4,985 Other revenue 1,060 6,895 20,910 — — 28,865 Total external revenue 336,392 98,962 37,555 — — 472,909 Internal revenue 3,830 4,541 20,025 — (28,396 ) — Total operating revenue 340,222 103,503 57,580 — (28,396 ) 472,909 Operating expenses Cost of services 101,085 47,138 27,234 — (26,278 ) 149,179 Cost of goods sold 45,740 443 153 — — 46,336 Selling, general and administrative 31,836 17,898 5,769 29,685 (2,118 ) 83,070 Depreciation and amortization 90,469 19,239 10,057 393 — 120,158 Total operating expenses 269,130 84,718 43,213 30,078 (28,396 ) 398,743 Operating income (loss) $ 71,092 $ 18,785 $ 14,367 $ (30,078 ) $ — $ 74,166 Nine Months Ended September 30, 2018 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 284,154 $ 85,797 $ 16,052 $ — $ — $ 386,003 Equipment revenue 48,859 537 155 — — 49,551 Tower revenue 4,934 — — — — 4,934 Other revenue 1,963 6,276 20,643 — — 28,882 Total external revenue 339,910 92,610 36,850 — — 469,370 Internal revenue 3,746 3,394 21,591 — (28,731 ) — Total operating revenue 343,656 96,004 58,441 — (28,731 ) 469,370 Operating expenses Cost of services 99,491 45,118 28,441 — (26,688 ) 146,362 Cost of goods sold 45,749 197 61 — — 46,007 Selling, general and administrative 35,693 14,940 5,183 32,344 (2,043 ) 86,117 Depreciation and amortization 95,853 18,305 10,069 405 — 124,632 Total operating expenses 276,786 78,560 43,754 32,749 (28,731 ) 403,118 Operating income (loss) $ 66,870 $ 17,444 $ 14,687 $ (32,749 ) $ — $ 66,252 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Dividend Declaration & Share Repurchase Program On October 29, 2019, the Company's Board of Directors approved a dividend of $0.29 per common share and authorized a stock repurchase program that will enable the Company to repurchase an aggregate of $80 million of its outstanding common stock. The dividend will be payable on December 2, 2019 to shareholders of record as of the close of business on November 14, 2019. The share repurchase program will be become effective November 4, 2019, and is expected to be executed over the next twelve months subject to market conditions. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Adoption of New Accounting Principles Policy | Adoption of New Accounting Principles There have been no developments related to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company's unaudited condensed consolidated financial statements and note disclosures, from those disclosed in the Company's 2018 Annual Report on Form 10-K, that would be expected to impact the Company except for the following: The Company adopted ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), as of January 1, 2019. The Company elected not to reclassify stranded income tax effects from accumulated other comprehensive income (OCI) to retained earnings and has implemented this election as its accounting policy as of January 1, 2019. The Company utilizes the portfolio approach as its policy to release the income tax effects from accumulated OCI as the entire portfolio is liquidated, sold, or extinguished. The Company adopted ASU No. 2016-02, Leases (“ Topic 842 ” or “ the new lease standard ”) on January 1, 2019. Topic 842 replaces previous leasing guidance with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. Topic 842 requires lessees to recognize most leases on their balance sheet as liabilities, with corresponding right-of-use, or ROU assets. The Company adopted the new lease standard utilizing the modified retrospective approach. As a result, comparable period information has not been retrospectively updated. The modified retrospective approach includes a package of optional practical expedients that we elected to apply. As a result, the Company did not reassess prior conclusions regarding lease identification, lease classification and initial direct costs under the new standard. In those circumstances where the Company is the lessee, we have elected to account for non-lease components associated with our leases (e.g., maintenance costs) and lease components as a single lease component for substantially all of our asset classes under Topic 842. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to the consolidated January 1, 2019 balance sheet for the adoption of the new lease standard were as follows: (in thousands) December 31, 2018 As Previously Reported Effect of the Adoption of ASC Topic 842 (Leases) January 1, 2019 As Adjusted Assets Prepaid expenses and other $ 60,162 $ (11,580 ) $ 48,582 Property, plant and equipment, net 701,359 1,789 703,148 Operating lease right-of-use assets — 369,344 369,344 Intangible assets, net 366,029 (13,828 ) 352,201 Liabilities Current operating lease liabilities — 38,773 38,773 Accrued liabilities and other 14,563 (412 ) 14,151 Deferred Lease 22,436 (22,436 ) — Noncurrent operating lease liabilities — 328,156 328,156 Other liabilities 14,364 1,644 16,008 |
Lease Income and Costs and Lease Terms and Discount Rates | The following table summarizes other information related to operating and finance leases: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating cash flows used by leases $ 16,002 $ 46,546 Leased assets obtained in exchange for new operating lease liabilities 43,647 69,407 The following table shows the components of lease income and costs: (in thousands) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Lease income from operating leases - fixed $ 2,149 $ 6,219 Operating lease expense 18,151 51,811 Amortization of finance lease assets 158 399 Interest on finance lease liabilities 14 59 Subtotal finance lease cost 172 458 Total lease expense $ 18,323 $ 52,269 The following table summarizes the lease terms and discount rates: September 30, Weighted-average remaining lease term (years) Operating leases 8 Finance leases 16 Weighted-average discount rate Operating leases 4.6 % Finance leases 5.2 % |
