Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | NUVERA COMMUNICATIONS, INC. | |
Trading Symbol | NUVR | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 5,126,581 | |
Amendment Flag | false | |
Entity Central Index Key | 0000071557 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-3024 | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-0440990 | |
Entity Address, Address Line One | 27 North Minnesota Street | |
Entity Address, City or Town | New Ulm | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 56073 | |
City Area Code | 507 | |
Local Phone Number | 354-4111 | |
Entity Interactive Data Current | Yes | |
Title of 12(g) Security | Common Stock - $1.66 par value |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
OPERATING REVENUES: | ||||
Operating Revenues | $ 16,370,478 | $ 16,481,127 | $ 49,018,112 | $ 49,396,262 |
OPERATING EXPENSES: | ||||
Plant Operations (Excluding Depreciation and Amortization) | 3,590,491 | 3,677,595 | 11,512,927 | 10,770,036 |
Cost of Video | 2,346,037 | 2,505,185 | 7,229,269 | 7,604,067 |
Cost of Data | 1,280,342 | 997,843 | 3,673,237 | 3,098,866 |
Cost of Other Nonregulated Services | 485,149 | 393,212 | 1,275,125 | 1,181,518 |
Depreciation and Amortization | 3,949,978 | 3,520,963 | 11,371,459 | 10,512,317 |
Selling, General and Administrative | 2,372,515 | 2,264,090 | 7,608,787 | 7,571,025 |
Total Operating Expenses | 14,024,512 | 13,358,888 | 42,670,804 | 40,737,829 |
OPERATING INCOME | 2,345,966 | 3,122,239 | 6,347,308 | 8,658,433 |
OTHER INCOME (EXPENSE) | ||||
Interest Expense | (1,959,514) | (1,083,162) | (4,718,502) | (2,106,225) |
Interest/Dividend Income | 14,307 | 24,132 | 159,353 | 260,540 |
Interest During Construction | 243,113 | 106,229 | 439,356 | 199,069 |
Gain on Sale of Investments | (38,096) | 217,876 | 4,022,401 | 217,876 |
CoBank Patronage Dividends | 692,371 | 567,468 | ||
Other Investment Income | 65,269 | 144,140 | 216,256 | 431,517 |
Total Other Income (Expense) | (1,674,921) | (590,785) | 811,235 | (429,755) |
INCOME BEFORE INCOME TAXES | 671,045 | 2,531,454 | 7,158,543 | 8,228,678 |
INCOME TAXES EXPENSE | 187,875 | 708,806 | 2,004,386 | 2,304,023 |
NET INCOME | $ 483,170 | $ 1,822,648 | $ 5,154,157 | $ 5,924,655 |
NET INCOME PER SHARE | ||||
Basic (in Dollars per share) | $ 0.09 | $ 0.36 | $ 1.01 | $ 1.16 |
Diluted (in Dollars per share) | 0.09 | 0.36 | 1 | 1.16 |
DIVIDENDS PER SHARE (in Dollars per share) | $ 0 | $ 0.14 | $ 0.28 | $ 0.42 |
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||
Basic (in Shares) | 5,126,581 | 5,084,578 | 5,113,007 | 5,091,391 |
Diluted (in Shares) | 5,211,382 | 5,115,477 | 5,175,507 | 5,112,358 |
Voice Services [Member] | ||||
OPERATING REVENUES: | ||||
Operating Revenues | $ 1,363,543 | $ 1,404,890 | $ 3,969,394 | $ 4,321,047 |
Network Access [Member] | ||||
OPERATING REVENUES: | ||||
Operating Revenues | 876,186 | 1,190,870 | 2,926,937 | 3,685,145 |
Video Service [Member] | ||||
OPERATING REVENUES: | ||||
Operating Revenues | 3,005,010 | 3,126,733 | 9,120,164 | 9,446,613 |
Data Service [Member] | ||||
OPERATING REVENUES: | ||||
Operating Revenues | 6,881,965 | 6,797,329 | 20,573,084 | 20,288,217 |
ACAM/FUSF [Member] | ||||
OPERATING REVENUES: | ||||
Operating Revenues | 2,971,267 | 2,952,651 | 8,950,127 | 8,737,738 |
Other Non Regulated [Member] | ||||
OPERATING REVENUES: | ||||
Operating Revenues | $ 1,272,507 | $ 1,008,654 | $ 3,478,406 | $ 2,917,502 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 483,170 | $ 1,822,648 | $ 5,154,157 | $ 5,924,655 |
Other Comprehensive Gain (Loss): | ||||
Unrealized Gains (Losses) on Interest Rate Swaps | (125,051) | 765,646 | (222,693) | 3,239,407 |
Income Tax Expense (Benefit) Related to Unrealized Gains (Losses) on Interest Rate Swaps | 35,689 | (218,515) | 63,556 | (924,526) |
Other Comprehensive Gain (Loss): | (89,362) | 547,131 | (159,137) | 2,314,881 |
Comprehensive Income | $ 393,808 | $ 2,369,779 | $ 4,995,020 | $ 8,239,536 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash | $ 573,175 | $ 310,556 |
Receivables, Net of Allowance for Doubtful Accounts of $153,000 and $140,000 | 4,091,864 | 3,725,422 |
Income Taxes Receivable | 283,665 | |
Materials, Supplies, and Inventories | 39,237,118 | 23,617,800 |
Prepaid Expenses and Other Current Assets | 2,553,960 | 1,886,480 |
Total Current Assets | 46,456,117 | 29,823,923 |
INVESTMENTS & OTHER ASSETS: | ||
Goodwill | 49,903,029 | 49,903,029 |
Intangibles | 15,001,666 | 16,363,192 |
Other Investments | 8,415,582 | 11,016,246 |
Right of Use Asset | 1,276,743 | 1,341,029 |
Financial Derivative Instruments | 1,991,769 | 2,214,462 |
Other Assets | 889,708 | 461,445 |
Total Investments and Other Assets | 77,478,497 | 81,299,403 |
PROPERTY, PLANT & EQUIPMENT: | ||
Communications Plant | 259,579,160 | 219,891,050 |
Other Property & Equipment | 31,319,882 | 29,836,775 |
Video Plant | 18,437,925 | 16,096,032 |
Total Property, Plant and Equipment | 309,336,967 | 265,823,857 |
Less Accumulated Depreciation | 169,642,226 | 159,632,293 |
Net Property, Plant & Equipment | 139,694,741 | 106,191,564 |
TOTAL ASSETS | 263,629,355 | 217,314,890 |
CURRENT LIABILITIES: | ||
Current Portion of Long-Term Debt, Net of Unamortized Loan Fees | ||
Accounts Payable | 15,874,273 | 7,012,264 |
Accrued Income Taxes | 1,350,222 | |
Other Accrued Taxes | 189,031 | 243,965 |
Accrued Compensation | 1,977,903 | 2,051,316 |
Other Accrued Liabilities | 1,622,245 | 2,354,395 |
Total Current Liabilities | 21,013,674 | 11,661,940 |
LONG-TERM DEBT, Net of Unamortized Loan Fees | 111,805,495 | 78,552,197 |
NONCURRENT LIABILITIES: | ||
Loan Guarantees | 169,565 | |
Deferred Income Taxes | 22,673,974 | 22,737,530 |
Unrecognized Tax Benefit | 23,304 | 23,304 |
Other Accrued Liabilities | 1,322,867 | 1,588,502 |
Total Noncurrent Liabilities | 24,020,145 | 24,518,901 |
COMMITMENTS AND CONTINGENCIES: | ||
STOCKHOLDERS' EQUITY: | ||
Preferred Stock - $1.66 Par Value, 10,000,000 Shares Authorized, No Shares Issued and Outstanding | ||
Common Stock - $1.66 Par Value, 90,000,000 Shares Authorized, 5,126,581 and 5,093,213 Shares Issued and Outstanding | 8,544,302 | 8,488,689 |
Accumulated Other Comprehensive Gain | 1,423,318 | 1,582,455 |
Unearned Compensation | 79,750 | 79,892 |
Retained Earnings | 96,742,671 | 92,430,816 |
Total Stockholders' Equity | 106,790,041 | 102,581,852 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 263,629,355 | $ 217,314,890 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts (in Dollars) (in Dollars) | $ 153,000 | $ 140,000 |
Preferred stock par value (in Dollars per share) (in Dollars per share) | $ 1.66 | $ 1.66 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock par value (in Dollars per share) (in Dollars per share) | $ 1.66 | $ 1.66 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 5,126,581 | 5,093,213 |
Common stock, shares outstanding | 5,126,581 | 5,093,213 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 5,154,157 | $ 5,924,655 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation and Amortization | 11,526,448 | 10,627,533 |
Gains on Investments | (4,022,401) | (217,876) |
Undistributed Earnings of Other Equity Investments | (219,912) | (408,613) |
Noncash Patronage Refund | (123,745) | (133,467) |
Stock Issued in Lieu of Cash Payment | 373,175 | 300,507 |
Distributions from Equity Investments | 28,048 | 210,917 |
Stock-based Compensation | 172,820 | 81,273 |
Changes in Assets and Liabilities: | ||
Receivables | (259,621) | 130,198 |
Income Taxes Receivable | 283,665 | 1,405,622 |
Inventory for Resale | 30,767 | 13,252 |
Prepaid Expenses | (569,535) | (68,097) |
Other Assets | (451,967) | (11,588) |
Accounts Payable | (4,230) | 358,289 |
Accrued Income Taxes | 1,350,222 | 643,401 |
Other Accrued Taxes | (54,934) | (73,361) |
Other Accrued Liabilities | (906,890) | 1,154,325 |
Deferred Compensation | (100,022) | (30,098) |
Net Cash Provided by Operating Activities | 12,206,045 | 19,906,872 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to Property, Plant, and Equipment, Net | (33,397,721) | (22,407,662) |
Materials and Supplies for Construction | (17,827,735) | (12,319,553) |
Proceeds from Sale of Equity Investments | 5,876,305 | |
Other, Net | 216,511 | 7,304 |
Net Cash Used in Investing Activities | (45,132,640) | (34,719,911) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal Payments of Long-Term Debt | (57,330,775) | |
Loan Proceeds | 30,000,000 | 56,063,223 |
Loan Origination Fees | (17,811) | (1,055,773) |
Changes in Revolving Credit Facility | 3,116,119 | 22,216,303 |
Grants Received for Construction of Plant | 1,521,677 | 396,360 |
Repurchase of Common Stock | (3,187,500) | |
Dividends Paid | (1,430,771) | (2,132,089) |
Net Cash Provided by Financing Activities | 33,189,214 | 14,969,749 |
NET CHANGE IN CASH | 262,619 | 156,710 |
CASH at Beginning of Period | 310,556 | 2,306,149 |
CASH at End of Period | 573,175 | 2,462,859 |
Supplemental cash flow information: | ||
Cash paid for interest | 5,286,760 | 925,530 |
Net cash paid for income taxes | $ 370,500 | $ 255,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS` EQUITY (Unaudited) - USD ($) | Common Stock [Member] | AOCI Attributable to Parent [Member] | Unearned Compensation [Member] | Retained Earnings [Member] | Total |
BALANCE at Dec. 31, 2021 | $ 8,683,422 | $ (631,253) | $ 259,620 | $ 90,338,806 | $ 98,650,595 |
BALANCE (in Shares) at Dec. 31, 2021 | 5,210,053 | ||||
Directors' Stock Plan | $ 33,030 | 354,412 | 387,442 | ||
Directors' Stock Plan (in Shares) | 19,818 | ||||
Employee Stock Plan | $ 7,793 | 92,741 | 100,534 | ||
Employee Stock Plan (in Shares) | 4,676 | ||||
Restricted Stock Grant | 19,371 | 19,371 | |||
Non-Cash, Share-Based Compensation | 61,903 | 61,903 | |||
Exercise of RSU's | $ 52 | (667) | 615 | ||
Exercise of RSU's (in Shares) | 31 | ||||
Repurchase of Common Stock | $ (250,000) | (2,937,500) | (3,187,500) | ||
Repurchase of Common Stock (in Shares) | (150,000) | ||||
Net Income | 5,924,655 | 5,924,655 | |||
Dividends | (2,132,089) | (2,132,089) | |||
Unrealized Gain (Loss) on Interest Rate Swap | 2,314,881 | 2,314,881 | |||
BALANCE at Sep. 30, 2022 | $ 8,474,297 | 1,683,628 | 278,324 | 91,703,543 | 102,139,792 |
BALANCE (in Shares) at Sep. 30, 2022 | 5,084,578 | ||||
BALANCE at Dec. 31, 2021 | $ 8,683,422 | (631,253) | 259,620 | 90,338,806 | 98,650,595 |
BALANCE (in Shares) at Dec. 31, 2021 | 5,210,053 | ||||
BALANCE at Dec. 31, 2022 | $ 8,488,689 | 1,582,455 | 79,892 | 92,430,816 | 102,581,852 |
BALANCE (in Shares) at Dec. 31, 2022 | 5,093,213 | ||||
BALANCE at Jun. 30, 2022 | $ 8,474,297 | 1,136,497 | 272,234 | 90,530,833 | 100,413,861 |
BALANCE (in Shares) at Jun. 30, 2022 | 5,084,578 | ||||
Restricted Stock Grant | 34,882 | 34,882 | |||
Non-Cash, Share-Based Compensation | (28,792) | 61,903 | 33,111 | ||
Net Income | 1,822,648 | 1,822,648 | |||
Dividends | (711,841) | (711,841) | |||
Unrealized Gain (Loss) on Interest Rate Swap | 547,131 | 547,131 | |||
BALANCE at Sep. 30, 2022 | $ 8,474,297 | 1,683,628 | 278,324 | 91,703,543 | 102,139,792 |
BALANCE (in Shares) at Sep. 30, 2022 | 5,084,578 | ||||
BALANCE at Dec. 31, 2022 | $ 8,488,689 | 1,582,455 | 79,892 | 92,430,816 | 102,581,852 |
BALANCE (in Shares) at Dec. 31, 2022 | 5,093,213 | ||||
Directors' Stock Plan | $ 46,193 | 341,277 | 387,470 | ||
Directors' Stock Plan (in Shares) | 27,716 | ||||
Employee Stock Plan | $ 9,420 | 74,230 | 83,650 | ||
Employee Stock Plan (in Shares) | 5,652 | ||||
Restricted Stock Grant | (142) | (142) | |||
Non-Cash, Share-Based Compensation | 172,962 | 172,962 | |||
Net Income | 5,154,157 | 5,154,157 | |||
Dividends | (1,430,771) | (1,430,771) | |||
Unrealized Gain (Loss) on Interest Rate Swap | (159,137) | (159,137) | |||
BALANCE at Sep. 30, 2023 | $ 8,544,302 | 1,423,318 | 79,750 | 96,742,671 | 106,790,041 |
BALANCE (in Shares) at Sep. 30, 2023 | 5,126,581 | ||||
BALANCE at Jun. 30, 2023 | $ 8,544,302 | 1,512,680 | 78,231 | 96,188,831 | 106,324,044 |
BALANCE (in Shares) at Jun. 30, 2023 | 5,126,581 | ||||
Restricted Stock Grant | 1,519 | 1,519 | |||
Non-Cash, Share-Based Compensation | 70,670 | 70,670 | |||
Net Income | 483,170 | 483,170 | |||
Unrealized Gain (Loss) on Interest Rate Swap | (89,362) | (89,362) | |||
BALANCE at Sep. 30, 2023 | $ 8,544,302 | $ 1,423,318 | $ 79,750 | $ 96,742,671 | $ 106,790,041 |
