Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 26, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-09881 | |
Entity Registrant Name | SHENANDOAH TELECOMMUNICATIONS COMPANY | |
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 | 54,547,093 | |
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 Central Index Key | 0000354963 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 389,735 | $ 139,255 |
Accounts receivable, net of allowance for credit losses of $1,064 and $886, respectively | 18,228 | 19,782 |
Income taxes receivable | 2,618 | 4,691 |
Prepaid expenses and other | 15,025 | 11,782 |
Current assets held for sale | 561 | 561 |
Total current assets | 426,167 | 176,071 |
Investments | 13,408 | 13,198 |
Property, plant and equipment, net | 896,208 | 850,337 |
Goodwill and intangible assets, net | 81,083 | 81,123 |
Operating lease right-of-use assets | 14,170 | 13,024 |
Deferred charges and other assets | 14,886 | 11,561 |
Non-current assets held for sale | 0 | 68,915 |
Total assets | 1,445,922 | 1,214,229 |
Current liabilities: | ||
Current maturities of long-term debt, net of unamortized loan fees | 7,879 | 7,095 |
Accounts payable | 50,281 | 53,546 |
Advanced billings and customer deposits | 12,267 | 12,394 |
Accrued compensation | 7,337 | 11,749 |
Current operating lease liabilities | 2,266 | 2,222 |
Accrued liabilities and other | 11,003 | 7,747 |
Current liabilities held for sale | 0 | 3,602 |
Total current liabilities | 91,033 | 98,355 |
Long-term debt, less current maturities, net of unamortized loan fees | 290,716 | 292,804 |
Other long-term liabilities: | ||
Deferred income taxes | 163,726 | 85,664 |
Benefit plan obligations | 4,161 | 3,943 |
Non-current operating lease liabilities | 8,362 | 7,185 |
Other liabilities | 16,281 | 16,912 |
Non-current liabilities held for sale | 0 | 56,696 |
Total other long-term liabilities | 192,530 | 170,400 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity: | ||
Common stock, no par value, authorized $96,000; $50,447 and $50,272 issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 0 | 0 |
Additional paid in capital | 69,616 | 66,933 |
Retained earnings | 798,765 | 584,069 |
Accumulated other comprehensive income, net of taxes | 3,262 | 1,668 |
Total shareholders’ equity | 871,643 | 652,670 |
Total liabilities and shareholders’ equity | $ 1,445,922 | $ 1,214,229 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,064 | $ 886 |
Common stock, shares authorized (in shares) | 96,000,000 | 96,000,000 |
Common stock, shares issued (in shares) | 50,447,000 | 50,272,000 |
Common stock, shares, outstanding (in shares) | 50,447,000 | 50,272,000 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | Service revenue and other [Member] | Service revenue and other [Member] |
Service revenue and other | $ 69,248 | $ 67,165 |
Operating expenses: | ||
Cost of services exclusive of depreciation and amortization | 25,985 | 25,431 |
Selling, general and administrative | 28,596 | 26,159 |
Depreciation and amortization | 17,443 | 15,269 |
Total operating expenses | 72,024 | 66,859 |
Operating (loss) income | (2,776) | 306 |
Other (expense) income: | ||
Interest expense | (4,076) | (392) |
Other income, net | 1,736 | 1,509 |
(Loss) income from continuing operations before income taxes | (5,116) | 1,423 |
Income tax (benefit) expense | (1,026) | 682 |
(Loss) income from continuing operations | (4,090) | 741 |
Discontinued operations: | ||
Income from discontinued operations, net of tax | 1,981 | 1,325 |
Gain on the sale of discontinued operations, net of tax | 216,805 | 0 |
Total income from discontinued operations, net of tax | 218,786 | 1,325 |
Net income | 214,696 | 2,066 |
Other comprehensive income: | ||
Unrealized gain on interest rate hedge, net of tax | 1,594 | 0 |
Comprehensive income | $ 216,290 | $ 2,066 |
Net income per share, basic and diluted: | ||
Basic - (Loss) income from continuing operations (in dollars per share) | $ (0.08) | $ 0.01 |
Basic - Income from discontinued operations, net of tax (in dollars per share) | 4.33 | 0.03 |
Basic net income per share (in dollars per share) | 4.25 | 0.04 |
Diluted - (Loss) income from continuing operations (in dollars per share) | (0.08) | 0.01 |
Diluted - Income from discontinued operations, net of tax (in dollars per share) | 4.29 | 0.03 |
Diluted net income per share (in dollars per share) | $ 4.21 | $ 0.04 |
Weighted average shares outstanding, basic (in shares) | 50,520 | 50,291 |
Weighted average shares outstanding, diluted (in shares) | 51,011 | 50,512 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Shares of Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Beginning balance (in shares) at Dec. 31, 2022 | 50,110,000 | ||||
Beginning balance at Dec. 31, 2022 | $ 638,007 | $ 57,453 | $ 580,554 | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 2,066 | 2,066 | |||
Stock based compensation (in shares) | 196,000 | ||||
Stock-based compensation | 3,852 | 3,852 | |||
Common stock issued (in shares) | 1,000 | ||||
Common stock issued | 11 | 11 | |||
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards (in shares) | (60,000) | ||||
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards | (1,156) | (1,156) | |||
Ending balance (in shares) at Mar. 31, 2023 | 50,247,000 | ||||
Ending balance at Mar. 31, 2023 | $ 642,780 | 60,160 | 582,620 | 0 | |
Beginning balance (in shares) at Dec. 31, 2023 | 50,272,000 | 50,272,000 | |||
Beginning balance at Dec. 31, 2023 | $ 652,670 | 66,933 | 584,069 | 1,668 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 214,696 | 214,696 | |||
Stock based compensation (in shares) | 248,000 | ||||
Stock-based compensation | 4,135 | 4,135 | |||
Common stock issued (in shares) | 0 | ||||
Common stock issued | 4 | 4 | |||
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards (in shares) | (73,000) | ||||
Shares surrendered for settlement of employee taxes upon issuance of vested equity awards | (1,456) | (1,456) | |||
Unrealized gain on interest rate hedge, net of tax | $ 1,594 | 1,594 | |||
Ending balance (in shares) at Mar. 31, 2024 | 50,447,000 | 50,447,000 | |||
Ending balance at Mar. 31, 2024 | $ 871,643 | $ 69,616 | $ 798,765 | $ 3,262 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 214,696 | $ 2,066 |
Income from discontinued operations, net of tax | 218,786 | 1,325 |
(Loss) income from continuing operations | (4,090) | 741 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 17,443 | 15,269 |
Stock-based compensation expense, net of amount capitalized | 3,966 | 3,717 |
Deferred income taxes | (1,026) | 2,083 |
Provision for credit losses | 756 | 383 |
Other, net | (184) | 214 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,726 | 4,488 |
Current income taxes | 0 | 24,676 |
Operating lease assets and liabilities, net | 75 | 2 |
Other assets | (4,495) | (904) |
Accounts payable | (38) | (837) |
Other deferrals and accruals | (1,218) | (4,152) |
Net cash provided by operating activities - continuing operations | 12,915 | 45,680 |
Net cash provided by operating activities - discontinued operations | 2,243 | 2,644 |
Net cash provided by operating activities | 15,158 | 48,324 |
Cash flows from investing activities: | ||
Capital expenditures | (70,053) | (67,468) |
Government grants received | 2,710 | 0 |
Proceeds from sale of assets and other | 0 | 101 |
Net cash used in investing activities - continuing operations | (67,343) | (67,367) |
Net cash provided by (used in) investing activities - discontinued operations | 305,827 | (203) |
Net cash provided by (used in) investing activities | 238,484 | (67,570) |
Cash flows from financing activities: | ||
Principal payments on long-term debt | (1,312) | 0 |
Proceeds from credit facility borrowings | 0 | 25,000 |
Taxes paid for equity award issuances | (1,456) | (1,156) |
Payments for financing arrangements and other | (394) | (263) |
Net cash (used in) provided by financing activities | (3,162) | 23,581 |
Net increase in cash and cash equivalents | 250,480 | 4,335 |
Cash and cash equivalents, beginning of period | 139,255 | 44,061 |
Cash and cash equivalents, end of period | 389,735 | 48,396 |
Supplemental Disclosures of Cash Flow Information | ||
Interest paid | 5,262 | 1,327 |
Income tax refunds received, net | $ 0 | $ 25,030 |
Basis of Presentation and Other
Basis of Presentation and Other Information | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Other Information | Basis of Presentation and Other Information Shenandoah Telecommunications Company and its subsidiaries (collectively, “Shentel”, “we”, “our”, “us”, or the “Company”) provide broadband data, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, Pennsylvania and Kentucky, via fiber optic and hybrid fiber coaxial cable networks. We also lease dark fiber and provide Ethernet and Wavelength fiber optic services to enterprise and wholesale customers throughout the entirety of our service area. Shentel’s Broadband business also provides voice and DSL telephone services to customers in Virginia’s Shenandoah County and portions of adjacent counties as a Rural Local Exchange Carrier (“RLEC”). These integrated networks are connected by a fiber network. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. All normal recurring adjustments considered necessary for a fair presentation have been included. Certain disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2023. The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an on-going basis we evaluate significant estimates and assumptions, including, but not limited to, revenue recognition, stock-based compensation, estimated useful lives of assets, impairment of goodwill and indefinite-lived intangible assets, intangible assets subject to amortization, the computation of income taxes and the fair value of interest rate swaps. Future events and their effects cannot be predicted with certainty; accordingly, the Company’s accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. Management evaluates and updates assumptions and estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. Sale of Shentel’s Tower Portfolio On March 29, 2024, Shenandoah Mobile, LLC, a wholly-owned subsidiary of Shenandoah Telecommunications Company, completed the initial closing of its previously disclosed sale of substantially all of Shentel’s tower portfolio and operations (“Tower Portfolio”) to Vertical Bridge Holdco, LLC for $309.9 million (the “Tower Transaction”). The Company received $305.8 million, net of certain transaction costs at the time of the initial closing. At the initial close, the Company conveyed sites representing approximately 99.5% of the tower portfolio value. The Company expects to convey the remaining tower sites in the portfolio by the end of March 2025. The Tower Transaction was completed pursuant to the terms of a Purchase and Sale Agreement, dated February 29, 2024, as amended by Amendment No. 1 to the Purchase and Sale Agreement, dated March 29, 2024. The Tower Portfolio represented substantially all of the assets and operations in Shentel’s previously reported Tower Reporting Segment and the Tower Transaction represented a strategic shift in the Company’s business. Consequently, the Tower Portfolio has been reclassified as a discontinued operation. For all periods presented, the assets and liabilities that transferred in the Tower Transaction (the “disposal group”) are presented as held for sale in our unaudited condensed consolidated balance sheets , and operating results and cash flows related to the Tower Portfolio were reflected as a discontinued operations in our unaudited condensed consolidated statements of comprehensive income and unaudited condensed consolidated statements of cash flows . Refer to Note 14, Discontinued Operations for more information regarding the presentation of the disposal group in the Company’s financial statements. As a result of the sale of the Tower Portfolio, the Company has one reportable segment. Consequently, segment reporting previously disclosed is no longer applicable. Adoption of New Accounting Standards There have been no material 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 Annual Report on Form 10-K for its fiscal year ended December 31, 2023, that would be expected to impact the Company. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company’s revenues by activity type are as follows: Three Months Ended (in thousands) 2024 2023 Residential & SMB - Cable Markets $ 44,370 $ 44,756 Residential & SMB - Glo Fiber Markets 12,118 7,003 Commercial Fiber 9,377 11,698 RLEC & Other 3,383 3,708 Service revenue and other $ 69,248 $ 67,165 Contract Assets The Company’s contract assets primarily include commissions incurred to acquire contracts with customers. The Company incurs commission expenses related to in-house and third-party vendors which are capitalized and amortized over the expected customer benefit period which is approximately six years. The Company’s current contract assets are included in prepaid expenses and other and the Company’s non-current contract assets are included in deferred charges and other assets in its unaudited condensed consolidated balance sheets. Amortization of capitalized commission expenses is recorded in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of comprehensive income. The following tables present the activity of current and non-current contract assets: Three Months Ended (in thousands) 2024 2023 Beginning Balance $ 8,633 $ 8,646 Commission payments 851 891 Contract asset amortization (717) (781) Ending Balance $ 8,767 $ 8,756 Contract Liabilities The Company’s contract liabilities include services that are billed in advance and recorded as deferred revenue, as well as installation fees that are charged upfront without transfer of commensurate goods or services to the customer. The Company’s current contract liabilities are included in advanced billings and customer deposits in its unaudited condensed consolidated balance sheets and the Company’s non-current contract liabilities are included in other liabilities in its unaudited condensed consolidated balance sheets. Shentel’s current contract liability balances were $10.0 million at both March 31, 2024 and December 31, 2023, respectively. Shentel’s non-current contract liability balances were $0.9 million and $1.0 million as of March 31, 2024 and December 31, 2023, respectively. Shentel expects its current contract liability balances to be recognized as revenues during the twelve-month periods following the respective balance sheet dates and its non-current contract liability balances to be recognized as revenues after the twelve-month periods following the respective balance sheet dates. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2024 | |
Investments [Abstract] | |
Investments | Investments Investments consist of the following: (in thousands) March 31, December 31, SERP investments at fair value $ 2,467 $ 2,290 Cost method investments 10,708 10,675 Equity method investments 233 233 Total investments $ 13,408 $ 13,198 SERP investments at fair value: The fair value of the SERP investments are based on unadjusted quoted prices in active markets and are classified as Level 1 of the fair value hierarchy. Cost method investments |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consist of the following: ($ in thousands) Estimated Useful Lives March 31, December 31, Land $ 3,671 $ 3,671 Land improvements 10 years 4,448 4,448 Buildings and structures 10 - 45 years 43,027 42,871 Cable and fiber 15 - 30 years 833,360 799,612 Equipment and software 4 - 8 years 348,677 331,595 Plant in service 1,233,183 1,182,197 Plant under construction 156,513 145,623 Total property, plant and equipment 1,389,696 1,327,820 Less: accumulated depreciation and amortization (493,488) (477,483) Property, plant and equipment, net $ 896,208 $ 850,337 Property, plant and equipment, net increased due primarily to capital expenditures driven by the Company’s Glo Fiber market expansion. The Company’s accounts payable as of March 31, 2024 and December 31, 2023 included amounts associated with capital expenditures of approximately $48.4 million and $51.1 million, respectively. Depreciation and amortization expense was $17.3 million and $15.1 million during the three months ended March 31, 2024 and 2023, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets consist of the following: March 31, 2024 December 31, 2023 (in thousands) Gross Accumulated Amortization and Other Net Gross Accumulated Amortization and Other Net Goodwill $ 3,244 $ — $ 3,244 $ 3,244 $ — $ 3,244 Indefinite-lived intangibles: Cable franchise rights 64,334 — 64,334 64,334 — 64,334 FCC Spectrum licenses 12,122 — 12,122 12,122 — 12,122 Railroad crossing rights and other 300 — 300 217 — 217 Total indefinite-lived intangibles 76,756 — 76,756 76,673 — 76,673 Finite-lived intangibles: Subscriber relationships 28,425 (27,485) 940 28,425 (27,370) 1,055 Other intangibles 510 (367) 143 510 (359) 151 Total finite-lived intangibles 28,935 (27,852) 1,083 28,935 (27,729) 1,206 Total goodwill and intangible assets $ 108,935 $ (27,852) $ 81,083 $ 108,852 $ (27,729) $ 81,123 Amortization expense was $0.1 million during each of the three months ended March 31, 2024 and 2023. |
Other Assets and Accrued Liabil
Other Assets and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
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) March 31, December 31, Prepaid maintenance expenses $ 7,365 $ 5,157 Broadband contract acquisition costs 2,757 2,675 Interest rate swaps 2,626 1,443 Other 2,277 2,507 Prepaid expenses and other $ 15,025 $ 11,782 Deferred charges and other assets, classified as long-term assets, included the following: (in thousands) March 31, December 31, Broadband contract acquisition costs $ 6,010 $ 5,958 Interest rate swaps 1,735 798 Prepaid expenses and other 7,141 4,805 Deferred charges and other assets $ 14,886 $ 11,561 Accrued liabilities and other, classified as current liabilities, included the following: (in thousands) March 31, December 31, Accrued programming costs $ 3,624 $ 3,209 Other current liabilities 7,379 4,538 Accrued liabilities and other $ 11,003 $ 7,747 Other liabilities, classified as long-term liabilities, included the following: (in thousands) March 31, December 31, Noncurrent portion of deferred lease revenue $ 14,346 $ 14,670 Noncurrent portion of financing leases 1,306 1,395 Other 629 847 Other liabilities $ 16,281 $ 16,912 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company leases various broadband network and telecommunications sites, fiber optic cable routes, warehouses, retail stores and office facilities for use in our business. The components of lease costs were as follows: Classification Three Months Ended (in thousands) 2024 2023 Finance lease cost Amortization of leased assets Depreciation $ 119 $ 119 Interest on lease liabilities Interest expense 19 20 Operating lease cost Operating expense 1 736 856 Lease cost $ 874 $ 995 _________________________________________ (1) Operating lease expense is presented in cost of services or selling, general and administrative expense based on the use of the relevant facility. The following table summarizes the expected maturity of lease liabilities as of March 31, 2024: (in thousands) Operating Leases Finance Leases Total 2024 (remainder of the year) $ 1,893 $ 73 $ 1,966 2025 2,643 180 2,823 2026 1,841 153 1,994 2027 979 155 1,134 2028 698 158 856 2029 and thereafter 7,752 1,201 8,953 Total lease payments 15,806 1,920 17,726 Less: Interest (5,178) (507) (5,685) Present value of lease liabilities $ 10,628 $ 1,413 $ 12,041 Other information related to operating and finance leases was as follows: March 31, December 31, Operating leases Weighted average remaining lease term (years) 10.4 7.1 Weighted average discount rate 5.8 % 5.0 % Finance leases Weighted average remaining lease term (years) 12.3 12.3 Weighted average discount rate 5.2 % 5.2 % Three Months Ended (in thousands) 2024 2023 Cash paid for operating lease liabilities $ 765 $ 877 Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases) 1,737 1,493 |