Expected Maturity of Lease Liabilities, Operating | The following table summarizes the expected maturity of lease liabilities at September 30, 2019 : (in thousands) Operating Leases Finance Leases Total 2019 $ 12,742 $ 63 $ 12,805 2020 64,474 174 64,648 2021 65,087 174 65,261 2022 63,341 174 63,515 2023 59,885 174 60,059 2024 and thereafter 242,115 1,704 243,819 Total lease payments 507,644 2,463 510,107 Less: Interest 103,481 748 104,229 Present value of lease liabilities $ 404,163 $ 1,715 $ 405,878 |
Expected Maturity of Lease Liabilities, Financing | The following table summarizes the expected maturity of lease liabilities at September 30, 2019 : (in thousands) Operating Leases Finance Leases Total 2019 $ 12,742 $ 63 $ 12,805 2020 64,474 174 64,648 2021 65,087 174 65,261 2022 63,341 174 63,515 2023 59,885 174 60,059 2024 and thereafter 242,115 1,704 243,819 Total lease payments 507,644 2,463 510,107 Less: Interest 103,481 748 104,229 Present value of lease liabilities $ 404,163 $ 1,715 $ 405,878 |
Minimum Rental Receipts Under Lease Agreement, Lessor, Operating Leases | The following table summarizes the total minimum rental receipts under lease agreements at September 30, 2019 : (in thousands) Operating Leases 2019 $ 1,774 2020 6,621 2021 4,526 2022 3,432 2023 1,801 2024 and thereafter 4,978 Total lease income $ 23,132 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract Asset Balances and Activity | Contract asset balances and activity for 2019 were as follows: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Beginning balance $ 73,789 $ 57,256 $ 65,674 $ 51,103 Contract payments 20,761 16,421 56,477 44,790 Contract amortization (14,930 ) (11,861 ) (42,531 ) (34,077 ) Ending balance $ 79,620 $ 61,816 $ 79,620 $ 61,816 |
Revenue, Remaining Performance Obligation | The following table summarizes the approximate amounts expected to be recognized as revenue after September 30, 2019 . Amount Expected to be Recognized as Revenue: (in thousands) 2019 $ 219 2020 850 2021 770 2022 and thereafter 1,707 Total $ 3,546 |
Amortized and Capitalized Contract Costs | Amortized and capitalized costs for Cable and Wireline contracts were as follows: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Beginning Balance $ 10,476 $ 9,755 $ 10,091 $ 9,841 Contract payments 1,840 1,613 4,996 4,246 Contract amortization (1,399 ) (1,339 ) (4,170 ) (4,058 ) Ending Balance $ 10,917 $ 10,029 $ 10,917 $ 10,029 |
Earnings Per Share (EPS) (Table
Earnings Per Share (EPS) (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table indicates the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2019 2018 2019 2018 Calculation of net income per share: Net income $ 14,354 $ 15,534 $ 41,414 $ 31,743 Basic weighted average shares outstanding 49,857 49,559 49,827 49,527 Basic net income per share $ 0.29 $ 0.31 $ 0.83 $ 0.64 Effect of stock options outstanding: Basic weighted average shares outstanding 49,857 49,559 49,827 49,527 Effect from dilutive shares and options outstanding 272 558 283 517 Diluted weighted average shares outstanding 50,129 50,117 50,110 50,044 Diluted net income per share $ 0.29 $ 0.31 $ 0.83 $ 0.63 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The awards excluded because of their anti-dilutive effect were as follows: Three Months Ended Nine Months Ended (in thousands) 2019 2018 2019 2018 Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive 93 13 109 60 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments [Abstract] | |
Schedule of other investments which do not have readily determinable fair values | Investments consist of the following: (in thousands) September 30, December 31, Domestic equity funds $ 1,681 $ 1,409 International equity funds 421 370 Total investments carried at fair value 2,102 1,779 CoBank 8,368 7,705 Equity in other telecommunications partners 767 782 Total investments carried at cost 9,135 8,487 Other 614 522 Total equity method investments 614 522 Total investments $ 11,851 $ 10,788 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consisted of the following: (in thousands) Estimated Useful Lives September 30, December 31, 2018 Land $ 6,936 $ 6,723 Buildings and structures 10 - 40 years 231,962 213,657 Cable and fiber 15 - 40 years 321,963 309,928 Equipment and software 3 - 20 years 839,624 791,401 Plant in service 1,400,485 1,321,709 Plant under construction 70,674 81,409 Total property, plant and equipment 1,471,159 1,403,118 Less: accumulated amortization and depreciation 782,643 701,759 Property, plant and equipment, net $ 688,516 $ 701,359 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | Goodwill by segment consisted of the following: (in thousands) September 30, December 31, 2018 Wireless $ 146,383 $ 146,383 Cable 2,677 104 Wireline 10 10 Total Goodwill $ 149,070 $ 146,497 |
Schedule of Intangible Assets | Intangible assets consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Gross Accumulated Amortization and Other Net Gross Accumulated Amortization and Other Net Non-amortizing intangibles: Cable franchise rights $ 64,334 $ — $ 64,334 $ 64,334 $ — $ 64,334 FCC spectrum licenses 13,839 — 13,839 — — — Railroad crossing rights 141 — 141 141 — 141 Total non-amortizing intangibles 78,314 — 78,314 64,475 — 64,475 Finite-lived intangibles: Sprint affiliate contract expansion - Wireless 455,305 (212,194 ) 243,111 455,305 (167,830 ) 287,475 FCC spectrum licenses 4,659 (39 ) 4,620 — — — Favorable leases - Wireless — — — 15,743 (1,919 ) 13,824 Acquired subscribers - Cable 28,065 (25,499 ) 2,566 25,265 (25,250 ) 15 Other intangibles 463 (243 ) 220 463 (223 ) 240 Total finite-lived intangibles 488,492 (237,975 ) 250,517 496,776 (195,222 ) 301,554 Total intangible assets $ 566,806 $ (237,975 ) $ 328,831 $ 561,251 $ (195,222 ) $ 366,029 |