BALANCE (in Shares) at Sep. 30, 2023 | 5,126,581 |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Business Description and Accounting Policies [Text Block] | Note 1 – Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements of Nuvera Communications, Inc. and its subsidiaries (Nuvera) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, rules and regulations of the Securities and Exchange Commission (SEC) and, where applicable, conform to the accounting principles as prescribed by federal and state telephone utility regulatory authorities. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted or condensed pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring accruals) considered necessary for the fair presentation of the financial statements and present fairly the results of operations, financial position and cash flows for the interim periods presented as required by Regulation S-X, Rule 10-01. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2022. The preparation of our financial statements requires our management to make estimates and judgements that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities at the date of the financial statements and during the reporting period. Actual results may differ from these estimates. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year as a whole or any other interim period. Our consolidated financial statements report the financial condition and results of operations for Nuvera and its subsidiaries in one business segment: the Communications Segment. Inter-company transactions have been eliminated from the consolidated financial statements. Revenue Recognition See Note 2 – “Revenue Recognition” for a discussion of our revenue recognition policies. Cost of Services (excluding depreciation and amortization) Cost of services includes all costs related to the delivery of communication services and products. These operating costs include all the costs of performing services and providing related products including engineering, network monitoring and transportation costs. Selling, General and Administrative Expenses Selling, general and administrative expenses include direct and indirect selling expenses, customer service, billing and collections, advertising and all other general and administrative costs associated with our operations. Depreciation and Amortization Expense We use the group life method (mass asset accounting) to depreciate the assets of our communications companies. Communications plant acquired in a given year is grouped into similar categories and depreciated over the remaining estimated useful life of the group. When an asset is retired, both the asset and the accumulated depreciation associated with that asset are removed from the books. Due to rapid changes in technology, selecting the estimated economic life of communications plant and equipment requires a significant amount of judgment. We periodically review data on expected utilization of new equipment, asset retirement activity and net salvage values to determine adjustments to our depreciation rates. In 2022, we accelerated depreciation on our copper networks as we transition to a new fiber-to-the-premise (FTTP) network. Other than this change, we have not made any other significant changes to the lives of these assets in the two-year period ended September 30, 2023. Depreciation expense was $10,009,933 and $9,048,064 for the nine months ended September 30, 2023, and 2022. The increase in depreciation expense in the first nine months of 2023 was primarily due to an increase in capital expenditures used to aid in our transition to a new advanced FTTP network. We amortize our definite-lived intangible assets over their estimated useful lives. Identifiable intangible assets that are subject to amortization are evaluated for impairment. Grant money received from governmental entities for reimbursement of capital expenditures is accounted for as a reduction from the cost of the asset. As the grant was to be used in the Company’s regulated network, the Company accounts for this funding as aid to construction as outlined in the Federal Communications Commission (FCC) Part 32 “Uniform System of Accounts for Telecommunications Companies.” Income Taxes The provision for income taxes consists of an amount for taxes currently payable and a provision for tax consequences deferred to future periods. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax basis. Significant components of our deferred taxes arise from differences (i) in the basis of property, plant and equipment due to the use of accelerated depreciation methods for tax purposes, as well as (ii) in partnership investments and intangible assets due to the difference between book and tax basis. Our effective income tax rate is normally higher than the United States tax rate due to state income taxes and permanent differences. We account for income taxes in accordance with GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. As required by GAAP, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. As of September 30, 2023, and December 31, 2022, we had $19,787 of unrecognized tax benefits that if recognized would affect the tax rate. We do not expect the total amount of unrecognized tax benefits to materially change over the next twelve months. We are primarily subject to United States, Minnesota, Iowa, Nebraska, North Dakota and Wisconsin income taxes. Tax years subsequent to 2018 remain open to examination by federal and state tax authorities. During the year ending December 31, 2022, we settled our examination by the State of Minnesota. The examination did not have a material effect on our financial statements. Our policy is to recognize interest and penalties related to income tax matters as income tax expense. As of September 30, 2023, and December 31, 2022, we had $3,518 of accrued interest or penalties that related to income tax matters. Earnings and Dividends Per Share The basic and diluted net income per share is calculated as follows: Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net Income $ 483,170 $ 483,170 $ 1,822,648 $ 1,822,648 $ 5,154,157 $ 5,154,157 $ 5,924,655 $ 5,924,655 Weighted-average common shares outstanding 5,126,581 5,211,382 5,084,578 5,115,477 5,113,007 5,175,507 5,091,391 5,112,358 Net income per share $ 0.09 $ 0.09 $ 0.36 $ 0.36 $ 1.01 $ 1.00 $ 1.16 $ 1.16 The weighted-average shares outstanding, basic and diluted, are calculate as follows: Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Weighted-average common shares outstanding $ 5,126,581 $ 5,126,581 $ 5,084,578 $ 5,084,578 $ 5,113,007 $ 5,113,007 $ 5,091,391 $ 5,091,391 Dilutive RSU's/Options - 84,801 - 30,899 - 62,500 - 20,967 Weighted-average common shares outstanding $ 5,126,581 $ 5,211,382 $ 5,084,578 $ 5,115,477 $ 5,113,007 $ 5,175,507 $ 5,091,391 $ 5,112,358 Nuvera’s Board of Directors (BOD) reviews quarterly dividend declarations based on our anticipated earnings, capital requirements and our operating and financial conditions. Recent Accounting Developments Effective January 1, 2022, we adopted Accounting Standards Update (ASU) No. 2021-10 “Disclosures by Business Entities about Government Assistance.” ASU 2021-10 requires disclosure by business entities of the types of government assistance received, the method of accounting for such assistance and the effects of the assistance on its financial statements. The adoption of this guidance did not have a material impact on our related disclosures. In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. During the quarter ended June 30, 2022, we novated a certain hedging relationship to one our interest rate swap agreements (IRSAs) by changing the reference rated from the London Inter-Bank Offered Rate to a secured overnight financing rate (SOFR). The amendment did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires entities to use a new forward-looking, expected loss model to estimate credit losses. It also requires additional disclosures relating to the credit quality of trade and other receivables, including information relating to management’s estimate of credit allowances. The Company is required to adopt ASU 2016-13 for fiscal periods beginning after December 15, 2022, including interim periods within that fiscal year. Early adoption as of December 15, 2018, is permitted. As of January 1, 2022, the Company adopted ASU 2016-13 and the adoption did not have a significant impact on our consolidated financial statements. We have reviewed all other significant newly issued accounting pronouncements and determined that they are either not applicable to our business or that no material effect is expected on our financial position and results of operations. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Note 2 – Revenue Recognition The Company recognizes revenue based on the following single principles-based, five-step model that is applied to all contracts with customers. These steps include (1) identify the contract(s) with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when each performance obligation is satisfied. Our revenue contracts with customers may include a promise or promises to deliver services such as broadband, video or voice services. Promised services are considered distinct as the customer can benefit from the services either on their own or together with other resources that are readily available to the customer and the Company’s promise to transfer service to the customer is separately identifiable from other promises in the contract. The Company accounts for services as separate performance obligations. Each service is considered a single performance obligation as it provides a series of distinct services that are substantially the same and have the same pattern of transfer. The transaction price is determined at contract inception and reflects the amount of consideration to which we expect to be entitled in exchange for transferring service to the customer. This amount is generally equal to the market price of the services promised in the contract and may include promotional or bundling discounts. The majority of our prices are based on tariffed rates filed with regulatory bodies or standard company price lists. The transaction price excludes amounts collected on behalf of third parties such as sales taxes and regulatory fees. Conversely, nonrefundable up-front fees, such as service activation and set-up fees, which are immaterial to our overall revenues, are included in the transaction price. In determining the transaction price, we consider our enforceable rights and obligations within the contract. We do not consider the possibility of a contract being cancelled, renewed or modified, which is consistent with Accounting Standards Codification (ASC) 606-10-32-4. The transaction price is allocated to each performance obligation based on the standalone selling price of the service, net of the related discount, as applicable. Revenue is recognized when performance obligations are satisfied by transferring service to the customer as described below. Significant Judgements The Company often provides multiple services to a customer. Provision of customer premise equipment (CPE) and additional service tiers may have a significant level of integration and interdependency with the subscription voice, video, Internet or connectivity services. Judgement is required to determine whether the provision of CPE, installation services and additional service tiers are considered distinct and accounted for separately, or not distinct and accounted for together with the subscription services. Allocation of the transaction price to the distinct performance obligations in bundled service subscriptions requires judgement. The transaction price for a bundle of services is frequently less than the sum of standalone selling prices of each individual service. Bundled discounts are allocated proportionally to the selling price of each individual service within the bundle. Standalone selling prices for the Company’s services are directly observable. Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the three months ended September 30, 2023, and 2022: Three Months Ended September 30, 2023 2022 Voice Service¹ $ 1,505,320 $ 1,550,057 Network Access¹ 909,502 1,224,952 Video Service¹ 3,005,010 3,126,733 Data Service¹ 6,327,829 6,209,861 Directory² 151,562 165,094 Other Contracted Revenue³ 653,417 683,973 Other⁴ 600,171 317,974 Revenue from customers 13,152,811 13,278,644 Subsidy and other revenue 3,217,667 3,202,483 Total revenue $ 16,370,478 $ 16,481,127 ¹ Month-to-Month contracts billed and cosumed in the same month. ² Directory revenue is contracted annually, however, this revenue is recognized ³ This includes long-term contracts where the revenue is recognized monthly ⁴ This includes CPE and other equipment sales. ⁵ This includes governmental subsidies and lease revenue outside the scope of ASC 606. For the three months ended September 30, 2023, approximately 76.68% of our total revenue was from month-to-month and other contracted revenue from customers. Approximately 19.65% of our total revenue was from revenue sources outside of the scope of ASC 606. The remaining 3.67% of total revenue was from other sources including CPE and equipment sales and installation. For the three months ended September 30, 2022, approximately 78.64% of our total revenue was from month-to-month and other contracted revenue from customers. Approximately 19.43% of our total revenue was from revenue sources outside of the scope of ASC 606. The remaining 1.93% of total revenue was from other sources including CPE and equipment sales and installation. The following table summarizes revenue from contracts with customers for the nine months ended September 30, 2023, and 2022: Nine Months Ended September 30, 2023 2022 Voice Service¹ $ 4,373,187 $ 4,748,380 Network Access¹ 3,027,881 3,790,634 Video Service¹ 9,120,164 9,446,473 Data Service¹ 18,850,042 18,543,327 Directory² 454,852 490,832 Other Contracted Revenue³ 2,019,130 2,048,531 Other⁴ 1,497,123 917,181 Revenue from customers 39,342,379 39,985,358 Subsidy and other revenue 9,675,733 9,410,904 Total revenue $ 49,018,112 $ 49,396,262 ¹ Month-to-Month contracts billed and cosumed in the same month. ² Directory revenue is contracted annually, however, this revenue is recognized ³ This includes long-term contracts where the revenue is recognized monthly over ⁴ This includes CPE and other equipment sales. ⁵ This includes governmental subsidies and lease revenue outside the scope of ASC 606. For the nine months ended September 30, 2023, approximately 77.21% of our total revenue was from month-to-month and other contracted revenue from customers. Approximately 19.74% of our total revenue was from revenue sources outside of the scope of ASC 606. The remaining 3.05% of total revenue was from other sources including CPE and equipment sales and installation. For the nine months ended September 30, 2022, approximately 79.09% of our total revenue was from month-to-month and other contracted revenue from customers. Approximately 19.05% of our total revenue was from revenue sources outside of the scope of ASC 606. The remaining 1.86% of total revenue was from other sources including CPE and equipment sales and installation. A significant portion of our revenue is derived from customers who may generally cancel their subscriptions at any time without penalty. As such, the amount of revenue related to unsatisfied performance obligations is not necessarily indicative of the future revenue to be recognized from our existing customer base. Revenue from customers with a contractually specified term and non-cancelable service period will be recognized over the term of such contracts, which is generally 3 to 10 years for these types of contracts. Nature of Services Revenues are earned from our customers primarily through the connection to our advanced fiber networks, digital and commercial television (TV) programming, Internet services (high-speed broadband), and hosted and managed services. Revenues for these services are billed based on set rates for monthly service or based on the amount of time the customer is utilizing our facilities. The revenue for these services is recognized over time as the service is rendered. Voice Service – We receive recurring revenue for basic local services that enable end-user customers to make and receive telephone calls within a defined local calling area for a flat monthly fee. In addition to subscribing to basic local telephone services, our customers may choose from multiple voice service plans with a variety of custom calling features such as call waiting, call forwarding, caller identification and voicemail. Our Voice over Internet Protocol (VoIP) digital phone service is also available as an alternative to the traditional telephone line. Customers may generally cancel their subscriptions at any time without penalty. Each subscription service provided is accounted for as a distinct performance obligation and revenue is recognized over a one-month service period as the subscription services are delivered. Other optional services purchased by the customer are generally accounted for as a distinct performance obligation when purchased and revenue is recognized when the service is provided. Network Access – We provide access services to other communication carriers for the use of our facilities to terminate or originate long distance calls on our network. Additionally, we bill monthly subscriber line charges (SLCs) to substantially all of our customers for access to the public switched network. These monthly SLCs are regulated and approved by the FCC. In addition, network access revenue is derived from several federally administered pooling arrangements designed to provide support and distribute funding to us. Revenues earned from other communication carriers accessing our network are based on the utilization of our network by these carriers as measured by minutes of use on the network or special access to the network by the individual carriers on a monthly basis. Revenues are billed at tariffed access rates for both interstate and intrastate calls and are recognized as revenue monthly based on the period the access was provided. The National Exchange Carriers Association (NECA) pools and redistributes the SLCs to various communication providers through the Connect America Fund (CAF). These revenues are earned and recognized into revenue on a monthly basis. Any adjustments to these amounts received by NECA are adjusted for in revenue upon receipt of the adjustment. Video Service – We provide a variety of enhanced video services on a monthly recurring basis to our customers. We also receive monthly recurring revenue from our subscribers for providing commercial TV programming in competition with local cable TV (CATV), satellite dish TV and off-air TV service providers. We serve twenty-two communities with our Internet Protocol (IPTV) services and five communities with our CATV services. Customers may generally cancel their subscriptions at any time without penalty. Each subscription service provided is accounted for as a distinct performance obligation and revenue is recognized over a one-month service period as the subscription services are delivered. Other optional services purchased by the customer are generally accounted for as a distinct performance obligation when purchased and revenue is recognized when the service is provided. Data Service – We provide high speed Internet to business and residential customers depending on the nature of the network facilities that are available, the level of service selected and the location. Our revenue is earned based on the offering of various flat packages based on the level of service, data speeds and features. We also provide e-mail and managed services, such as web hosting and design, on-line file back up and on-line file storage. Data customers may generally cancel their subscriptions at any time without penalty. Each subscription service provided is accounted for as a distinct performance obligation and revenue is recognized over a one-month service period as the subscription services are delivered. Other optional services purchased by the customer are generally accounted for as a distinct performance obligation when purchased and revenue is recognized when the service is provided. Directory – Our directory publishing revenue in our telephone directories recurs monthly and is recognized as revenue on a monthly basis. Other Contracted Revenue - Managed services and certain other data customers include advanced fiber-delivered communications and managed information technology solutions to mainly business customers, as well as high-capacity last-mile data connectivity services to wireless and wireline carriers. Services are primarily offered on a subscription basis with a contractually specified and non-cancelable service period. The non-cancelable contract terms for these customers generally range from three to ten years. Each subscription service provided is accounted for as a distinct performance obligation and revenue is recognized ratably over the contract period as the subscription services are delivered. These services are billed as monthly recurring charges to customers. Other – We also generate revenue from the sales, service and installation of CPE and other services. Sales and service of CPE are billed and recognized into revenue once the sale or service is complete or delivered. These sales and services are generally short-term in nature and are completed within one month. Other revenues are immaterial to our total revenues. Subsidy and Other Revenue outside the scope of ASC 606 – We receive subsidies from governmental entities to operate and expand our advanced fiber networks. In addition, we have revenue from leasing arrangements. Both of these revenue streams are outside of the scope of ASC 606. Interstate access rates are established by a nationwide pooling of companies known as NECA. The FCC established NECA in 1983 to develop and administer interstate access service rates, terms and conditions. Revenues are pooled and redistributed on the basis of a company's actual or average costs. There has been a change in the composition of interstate access charges in recent years, shifting more of the charges to the end user and reducing the amount of access charges paid by the interexchange carriers (IXC’s). We believe this trend will continue. Intrastate access rates are filed with state regulatory commissions in Minnesota and Iowa. The Company currently receives funding based on the Alternative Connect America Cost Model (A-CAM) as described below, with the exception of Scott-Rice Telephone Company (Scott-Rice), which receives funding from the Federal Universal Service Fund (FUSF). Scott-Rice’s settlements from the pools are based on nationwide average schedules, which includes the pooling and redistribution of revenues based on a company’s actual or average costs as described below. A-CAM As described above, with the exception of Scott-Rice, the remainder of our companies receive funding from A-CAM. Per the FCC Public Notice DA 19-115, the Company receives A-CAM support and has corresponding service deployment obligations under that program. The Company annually receives (i) $596,084 for its Iowa operations and (ii) $8,354,481 for its Minnesota operations. The Company will receive the A-CAM support for a period of 10 years, which started in 2019. The Company uses the funding that it receives through the A-CAM program to meet its defined broadband build-out obligations, which the Company is currently completing. On September 29, 2023, Nuvera announced that it had notified the FCC that the Company had decided to remain on the current A-CAM funding, rather than moving to the Enhanced A-CAM (E-ACAM) program that the FCC introduced earlier in 2023. A-CAM and E-ACAM are FCC administered programs to subsidize the deployment of broadband to rural areas. E-ACAM is a successor to this program which requires participating carriers to offer broadband and voice services at speeds of 100/20 Mbps or faster to all E-ACAM required locations within its study area. Broadband providers were required to choose one of the two funding options and notify the FCC by September 29, 2023. Accounts Receivable, Contract Assets and Contract Liabilities The following table provides information about our receivables, contracts assets and contract liabilities from revenue contracts with our customers: September 30, September 30, Accounts receivable, net - beginning balance $ 1,477,692 $ 1,512,369 Accounts receivable, net - ending balance 2,437,313 2,449,882 Contract assets - beginning balance 794,193 662,437 Contract assets - ending balance 