Leases | Leases The Company leases various broadband network and telecommunications sites, fiber optic cable routes, warehouses, retail stores and office facilities for use in our business. The components of lease costs were as follows: Classification Three Months Ended (in thousands) 2024 2023 Finance lease cost Amortization of leased assets Depreciation $ 119 $ 119 Interest on lease liabilities Interest expense 19 20 Operating lease cost Operating expense 1 736 856 Lease cost $ 874 $ 995 _________________________________________ (1) Operating lease expense is presented in cost of services or selling, general and administrative expense based on the use of the relevant facility. The following table summarizes the expected maturity of lease liabilities as of March 31, 2024: (in thousands) Operating Leases Finance Leases Total 2024 (remainder of the year) $ 1,893 $ 73 $ 1,966 2025 2,643 180 2,823 2026 1,841 153 1,994 2027 979 155 1,134 2028 698 158 856 2029 and thereafter 7,752 1,201 8,953 Total lease payments 15,806 1,920 17,726 Less: Interest (5,178) (507) (5,685) Present value of lease liabilities $ 10,628 $ 1,413 $ 12,041 Other information related to operating and finance leases was as follows: March 31, December 31, Operating leases Weighted average remaining lease term (years) 10.4 7.1 Weighted average discount rate 5.8 % 5.0 % Finance leases Weighted average remaining lease term (years) 12.3 12.3 Weighted average discount rate 5.2 % 5.2 % Three Months Ended (in thousands) 2024 2023 Cash paid for operating lease liabilities $ 765 $ 877 Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases) 1,737 1,493 |
Leases | Leases The Company leases various broadband network and telecommunications sites, fiber optic cable routes, warehouses, retail stores and office facilities for use in our business. The components of lease costs were as follows: Classification Three Months Ended (in thousands) 2024 2023 Finance lease cost Amortization of leased assets Depreciation $ 119 $ 119 Interest on lease liabilities Interest expense 19 20 Operating lease cost Operating expense 1 736 856 Lease cost $ 874 $ 995 _________________________________________ (1) Operating lease expense is presented in cost of services or selling, general and administrative expense based on the use of the relevant facility. The following table summarizes the expected maturity of lease liabilities as of March 31, 2024: (in thousands) Operating Leases Finance Leases Total 2024 (remainder of the year) $ 1,893 $ 73 $ 1,966 2025 2,643 180 2,823 2026 1,841 153 1,994 2027 979 155 1,134 2028 698 158 856 2029 and thereafter 7,752 1,201 8,953 Total lease payments 15,806 1,920 17,726 Less: Interest (5,178) (507) (5,685) Present value of lease liabilities $ 10,628 $ 1,413 $ 12,041 Other information related to operating and finance leases was as follows: March 31, December 31, Operating leases Weighted average remaining lease term (years) 10.4 7.1 Weighted average discount rate 5.8 % 5.0 % Finance leases Weighted average remaining lease term (years) 12.3 12.3 Weighted average discount rate 5.2 % 5.2 % Three Months Ended (in thousands) 2024 2023 Cash paid for operating lease liabilities $ 765 $ 877 Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases) 1,737 1,493 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Shentel has a credit agreement, dated as of July 1, 2021 (as amended by (i) Amendment No. 1 to Credit Agreement, dated as of May 17, 2023 and (ii) Consent and Amendment No. 2 to Credit Agreement, dated as of October 24, 2023, the “Credit Agreement”), with various financial institutions party thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders, which contains (i) a $100 million, five-year available revolving credit facility (the “Revolver”), (ii) a $150 million five-year delayed draw amortizing term loan (“Term Loan A-1”) and (iii) a $150 million seven-year delayed draw amortizing term loan (“Term Loan A-2” and collectively with Term Loan A-1, the “Term Loans”). The following loans were outstanding under the Credit Agreement: (in thousands) March 31, December 31, Term loan A-1 $ 149,063 $ 150,000 Term loan A-2 149,625 150,000 Total debt 298,688 300,000 Less: unamortized loan fees (93) (101) Total debt, net of unamortized loan fees $ 298,595 $ 299,899 Both Term Loan A-1 and Term Loan A-2 bore interest at one-month LIBOR plus a margin of 1.50% until May 2023 and now bear interest at one-month term SOFR plus a margin of 1.60%. The margin of 1.60% is variable and determined by the Company’s net leverage ratio. Interest is paid monthly. The interest rate was 6.93% and 6.95% at March 31, 2024 and December 31, 2023, respectively. Interest expense recorded in Shentel’s unaudited condensed consolidated statements of comprehensive income consists of the following: Three Months Ended (in thousands) 2024 2023 Interest expense $ 5,383 $ 1,463 Less: capitalized interest (1,307) (1,071) Interest expense, net of capitalized interest $ 4,076 $ 392 The Credit Agreement includes various covenants, including total net leverage ratio and debt service coverage ratio financial covenants. Shentel’s Term Loans require quarterly payments based on a percentage of the outstanding balance. Based on the outstanding balance as of March 31, 2024, Term Loan A-1 requires quarterly principal repayments of 0.63% from March 31, 2024 through June 30, 2024; then increasing to 1.25% quarterly from September 30, 2024 through March 31, 2026, with the remaining balance due June 30, 2026. Based on the outstanding balance as of March 31, 2024, Term Loan A-2 requires quarterly principal repayments of 0.25% from March 31, 2024 through March 31, 2028, with the remaining balance due June 30, 2028. The following table summarizes the expected payments of Shentel’s outstanding borrowings as of March 31, 2024: (in thousands) Amount 2024 $ 5,731 2025 8,568 2026 138,827 2027 1,450 2028 144,112 Total $ 298,688 Shentel has not made any borrowings under its Revolver as of March 31, 2024. In the event borrowings are made in the future, the entire outstanding principal amount borrowed is due June 30, 2026. The Credit Agreement is fully secured by a pledge and unconditional guarantee from the Company and all of its subsidiaries, except Shenandoah Telephone Company. This provides the lenders a security interest in substantially all of the assets of the Company. Refer to Note 15, Subsequent Events , for events that occurred subsequent to March 31, 2024 which affect Shentel’s Credit Agreement. |
Derivatives and Hedging
Derivatives and Hedging | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging During the second quarter of 2023, Shentel entered into pay fixed (2.90%), receive variable (one-month term SOFR) interest rate swaps totaling $150.0 million of notional principal (the “Swaps”). The Swaps contain monthly payment terms beginning in May 2024, which extend through their maturity dates in June 2026. The Swaps are designated as cash flow hedges, representing 50% of the Company’s expected outstanding debt. The Company uses the Swaps to manage its exposure to interest rate risk for its long-term variable-rate Term Loans. The Swaps were determined to be highly effective hedges and therefore all change in the fair value of the Swaps was recognized in other comprehensive income. Since the Company did not have outstanding interest rate swaps in the prior year period, there were no gains or losses recorded for the three months ended March 31, 2023. Shentel expects to begin reclassifying amounts related to the Swaps from accumulated other comprehensive income to interest expense in May 2024, when the payment periods of the Swaps begin. The table below presents the fair value of the Swaps as well as their classification in the unaudited condensed consolidated balance sheets. The fair value of these instruments was estimated using an income approach and observable market inputs (Level 2): (in thousands) March 31, December 31, Balance sheet line item of derivative financial instruments: Prepaid expenses and other $ 2,626 $ 1,443 Deferred charges and other assets 1,735 798 Total derivatives designated as hedging instruments $ 4,361 $ 2,241 The table below summarizes changes in accumulated other comprehensive income by component: (in thousands) Gain on Swaps Income tax expense Accumulated Other Comprehensive Income, net of taxes Balance, December 31, 2023 $ 2,241 $ (573) $ 1,668 Net change in unrealized gain 2,120 (526) 1,594 Balance, March 31, 2024 $ 4,361 $ (1,099) $ 3,262 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
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 currently involved in one state income tax audit and no federal income tax audits as of March 31, 2024. The Company’s income tax returns are generally open to examination from 2020 forward and the net operating losses acquired in the acquisition of nTelos are open to examination from 2004 forward. The effective tax rates for the three and three months ended March 31, 2024 and 2023, differ from the statutory U.S. federal income tax rate of 21% primarily due to the state income taxes, excess tax benefits and other discrete items. Three Months Ended (in thousands) 2024 2023 Expected tax (benefit) expense at federal statutory $ (1,074) $ 299 State income tax (benefit) expense, net of federal tax effect (262) 77 Excess tax deficiency from share-based compensation and other expense, net 310 306 Income tax (benefit) expense $ (1,026) $ 682 The Company made no cash payments and received no cash refunds for income taxes for the three months ended March 31, 2024. The Company received $25.0 million in cash refunds for income taxes for the three months ended March 31, 2023. |