Derivative and Hedging (Tables)
Derivative and Hedging (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [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 instruments as well as their classification in the condensed consolidated balance sheets. The fair value of these instruments was estimated using an income approach and observable market inputs (Level II): (in thousands) September 30, December 31, Balance sheet location of derivative financial instruments: Prepaid expenses and other $ 1,483 $ 4,930 Deferred charges and other assets, net 536 8,323 Total derivatives designated as hedging instruments $ 2,019 $ 13,253 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below summarizes changes in accumulated other comprehensive income (loss) by component: Nine Months Ended September 30, 2019 (in thousands) Accumulated Gains (Losses) on Income Tax Accumulated Balance as of December 31, 2018 $ 13,253 $ (4,973 ) $ 8,280 Unrealized gain (loss) (7,741 ) 1,929 (5,812 ) Amounts reclassified from accumulated other comprehensive income to interest expense (3,493 ) 871 (2,622 ) Net current period other comprehensive income (loss) (11,234 ) 2,800 (8,434 ) Balance as of September 30, 2019 $ 2,019 $ (2,173 ) $ (154 ) |
Other Assets and Accrued Liab_2
Other Assets and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Assets | Prepaid expenses and other, classified as current assets, included the following: (in thousands) September 30, December 31, 2018 Prepaid rent $ — $ 11,245 Prepaid maintenance expenses 3,788 3,981 Interest rate swaps 1,483 4,930 Wireless contract asset 41,878 33,323 Contract acquisition and fulfillment costs 4,861 4,634 Other 4,587 2,049 Prepaid expenses and other $ 56,597 $ 60,162 |
Schedule of Other Assets, Noncurrent | Deferred charges and other assets, classified as long-term assets, included the following: (in thousands) September 30, December 31, 2018 Interest rate swaps $ 536 $ 8,323 Wireless contract asset 37,742 32,351 Contract acquisition and fulfillment costs 6,056 5,457 Other 6,135 3,760 Deferred charges and other assets $ 50,469 $ 49,891 |
Summary of Accrued Liabilities and Other | Accrued liabilities and other, classified as current liabilities, included the following: (in thousands) September 30, December 31, 2018 Sales and property taxes payable $ 4,409 $ 4,281 Asset retirement obligations 407 582 Accrued programming costs 3,125 2,886 Financing leases 89 — FCC spectrum licenses 87 — Other current liabilities 6,614 6,814 Accrued liabilities and other $ 14,731 $ 14,563 |
Summary of Other Liabilities | Other liabilities, classified as long-term liabilities, included the following: (in thousands) September 30, December 31, 2018 Noncurrent portion of deferred lease revenue $ 12,613 $ 12,593 FCC spectrum licenses 1,687 — Noncurrent portion of financing leases 1,627 — Other 749 1,771 Other liabilities $ 16,676 $ 14,364 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long term debt | Total debt consisted of the following: (in thousands) September 30, December 31, 2018 Term loan A-1 $ 265,855 $ 287,699 Term loan A-2 474,715 497,537 740,570 785,236 Less: unamortized loan fees 12,558 14,994 Total debt, net of unamortized loan fees $ 728,012 $ 770,242 Current maturities of long-term debt, net of current unamortized loan fees $ 31,634 $ 20,618 Long-term debt, less current maturities, net of unamortized loan fees $ 696,378 $ 749,624 |
Financial covenants in credit agreements | As shown below, as of September 30, 2019 , the Company was in compliance with the financial covenants in its credit agreement. Actual Covenant Requirement Total leverage ratio 2.38 3.50 or Lower Debt service coverage ratio 6.21 2.00 or Higher Minimum liquidity balance (in millions) $ 172.2 $25.0 or Higher |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Selected Financial Data for Segments | Three Months Ended September 30, 2019 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 91,108 $ 30,829 $ 5,446 $ — $ — $ 127,383 Equipment revenue 15,975 292 53 — — 16,320 Tower revenue 1,660 — — — — 1,660 Other revenue 395 2,392 7,002 — — 9,789 Total external revenue 109,138 33,513 12,501 — — 155,152 Internal revenue 1,290 1,591 6,643 — (9,524 ) — Total operating revenue 110,428 35,104 19,144 — (9,524 ) 155,152 Operating expenses Cost of services 34,044 15,790 9,104 — (8,774 ) 50,164 Cost of goods sold 15,571 156 98 — — 15,825 Selling, general and administrative 9,882 6,636 1,938 9,472 (750 ) 27,178 Depreciation and amortization 27,200 6,226 3,077 123 — 36,626 Total operating expenses 86,697 28,808 14,217 9,595 (9,524 ) 129,793 Operating income (loss) $ 23,731 $ 6,296 $ 4,927 $ (9,595 ) $ — $ 25,359 Three Months Ended September 30, 2018 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 96,299 $ 28,578 $ 5,443 $ — $ — $ 130,320 Equipment revenue 15,666 234 63 — — 15,963 Tower revenue 1,639 — — — — 1,639 Other revenue 1,232 2,104 7,473 — — 10,809 Total external revenue 114,836 30,916 12,979 — — 158,731 Internal revenue 1,263 1,266 6,643 — (9,172 ) — Total operating revenue 116,099 32,182 19,622 — (9,172 ) 158,731 Operating expenses Cost of services 32,253 14,837 9,266 (12 ) (8,458 ) 47,886 Cost of goods sold 14,940 78 19 (1 ) — 15,036 Selling, general and administrative 11,191 5,331 1,780 9,864 (714 ) 27,452 Depreciation and amortization 30,363 6,102 3,435 128 — 40,028 Total operating expenses 88,747 26,348 14,500 9,979 (9,172 ) 130,402 Operating income (loss) $ 27,352 $ 5,834 $ 5,122 $ (9,979 ) $ — $ 28,329 Nine Months Ended September 30, 2019 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 282,533 $ 91,250 $ 16,489 $ — $ — $ 390,272 Equipment revenue 47,814 817 156 — — 48,787 Tower revenue 4,985 — — — — 4,985 Other revenue 1,060 6,895 20,910 — — 28,865 Total external revenue 336,392 98,962 37,555 — — 