1,445,577 735,482 Contract liabilities - beginning balance 626,306 602,007 Contract liabilities - ending balance 715,279 831,479 Accounts Receivable A receivable is recognized in the period the Company provides goods and services when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are generally 30-60 days. Contract Assets Contract assets include costs that are incremental to the acquisition of a contract. Incremental costs are those that result directly from obtaining a contract or costs that would not have been incurred if the contract had not been obtained, which primarily relates to sales commissions. We defer and amortize these costs over the expected customer life as the contract obligations are satisfied. We determined that the expected customer life is the expected period of benefit as the commission on the renewal contract is commensurate with the commission on the initial contract. During the three months ended September 30, 2023, and 2022 the Company recognized expenses of $141,051 and $77,215, respectively, related to deferred contact acquisition costs. During the nine months ended September 30, 2023, and 2022 the Company recognized expenses of $340,786 and $214,946, respectively, related to deferred contact acquisition costs. Short-term contact assets are included in current assets under prepaid expenses and other current assets. Long-term contract assets are included in investments and other assets under other assets. Contract Liabilities Contract liabilities include deferred revenues related to advanced payments for services and nonrefundable, upfront service activation and set-up fees, which are generally deferred. In addition, contact liabilities include customer deposits that are not recognized as revenue, but are instead returned to the customer after a holding period. Short-term contract liabilities include deferred revenues for advanced payments for managed services and other long-term contracts. This includes the current portion of the deferred revenues that will be recognized monthly within one year. Short-term contact liabilities are included in current liabilities under other accrued liabilities. Long-term contract liabilities include deferred revenues for advanced payments for managed services and other long-term contracts. This includes the portion longer than one year and the corresponding deferred revenues are recognized into revenue on a monthly basis based on the term of the contract. Long-term contact liabilities are included in noncurrent liabilities under other accrued liabilities. During the three months ended September 30, 2023, and 2022, the Company recognized revenues of $54,413 and $48,323, respectively, related to deferred revenues. During the nine months ended September 30, 2023, and 2022, the Company recognized revenues of $302,831 and $284,259, respectively, related to deferred revenues. Performance Obligations ASC 606, Revenue from Contracts with Customers, requires that the Company disclose the aggregate amount of the transaction price that is allocated to remaining performance obligations that are unsatisfied as of September 30, 2023. The guidance provides certain practical expedients that limit this requirement. The service revenue contracts of the Company meet the following practical expedients provided by ASC 606: 1. 2. The Company has elected these practical expedients. Performance obligations related to our service revenue contracts are generally satisfied over time. For services transferred over time, revenue is recognized based on amounts invoiced to the customer as the Company has concluded that the invoice amount directly corresponds with the value of services provided to the customer. Management considers this a faithful depiction of the transfer of control as services are substantially the same and have the same pattern of transfer over the life of the contract. As such, revenue related to unsatisfied performance obligations that will be billed in future periods has not been disclosed. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Leases [Text Block] | Note 3 – Leases Under FASB’s ASU 2016-02, “Leases,” which, together with its related clarifying ASUs, provided revised guidance for lease accounting and related disclosure requirements and established a right-to-use (ROU) model that requires lessees to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. The ASU also requires disclosures to allow financial statement users to better understand the amount, timing and uncertainty of cash flows arising from leases. These disclosures include qualitative requirements, providing additional information about the amounts recorded in the financial statements. The following tables include the ROU assets and operating lease liabilities as of September 30, 2023, and December 31, 2022. Short-term operating lease liabilities are included in current liabilities in other accrued liabilities. Long-term operating lease liabilities are included in noncurrent liabilities in other accrued liabilities. Balance September 30, 2023 Balance December 31, 2023 Right of Use Assets Operating Lease Right-Of-Use Assets $ 1,276,743 $ 1,341,029 Balance September 30, 2023 Balance December 31, 2022 Operating Lease Liabilities Short-Term Operating Lease Liabilities $ 382,423 $ 356,400 Long-Term Operating Lease Liabilities 928,271 1,026,978 Total $ 1,310,694 $ 1,383,378 Maturity analysis under these lease agreements are as follows: Balance September 30, 2023 Maturity Analysis 2023 (remaining) $ 126,735 2024 396,766 2025 208,414 2026 167,639 2027 131,626 Thereafter 572,681 Total 1,603,861 Less Imputed interest (293,167) Present Value of Operating Leases $ 1,310,694 The following summarizes other information related to leases for the quarter ended September 30, 2023, as follows: Weighted Average Remaining Lease Term (Years) 6.35 Weighted Average Discount Rate 6.05% We amortize our leases over the shorter of the term of the lease or the useful life of the asset. Lease expenses for the three and nine months ended September 30, 2023, were $123,588 and $334,295. Lease expenses for the three and nine months ended September 30, 2022, were $89,040 and $269,046. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 4 – Fair Value Measurements We have adopted the rules prescribed under GAAP for our financial assets and liabilities. GAAP includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques used to measure fair value that is either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs that are derived principally from or corroborated by observable market data. Level 3: Inputs are derived from valuation techniques where one or more significant inputs or value drivers are unobservable. We have used financial derivative instruments to manage our overall cash flow exposure to fluctuations in interest rates. We accounted for derivative instruments in accordance with GAAP that requires derivative instruments to be recorded on the balance sheet at fair value. Changes in the fair value of derivative instruments must be recognized in earnings unless specific hedge accounting criteria are met, in which case, the gains and losses are included in other comprehensive income rather than in earnings. We have entered into IRSAs with our lender, CoBank, ACB (CoBank) to manage our cash flow exposure to fluctuations in interest rates. These instruments are designated as cash flow hedges and are effective at mitigating the risk of fluctuations on interest rates in the marketplace. Any gains or losses related to changes in the fair value of these derivatives are accounted for as a component of accumulated other comprehensive gain (loss) for as long as the hedge remains effective. The fair value of our IRSAs is discussed in Note 7 – “Interest Rate Swaps”. The fair value of our swap agreements was determined based on Level 2 inputs. Other Financial Instruments Other Investments - We conducted an evaluation of our investments in all of our investees in connection with the preparation of our audited financial statements as of December 31, 2022. As of September 30, 2023, we believe the carrying value of our investments is not impaired. Debt – We estimate the fair value of our long-term debt based on the discounted future cash flows we expect to pay using current rates of borrowing for similar types of debt. Fair value of the debt approximates carrying value. Other Financial Instruments - Our financial instruments also include cash equivalents, trade accounts receivable and accounts payable where the current carrying amounts approximate fair market value. |
Goodwill and Intangibles
Goodwill and Intangibles | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Note 5 – Goodwill and Intangibles We account for goodwill and other intangible assets under GAAP. Under GAAP, goodwill and intangible assets with indefinite useful lives are not amortized but are instead tested for impairment (i) on at least an annual basis and (ii) when changes in circumstances indicate that the fair value of goodwill may be below its carrying value. These circumstances include but are not limited to (i) a significant adverse change in the business climate, (ii) unanticipated competition or (iii) an adverse action or assessment by a regulator. Determining impairment involves estimating the fair value of a reporting unit using a combination of (i) the income or discounted cash flow approach and (ii) the market approach that utilizes comparable companies’ data. If the carrying amount of a reporting unit exceeds its fair value, the amount of the impairment loss must be measured. The impairment loss is calculated by comparing the implied fair value of the reporting unit’s goodwill to its carrying amount. In calculating the implied fair value of the reporting unit’s goodwill, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit. The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied value of goodwill. We recognize impairment loss when the carrying amount of goodwill exceeds its implied fair value. Our goodwill totaled $49,903,029 as of September 30, 2023, and December 31, 2022. In 2022 and 2021, we engaged an independent valuation firm to aid in the completion of our annual impairment testing for existing goodwill. For 2022 and 2021, the testing results indicated no impairment charge to goodwill as the determined fair value was sufficient to pass the impairment test. Our intangible assets subject to amortization consist of acquired customer relationships, regulatory rights and trade names. We amortize intangible assets with finite lives over their respective estimated useful lives. Identifiable intangible assets that are subject to amortization are evaluated for impairment. In addition, we periodically reassess the carrying value, useful lives and classifications of our identifiable intangible assets. The components of our identified intangible assets are as follows: September 30, 2023 December 31, 2022 Useful Lives Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Definite-Lived Intangible Assets Customers Relationships 14-15 yrs $ 42,878,445 $ 31,647,448 $ 42,878,445 $ 30,429,708 Regulatory Rights 15 yrs 4,000,000 4,000,000 4,000,000 4,000,000 Video Franchise 7 yrs 3,000,000 107,145 - - Trade Name 3-5 yrs 310,106 310,106 310,106 273,465 Indefinitely-Lived Intangible Assets Video Franchise - - 3,000,000 - Spectrum 877,814 - 877,814 - Total $ 51,066,365 $ 36,064,699 $ 51,066,365 $ 34,703,173 Net Identified Intangible Assets $ 15,001,666 $ 16,363,192 Amortization expense related to the definite-lived intangible assets was $1,361,526 and $1,464,253 for the nine months ended September 30, 2023, and 2022. Amortization expense for the remaining three months of 2023 and the five years subsequent to 2023 is estimated to be: • (October 1 – December 31) $ 513,059 • 2024 $ 2,052,234 • 2025 $ 2,047,312 • 2026 $ 2,042,389 • 2027 $ 1,335,247 • 2028 $ 1,335,247 |
Secured Credit Facility
Secured Credit Facility | 9 Months Ended |
Sep. 30, 2023 | |
Secured Credit Facility Abstract | |