Stock Compensation and Earnings
Stock Compensation and Earnings (Loss) per Share | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation and Earnings (Loss) per Share | Stock Compensation and Earnings (Loss) per Share Activity related to the Company’s restricted stock units (“RSUs”) was as follows: (in thousands, except weighted average grant price) Number of Shares Weighted Average Grant Price Outstanding awards, December 31, 2023 825 $ 21.16 Granted 334 $ 20.64 Vested (247) $ 22.13 Forfeited — $ — Outstanding awards, March 31, 2024 912 $ 20.73 The total fair value of RSUs vested was $4.9 million during the three months ended March 31, 2024. Activity related to the Company’s Relative Total Shareholder Return RSUs (“RTSRs”) was as follows: (in thousands, except weighted average grant price) Number of Shares Weighted Average Grant Price Outstanding awards, December 31, 2023 293 $ 25.80 Granted 128 $ 22.30 Vested — $ — Forfeited — $ — Outstanding awards, March 31, 2024 421 $ 24.74 Stock-based compensation expense was as follows: Three Months Ended (in thousands) 2024 2023 Stock compensation expense $ 4,135 $ 3,852 Capitalized stock compensation (169) (135) Stock compensation expense, net $ 3,966 $ 3,717 As of March 31, 2024, there was $13.8 million of total unrecognized compensation cost related to non-vested RSUs and RTSRs which is expected to be recognized over weighted average period of 2.3 years. We utilize the treasury stock method to calculate the impact on diluted earnings (loss) per share that potentially dilutive stock-based compensation awards have. The following table indicates the computation of basic and diluted earnings (loss) per share: Three Months Ended (in thousands, except per share amounts) 2024 2023 Calculation of net income per share: (Loss) income from continuing operations $ (4,090) $ 741 Total income from discontinued operations, net of tax 218,786 1,325 Net income $ 214,696 $ 2,066 Basic weighted average shares outstanding 50,520 50,291 Basic net (loss) income per share - continuing operations $ (0.08) $ 0.01 Basic net income per share - discontinued operations 4.33 0.03 Basic net income per share $ 4.25 $ 0.04 Effect of stock-based compensation awards outstanding: Basic weighted average shares outstanding 50,520 50,291 Effect from dilutive shares and options outstanding 491 221 Diluted weighted average shares outstanding 51,011 50,512 Diluted net (loss) income per share - continuing operations $ (0.08) $ 0.01 Diluted net income per share - discontinued operations 4.29 0.03 Diluted net income per share $ 4.21 $ 0.04 There were approximately 462,000 and 478,000 anti-dilutive equity awards outstanding during the three months ended March 31, 2024 and 2023, respectively. |
Government Grants
Government Grants | 3 Months Ended |
Mar. 31, 2024 | |
Government Assistance [Abstract] | |
Government Grants | Government Grants During the three months ended March 31, 2024, Shentel was awarded an additional grant of $0.6 million to strategically expand the Company’s broadband network in order to provide broadband services to unserved residences. The Company recognizes grant receivables at the time it becomes probable that the Company will be eligible to receive the grant, which is estimated to correspond with the date when specified build-out milestones are achieved. As a result of these programs, the Company received $2.7 million in cash reimbursements during the three months ended March 31, 2024 and had approximately $2.8 million and $1.9 million in accounts receivable as of March 31, 2024 and December 31, 2023, respectively. The Company did not recognize any material amounts under these programs during the three months ended March 31, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are committed to make payments to satisfy our lease liabilities. The scheduled payments under those obligations are summarized in Note 7, Leases . We also have outstanding unconditional purchase commitments to procure marketing services and IT software licenses through 2027. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations As discussed in Note 1, Basis of Presentation and Other Information above, t he Tower Transaction represented a strategic shift in the Company’s business and the Tower Portfolio has been reclassified as a discontinued operation. As a result, for all periods presented, the assets and liabilities that transferred in the Tower Transaction disposal group are presented as held for sale in our unaudited condensed consolidated balance sheets , and operating results and cash flows related to the Tower Portfolio were reflected as a discontinued operations in our unaudited condensed consolidated statements of comprehensive income and unaudited condensed consolidated statements of cash flows . The carrying amounts of the major classes of assets and liabilities, classified as held for sale in the unaudited condensed consolidated balance sheets, were as follows: (in thousands) December 31, ASSETS Property, plant and equipment, net $ 29,162 Operating lease right-of-use assets 37,616 Deferred charges and other assets 2,137 Noncurrent assets held for sale $ 68,915 LIABILITIES Accrued liabilities and other current liabilities $ 3,602 Current liabilities held for sale $ 3,602 Deferred income taxes $ 2,483 Asset retirement obligations 9,516 Non-current operating lease liabilities 41,173 Other liabilities 3,524 Noncurrent liabilities held for sale $ 56,696 Income from discontinued operations, net of tax in the unaudited condensed consolidated statements of comprehensive income consist of the following for the periods ended: (in thousands) Three Months Ended 2024 2023 Service revenue and other $ 4,542 $ 4,576 Operating expenses: Cost of services 1,059 1,191 Selling, general and administrative 572 450 Depreciation and amortization 222 513 Total operating expenses 1,853 2,154 Operating income 2,689 2,422 Other income: Gain on sale of disposition of Tower Portfolio 294,250 — Income before income taxes 296,939 2,422 Income tax expense 78,153 1,097 Income from discontinued operations, net of tax $ 218,786 $ 1,325 Consummation of the sale triggered the recognition of approximately $4.4 million of incremental transaction costs during the three months ended March 31, 2024 , for contingent deal advisory fees and legal expenses, which are netted against the gain on sale of disposition of Tower Portfolio. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Horizon Transaction On April 1, 2024 (the “Closing Date”), Shentel completed its previously announced acquisition of Horizon Acquisition Parent LLC, a Delaware limited liability company (“Horizon”). On the Closing Date, Shentel acquired 100% of the outstanding equity interests of Horizon in exchange for (i) issuing 4,100,375 shares of Shentel’s common stock to a selling shareholder of Horizon; and (ii) paying $305 million in cash consideration to the other sellers and certain third parties, including Horizon’s existing lenders to discharge debt (collectively, the “Horizon Transaction”). The Horizon selling shareholder has agreed to an investor rights agreement with the Company that includes among other provision, a one year lockup period of common shares received. In addition, Shentel paid certain sellers an additional amount of approximately $39 million based on Horizon’s capital expenditures funded by capital contributions of such Sellers between July 1, 2023 and the Closing Date, plus interest in the amount of 6.00% per annum. Shentel is in the process of finalizing its evaluation of the tangible and intangible assets acquired and liabilities assumed, as well as the initial purchase price allocation as of the acquisition date, including the determination of any resulting goodwill; therefore, this information cannot be provided at this time. Series A Preferred Stock Contemporaneously with the Horizon Transaction, Shentel and Shentel Broadband Holding Inc., a wholly-owned subsidiary of Shentel (“Shentel Broadband”), entered into an investment agreement (the “Investment Agreement”) with a third party (the “Investor”). Subject to the terms and conditions set forth in the Investment Agreement, on the Closing Date, Shentel Broadband issued 81,000 shares of Shentel Broadband’s 7% Series A Participating Exchangeable Perpetual Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), at a purchase price of $1,000 per share in exchange for $81 million in cash. The Series A Preferred Stock is exchangeable at the option of the Investor in certain circumstances for shares of Common Stock at an exchange price of $24.50 per share (as it may be adjusted pursuant to the terms of the Investment Agreement, the “Exchange Price”). As a condition to closing the transactions contemplated by the Investment Agreement, Shentel completed a corporate reorganization of Shentel’s subsidiaries (the “Reorganization”). As a result of the Reorganization effected on the Closing Date, Shentel Broadband, both directly and through its subsidiaries, holds substantially all of the operating assets of Shentel. On the Closing Date, Shentel Broadband filed a certificate of designations with the Secretary of State of the State of Delaware authorizing 100,000 shares of Series A Preferred Stock and setting forth the