472,909 Internal revenue 3,830 4,541 20,025 — (28,396 ) — Total operating revenue 340,222 103,503 57,580 — (28,396 ) 472,909 Operating expenses Cost of services 101,085 47,138 27,234 — (26,278 ) 149,179 Cost of goods sold 45,740 443 153 — — 46,336 Selling, general and administrative 31,836 17,898 5,769 29,685 (2,118 ) 83,070 Depreciation and amortization 90,469 19,239 10,057 393 — 120,158 Total operating expenses 269,130 84,718 43,213 30,078 (28,396 ) 398,743 Operating income (loss) $ 71,092 $ 18,785 $ 14,367 $ (30,078 ) $ — $ 74,166 Nine Months Ended September 30, 2018 (in thousands) Wireless Cable Wireline Other Eliminations Consolidated External revenue Service revenue $ 284,154 $ 85,797 $ 16,052 $ — $ — $ 386,003 Equipment revenue 48,859 537 155 — — 49,551 Tower revenue 4,934 — — — — 4,934 Other revenue 1,963 6,276 20,643 — — 28,882 Total external revenue 339,910 92,610 36,850 — — 469,370 Internal revenue 3,746 3,394 21,591 — (28,731 ) — Total operating revenue 343,656 96,004 58,441 — (28,731 ) 469,370 Operating expenses Cost of services 99,491 45,118 28,441 — (26,688 ) 146,362 Cost of goods sold 45,749 197 61 — — 46,007 Selling, general and administrative 35,693 14,940 5,183 32,344 (2,043 ) 86,117 Depreciation and amortization 95,853 18,305 10,069 405 — 124,632 Total operating expenses 276,786 78,560 43,754 32,749 (28,731 ) 403,118 Operating income (loss) $ 66,870 $ 17,444 $ 14,687 $ (32,749 ) $ — $ 66,252 |
Leases - Cumulative Effect of A
Leases - Cumulative Effect of Adoption (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Prepaid expenses and other | $ 56,597 | $ 48,582 | $ 60,162 |
Property, plant and equipment, net | 688,516 | 703,148 | 701,359 |
Operating lease right-of-use assets | 400,489 | 369,344 | 0 |
Intangible assets, net | 328,831 | 352,201 | 366,029 |
Liabilities | |||
Current operating lease liabilities | 44,178 | 38,773 | 0 |
Accrued liabilities and other | 14,731 | 14,151 | 14,563 |
Deferred Lease | 0 | 0 | 22,436 |
Noncurrent operating lease liabilities | 359,985 | 328,156 | 0 |
Other liabilities | $ 16,676 | 16,008 | $ 14,364 |
Effect of the Adoption of ASC Topic 842 (Leases) | |||
Assets | |||
Prepaid expenses and other | (11,580) | ||
Property, plant and equipment, net | 1,789 | ||
Operating lease right-of-use assets | 369,344 | ||
Intangible assets, net | (13,828) | ||
Liabilities | |||
Current operating lease liabilities | 38,773 | ||
Accrued liabilities and other | (412) | ||
Deferred Lease | (22,436) | ||
Noncurrent operating lease liabilities | 328,156 | ||
Other liabilities | $ 1,644 |
Leases - Lease Income and Cost
Leases - Lease Income and Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Lease income from operating leases - fixed | $ 2,149 | $ 6,219 |
Operating lease expense | 18,151 | 51,811 |
Amortization of lease assets | 158 | 399 |
Interest on finance lease liabilities | 14 | 59 |
Subtotal finance lease cost | 172 | 458 |
Total lease expense | $ 18,323 | $ 52,269 |
Leases - Other Information (Det
Leases - Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating cash flows used by leases | $ 16,002 | $ 46,546 |
Leased assets obtained in exchange for new operating lease liabilities | $ 43,647 | $ 69,407 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Sep. 30, 2019 |
Weighted-average remaining lease term (years) | |
Operating leases | 8 years |
Finance leases | 16 years |
Weighted-average discount rate | |
Operating leases | 4.60% |
Finance leases | 5.20% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liability - Lessee (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 12,742 |
2020 | 64,474 |
2021 | 65,087 |
2022 | 63,341 |
2023 | 59,885 |
2024 and thereafter | 242,115 |
Total lease payments | 507,644 |
Less: Interest | 103,481 |
Present value of lease liabilities | 404,163 |
Finance Leases | |
2019 | 63 |
2020 | 174 |
2021 | 174 |
2022 | 174 |
2023 | 174 |
2024 and thereafter | 1,704 |
Total lease payments | 2,463 |
Less: Interest | 748 |
Present value of lease liabilities | 1,715 |
Total | |
2019 | 12,805 |
2020 | 64,648 |
2021 | 65,261 |
2022 | 63,515 |
2023 | 60,059 |
2024 and thereafter | 243,819 |
Total lease payments | 510,107 |
Less: Interest | 104,229 |
Total lease liabilities | $ 405,878 |
Leases - Maturity of Lease Li_2
Leases - Maturity of Lease Liability - Lessor (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 1,774 |
2020 | 6,621 |
2021 | 4,526 |
2022 | 3,432 |
2023 | 1,801 |
2024 and thereafter | 4,978 |
Total lease income | $ 23,132 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
Commitments under leases under ASU 840, 2019 | $ 55.1 |
Commitments under leases under ASU 840, 2020 | 104.4 |
Commitments under leases under ASU 840, 2021 | 104.4 |
Commitments under leases under ASU 840, 2022 | 97.6 |
Commitments under leases under ASU 840, 2023 | 97.6 |
Commitments under leases under ASU 840, thereafter | $ 168.5 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions | 4 Months Ended | 9 Months Ended |
Apr. 30, 2019 | Sep. 30, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Management fee, percentage | 8.00% | |
Service fee retained by Sprint | 8.60% | |
Management fee on prepaid wireless revenues and costs | 6.00% | |
Revenue | $ 1.5 | |
Capitalized contract costs, average customer life (in months) | 44 months | |
Cable | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Installation revenue, recognition period | 10 months | |
Commissions and other costs, recognition period (in months) | 44 months | |
Wireline | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Installation revenue, recognition period | 11 months | |
Commissions and other costs, recognition period (in months) | 72 months | |