Secured Credit Facility [Text Block] | Note 6 – Secured Credit Facility On July 15, 2022, Nuvera and CoBank entered into (i) an Agreement Regarding Amendments to Loan Documents and (ii) an Amended and Restated Revolving Loan Promissory Note. The agreements amended our existing credit facility with CoBank and secured a new credit facility in the aggregate principal amount of $130.0 million. Under the Agreements, among other things, (i) the Company received a $50.0 million term loan to replace existing debt, (ii) a $50.0 million delayed draw term loan, (iii) the Company’s revolving loan was increased from $20.0 million to $30.0 million, (iv) the maturity date of the term loans were set at July 15, 2029, and the maturity day of the revolving loan was set at July 15, 2027, and (v) the Company’s operating subsidiaries agreed to extend their previous guarantees, security interests and mortgages to cover the increased amount of the revolving note. The financing was secured to facilitate the Company’s advanced fiber-build plans announced on December 15, 2021. Refer to the Company’s 8-K filing with the SEC on July 20, 2022 for further details regarding the new credit agreements with CoBank. Under the new credit agreement, the Company and its respective subsidiaries have entered into security agreements under which substantially all the assets of Nuvera and its respective subsidiaries have been pledged to CoBank as collateral. In addition, Nuvera and its respective subsidiaries have guaranteed all the obligations under the credit facility. The credit agreement contains certain customary events of default, which include failure to make payments when due, the material inaccuracy of representations or warranties, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, certain judgments, certain ERISA-related events, or a change in control (as defined in the credit agreement). New Credit Agreement: ● TERM A-1 LOAN - $50,000,000 term note with interest payable quarterly. The final maturity date of this note is July 15, 2029. Twelve quarterly principal payments of $625,000 are due commencing December 31, 2025, through September 30, 2028, and three quarterly principal payments of $937,500 commencing on December 31, 2028, through maturity date. A final balloon payment of $39,687,500 is due at maturity of this note on July 15, 2029. ● DELAYED DRAW TERM LOAN - $50,000,000 Delayed Draw Term Loan with interest on any outstanding amounts payable quarterly. The final maturity date of this loan is July 15, 2029. Twelve quarterly principal payments of 1.25% of the outstanding loan balance are due commencing December 31, 2025, through September 30, 2028, and three quarterly principal payments of 1.875% of the outstanding loan balance commencing on December 31, 2028, through maturity date. A final balloon payment of the balance of the Delayed Draw Term Loan is due at maturity of this note on July 15, 2029. We currently have drawn $40,000,000 on this Delayed Draw Term Loan as of September 30, 2023. ● REVOLVING LOAN - $30,000,000 revolving loan with interest payable quarterly. The final maturity date of this note is July 15, 2027. We currently have drawn $23,001,202 on this revolving note as of September 30, 2023. The term loan borrowings initially bear interest at a “Margin for Base Rate Loans” of 2.15% above the applicable base rate. The margin for base rate loans for term loans increases as our “Leverage Ratio” increases. The revolving loan borrowings initially bear interest at a “Margin for Base Rate Loans” of 1.90% above the applicable base rate. The margin for base rate loans for revolving loans increases as our “Leverage Ratio” increases. We generally use variable-rate debt to finance our operations, capital expenditures and acquisitions. These variable-rate debt obligations expose us to variability in interest payments due to changes in interest rates. The terms of our credit facility with CoBank require that we enter into interest rate agreements designed to protect us against fluctuations in interest rates, in an aggregate principal amount and for a duration determined under the credit facility. Under the new credit facility, Nuvera has the ability to enter into IRSAs in connection with amounts borrowed from CoBank. In connection with the closing of the new credit facility, the Company “rolled over” its two exiting IRSAs. As described in Note 7 – “Interest Rate Swaps,” on August 1, 2018, we entered into an IRSA with CoBank covering 25 percent of our existing debt balance or $16,137,500 of our aggregate indebtedness to CoBank on August 1, 2018. As of September 30, 2023, our IRSA covered $10,086,350, with a weighted average interest rate of 6.11%. As described in Note 7 – “Interest Rate Swaps,” on August 29, 2019, we entered into a second IRSA with CoBank covering an additional $42,000,000 of our aggregate indebtedness to CoBank on August 29, 2019. As of September 30, 2023, our IRSA covered $28,270,239, with a weighted average interest rate of 4.44%. Our remaining outstanding debt of $74.6 million remains subject to variable interest rates at an effective weighted average interest rate of 8.48%, as of September 30, 2023. As of September 30, 2023 our additional delayed draw term loan of $10.0 million and unused revolving credit facility of $7.0 million are subject to an unused commitment fee of 0.25% annually, until drawn. Once drawn, this debt would be subject to an effective weighted average interest rate based on current rate of interest in effect at the time. Our loan agreements include restrictions on our ability to pay cash dividends to our stockholders. However, we are allowed to pay dividends in an amount up to $3,000,000 in any year as long as no default or event of default has occurred. Our current Total Leverage Ratio as of September 30, 2023, was 4.67, which exceeded our maximum total leverage of 4.25 per our existing covenants with CoBank. On November 10 5.50 Our credit facility requires us to comply with specified financial ratios and tests. These financial ratios include total leverage ratio, debt service coverage ratio and equity to total assets ratio. As of September 30, 2023, other than our total leverage ratio, we were in compliance with all the stipulated financial ratios in our loan agreements. There are security and loan agreements underlying our current CoBank credit facility that contain restrictions on our distributions to stockholders and investment in, or loans, to others. Also, our credit facility contains restrictions that, among other things, limits or restricts our ability to enter into guarantees and contingent liabilities, incur additional debt, issue stock, transact asset sales, transfers or dispositions, and engage in mergers and acquisitions, without CoBank approval. |
Interest Rate Swaps
Interest Rate Swaps | 9 Months Ended |
Sep. 30, 2023 | |
Disclosure Text Block Supplement [Abstract] | |
Financial Instruments Disclosure [Text Block] | Note 7 – Interest Rate Swaps We assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely affect expected future cash flows and by evaluating hedging opportunities. We generally use variable-rate debt to finance our operations, capital expenditures and acquisitions. These variable-rate debt obligations expose us to variability in interest payments due to changes in interest rates. The terms of our credit facility with CoBank required that we enter into interest rate agreements designed to protect us against fluctuations in interest rates, in an aggregate principal amount and for a duration determined under the credit facility. Under the new credit facility, Nuvera has the ability to enter into IRSAs in connection with amounts borrowed from CoBank. In connection with the closing of the new credit facility, the Company “rolled over” its two exiting IRSAs. To meet this objective, we have entered into an IRSA with CoBank covering 25 percent of our then existing outstanding debt balance or $16,137,500 of our aggregate indebtedness to CoBank as of August 1, 2018. The swap effectively locked in the interest rate on 25 percent of our variable-rate debt through July 2025. Under this IRSA, we have changed the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the IRSA, we pay a fixed contractual interest rate and (i) make an additional payment if the SOFR variable rate payment is below a contractual rate or (ii) receive a payment if the SOFR variable rate payment is above the contractual rate. On August 29, 2019, we entered into a second IRSA with CoBank covering an additional $42,000,000 of our then aggregate indebtedness to CoBank on August 29, 2019. The swap effectively locked in a significant portion of our variable-rate debt through July 2025. Under this IRSA, we have changed the variable rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the IRSA, we pay a fixed contractual interest rate and (i) make an additional payment if the SOFR variable rate payment is below a contractual rate or (ii) receive a payment if the SOFR variable rate payment is above the contractual rate. Each month, we make interest payments to CoBank under its loan agreements based on the current applicable SOFR plus the contractual SOFR margin then in effect with respect to the loan, without reflecting our IRSAs. At the end of each calendar month, CoBank adjusts our aggregate interest payments based on the difference, if any, between the amounts paid by us during the month and the current effective interest rate. Net interest payments are reported in our consolidated income statement as interest expense. Our IRSAs under our credit facilities both qualify as cash flow hedges for accounting purposes under GAAP. We reflect the effect of these hedging transactions in the financial statements. The unrealized gain/loss is reported in other comprehensive income. If we terminate our IRSAs, the cumulative change in fair value at the date of termination would be reclassified from accumulated other comprehensive gain (loss), which is classified in stockholders’ equity, into earnings on the consolidated statements of income. The fair value of the Company’s IRSAs was determined based on valuations received from CoBank and were based on the present value of expected future cash flows using discount rates appropriate with the terms of the IRSAs. The fair value indicates an estimated amount we would be required to pay if the contracts were canceled or transferred to other parties. As of September 30, 2023, the fair value asset of these swaps was $1,991,769, which has been recorded net of deferred tax of $568,451, resulting in the $1,423,318 in accumulated other comprehensive income gain. As of September 30, 2022, the fair value asset of these swaps was $2,356,042, which has been recorded net of deferred tax of $672,414, resulting in the $1,683,628 in accumulated other comprehensive income gain. |
Other Investments
Other Investments | 9 Months Ended |
Sep. 30, 2023 | |
Other Investments [Abstract] | |
Other Investments [TextBlock] | Note 8 – Other Investments We are a co-investor with other communication companies in several partnerships and limited liability companies. These joint ventures make it possible to offer services to customers, including digital video services and fiber transport services that we would have difficulty offering on our own. These joint ventures also make it possible to invest in new technologies with a lower level of financial risk. We recognize income and losses from these investments on the equity method of accounting. For a listing of our investments, see Note 11 – “Segment Information.” Nuvera recognized a net gain of $4,060,775, including true-ups subsequent to the sale, in book value in connection with the sale of the FiberComm, LC (Fibercomm) interest. The FASB requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of September 30, 2023, and 2022, respectively, the Company had not recorded any gains or losses on our investments. |
Guarantees
Guarantees | 9 Months Ended |
Sep. 30, 2023 | |
Guarantees [Abstract] | |
Guarantees [Text Block] | Note 9 – Guarantees On March 31, 2023, Nuvera and the other owners of FiberComm sold 100% of their interest in FiberComm to ImOn Communications, LLC. FiberComm has been providing high quality Internet and voice services to businesses in the Sioux City, Iowa market for over 20 years. Nuvera owned a 20% interest in FiberComm through its wholly owned subsidiary Peoples Telephone Company. Nuvera announced the execution of the FiberComm sale agreement in January 2023. Prior to the sale of Nuvera’s equity investment in FiberComm, Nuvera had guaranteed a portion of a ten-year loan owed by FiberComm, set to mature on April 30, 2026. On March 31, 2023, upon closing of the sale, the loan was paid and Nuvera was released from their guarantee of loan. |