powers, designations, preferences, rights, qualifications, limitations and restrictions of the Series A Preferred Stock (the “Certificate of Designations”). The Series A Preferred Stock ranks senior to Shentel’s Common Stock with respect to the payment of dividends and with respect to the distribution of assets upon Shentel Broadband’s liquidation, dissolution or winding up. Dividends on the Series A Preferred Stock accrue at 7% per annum compounded and payable quarterly in arrears, and, at Shentel’s option, may be paid in cash or in kind (such dividends paid in kind, “PIK Dividends”). The PIK Dividend rate is subject to increase to 8.5% and 10% after the fifth and seventh anniversaries of the Closing Date, respectively, to the extent any dividends accrued during the period from and including such anniversary dates are paid in the form of PIK Dividends. Beginning two years after the Closing Date, Shentel may require the Investor to exchange the Series A Preferred Stock for shares of Common Stock if the price per share of the Common Stock exceeds 125% of the Exchange Price, subject to certain conditions. After five years, Shentel may redeem all of the Series A Preferred Stock for the greater of (i) $1,000 per share, plus (a) any accrued PIK Dividend amount and (b) accrued and unpaid dividends to, but excluding the redemption date (to the extent such accrued and unpaid dividends are not included in such PIK Dividend amount), and (ii) the value of the shares of Common Stock for which such Series A Preferred Stock are exchangeable. Under the terms of the Investment Agreement, the Investor has the right to nominate a director to the Board so long as the Investor beneficially owns at least 7.5% of Shentel’s outstanding Common Stock (including on an as exchanged basis with respect to the Series A Preferred Stock). So long as the Investor beneficially owns at least 7.5% of Shentel’s outstanding Common Stock (including on an as exchanged basis with respect to the Series A Preferred Stock), the Investor is subject to certain standstill provisions and voting covenants and has certain other rights with respect to the shares of Series A Preferred Stock, including, among others, pre-emptive, information and participation rights. The shares of Series A Preferred Stock are subject to a lock-up until the first anniversary of the Closing Date and are subject to certain other transfer restrictions. Amendment No. 3 to Credit Agreement On April 1, 2024, Shentel entered into Amendment No. 3 to Credit Agreement, Incremental Term Loan Funding Agreement, Joinder and Assignment and Assumption (the “Third Amendment”) to its existing Credit Agreement, dated as of July 1, 2021, with various financial institutions party thereto (the “Lenders”) and CoBank, ACB, as administrative agent for the Lenders (as previously amended by Amendment No. 1 to Credit Agreement, dated as of May 17, 2023, and Consent and Amendment No. 2 to Credit Agreement, dated October 24, 2023, the “Credit Agreement”). The Third Amendment provides for, among other things, incremental delay draw term loan commitments under the Credit Agreement in an aggregate amount equal to $225 million and an increase in the revolving commitment under the Credit Agreement in an amount equal to $50 million. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 214,696 | $ 2,066 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Oth_2
Basis of Presentation and Other Information (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Sale of Shentel’s Tower portfolio | Sale of Shentel’s Tower Portfolio On March 29, 2024, Shenandoah Mobile, LLC, a wholly-owned subsidiary of Shenandoah Telecommunications Company, completed the initial closing of its previously disclosed sale of substantially all of Shentel’s tower portfolio and operations (“Tower Portfolio”) to Vertical Bridge Holdco, LLC for $309.9 million (the “Tower Transaction”). The Company received $305.8 million, net of certain transaction costs at the time of the initial closing. At the initial close, the Company conveyed sites representing approximately 99.5% of the tower portfolio value. The Company expects to convey the remaining tower sites in the portfolio by the end of March 2025. The Tower Transaction was completed pursuant to the terms of a Purchase and Sale Agreement, dated February 29, 2024, as amended by Amendment No. 1 to the Purchase and Sale Agreement, dated March 29, 2024. The Tower Portfolio represented substantially all of the assets and operations in Shentel’s previously reported Tower Reporting Segment and the Tower Transaction represented a strategic shift in the Company’s business. Consequently, the Tower Portfolio has been reclassified as a discontinued operation. For all periods presented, the assets and liabilities that transferred in the Tower Transaction (the “disposal group”) are presented as held for sale in our unaudited condensed consolidated balance sheets , and operating results and cash flows related to the Tower Portfolio were reflected as a discontinued operations in our unaudited condensed consolidated statements of comprehensive income and unaudited condensed consolidated statements of cash flows . Refer to Note 14, Discontinued Operations for more information regarding the presentation of the disposal group in the Company’s financial statements. As a result of the sale of the Tower Portfolio, the Company has one reportable segment. Consequently, segment reporting previously disclosed is no longer applicable. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards There have been no material 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 Annual Report on Form 10-K for its fiscal year ended December 31, 2023, that would be expected to impact the Company. |
Investments | SERP investments at fair value: The fair value of the SERP investments are based on unadjusted quoted prices in active markets and are classified as Level 1 of the fair value hierarchy. Cost method investments |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenues by Activity Type | The Company’s revenues by activity type are as follows: Three Months Ended (in thousands) 2024 2023 Residential & SMB - Cable Markets $ 44,370 $ 44,756 Residential & SMB - Glo Fiber Markets 12,118 7,003 Commercial Fiber 9,377 11,698 RLEC & Other 3,383 3,708 Service revenue and other $ 69,248 $ 67,165 |
Schedule of Amortized and Capitalized Contract Cost | The following tables present the activity of current and non-current contract assets: Three Months Ended (in thousands) 2024 2023 Beginning Balance $ 8,633 $ 8,646 Commission payments 851 891 Contract asset amortization (717) (781) Ending Balance $ 8,767 $ 8,756 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments [Abstract] | |
Schedule of Other Investments | Investments consist of the following: (in thousands) March 31, December 31, SERP investments at fair value $ 2,467 $ 2,290 Cost method investments 10,708 10,675 Equity method investments 233 233 Total investments $ 13,408 $ 13,198 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following: ($ in thousands) Estimated Useful Lives March 31, December 31, Land $ 3,671 $ 3,671 Land improvements 10 years 4,448 4,448 Buildings and structures 10 - 45 years 43,027 42,871 Cable and fiber 15 - 30 years 833,360 799,612 Equipment and software 4 - 8 years 348,677 331,595 Plant in service 1,233,183 1,182,197 Plant under construction 156,513 145,623 Total property, plant and equipment 1,389,696 1,327,820 Less: accumulated depreciation and amortization (493,488) (477,483) Property, plant and equipment, net $ 896,208 $ 850,337 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Resulting from Acquisition | Goodwill and intangible assets consist of the following: March 31, 2024 December 31, 2023 (in thousands) Gross Accumulated Amortization and Other Net Gross Accumulated Amortization and Other Net Goodwill $ 3,244 $ — $ 3,244 $ 3,244 $ — $ 3,244 Indefinite-lived intangibles: Cable franchise rights 64,334 — 64,334 64,334 — 64,334 FCC Spectrum licenses 12,122 — 12,122 12,122 — 12,122 Railroad crossing rights and other 300 — 300 217 — 217 Total indefinite-lived intangibles 76,756 — 76,756 76,673 — 76,673 Finite-lived intangibles: Subscriber relationships 28,425 (27,485) 940 28,425 (27,370) 1,055 Other intangibles 510 (367) 143 510 (359) 151 Total finite-lived intangibles 28,935 (27,852) 1,083 28,935 (27,729) 1,206 Total goodwill and intangible assets $ 108,935 $ (27,852) $ 81,083 $ 108,852 $ (27,729) $ 81,123 |
Schedule of Finite-Lived Intangible Assets | Goodwill and intangible assets consist of the following: March 31, 2024 December 31, 2023 (in thousands) Gross Accumulated Amortization and Other Net Gross Accumulated Amortization and Other Net Goodwill $ 3,244 $ — $ 3,244 $ 3,244 $ — $ 3,244 Indefinite-lived intangibles: Cable franchise rights 64,334 — 64,334 64,334 — 64,334 FCC Spectrum licenses 12,122 — 12,122 12,122 — 12,122 Railroad crossing rights and other 300 — 300 217 — 217 Total indefinite-lived intangibles 76,756 — 76,756 76,673 — 76,673 Finite-lived intangibles: Subscriber relationships 28,425 (27,485) 940 28,425 (27,370) 1,055 Other intangibles 510 (367) 143 510 (359) 151 Total finite-lived intangibles 28,935 (27,852) 1,083 28,935 (27,729) 1,206 Total goodwill and intangible assets $ 108,935 $ (27,852) $ 81,083 $ 108,852 $ (27,729) $ 81,123 |
Other Assets and Accrued Liab_2
Other Assets and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Assets | Prepaid expenses and other, classified as current assets, included the following: (in thousands) March 31, December 31, Prepaid maintenance expenses $ 7,365 $ 5,157 Broadband contract acquisition costs 2,757 2,675 Interest rate swaps 2,626 1,443 Other 2,277 2,507 Prepaid expenses and other $ 15,025 $ 11,782 |