Minimum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reimbursement payment, cost of equipment and commissions, benefit period for recognition | 21 months | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reimbursement payment, cost of equipment and commissions, benefit period for recognition | 53 months |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Asset Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Contract Asset Balance [Roll Forward] | ||||
Beginning balance | $ 73,789 | $ 57,256 | $ 65,674 | $ 51,103 |
Contract payments | 20,761 | 16,421 | 56,477 | 44,790 |
Contract amortization | (14,930) | (11,861) | (42,531) | (34,077) |
Ending balance | $ 79,620 | $ 61,816 | $ 79,620 | $ 61,816 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Remaining Performance Obligations (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 3,546 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 219 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 850 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 770 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 1,707 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations, period | 1 year |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Contract Acquisition Costs and Cost to Fulfill Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Capitalized Contract Cost [Roll Forward] | ||||
Beginning Balance | $ 10,476 | $ 9,755 | $ 10,091 | $ 9,841 |
Contract payments | 1,840 | 1,613 | 4,996 | 4,246 |
Contract amortization | (1,399) | (1,339) | (4,170) | (4,058) |
Ending Balance | $ 10,917 | $ 10,029 | $ 10,917 | $ 10,029 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill acquired | $ 149,070 | $ 146,497 | |
Big Sandy Acquisition | |||
Business Acquisition [Line Items] | |||
Cash purchase price | $ 10,000 | ||
Property, plant and equipment acquired | 4,600 | ||
Goodwill acquired | 2,600 | ||
Subscriber Relationships | Big Sandy Acquisition | |||
Business Acquisition [Line Items] | |||
Subscriber relationships acquired | $ 2,800 | ||
Estimated useful life, acquired intangible asset | 7 years | ||
Minimum | Big Sandy Acquisition | |||
Business Acquisition [Line Items] | |||
Estimated useful life, acquired property, plant and equipment | 2 years 6 months | ||
Maximum | Big Sandy Acquisition | |||
Business Acquisition [Line Items] | |||
Estimated useful life, acquired property, plant and equipment | 12 years 6 months |
Customer Concentration (Details
Customer Concentration (Details) | 12 Months Ended |
Dec. 31, 1999renewalmegahertz | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Megahertz spectrum used | 1,900 |
Initial term of contract | 2029 years |
Number of contract renewals | renewal | 2 |
Length of renewals | 10 years |
Right or obligation to sell business, percentage of EBV | 90.00% |
Minimum | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Megahertz spectrum used | 800 |
Maximum | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Megahertz spectrum used | 2,500 |
Earnings Per Share (EPS) - Sche
Earnings Per Share (EPS) - Schedule of Diluted Earnings Per Shares Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Calculation of net income per share: | ||||
Net income | $ 14,354 | $ 15,534 | $ 41,414 | $ 31,743 |
Basic weighted average shares outstanding (in shares) | 49,857 | 49,559 | 49,827 | 49,527 |
Basic income per share (in dollars per share) | $ 0.29 | $ 0.31 | $ 0.83 | $ 0.64 |
Effect of stock options outstanding: | ||||
Basic weighted average shares outstanding (in shares) | 49,857 | 49,559 | 49,827 | 49,527 |
Effect from dilutive shares and options outstanding (in shares) | 272 | 558 | 283 | 517 |
Diluted weighted average shares (in shares) | 50,129 | 50,117 | 50,110 | 50,044 |
Diluted income per share (in dollars per share) | $ 0.29 | $ 0.31 | $ 0.83 | $ 0.63 |
Earnings Per Share (EPS) - Sc_2
Earnings Per Share (EPS) - Schedule of Antidilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive (in shares) | 93 | 13 | 109 | 60 |
Investments - Other Investments
Investments - Other Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investment [Line Items] | ||
Total investments carried at fair value | $ 2,102 | $ 1,779 |
Total investments carried at cost | 9,135 | 8,487 |
Total equity method investments | 614 | 522 |
Total investments | 11,851 | 10,788 |
CoBank | ||
Investment [Line Items] | ||
Total investments carried at cost | 8,368 | 7,705 |
Other | ||
Investment [Line Items] | ||
Total investments carried at cost | 767 | 782 |
Total equity method investments | 614 | 522 |
Domestic equity funds | ||
Investment [Line Items] | ||
Total investments carried at fair value | 1,681 | 1,409 |
International equity funds | ||
Investment [Line Items] | ||
Total investments carried at fair value | $ 421 | $ 370 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Property, plant and equipment [Abstract] | ||||
Total property, plant and equipment | $ 1,471,159 | $ 1,471,159 | $ 1,403,118 | |
Less accumulated amortization and depreciation | 782,643 | 782,643 | 701,759 | |
Property, plant and equipment, net | 688,516 | 688,516 | $ 703,148 | 701,359 |
Depreciation expense | 800 | 800 | ||
Land | ||||
Property, plant and equipment [Abstract] | ||||
Total property, plant and equipment | 6,936 | 6,936 | 6,723 | |
Buildings and structures | ||||
Property, plant and equipment [Abstract] | ||||
Total property, plant and equipment | 231,962 | 231,962 | 213,657 | |
Cable and fiber | ||||
Property, plant and equipment [Abstract] | ||||
Total property, plant and equipment | 321,963 | 321,963 | 309,928 | |
Equipment and software | ||||
Property, plant and equipment [Abstract] | ||||
Total property, plant and equipment | 839,624 | 839,624 | 791,401 | |
Plant in service | ||||
Property, plant and equipment [Abstract] | ||||
Total property, plant and equipment | 1,400,485 | 1,400,485 | 1,321,709 | |
Plant under construction | ||||
Property, plant and equipment [Abstract] | ||||