Incentive and Retirement Plans
Incentive and Retirement Plans | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Benefits [Text Block] | Note 10 – Incentive and Retirement Plans In 2006, we implemented an Employee Incentive Plan for employees other than executive officers and a Management Incentive Plan for executive officers (collectively the 2006 Plan). In 2015, our BOD adopted, and our shareholders approved our 2015 Employee Stock Plan, which permits the issuance of up to 200,000 shares of our Common Stock in stock awards for performance under the 2006 Plan. Each qualified employee of the Company may elect to receive up to 50% of their incentive compensation in Company Common Stock in lieu of cash. Each Company executive officer is required to receive 50% of their incentive compensation earned in Company Common Stock in lieu of cash. As of September 30, 2023, 149,747 shares remain available to be issued under the Plan. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 11 – Segment Information We operate in the Communications Segment and have no other significant business segments. The Communications Segment consists of voice, data and video communication services delivered to the customer over our advanced fiber communications network. No single customer accounted for a material portion of our consolidated revenues. The Communications Segment operates the following communications companies and has investment ownership interests as follows: Communications Segment ● Communications Companies: • Nuvera Communications, Inc., the parent company. • Hutchinson Telephone Company (HTC), a wholly owned subsidiary of Nuvera. • Peoples Telephone Company, a wholly owned subsidiary of Nuvera. • Scott-Rice Telephone Co., a wholly owned subsidiary of Nuvera. • Sleepy Eye Telephone Company, a wholly owned subsidiary of Nuvera. • Western Telephone Company, a wholly owned subsidiary of Nuvera; and • Hutchinson Telecommunications, Inc., a wholly owned subsidiary of HTC, located in Litchfield and Glencoe, Minnesota. ● Our investments and interests in the following entities include some management responsibilities: • Broadband Visions, LLC (BBV) – 24.30% subsidiary equity ownership interest. BBV provides video headend and Internet services. • Independent Emergency Services, LLC (IES) – 14.29% subsidiary equity ownership interest. IES is a provider of E-911 services to the State of Minnesota as well as a number of counties located in Minnesota; and • Fiber Minnesota, LLC (FM) – 7.54% subsidiary equity ownership interest. FM is a Minnesota state-wide network that provides connectivity for regional businesses. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 12 – Commitments and Contingencies On December 15, 2021, the Company announced plans for a fiber network initiative. The Company has made commitments to purchase materials and entered into contracts with various parties to successfully build this next-generation fiber network. As of September 30, 2023, the Company had outstanding commitments for material of approximately $0.1 million and outstanding contract amounts of approximately $12.2 million in 2023 and $14.9 million in 2024. We are involved in certain contractual disputes in the ordinary course of business. We do not believe the ultimate resolution of any of these existing matters will have a material adverse effect on our financial position, results of operations or cash flows. Our capital budget for 2023 is approximately $49.3 million and will be financed through our credit facility with CoBank debt financing and internally generated funds. The Company has committed to buying large quantities of fiber in 2023 to accommodate the building of its new advanced fiber network. |
Broadband Grants
Broadband Grants | 9 Months Ended |
Sep. 30, 2023 | |
Broadband Grants Abstract | |
Broadband Grants [TextBlock] | Note 13 – Broadband Grants On December 8, 2022, the Company was awarded four broadband grants from the Minnesota Department of Employment and Economic Development (DEED). The grants will provide up to 45.0% to 50.0% of the total cost of building fiber connections to homes and businesses for improved high-speed Internet in unserved and underserved communities and businesses in the Company’s service area. The Company is eligible to receive $8,594,688 of approximately $18,139,749 total project costs. The Company will provide the remaining 50.0% to 55.0% matching funds. Construction and expenditures for these projects began in the spring of 2023. We have not received any funds for these projects as of September 30, 2023. On January 29, 2021, the Company was awarded five broadband grants from the DEED. The grants will provide up to 35.4% of the total cost of building fiber connections to homes and businesses for improved high-speed Internet in unserved or underserved communities and businesses in the Company’s service area. The Company is eligible to receive $1,918,037 of the approximately $5,419,617 total project costs. The Company will provide the remaining 64.6% of the matching funds. Construction and expenditures for these projects began in the spring of 2021. We have received $1,918,037 for these projects as of September 30, 2023. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement [Text Block] | Note 14 – Stock Based Compensation The Company’s 2017 Omnibus Stock Plan (2017 OSP) was adopted by the Company’s BOD on February 24, 2017, and approved by the Company’s shareholders at the May 25, 2017, Annual Meeting of Shareholders. The 2017 OSP enables the Company to grant stock incentive awards to current and new employees, including officers, and to Board members and service providers. The 2017 OSP permits stock incentive awards in the form of Options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units (RSUs), performance stock, performance units, and other awards in stock or cash. The 2017 OSP permits the issuance of up to 625,000 shares of our Common Stock in any of the above stock awards. As of September 30, 2023, 221,984 shares remain available for future grant under the 2017 OSP. Starting in 2017, our BOD and Compensation Committee granted RSU awards to the Company’s executive officers under the 2017 OSP. We recognize share-based compensation expense for these RSUs over the vesting period of the RSUs, which is determined by our BOD. Forfeitures of RSUs are accounted for as they occur. Each executive officer was eligible to receive time-based RSUs and performance based RSUs. The time-based RSUs are computed as a percentage of the executive officer’s base salary based on the closing price of Company common stock on a date set by the BOD, and vest over a three-year period, subject to the executive officer being employed by the Company on the vesting date. The performance based RSUs are also computed as a percentage of the executive officer’s base salary based on the closing price of Company common stock on a date set by the BOD and vest over a three-year period based on the Company attaining an average Return on Invested Capital (ROIC) over that three-year period. The ROIC target is set by the BOD. Executive officers may earn more or fewer performance based RSUs based on if the actual ROIC achieved over the time period is more or less than target. Upon vesting of either time-based or performance based RSUs, the executive officers are issued Common Stock in exchange for the RSUs. RSUs currently issued, exercised or forfeited is as follows: Time-Based RSU's Targeted Performance-Based RSU's Closing Stock Price Vesting Date Balance at December 31, 2021 9,440 13,270 Forfeited (1,685) (4,325) Exercised (4,391) (4,244) $ 17.18 12/31/2022 Balance at December 31, 2022 3,364 4,701 Forfeited - - Exercised - - Balance at September 30, 2023 3,364 4,701 Option Awards In 2022, after considerable study, discussion and interaction with our consultants, the Compensation Committee decided to replace RSUs with non-qualified stock Options (Options). The Compensation Committee believes that grants of Options more directly align management long-term equity compensation with increased shareholder value creation at a time when the Company is engaged in significant investment and transformation as part of its long-term strategy. The Compensation Committee also determined to extend the grant of Options to include Named Executive Officers, senior employee directors and other employee directors as key members of the Company leadership team and contributors to overall success. As previously disclosed, the number of Options awarded was computed as a percentage of the employee’s base salary using a Black-Scholes formula using an exercise price equal to the closing price of Company common stock of $14.70 on March 31, 2023, and $21.20 on April 11, 2022. The 2023 Options will vest one-third each on March 31, 2024, 2025 and 2026. The 2022 Options will vest one-third each on April 11, 2023, 2024 and 2025. Closing Stock Price Vesting Date Options Balance at December 31, 2021 - Issued 40,577 $ 21.20 4/11/2023 Issued 40,583 $ 21.20 4/11/2024 Issued 40,583 $ 21.20 4/11/2025 Balance at December 31, 2022 121,743 Issued 51,431 $ 14.70 3/31/2024 Issued 51,431 $ 14.70 3/31/2025 Issued 51,432 $ 14.70 3/31/2026 Balance at September 30, 2023 276,037 The grant date fair value of employee stock Option awards is determined using the Black Scholes Option-pricing model. The following assumptions were used during the following periods: 2023 Grants 2022 Grants Exercise Price $ 14.70 $ 21.20 Risk-Free Rate of Interest 2.957% 1.515% Expected Term (Years) 10 10 Expected Stock Price Volatility 20.7% 18.1% Dividend Yield 2.83% 2.44% The following table summarizes the Company’s employee stock Option activity under the 2017 OSP, which was approved by the Company’s shareholders, for the following periods: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value (in Thousands) Outstanding as of December 31, 2021 - $ - - $ - Granted 121,743 21.20 9.00 - Forfeited - - - - Outstanding as of December 31, 2022 121,743 $ 21.20 9.00 $ - Granted 154,294 14.70 9.75 - Forfeited - - - - Outstanding as of September 2023 276,037 $ 17.57 9.42 $ - The weighted average grant date fair value per share for employee stock and non-employee Option grants issued on March 31, 2023 was $2.90. The weighted average grant date fair value per share for employee stock and non-employee Option grants issued on April 11, 2022 was $3.24. As of September 30, 2023, the total unrecognized compensation related to unvested employee and non-employee stock Option awards granted was $573,923, which the Company expects to recognize over a weighted-average period of approximately 2.16 years. As of December 31, 2022, the total unrecognized compensation related to unvested employee and non-employee stock Option awards granted was $299,434, which the Company expects to recognize over a weighted-average period of approximately 2.28 years. On March 13, 2023, the Company Board adopted changes to the Nuvera Communications, Inc. 2017 OSP. Most of the changes eliminate language specific to the requirements and limitations on grants under Internal Revenue Code Section162 (m), which has been repealed by Congress. This includes, in particular, provisions related to “Performance-Based Exception” in several sections of the 2017 OSP. The Board also increased the limit on annual grants from 50,000 to 100,000 shares per participant and eliminated separate provisions on new-hire stock grants and cash-based grants. The Board also made minor changes to other sections of the 2017 OSP. The Board did not increase the number of shares authorized for issuance under the 2017 OSP or change the terms of eligibility for participants under the 2017 OSP. The foregoing description of the changes to the 2017 OSP does not purport to be complete and is qualified in its entirety by reference to the full text of the 2017 OSP, as amended, which is filed as Exhibit 10.12 to the 2022 Annual Report on Form 10-K. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 15 – Subsequent Events Our current Total Leverage Ratio as of September 30, 2023, was 4.67, which exceeded our maximum total leverage of 4.25 per our existing covenants with CoBank. On November 10 5.50 We have evaluated and disclosed subsequent events through the filing date of this Quarterly Report on Form 10-Q. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Revenue [Policy Text Block] | Revenue Recognition See Note 2 – “Revenue Recognition” for a discussion of our revenue recognition policies. |