Schedule of Other Assets, Noncurrent | Deferred charges and other assets, classified as long-term assets, included the following: (in thousands) March 31, December 31, Broadband contract acquisition costs $ 6,010 $ 5,958 Interest rate swaps 1,735 798 Prepaid expenses and other 7,141 4,805 Deferred charges and other assets $ 14,886 $ 11,561 |
Summary of Accrued Liabilities and Other | Accrued liabilities and other, classified as current liabilities, included the following: (in thousands) March 31, December 31, Accrued programming costs $ 3,624 $ 3,209 Other current liabilities 7,379 4,538 Accrued liabilities and other $ 11,003 $ 7,747 |
Schedule of Other Noncurrent Liabilities | Other liabilities, classified as long-term liabilities, included the following: (in thousands) March 31, December 31, Noncurrent portion of deferred lease revenue $ 14,346 $ 14,670 Noncurrent portion of financing leases 1,306 1,395 Other 629 847 Other liabilities $ 16,281 $ 16,912 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Components of Lease Costs | The components of lease costs were as follows: Classification Three Months Ended (in thousands) 2024 2023 Finance lease cost Amortization of leased assets Depreciation $ 119 $ 119 Interest on lease liabilities Interest expense 19 20 Operating lease cost Operating expense 1 736 856 Lease cost $ 874 $ 995 _________________________________________ (1) Operating lease expense is presented in cost of services or selling, general and administrative expense based on the use of the relevant facility. Other information related to operating and finance leases was as follows: March 31, December 31, Operating leases Weighted average remaining lease term (years) 10.4 7.1 Weighted average discount rate 5.8 % 5.0 % Finance leases Weighted average remaining lease term (years) 12.3 12.3 Weighted average discount rate 5.2 % 5.2 % Three Months Ended (in thousands) 2024 2023 Cash paid for operating lease liabilities $ 765 $ 877 Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases) 1,737 1,493 |
Schedule of Expected Maturity of Lease Liabilities, Operating | The following table summarizes the expected maturity of lease liabilities as of March 31, 2024: (in thousands) Operating Leases Finance Leases Total 2024 (remainder of the year) $ 1,893 $ 73 $ 1,966 2025 2,643 180 2,823 2026 1,841 153 1,994 2027 979 155 1,134 2028 698 158 856 2029 and thereafter 7,752 1,201 8,953 Total lease payments 15,806 1,920 17,726 Less: Interest (5,178) (507) (5,685) Present value of lease liabilities $ 10,628 $ 1,413 $ 12,041 |
Schedule of Expected Maturity of Lease Liabilities, Financing | The following table summarizes the expected maturity of lease liabilities as of March 31, 2024: (in thousands) Operating Leases Finance Leases Total 2024 (remainder of the year) $ 1,893 $ 73 $ 1,966 2025 2,643 180 2,823 2026 1,841 153 1,994 2027 979 155 1,134 2028 698 158 856 2029 and thereafter 7,752 1,201 8,953 Total lease payments 15,806 1,920 17,726 Less: Interest (5,178) (507) (5,685) Present value of lease liabilities $ 10,628 $ 1,413 $ 12,041 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | (in thousands) March 31, December 31, Term loan A-1 $ 149,063 $ 150,000 Term loan A-2 149,625 150,000 Total debt 298,688 300,000 Less: unamortized loan fees (93) (101) Total debt, net of unamortized loan fees $ 298,595 $ 299,899 |
Maturities of Long-term Debt | The following table summarizes the expected payments of Shentel’s outstanding borrowings as of March 31, 2024: (in thousands) Amount 2024 $ 5,731 2025 8,568 2026 138,827 2027 1,450 2028 144,112 Total $ 298,688 |
Interest Income and Interest Expense Disclosure | Interest expense recorded in Shentel’s unaudited condensed consolidated statements of comprehensive income consists of the following: Three Months Ended (in thousands) 2024 2023 Interest expense $ 5,383 $ 1,463 Less: capitalized interest (1,307) (1,071) Interest expense, net of capitalized interest $ 4,076 $ 392 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments Fair Value | The table below presents the fair value of the Swaps as well as their classification in the unaudited condensed consolidated balance sheets. The fair value of these instruments was estimated using an income approach and observable market inputs (Level 2): (in thousands) March 31, December 31, Balance sheet line item of derivative financial instruments: Prepaid expenses and other $ 2,626 $ 1,443 Deferred charges and other assets 1,735 798 Total derivatives designated as hedging instruments $ 4,361 $ 2,241 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below summarizes changes in accumulated other comprehensive income by component: (in thousands) Gain on Swaps Income tax expense Accumulated Other Comprehensive Income, net of taxes Balance, December 31, 2023 $ 2,241 $ (573) $ 1,668 Net change in unrealized gain 2,120 (526) 1,594 Balance, March 31, 2024 $ 4,361 $ (1,099) $ 3,262 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Income Taxes | The effective tax rates for the three and three months ended March 31, 2024 and 2023, differ from the statutory U.S. federal income tax rate of 21% primarily due to the state income taxes, excess tax benefits and other discrete items. Three Months Ended (in thousands) 2024 2023 Expected tax (benefit) expense at federal statutory $ (1,074) $ 299 State income tax (benefit) expense, net of federal tax effect (262) 77 Excess tax deficiency from share-based compensation and other expense, net 310 306 Income tax (benefit) expense $ (1,026) $ 682 |
Stock Compensation and Earnin_2
Stock Compensation and Earnings (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of restricted stock shares activity | Activity related to the Company’s restricted stock units (“RSUs”) was as follows: (in thousands, except weighted average grant price) Number of Shares Weighted Average Grant Price Outstanding awards, December 31, 2023 825 $ 21.16 Granted 334 $ 20.64 Vested (247) $ 22.13 Forfeited — $ — Outstanding awards, March 31, 2024 912 $ 20.73 Activity related to the Company’s Relative Total Shareholder Return RSUs (“RTSRs”) was as follows: (in thousands, except weighted average grant price) Number of Shares Weighted Average Grant Price Outstanding awards, December 31, 2023 293 $ 25.80 Granted 128 $ 22.30 Vested — $ — Forfeited — $ — Outstanding awards, March 31, 2024 421 $ 24.74 |
Schedule of stock compensation expense | Stock-based compensation expense was as follows: Three Months Ended (in thousands) 2024 2023 Stock compensation expense $ 4,135 $ 3,852 Capitalized stock compensation (169) (135) Stock compensation expense, net $ 3,966 $ 3,717 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table indicates the computation of basic and diluted earnings (loss) per share: Three Months Ended (in thousands, except per share amounts) 2024 2023 Calculation of net income per share: (Loss) income from continuing operations $ (4,090) $ 741 Total income from discontinued operations, net of tax 218,786 1,325 Net income $ 214,696 $ 2,066 Basic weighted average shares outstanding 50,520 50,291 Basic net (loss) income per share - continuing operations $ (0.08) $ 0.01 Basic net income per share - discontinued operations 4.33 0.03 Basic net income per share $ 4.25 $ 0.04 Effect of stock-based compensation awards outstanding: Basic weighted average shares outstanding 50,520 50,291 Effect from dilutive shares and options outstanding 491 221 Diluted weighted average shares outstanding 51,011 50,512 Diluted net (loss) income per share - continuing operations $ (0.08) $ 0.01 Diluted net income per share - discontinued operations 4.29 0.03 Diluted net income per share $ 4.21 $ 0.04 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | The carrying amounts of the major classes of assets and liabilities, classified as held for sale in the unaudited condensed consolidated balance sheets, were as follows: (in thousands) December 31, ASSETS Property, plant and equipment, net $ 29,162 Operating lease right-of-use assets 37,616 Deferred charges and other assets 2,137 Noncurrent assets held for sale $ 68,915 LIABILITIES Accrued liabilities and other current liabilities $ 3,602 Current liabilities held for sale $ 3,602 Deferred income taxes $ 2,483 Asset retirement obligations 9,516 Non-current operating lease liabilities 41,173 Other liabilities 3,524 Noncurrent liabilities held for sale $ 56,696 Income from discontinued operations, net of tax in the unaudited condensed consolidated statements of comprehensive income consist of the following for the periods ended: (in thousands) Three Months Ended 2024 2023 Service revenue and other $ 4,542 $ 4,576 Operating expenses: Cost of services 1,059 1,191 Selling, general and administrative 572 450 Depreciation and amortization 222 513 Total operating expenses 1,853 2,154 Operating income 2,689 2,422 Other income: Gain on sale of disposition of Tower Portfolio 294,250 — Income before income taxes 296,939 2,422 Income tax expense 78,153 1,097 Income from discontinued operations, net of tax $ 218,786 $ 1,325 |
Basis of Presentation and Oth_3
Basis of Presentation and Other Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) segment | Mar. 29, 2024 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of reportable segments | segment | 1 | |
Discontinued Operations, Held-for-sale | Tower Business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sale proceeds | $ 309.9 | |
Proceeds from sale of real estate portfolio | $ 305.8 | |
Percentage of portfolio | 99.50% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Revenues By Activity Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Service revenue and other | $ 69,248 | $ 67,165 |
Residential & SMB - Cable Markets | ||
Disaggregation of Revenue [Line Items] | ||
Service revenue and other | 44,370 | 44,756 |