Total property, plant and equipment | $ 70,674 | $ 70,674 | $ 81,409 | |
Minimum | Buildings and structures | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life (in years) | 10 years | |||
Minimum | Cable and fiber | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life (in years) | 15 years | |||
Minimum | Equipment and software | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life (in years) | 3 years | |||
Maximum | Buildings and structures | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life (in years) | 40 years | |||
Maximum | Cable and fiber | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life (in years) | 40 years | |||
Maximum | Equipment and software | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life (in years) | 20 years |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 149,070 | $ 146,497 |
Wireless | ||
Goodwill [Line Items] | ||
Goodwill | 146,383 | 146,383 |
Cable | ||
Goodwill [Line Items] | ||
Goodwill | 2,677 | 104 |
Wireline | ||
Goodwill [Line Items] | ||
Goodwill | $ 10 | $ 10 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 41 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Total non-amortizing intangibles | $ 78,314 | $ 78,314 | $ 78,314 | $ 64,475 | |
Gross Carrying Amount | 488,492 | 488,492 | 488,492 | 496,776 | |
Accumulated Amortization and Other | (237,975) | (237,975) | (237,975) | (195,222) | |
Net | 250,517 | 250,517 | 250,517 | 301,554 | |
Total intangible assets, gross | 566,806 | 566,806 | 566,806 | 561,251 | |
Total intangible assets, net | 328,831 | 328,831 | 328,831 | $ 352,201 | 366,029 |
Waived management fees under affiliate agreement | $ 9,700 | 29,000 | 127,400 | ||
Waived management fees under affiliate agreement, expected to be collected | 128,200 | ||||
Waived management fees under affiliate agreement amount expected to collect monthly | 4,200 | ||||
Remaining lease term (in years) | 20 years | ||||
Sprint affiliate contract expansion - Wireless | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 455,305 | 455,305 | 455,305 | 455,305 | |
Accumulated Amortization and Other | (212,194) | (212,194) | (212,194) | (167,830) | |
Net | 243,111 | 243,111 | 243,111 | 287,475 | |
FCC spectrum licenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 4,659 | 4,659 | 4,659 | 0 | |
Accumulated Amortization and Other | (39) | (39) | (39) | 0 | |
Net | 4,620 | 4,620 | 4,620 | 0 | |
Finite-lived intangible assets acquired | 4,700 | ||||
Favorable leases - Wireless | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 0 | 0 | 0 | 15,743 | |
Accumulated Amortization and Other | 0 | 0 | 0 | (1,919) | |
Net | 0 | 0 | 0 | 13,824 | |
Acquired subscribers - Cable | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 28,065 | 28,065 | 28,065 | 25,265 | |
Accumulated Amortization and Other | (25,499) | (25,499) | (25,499) | (25,250) | |
Net | 2,566 | 2,566 | 2,566 | 15 | |
Other intangibles | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 463 | 463 | 463 | 463 | |
Accumulated Amortization and Other | (243) | (243) | (243) | (223) | |
Net | 220 | 220 | 220 | 240 | |
Cable franchise rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Total non-amortizing intangibles | 64,334 | 64,334 | 64,334 | 64,334 | |
FCC spectrum licenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Total non-amortizing intangibles | 13,839 | 13,839 | 13,839 | 0 | |
Indefinite-lived intangible assets acquired | 13,800 | ||||
Railroad crossing rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Total non-amortizing intangibles | $ 141 | $ 141 | $ 141 | $ 141 |
Derivatives and Hedging - Sched
Derivatives and Hedging - Schedule of Derivative Financial Instrument as Well as its Classification on the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Derivative assets | $ 536 | $ 8,323 |
Interest rate swap | Derivatives designated as hedging instruments | ||
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Total derivatives designated as hedging instruments | 2,019 | 13,253 |
Interest rate swap | Derivatives designated as hedging instruments | Prepaid expenses and other | ||
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Derivative assets | 1,483 | 4,930 |
Interest rate swap | Derivatives designated as hedging instruments | Deferred charges and other assets, net | ||
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract] | ||
Derivative assets | $ 536 | $ 8,323 |
Derivatives and Hedging - Sch_2
Derivatives and Hedging - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Accumulated Gains (Losses) on Cash Flow Hedges | |
Balance as of December 31, 2018 | $ 13,253 |
Balance as of September 30, 2019 | 2,019 |
Income Tax (Expense) Benefit | |
Balance as of December 31, 2018 | (4,973) |
Balance as of September 30, 2019 | (2,173) |
Accumulated Other Comprehensive Income (Loss), net of taxes | |
Balance as of December 31, 2018 | 8,280 |
Balance as of September 30, 2019 | (154) |
Gains (Losses) on Cash Flow Hedges | |
Accumulated Gains (Losses) on Cash Flow Hedges | |
Net change in unrealized gain (loss) | (7,741) |
Amounts reclassified from accumulated other comprehensive income to interest expense | (3,493) |
Net current period accumulated other comprehensive income (loss) | (11,234) |
Income Tax (Expense) Benefit | |
Net change in unrealized gain (loss) | 1,929 |
Amounts reclassified from accumulated other comprehensive income to interest expense | 871 |
Net current period accumulated other comprehensive income (loss) | 2,800 |
Accumulated Other Comprehensive Income (Loss), net of taxes | |
Net change in unrealized gain (loss) | (5,812) |
Amounts reclassified from accumulated other comprehensive income to interest expense | (2,622) |
Net current period accumulated other comprehensive income (loss) | $ (8,434) |
Derivatives and Hedging - Narra