Cost of Goods and Service [Policy Text Block] | Cost of Services (excluding depreciation and amortization) Cost of services includes all costs related to the delivery of communication services and products. These operating costs include all the costs of performing services and providing related products including engineering, network monitoring and transportation costs. |
Selling, General and Administrative Expenses, Policy [Policy Text Block] | Selling, General and Administrative Expenses Selling, general and administrative expenses include direct and indirect selling expenses, customer service, billing and collections, advertising and all other general and administrative costs associated with our operations. |
Depreciation, Depletion, and Amortization [Policy Text Block] | Depreciation and Amortization Expense We use the group life method (mass asset accounting) to depreciate the assets of our communications companies. Communications plant acquired in a given year is grouped into similar categories and depreciated over the remaining estimated useful life of the group. When an asset is retired, both the asset and the accumulated depreciation associated with that asset are removed from the books. Due to rapid changes in technology, selecting the estimated economic life of communications plant and equipment requires a significant amount of judgment. We periodically review data on expected utilization of new equipment, asset retirement activity and net salvage values to determine adjustments to our depreciation rates. In 2022, we accelerated depreciation on our copper networks as we transition to a new fiber-to-the-premise (FTTP) network. Other than this change, we have not made any other significant changes to the lives of these assets in the two-year period ended September 30, 2023. Depreciation expense was $10,009,933 and $9,048,064 for the nine months ended September 30, 2023, and 2022. The increase in depreciation expense in the first nine months of 2023 was primarily due to an increase in capital expenditures used to aid in our transition to a new advanced FTTP network. We amortize our definite-lived intangible assets over their estimated useful lives. Identifiable intangible assets that are subject to amortization are evaluated for impairment. Grant money received from governmental entities for reimbursement of capital expenditures is accounted for as a reduction from the cost of the asset. As the grant was to be used in the Company’s regulated network, the Company accounts for this funding as aid to construction as outlined in the Federal Communications Commission (FCC) Part 32 “Uniform System of Accounts for Telecommunications Companies.” |
Income Tax, Policy [Policy Text Block] | Income Taxes The provision for income taxes consists of an amount for taxes currently payable and a provision for tax consequences deferred to future periods. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax basis. Significant components of our deferred taxes arise from differences (i) in the basis of property, plant and equipment due to the use of accelerated depreciation methods for tax purposes, as well as (ii) in partnership investments and intangible assets due to the difference between book and tax basis. Our effective income tax rate is normally higher than the United States tax rate due to state income taxes and permanent differences. We account for income taxes in accordance with GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. As required by GAAP, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. As of September 30, 2023, and December 31, 2022, we had $19,787 of unrecognized tax benefits that if recognized would affect the tax rate. We do not expect the total amount of unrecognized tax benefits to materially change over the next twelve months. We are primarily subject to United States, Minnesota, Iowa, Nebraska, North Dakota and Wisconsin income taxes. Tax years subsequent to 2018 remain open to examination by federal and state tax authorities. During the year ending December 31, 2022, we settled our examination by the State of Minnesota. The examination did not have a material effect on our financial statements. Our policy is to recognize interest and penalties related to income tax matters as income tax expense. As of September 30, 2023, and December 31, 2022, we had $3,518 of accrued interest or penalties that related to income tax matters. |
Earnings Per Share, Policy [Policy Text Block] | Earnings and Dividends Per Share The basic and diluted net income per share is calculated as follows: Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net Income $ 483,170 $ 483,170 $ 1,822,648 $ 1,822,648 $ 5,154,157 $ 5,154,157 $ 5,924,655 $ 5,924,655 Weighted-average common shares outstanding 5,126,581 5,211,382 5,084,578 5,115,477 5,113,007 5,175,507 5,091,391 5,112,358 Net income per share $ 0.09 $ 0.09 $ 0.36 $ 0.36 $ 1.01 $ 1.00 $ 1.16 $ 1.16 The weighted-average shares outstanding, basic and diluted, are calculate as follows: Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Weighted-average common shares outstanding $ 5,126,581 $ 5,126,581 $ 5,084,578 $ 5,084,578 $ 5,113,007 $ 5,113,007 $ 5,091,391 $ 5,091,391 Dilutive RSU's/Options - 84,801 - 30,899 - 62,500 - 20,967 Weighted-average common shares outstanding $ 5,126,581 $ 5,211,382 $ 5,084,578 $ 5,115,477 $ 5,113,007 $ 5,175,507 $ 5,091,391 $ 5,112,358 Nuvera’s Board of Directors (BOD) reviews quarterly dividend declarations based on our anticipated earnings, capital requirements and our operating and financial conditions. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Developments Effective January 1, 2022, we adopted Accounting Standards Update (ASU) No. 2021-10 “Disclosures by Business Entities about Government Assistance.” ASU 2021-10 requires disclosure by business entities of the types of government assistance received, the method of accounting for such assistance and the effects of the assistance on its financial statements. The adoption of this guidance did not have a material impact on our related disclosures. In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, “Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. During the quarter ended June 30, 2022, we novated a certain hedging relationship to one our interest rate swap agreements (IRSAs) by changing the reference rated from the London Inter-Bank Offered Rate to a secured overnight financing rate (SOFR). The amendment did not have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires entities to use a new forward-looking, expected loss model to estimate credit losses. It also requires additional disclosures relating to the credit quality of trade and other receivables, including information relating to management’s estimate of credit allowances. The Company is required to adopt ASU 2016-13 for fiscal periods beginning after December 15, 2022, including interim periods within that fiscal year. Early adoption as of December 15, 2018, is permitted. As of January 1, 2022, the Company adopted ASU 2016-13 and the adoption did not have a significant impact on our consolidated financial statements. We have reviewed all other significant newly issued accounting pronouncements and determined that they are either not applicable to our business or that no material effect is expected on our financial position and results of operations. |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Net Income $ 483,170 $ 483,170 $ 1,822,648 $ 1,822,648 $ 5,154,157 $ 5,154,157 $ 5,924,655 $ 5,924,655 Weighted-average common shares outstanding 5,126,581 5,211,382 5,084,578 5,115,477 5,113,007 5,175,507 5,091,391 5,112,358 Net income per share $ 0.09 $ 0.09 $ 0.36 $ 0.36 $ 1.01 $ 1.00 $ 1.16 $ 1.16 |
Schedule of Weighted Average Number of Shares [Table Text Block] | Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Weighted-average common shares outstanding $ 5,126,581 $ 5,126,581 $ 5,084,578 $ 5,084,578 $ 5,113,007 $ 5,113,007 $ 5,091,391 $ 5,091,391 Dilutive RSU's/Options - 84,801 - 30,899 - 62,500 - 20,967 Weighted-average common shares outstanding $ 5,126,581 $ 5,211,382 $ 5,084,578 $ 5,115,477 $ 5,113,007 $ 5,175,507 $ 5,091,391 $ 5,112,358 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Three Months Ended September 30, 2023 2022 Voice Service¹ $ 1,505,320 $ 1,550,057 Network Access¹ 909,502 1,224,952 Video Service¹ 3,005,010 3,126,733 Data Service¹ 6,327,829 6,209,861 Directory² 151,562 165,094 Other Contracted Revenue³ 653,417 683,973 Other⁴ 600,171 317,974 Revenue from customers 13,152,811 13,278,644 Subsidy and other revenue 3,217,667 3,202,483 Total revenue $ 16,370,478 $ 16,481,127 ¹ Month-to-Month contracts billed and cosumed in the same month. ² Directory revenue is contracted annually, however, this revenue is recognized ³ This includes long-term contracts where the revenue is recognized monthly ⁴ This includes CPE and other equipment sales. ⁵ This includes governmental subsidies and lease revenue outside the scope of ASC 606. Nine Months Ended September 30, 2023 2022 Voice Service¹ $ 4,373,187 $ 4,748,380 Network Access¹ 3,027,881 3,790,634 Video Service¹ 9,120,164 9,446,473 Data Service¹ 18,850,042 18,543,327 Directory² 454,852 490,832 Other Contracted Revenue³ 2,019,130 2,048,531 Other⁴ 1,497,123 917,181 Revenue from customers 39,342,379 39,985,358 Subsidy and other revenue 9,675,733 9,410,904 Total revenue $ 49,018,112 $ 49,396,262 ¹ Month-to-Month contracts billed and cosumed in the same month. ² Directory revenue is contracted annually, however, this revenue is recognized ³ This includes long-term contracts where the revenue is recognized monthly over ⁴ This includes CPE and other equipment sales. ⁵ This includes governmental subsidies and lease revenue outside the scope of ASC 606. |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] | September 30, September 30, Accounts receivable, net - beginning balance $ 1,477,692 $ 1,512,369 Accounts receivable, net - ending balance 2,437,313 2,449,882 Contract assets - beginning balance 794,193 662,437 Contract assets - ending balance 1,445,577 735,482 Contract liabilities - beginning balance 626,306 602,007 Contract liabilities - ending balance 715,279 831,479 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Disclosure Text Block [Abstract] | |
ROU and Operating Lease Liabilities [Table Text Block] | Balance September 30, 2023 Balance December 31, 2023 Right of Use Assets Operating Lease Right-Of-Use Assets $ 1,276,743 $ 1,341,029 Balance September 30, 2023 Balance December 31, 2022 Operating Lease Liabilities Short-Term Operating Lease Liabilities $ 382,423 $ 356,400 Long-Term Operating Lease Liabilities 928,271 1,026,978 Total $ 1,310,694 $ 1,383,378 |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Balance September 30, 2023 Maturity Analysis 2023 (remaining) $ 126,735 2024 396,766 2025 208,414 2026 167,639 2027 131,626 Thereafter 572,681 Total 1,603,861 Less Imputed interest (293,167) Present Value of Operating Leases $ 1,310,694 |
Lease, Cost [Table Text Block] | Weighted Average Remaining Lease Term (Years) 6.35 Weighted Average Discount Rate 6.05% |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | September 30, 2023 December 31, 2022 Useful Lives Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Definite-Lived Intangible Assets Customers Relationships 14-15 yrs $ 42,878,445 $ 31,647,448 $ 42,878,445 $ 30,429,708 Regulatory Rights 15 yrs 4,000,000 4,000,000 4,000,000 4,000,000 Video Franchise 7 yrs 3,000,000 107,145 - - Trade Name 3-5 yrs 310,106 310,106 310,106 273,465 Indefinitely-Lived Intangible Assets Video Franchise - - 3,000,000 - Spectrum 877,814 - 877,814 - Total $ 51,066,365 $ 36,064,699 $ 51,066,365 $ 34,703,173 Net Identified Intangible Assets $ 15,001,666 $ 16,363,192 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | • (October 1 – December 31) $ 513,059 • 2024 $ 2,052,234 • 2025 $ 2,047,312 • 2026 $ 2,042,389 • 2027 $ 1,335,247 • 2028 $ 1,335,247 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block] | Time-Based RSU's Targeted Performance-Based RSU's Closing Stock Price Vesting Date Balance at December 31, 2021 9,440 13,270 Forfeited (1,685) (4,325) Exercised (4,391) (4,244) $ 17.18 12/31/2022 Balance at December 31, 2022 3,364 4,701 Forfeited - - Exercised - - Balance at September 30, 2023 3,364 4,701 |