Residential & SMB - Glo Fiber Markets | ||
Disaggregation of Revenue [Line Items] | ||
Service revenue and other | 12,118 | 7,003 |
Commercial Fiber | ||
Disaggregation of Revenue [Line Items] | ||
Service revenue and other | 9,377 | 11,698 |
RLEC & Other | ||
Disaggregation of Revenue [Line Items] | ||
Service revenue and other | $ 3,383 | $ 3,708 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Weighted-average customer benefit period | 6 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 10 | |
Performance obligation period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 10 | |
Performance obligation period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 1 | |
Performance obligation period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 0.9 | |
Performance obligation period | 1 year |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Amortized and Capitalized Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Capitalized Contract Cost [Roll Forward] | ||
Beginning Balance | $ 8,633 | $ 8,646 |
Commission payments | 851 | 891 |
Contract asset amortization | (717) | (781) |
Ending Balance | $ 8,767 | $ 8,756 |
Investments - Other Investments
Investments - Other Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Investments [Abstract] | ||
SERP investments at fair value | $ 2,467 | $ 2,290 |
Cost method investments | 10,708 | 10,675 |
Equity method investments | 233 | 233 |
Total investments | $ 13,408 | $ 13,198 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||
SERP investments at fair value | $ 2,467 | $ 2,290 | |
CoBank | |||
Schedule of Equity Method Investments [Line Items] | |||
SERP investments at fair value | 10,100 | $ 10,100 | |
Other nonoperating income (expense) | $ 300 | $ 100 | |
Percentage of patronage credit paid in cash | 88% | ||
Percentage of patronage credit paid in share | 12% |
Property, Plant and Equipment -
Property, Plant and Equipment - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 1,389,696 | $ 1,327,820 |
Less: accumulated depreciation and amortization | (493,488) | (477,483) |
Property, plant and equipment, net | 896,208 | 850,337 |
Land | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 3,671 | 3,671 |
Land improvements | ||
Property, plant and equipment [Abstract] | ||
Estimated Useful Lives | 10 years | |
Total property, plant and equipment | $ 4,448 | 4,448 |
Buildings and structures | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 43,027 | 42,871 |
Buildings and structures | Minimum | ||
Property, plant and equipment [Abstract] | ||
Estimated Useful Lives | 10 years | |
Buildings and structures | Maximum | ||
Property, plant and equipment [Abstract] | ||
Estimated Useful Lives | 45 years | |
Cable and fiber | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 833,360 | 799,612 |
Cable and fiber | Minimum | ||
Property, plant and equipment [Abstract] | ||
Estimated Useful Lives | 15 years | |
Cable and fiber | Maximum | ||
Property, plant and equipment [Abstract] | ||
Estimated Useful Lives | 30 years | |
Equipment and software | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 348,677 | 331,595 |
Equipment and software | Minimum | ||
Property, plant and equipment [Abstract] | ||
Estimated Useful Lives | 4 years | |
Equipment and software | Maximum | ||
Property, plant and equipment [Abstract] | ||
Estimated Useful Lives | 8 years | |
Plant in service | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 1,233,183 | 1,182,197 |
Plant under construction | ||
Property, plant and equipment [Abstract] | ||
Total property, plant and equipment | $ 156,513 | $ 145,623 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Accounts payable | $ 50,281 | $ 53,546 | |
Depreciation and amortization | 17,300 | $ 15,100 | |
Goodwill | |||
Property, Plant and Equipment [Line Items] | |||
Accounts payable | $ 48,400 | $ 51,100 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizing intangibles | $ 76,756 | $ 76,673 |
Gross carrying amount | 28,935 | 28,935 |
Accumulated amortization and other | (27,852) | (27,729) |
Total | 1,083 | 1,206 |
Total intangible assets, gross carrying amount | 108,935 | 108,852 |
Intangible assets, net | 81,083 | 81,123 |
Subscriber relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 28,425 | 28,425 |
Accumulated amortization and other | (27,485) | (27,370) |
Total | 940 | 1,055 |
Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 510 | 510 |
Accumulated amortization and other | (367) | (359) |
Total | 143 | 151 |
Cable franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizing intangibles | 64,334 | 64,334 |
FCC Spectrum licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizing intangibles | 12,122 | 12,122 |
Railroad crossing rights and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Non-amortizing intangibles | 300 | 217 |
Goodwill | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill, gross | 3,244 | 3,244 |
Goodwill | $ 3,244 | $ 3,244 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0.1 | $ 0.1 |
Other Assets and Accrued Liab_3
Other Assets and Accrued Liabilities - Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Prepaid maintenance expenses | $ 7,365 | $ 5,157 |
Broadband contract acquisition costs | 2,757 | 2,675 |
Interest rate swaps | 2,626 | 1,443 |
Other | 2,277 | 2,507 |
Prepaid expenses and other | $ 15,025 | $ 11,782 |
Other Assets and Accrued Liab_4
Other Assets and Accrued Liabilities - Long-Term Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Broadband contract acquisition costs | $ 6,010 | $ 5,958 |
Interest rate swaps | 1,735 | 798 |
Prepaid expenses and other | 7,141 | 4,805 |
Deferred charges and other assets | $ 14,886 | $ 11,561 |
Other Assets and Accrued Liab_5
Other Assets and Accrued Liabilities - Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Accrued programming costs | $ 3,624 | $ 3,209 |
Other current liabilities | 7,379 | 4,538 |
Accrued liabilities and other | $ 11,003 | $ 7,747 |
Other Assets and Accrued Liab_6
Other Assets and Accrued Liabilities - Long Term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Other Liabilities Disclosure [Abstract] | ||
Noncurrent portion of deferred lease revenue | $ 14,346 | $ 14,670 |
Noncurrent portion of financing leases | 1,306 | 1,395 |
Other | 629 | 847 |
Other liabilities | $ 16,281 | $ 16,912 |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Amortization of leased assets | $ 119 | $ 119 |
Interest on lease liabilities | 19 | 20 |
Operating lease cost | 736 | 856 |
Lease cost | $ 874 | $ 995 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liability - Lessee (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Operating Leases | |
2024 (remainder of the year) | $ 1,893 |
2025 | 2,643 |
2026 | 1,841 |
2027 | 979 |
2028 | 698 |
2029 and thereafter | 7,752 |
Total lease payments | 15,806 |
Less: Interest | (5,178) |
Present value of lease liabilities | 10,628 |
Finance Leases | |
2024 (remainder of the year) | 73 |
2025 | 180 |
2026 | 153 |
2027 | 155 |
2028 | 158 |
2029 and thereafter | 1,201 |
Total lease payments | 1,920 |
Less: Interest | (507) |
Present value of lease liabilities | 1,413 |
Total | |
2024 (remainder of the year) | 1,966 |
2025 | 2,823 |
2026 | 1,994 |
2027 | 1,134 |
2028 | 856 |
2029 and thereafter | 8,953 |
Total lease payments | 17,726 |
Less: Interest | (5,685) |
Present value of lease liabilities | $ 12,041 |
Leases - Other Information Rela
Leases - Other Information Related to Operating and Finance Leases (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 10 years 4 months 24 days | 7 years 1 month 6 days |
Operating lease, weighted average discount rate, percent | 5.80% | 5% |
Finance lease, weighted average remaining lease term | 12 years 3 months 18 days | 12 years 3 months 18 days |
Finance lease, weighted average discount rate, percent | 5.20% | 5.20% |
Leases - Operating Lease (Detai
Leases - Operating Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Cash paid for operating lease liabilities | $ 765 | $ 877 |
Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modification of existing leases) | $ 1,737 | $ 1,493 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | 18 Months Ended | 48 Months Ended | ||
Jul. 01, 2021 | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2026 | Mar. 31, 2028 | |
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 6.93% | 6.95% | ||||
Term loan A-1 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 150,000,000 | |||||
Term of credit facility | 5 years | |||||
Term loan A-1 | Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Quarterly principal payment percentage | 0.63% | 1.25% | ||||
Term loan A-1 | Secured Overnight Financing Rate (SOFR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.60% | |||||
Term loan A-1 | LIBOR Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% | |||||
Term loan A-2 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 150,000,000 | |||||
Term of credit facility | 7 years | |||||
Term loan A-2 | Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Quarterly principal payment percentage | 0.25% | |||||
Term loan A-2 | Secured Overnight Financing Rate (SOFR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.60% | |||||
Term loan A-2 | LIBOR Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 100,000,000 | |||||
Term of credit facility | 5 years |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Total debt | $ 298,688 | $ 300,000 |
Less: unamortized loan fees | (93) | (101) |
Total debt, net of unamortized loan fees | 298,595 | 299,899 |
Term loan A-1 | ||
Debt Instrument [Line Items] | ||
Total debt | 149,063 | 150,000 |
Term loan A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | $ 149,625 | $ 150,000 |
Debt - Maturities of Long-term