Derivatives and Hedging - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Not Designated as Hedging Instrument | Cash Flow Hedge | ||
Derivative [Line Items] | ||
Notional amount of cash flow hedges | $ 292.6 | $ 384 |
Other Assets and Accrued Liab_3
Other Assets and Accrued Liabilities - Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | |||
Prepaid rent | $ 0 | $ 11,245 | |
Prepaid maintenance expenses | 3,788 | 3,981 | |
Interest rate swaps | 1,483 | 4,930 | |
Wireless contract asset | 41,878 | 33,323 | |
Contract acquisition and fulfillment costs | 4,861 | 4,634 | |
Other | 4,587 | 2,049 | |
Prepaid expenses and other | $ 56,597 | $ 48,582 | $ 60,162 |
Other Assets and Accrued Liab_4
Other Assets and Accrued Liabilities - Long-Term Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Interest rate swaps | $ 536 | $ 8,323 |
Wireless contract asset | 37,742 | 32,351 |
Contract acquisition and fulfillment costs | 6,056 | 5,457 |
Other | 6,135 | 3,760 |
Deferred charges and other assets | $ 50,469 | $ 49,891 |
Other Assets and Accrued Liab_5
Other Assets and Accrued Liabilities - Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | |||
Sales and property taxes payable | $ 4,409 | $ 4,281 | |
Asset retirement obligations | 407 | 582 | |
Accrued programming costs | 3,125 | 2,886 | |
Financing leases | 89 | 0 | |
FCC spectrum licenses | 87 | 0 | |
Other current liabilities | 6,614 | 6,814 | |
Accrued liabilities and other | $ 14,731 | $ 14,151 | $ 14,563 |
Other Assets and Accrued Liab_6
Other Assets and Accrued Liabilities - Long-Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | |||
Non-current portion of deferred revenues | $ 12,613 | $ 12,593 | |
FCC spectrum licenses | 1,687 | 0 | |
Noncurrent portion of financing leases | 1,627 | ||
Other | 749 | 1,771 | |
Other liabilities | $ 16,676 | $ 16,008 | $ 14,364 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 740,570 | $ 785,236 |
Less: unamortized loan fees | 12,558 | 14,994 |
Total debt, net of unamortized loan fees | 728,012 | 770,242 |
Current maturities of long-term debt, net of current unamortized loan fees | 31,634 | 20,618 |
Long-term debt, less current maturities, net of unamortized loan fees | 696,378 | 749,624 |
Term loan A-1 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 265,855 | 287,699 |
Term loan A-2 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 474,715 | $ 497,537 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||||
Total debt, net of unamortized loan fees | $ 728,012 | $ 728,012 | $ 770,242 | ||
Unamortized loan fees | $ 12,558 | $ 12,558 | $ 14,994 | ||
Effective rate | 3.63% | 3.63% | |||
Leverage ratio threshold | 2.25 | ||||
Variable interest rate | 0.25% | ||||
Cash paid for interest, net of amounts capitalized | $ 21,600 | $ 25,100 | |||
Term loan A-1 | |||||
Debt Instrument [Line Items] | |||||
Periodic payment of principal | 3,600 | ||||
Periodic payment principal, period two | 7,300 | ||||
Periodic payment principal, period three | $ 10,900 | ||||
Term loan A-1 | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 1.50% | ||||
Term loan A-2 | |||||
Debt Instrument [Line Items] | |||||
Periodic payment of principal | $ 1,200 | ||||
Additional payment to required quarterly payments | $ 15,000 | $ 15,000 | |||
Term loan A-2 | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Variable interest rate | 1.75% |
Long-Term Debt - Schedule of Fi
Long-Term Debt - Schedule of Financial Covenants (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Debt Disclosure [Abstract] | |
Leverage ratio, actual | 2.38 |
Covenant requirement, total leverage ratio | 3.50 |
Debt service coverage ratio, actual | 6.21 |
Minimum debt service coverage ratio | 2 |
Covenant, liquidity balance, actual | $ 172,200,000 |
Debt instrument covenants minimum liquidity amount | $ 25,000,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 24.30% | 23.80% | 24.40% | 24.30% |
Cash income taxes paid | $ 6.1 | |||
Cash income tax refunds | $ 2.7 |
Segment Reporting - Selected Fi
Segment Reporting - Selected Financial Data for Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
External revenue | ||||
Operating revenues | $ 155,152 | $ 158,731 | $ 472,909 | $ 469,370 |
Operating expenses: | ||||
Selling, general and administrative | 27,178 | 27,452 | 83,070 | 86,117 |
Depreciation and amortization | 36,626 | 40,028 | 120,158 | 124,632 |
Total operating expenses | 129,793 | 130,402 | 398,743 | 403,118 |
Operating income | 25,359 | 28,329 | 74,166 | 66,252 |
Wireless | ||||
External revenue | ||||
Operating revenues | 109,138 | 114,836 | 336,392 | 339,910 |
Cable | ||||
External revenue | ||||
Operating revenues | 33,513 | 30,916 | 98,962 | 92,610 |
Wireline | ||||
External revenue | ||||
Operating revenues | 12,501 | 12,979 | 37,555 | 36,850 |
Other | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Eliminations | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Wireless | ||||
External revenue | ||||
Operating revenues | (1,290) | (1,263) | (3,830) | (3,746) |
Intersegment Eliminations | Cable | ||||
External revenue | ||||
Operating revenues | (1,591) | (1,266) | (4,541) | (3,394) |
Intersegment Eliminations | Wireline | ||||
External revenue | ||||
Operating revenues | (6,643) | (6,643) | (20,025) | (21,591) |
Intersegment Eliminations | Other | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Intersegment Eliminations | Eliminations | ||||
External revenue | ||||
Operating revenues | (9,524) | (9,172) | (28,396) | (28,731) |
Operating expenses: | ||||
Selling, general and administrative | (750) | (714) | (2,118) | (2,043) |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Total operating expenses | (9,524) | (9,172) | (28,396) | (28,731) |
Operating income | 0 | 0 | 0 | 0 |
Operating Segments | Wireless | ||||
External revenue | ||||