Debt - Maturities of Long-term Debt (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Maturities of Long-term Debt [Abstract] | |
2024 | $ 5,731 |
2025 | 8,568 |
2026 | 138,827 |
2027 | 1,450 |
2028 | 144,112 |
Total debt, net of unamortized loan fees | $ 298,688 |
Debt- Interest Expense (Details
Debt- Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 5,383 | $ 1,463 |
Less: capitalized interest | (1,307) | (1,071) |
Interest expense | $ 4,076 | $ 392 |
Derivatives and Hedging - Narra
Derivatives and Hedging - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Jun. 30, 2023 | |
Derivatives, Fair Value [Line Items] | ||
Unrealized gain (loss) on derivatives, net | $ 0 | |
Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, variable interest rate | 2.90% | |
Payments for derivative instruments | $ 150,000 | |
Expected outstanding debt | 50% |
Derivatives and Hedging - Sched
Derivatives and Hedging - Schedule of Derivative Instruments (Fair Value) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Derivatives, Fair Value [Line Items] | ||
Total derivatives designated as hedging instruments | $ 4,361 | $ 2,241 |
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Total derivatives designated as hedging instruments | 2,626 | 1,443 |
Designated as Hedging Instrument | Deferred Charges and Other Assets, Net | ||
Derivatives, Fair Value [Line Items] | ||
Total derivatives designated as hedging instruments | $ 1,735 | $ 798 |
Derivatives and Hedging - Accum
Derivatives and Hedging - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 652,670 | $ 638,007 |
Unrealized gain on interest rate hedge, net of tax | 1,594 | 0 |
Ending balance | 871,643 | 642,780 |
Gain on Swaps | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 2,241 | |
Unrealized gain on interest rate hedge, net of tax | 2,120 | |
Ending balance | 4,361 | |
Income tax expense | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (573) | |
Unrealized gain on interest rate hedge, net of tax | (526) | |
Ending balance | (1,099) | |
Accumulated Other Comprehensive Income | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 1,668 | 0 |
Ending balance | $ 3,262 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Expected tax (benefit) expense at federal statutory | $ (1,074) | $ 299 |
State income tax (benefit) expense, net of federal tax effect | (262) | 77 |
Excess tax deficiency from share-based compensation and other expense, net | 310 | 306 |
Income tax (benefit) expense | $ (1,026) | $ 682 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax refunds received, net | $ 0 | $ 25 |
Stock Compensation and Earnin_3
Stock Compensation and Earnings (Loss) per Share - RSU & RTSR (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted Stock Units (RSUs) | |
Number of Shares | |
Outstanding awards (in shares) | shares | 825 |
Granted (in shares) | shares | 334 |
Vested (in shares) | shares | (247) |
Forfeited (in shares) | shares | 0 |
Outstanding awards (in shares) | shares | 912 |
Weighted Average Grant Price | |
Outstanding awards (in usd per share) | $ / shares | $ 21.16 |
Granted (in usd per share) | $ / shares | 20.64 |
Vested (in usd per share) | $ / shares | 22.13 |
Forfeited (in usd per share) | $ / shares | 0 |
Outstanding awards (in usd per share) | $ / shares | $ 20.73 |
Relative Total Shareholder Return Awards | |
Number of Shares | |
Outstanding awards (in shares) | shares | 293 |
Granted (in shares) | shares | 128 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding awards (in shares) | shares | 421 |
Weighted Average Grant Price | |
Outstanding awards (in usd per share) | $ / shares | $ 25.80 |
Granted (in usd per share) | $ / shares | 22.30 |
Vested (in usd per share) | $ / shares | 0 |
Forfeited (in usd per share) | $ / shares | 0 |
Outstanding awards (in usd per share) | $ / shares | $ 24.74 |
Stock Compensation and Earnin_4
Stock Compensation and Earnings (Loss) per Share - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation, nonvested awards, compensation cost not yet recognized | $ 13.8 | |
Compensation, nonvested awards, cost not yet recognized, period for recognition | 2 years 3 months 18 days | |
Anti-dilutive awards outstanding (fewer than)(in shares) | 462,000 | 478,000 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of awards vested in period | $ 4.9 |
Stock Compensation and Earnin_5
Stock Compensation and Earnings (Loss) per Share - Schedule of Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Stock compensation expense | $ 4,135 | $ 3,852 |
Capitalized stock compensation | (169) | (135) |
Stock compensation expense, net | $ 3,966 | $ 3,717 |
Stock Compensation and Earnin_6
Stock Compensation and Earnings (Loss) per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
(Loss) income from continuing operations | $ (4,090) | $ 741 |
Income from discontinued operations, net of tax | 218,786 | 1,325 |
Net income | $ 214,696 | $ 2,066 |
Weighted average shares outstanding, basic (in shares) | 50,520 | 50,291 |
Basic net (loss) income per share - continuing operations (in dollars per share) | $ (0.08) | $ 0.01 |
Basic net income per share - discontinued operations (in dollars per share) | 4.33 | 0.03 |
Basic net income per share (in dollars per share) | $ 4.25 | $ 0.04 |
Effect from dilutive shares and options outstanding (in shares) | 491 | 221 |
Diluted weighted average shares (in shares) | 51,011 | 50,512 |
Diluted net income (loss) per share - continuing operations (in dollars per share) | $ (0.08) | $ 0.01 |
Diluted net income per share - discontinued operations (in dollars per share) | 4.29 | 0.03 |
Diluted net income per share (in dollars per share) | $ 4.21 | $ 0.04 |
Government Grants (Details)
Government Grants (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Government Assistance [Abstract] | |||
Increase (decrease) in grants receivable | $ 600 | ||
Government grants received | 2,710 | $ 0 | |
Grants receivable | $ 2,800 | $ 1,900 |
Discontinued Operations - Carry
Discontinued Operations - Carrying Amounts of the Major Classes of Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Non-current assets held for sale | $ 0 | $ 68,915 |
LIABILITIES | ||
Current liabilities held for sale | 0 | 3,602 |
Non-current liabilities held for sale | $ 0 | 56,696 |
Discontinued Operations, Held-for-sale | ||
ASSETS | ||
Property, plant and equipment, net | 29,162 | |
Operating lease right-of-use assets | 37,616 | |
Deferred charges and other assets | 2,137 | |
Non-current assets held for sale | 68,915 | |
LIABILITIES | ||
Accrued liabilities and other current liabilities | 3,602 | |
Current liabilities held for sale | 3,602 | |
Deferred income taxes | 2,483 | |
Asset retirement obligations | 9,516 | |
Non-current operating lease liabilities | 41,173 | |
Other liabilities | 3,524 | |
Non-current liabilities held for sale | $ 56,696 |
Discontinued Operations - Incom
Discontinued Operations - Income (Loss) From Discontinued Operations (Details) - Discontinued Operations, Held-for-sale - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating expenses: | ||
Selling, general and administrative | $ 572 | $ 450 |
Depreciation and amortization | 222 | 513 |
Total operating expenses | 1,853 | 2,154 |
Operating income | 2,689 | 2,422 |
Other (expense) income: | ||
Gain on sale of disposition of Tower Portfolio | 294,250 | 0 |
Income before income taxes | 296,939 | 2,422 |
Income tax expense | 78,153 | 1,097 |
Income from discontinued operations, net of tax | 218,786 | 1,325 |
Service revenue and other | ||
Revenues: | ||
Revenue | 4,542 | 4,576 |
Cost of services | ||
Operating expenses: | ||
Cost of services and cost of goods sold | $ 1,059 | $ 1,191 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Discontinued Operations, Held-for-sale | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Incremental selling costs | $ 4.4 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Thousands | Apr. 01, 2024 USD ($) $ / shares shares |
Revolving Credit Facility | |
Subsequent Event [Line Items] | |
Increase in maximum borrowing capacity | $ 50,000 |
Term Loan | |
Subsequent Event [Line Items] | |
Increase in maximum borrowing capacity | $ 225,000 |
Energy Capital Partners | |
Subsequent Event [Line Items] | |
Period for conversion of preferred stock | 2 years |
Preferred stock conversion common stock price trigger percentage | 125% |
Preferred stock redemption period | 5 years |
Energy Capital Partners | Shentel Broadband Holding Inc. | |
Subsequent Event [Line Items] | |
Percentage of shares owned | 7.50% |
Shentel Broadband Holding Inc. | Fifth Anniversary | |
Subsequent Event [Line Items] | |
Paid in kind dividend percentage | 8.50% |
Shentel Broadband Holding Inc. | Seventh Anniversary | |
Subsequent Event [Line Items] | |
Paid in kind dividend percentage | 10% |
Series A Preferred Stock | Shentel Broadband Holding Inc. | |
Subsequent Event [Line Items] | |
Dividend percentage | 7% |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 |
Preferred stock, shares authorized (in shares) | shares | 100,000 |
Series A Preferred Stock | Shentel Broadband Holding Inc. | Energy Capital Partners | |
Subsequent Event [Line Items] | |
Shares issued for acquisition (in shares) | shares | 81,000 |
Purchase price (in dollars per share) | $ / shares | $ 1,000 |
Value of shares issued for acquisition | $ 81,000 |
Conversion price per share (in dollars per share) | $ / shares | $ 24.50 |
Horizon Acquisition Parent LLC | |
Subsequent Event [Line Items] | |
Business acquisition, percentage of voting interests acquired | 100% |
Equity interest issued (in shares) | shares | 4,100,375 |
Cash consideration | $ 305,000 |
Horizon Transaction | |
Subsequent Event [Line Items] | |
Capital expenditure | $ 39,000 |
Percentage of interest on capital expenditures | 6% |
Lockup period | 1 year |