Operating revenues | 110,428 | 116,099 | 340,222 | 343,656 |
Operating expenses: | ||||
Selling, general and administrative | 9,882 | 11,191 | 31,836 | 35,693 |
Depreciation and amortization | 27,200 | 30,363 | 90,469 | 95,853 |
Total operating expenses | 86,697 | 88,747 | 269,130 | 276,786 |
Operating income | 23,731 | 27,352 | 71,092 | 66,870 |
Operating Segments | Cable | ||||
External revenue | ||||
Operating revenues | 35,104 | 32,182 | 103,503 | 96,004 |
Operating expenses: | ||||
Selling, general and administrative | 6,636 | 5,331 | 17,898 | 14,940 |
Depreciation and amortization | 6,226 | 6,102 | 19,239 | 18,305 |
Total operating expenses | 28,808 | 26,348 | 84,718 | 78,560 |
Operating income | 6,296 | 5,834 | 18,785 | 17,444 |
Operating Segments | Wireline | ||||
External revenue | ||||
Operating revenues | 19,144 | 19,622 | 57,580 | 58,441 |
Operating expenses: | ||||
Selling, general and administrative | 1,938 | 1,780 | 5,769 | 5,183 |
Depreciation and amortization | 3,077 | 3,435 | 10,057 | 10,069 |
Total operating expenses | 14,217 | 14,500 | 43,213 | 43,754 |
Operating income | 4,927 | 5,122 | 14,367 | 14,687 |
Operating Segments | Other | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Selling, general and administrative | 9,472 | 9,864 | 29,685 | 32,344 |
Depreciation and amortization | 123 | 128 | 393 | 405 |
Total operating expenses | 9,595 | 9,979 | 30,078 | 32,749 |
Operating income | (9,595) | (9,979) | (30,078) | (32,749) |
Service revenue | ||||
External revenue | ||||
Operating revenues | 127,383 | 130,320 | 390,272 | 386,003 |
Service revenue | Wireless | ||||
External revenue | ||||
Operating revenues | 91,108 | 96,299 | 282,533 | 284,154 |
Service revenue | Cable | ||||
External revenue | ||||
Operating revenues | 30,829 | 28,578 | 91,250 | 85,797 |
Service revenue | Wireline | ||||
External revenue | ||||
Operating revenues | 5,446 | 5,443 | 16,489 | 16,052 |
Service revenue | Other | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Service revenue | Eliminations | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | |
Equipment revenue | ||||
External revenue | ||||
Operating revenues | 16,320 | 15,963 | 48,787 | 49,551 |
Equipment revenue | Wireless | ||||
External revenue | ||||
Operating revenues | 15,975 | 15,666 | 47,814 | 48,859 |
Equipment revenue | Cable | ||||
External revenue | ||||
Operating revenues | 292 | 234 | 817 | 537 |
Equipment revenue | Wireline | ||||
External revenue | ||||
Operating revenues | 53 | 63 | 156 | 155 |
Equipment revenue | Other | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Equipment revenue | Eliminations | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | |
Tower revenue | ||||
External revenue | ||||
Operating revenues | 1,660 | 1,639 | 4,985 | 4,934 |
Tower revenue | Wireless | ||||
External revenue | ||||
Operating revenues | 1,660 | 1,639 | 4,985 | 4,934 |
Tower revenue | Cable | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Tower revenue | Wireline | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Tower revenue | Other | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Tower revenue | Eliminations | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | |
Other revenue | ||||
External revenue | ||||
Operating revenues | 9,789 | 10,809 | 28,865 | 28,882 |
Other revenue | Wireless | ||||
External revenue | ||||
Operating revenues | 395 | 1,232 | 1,060 | 1,963 |
Other revenue | Cable | ||||
External revenue | ||||
Operating revenues | 2,392 | 2,104 | 6,895 | 6,276 |
Other revenue | Wireline | ||||
External revenue | ||||
Operating revenues | 7,002 | 7,473 | 20,910 | 20,643 |
Other revenue | Other | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | 0 |
Other revenue | Eliminations | ||||
External revenue | ||||
Operating revenues | 0 | 0 | 0 | |
Cost of services | ||||
Operating expenses: | ||||
Cost of services | 50,164 | 47,886 | 149,179 | 146,362 |
Cost of services | Intersegment Eliminations | Eliminations | ||||
Operating expenses: | ||||
Cost of services | (8,774) | (8,458) | (26,278) | (26,688) |
Cost of services | Operating Segments | Wireless | ||||
Operating expenses: | ||||
Cost of services | 34,044 | 32,253 | 101,085 | 99,491 |
Cost of services | Operating Segments | Cable | ||||
Operating expenses: | ||||
Cost of services | 15,790 | 14,837 | 47,138 | 45,118 |
Cost of services | Operating Segments | Wireline | ||||
Operating expenses: | ||||
Cost of services | 9,104 | 9,266 | 27,234 | 28,441 |
Cost of services | Operating Segments | Other | ||||
Operating expenses: | ||||
Cost of services | 0 | (12) | 0 | 0 |
Cost of goods sold | ||||
Operating expenses: | ||||
Cost of services | 15,825 | 15,036 | 46,336 | 46,007 |
Cost of goods sold | Intersegment Eliminations | Eliminations | ||||
Operating expenses: | ||||
Cost of services | 0 | 0 | 0 | 0 |
Cost of goods sold | Operating Segments | Wireless | ||||
Operating expenses: | ||||
Cost of services | 15,571 | 14,940 | 45,740 | 45,749 |
Cost of goods sold | Operating Segments | Cable | ||||
Operating expenses: | ||||
Cost of services | 156 | 78 | 443 | 197 |
Cost of goods sold | Operating Segments | Wireline | ||||
Operating expenses: | ||||
Cost of services | 98 | 19 | 153 | 61 |
Cost of goods sold | Operating Segments | Other | ||||
Operating expenses: | ||||
Cost of services | $ 0 | $ (1) | $ 0 | $ 0 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event | Oct. 29, 2019USD ($)$ / shares |
Subsequent Event [Line Items] | |
Common stock dividend approved (in usd per share) | $ / shares | $ 0.29 |
Stock Repurchase Program | |
Subsequent Event [Line Items] | |
Amount of common stock repurchased | $ | $ 80,000,000 |
Uncategorized Items - shenq3201
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 56,097,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 56,097,000 |