Share-Based Compensation Arrangements by Share-Based Payment Award, Restricted Stock Units, Vested and Expected to Vest [Table Text Block] | Closing Stock Price Vesting Date Options Balance at December 31, 2021 - Issued 40,577 $ 21.20 4/11/2023 Issued 40,583 $ 21.20 4/11/2024 Issued 40,583 $ 21.20 4/11/2025 Balance at December 31, 2022 121,743 Issued 51,431 $ 14.70 3/31/2024 Issued 51,431 $ 14.70 3/31/2025 Issued 51,432 $ 14.70 3/31/2026 Balance at September 30, 2023 276,037 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2023 Grants 2022 Grants Exercise Price $ 14.70 $ 21.20 Risk-Free Rate of Interest 2.957% 1.515% Expected Term (Years) 10 10 Expected Stock Price Volatility 20.7% 18.1% Dividend Yield 2.83% 2.44% |
Share-Based Payment Arrangement, Option, Activity [Table Text Block] | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value (in Thousands) Outstanding as of December 31, 2021 - $ - - $ - Granted 121,743 21.20 9.00 - Forfeited - - - - Outstanding as of December 31, 2022 121,743 $ 21.20 9.00 $ - Granted 154,294 14.70 9.75 - Forfeited - - - - Outstanding as of September 2023 276,037 $ 17.57 9.42 $ - |
Basis of Presentation and Con_3
Basis of Presentation and Consolidation (Details) | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Accounting Policies [Abstract] | |||
Number of Reportable Segments | 1 | ||
Depreciation | $ 10,009,933 | $ 9,048,064 | |
Unrecognized Tax Benefits | 19,787 | $ 19,787 | |
Income Tax Examination, Interest Accrued | $ 3,518 | $ 3,518 |
Basis of Presentation and Con_4
Basis of Presentation and Consolidation (Details) - Basic and diluted net income per share - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Basic And Diluted Net Income Per Share Abstract | ||||
Net Income, Basic | $ 483,170 | $ 1,822,648 | $ 5,154,157 | $ 5,924,655 |
Net Income, Diluted | $ 483,170 | $ 1,822,648 | $ 5,154,157 | $ 5,924,655 |
Weighted-average common shares outstanding, Basic | 5,126,581 | 5,084,578 | 5,113,007 | 5,091,391 |
Weighted-average common shares outstanding, Diluted | 5,211,382 | 5,115,477 | 5,175,507 | 5,112,358 |
Net income per share, Basic | $ 0.09 | $ 0.36 | $ 1.01 | $ 1.16 |
Net income per share, Diluted | $ 0.09 | $ 0.36 | $ 1 | $ 1.16 |
Basis of Presentation and Con_5
Basis of Presentation and Consolidation (Details) - Weighted-average shares outstanding, basic and diluted - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Weighted Average Shares Outstanding Basic And Diluted Abstract | ||||
Weighted-average common shares outstanding, Basic | 5,126,581 | 5,084,578 | 5,113,007 | 5,091,391 |
Dilutive RSU's/Options | 84,801 | 30,899 | 62,500 | 20,967 |
Weighted-average common shares outstanding, Diluted | 5,211,382 | 5,115,477 | 5,175,507 | 5,112,358 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Recognition (Details) [Line Items] | ||||
Professional and Contract Services Expense (in Dollars) | $ 141,051 | $ 77,215 | $ 340,786 | $ 214,946 |
Deferred Revenue, Current (in Dollars) | 54,413 | 48,323 | 54,413 | 48,323 |
Deferred Revenue, Noncurrent (in Dollars) | 302,831 | $ 284,259 | $ 302,831 | $ 284,259 |
Minimum [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Contract Term | 3 years | |||
Payment Term | 30 days | |||
Maximum [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Contract Term | 10 years | |||
Payment Term | 60 days | |||
Iowa Operations [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Construction Contractor, Receivable, Excluding Contract Retainage (in Dollars) | 596,084 | $ 596,084 | ||
Minnesota Operations [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Construction Contractor, Receivable, Excluding Contract Retainage (in Dollars) | $ 8,354,481 | $ 8,354,481 | ||
Other Contracted Revenue [Member] | Minimum [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Contract Term | 3 years | |||
Other Contracted Revenue [Member] | Maximum [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Contract Term | 10 years | |||
Product and Service, Other [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Revenue Recognition Period | 1 month | |||
Month To Month And Other Contracted Revenue [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Concentration Risk, Percentage | 76.68% | 78.64% | 77.21% | 79.09% |
Outside of The Scope of ASC 606 [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Concentration Risk, Percentage | 19.65% | 19.43% | 19.74% | 19.05% |
CPE and Equipment Sales and Installation [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Concentration Risk, Percentage | 3.67% | 1.93% | 3.05% | 1.86% |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Revenue from contracts with customers - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | $ 13,152,811 | $ 13,278,644 | $ 39,342,379 | $ 39,985,358 |
Subsidy and other revenue outside scope of ASC 6065 | 3,217,667 | 3,202,483 | 9,675,733 | 9,410,904 |
Total revenue | 16,370,478 | 16,481,127 | 49,018,112 | 49,396,262 |
Voice Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | 1,505,320 | 1,550,057 | 4,373,187 | 4,748,380 |
Total revenue | 1,363,543 | 1,404,890 | 3,969,394 | 4,321,047 |
Network Access [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | 909,502 | 1,224,952 | 3,027,881 | 3,790,634 |
Total revenue | 876,186 | 1,190,870 | 2,926,937 | 3,685,145 |
Video Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | 3,005,010 | 3,126,733 | 9,120,164 | 9,446,473 |
Total revenue | 3,005,010 | 3,126,733 | 9,120,164 | 9,446,613 |
Data Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | 6,327,829 | 6,209,861 | 18,850,042 | 18,543,327 |
Total revenue | 6,881,965 | 6,797,329 | 20,573,084 | 20,288,217 |
Directory [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | 151,562 | 165,094 | 454,852 | 490,832 |
Other Contracted Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | 653,417 | 683,973 | 2,019,130 | 2,048,531 |
Product and Service, Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from customers | $ 600,171 | $ 317,974 | $ 1,497,123 | $ 917,181 |
Revenue Recognition (Details)_2
Revenue Recognition (Details) - Receivables, contracts assets and contract liabilities from revenue contracts with our customers - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Receivables Contracts Assets And Contract Liabilities From Revenue Contracts With Our Customers Abstract | |||
Accounts receivable, net - beginning balance | $ 1,477,692 | $ 2,449,882 | $ 1,512,369 |
Accounts receivable, net - ending balance | 2,437,313 | 1,477,692 | 2,449,882 |
Contract assets - beginning balance | 794,193 | 735,482 | 662,437 |
Contract assets - ending balance | 1,445,577 | 794,193 | 735,482 |
Contract liabilities - beginning balance | 626,306 | 831,479 | 602,007 |
Contract liabilities - ending balance | $ 715,279 | $ 626,306 | $ 831,479 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disclosure Text Block [Abstract] | ||||
Operating Lease, Expense | $ 123,588 | $ 89,040 | $ 334,295 | $ 269,046 |
Leases (Details) - ROU and oper
Leases (Details) - ROU and operating lease liabilities - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Rou And Operating Lease Liabilities Abstract | ||
Operating Lease Right-Of-Use Assets | $ 1,276,743 | $ 1,341,029 |
Short-Term Operating Lease Liabilities | 382,423 | 356,400 |
Long-Term Operating Lease Liabilities | 928,271 | 1,026,978 |
Total | $ 1,310,694 | $ 1,383,378 |
Leases (Details) - Maturity ana
Leases (Details) - Maturity analysis under these lease agreements - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Maturity Analysis Under These Lease Agreements Abstract | ||
2023 (remaining) | $ 126,735 | |
2024 | 396,766 | |
2025 | 208,414 | |
2026 | 167,639 | |
2027 | 131,626 | |
Thereafter | 572,681 | |
Total | 1,603,861 | |
Less Imputed interest | (293,167) | |
Present Value of Operating Leases | $ 1,310,694 | $ 1,383,378 |
Leases (Details) - Other inform
Leases (Details) - Other information related to leases | Sep. 30, 2023 |
Other Information Related To Leases Abstract | |
Weighted Average Remaining Lease Term (Years) | 6 years 4 months 6 days |
Weighted Average Discount Rate | 6.05% |
Goodwill and Intangibles (Detai
Goodwill and Intangibles (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 49,903,029 | $ 49,903,029 | |
Amortization of Intangible Assets | $ 1,361,526 | $ 1,464,253 |
Goodwill and Intangibles (Det_2
Goodwill and Intangibles (Details) - Components of our identified intangible assets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 51,066,365 | $ 51,066,365 |
Accumulated Amortization | 36,064,699 | 34,703,173 |
Net Identified Intangible Assets | 15,001,666 | 16,363,192 |
Franchise Rights [Member] | ||
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | 3,000,000 | |
Accumulated Amortization | ||
SPECTRUM MARKETS [Member] | ||
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | 877,814 | 877,814 |
Accumulated Amortization | ||
Customer Relationships [Member] | ||
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | 42,878,445 | 42,878,445 |
Accumulated Amortization | $ 31,647,448 | 30,429,708 |
Customer Relationships [Member] | Minimum [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 14 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 15 years | |
Regulatory Rights [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 15 years | |
Gross Carrying Amount | $ 4,000,000 | 4,000,000 |
Accumulated Amortization | $ 4,000,000 | 4,000,000 |
Franchise Rights [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 7 years | |
Gross Carrying Amount | $ 3,000,000 | |
Accumulated Amortization | 107,145 | |
Trade Names [Member] | ||
Definite-Lived Intangible Assets | ||
Gross Carrying Amount | 310,106 | 310,106 |
Accumulated Amortization | $ 310,106 | $ 273,465 |
Trade Names [Member] | Minimum [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 3 years | |
Trade Names [Member] | Maximum [Member] | ||
Definite-Lived Intangible Assets | ||
Useful Lives | 5 years |
Goodwill and Intangibles (Det_3
Goodwill and Intangibles (Details) - Summary of Future Amortization Expense | Sep. 30, 2023 USD ($) |
Summary Of Future Amortization Expense Abstract | |
● (July 1 – December 31) | $ 513,059 |
● 2024 | 2,052,234 |
● 2025 | 2,047,312 |
● 2026 | 2,042,389 |
● 2027 | 1,335,247 |
● 2028 | $ 1,335,247 |
Secured Credit Facility (Detail
Secured Credit Facility (Details) | 9 Months Ended | |||||
Jul. 15, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Nov. 10, 2023 | Aug. 29, 2019 USD ($) | Aug. 01, 2018 USD ($) | |
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument, Face Amount | $ 130,000,000 | |||||
Proceeds from Issuance of Long-Term Debt | 50,000,000 | $ 30,000,000 | $ 56,063,223 | |||
Long-Term Line of Credit | 50,000,000 | |||||
Term A-1 Loan (Member) | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument, Face Amount | 50,000,000 | |||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 39,687,500 | |||||
Debt Instrument, Interest Rate Terms | Margin for Base Rate Loans” of 2.15% above the applicable base rate | |||||
Term A-1 Loan (Member) | Beginning on December 2025 [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument, Periodic Payment, Principal | $ 625,000 | |||||
Term A-1 Loan (Member) | Beginning on December 2028 [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument, Periodic Payment, Principal | 937,500 | |||||
Delayed Draw Term Loan [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument, Face Amount | 50,000,000 | |||||
Long-Term Debt, Gross | 40,000,000 | |||||
Long-Term Debt | $ 10,000,000 | |||||
Delayed Draw Term Loan [Member] | Beginning on December 2025 [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument Periodic Payment Principal In Percentage | 1.25% | |||||
Delayed Draw Term Loan [Member] | Beginning on December 2028 [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument Periodic Payment Principal In Percentage | 1.875% | |||||
Revolving Credit Facility [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Long-Term Line of Credit | $ 23,001,202 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 30,000,000 | |||||
Debt Instrument, Interest Rate Terms | Margin for Base Rate Loans” of 1.90% above the applicable base rate | |||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 7 | |||||
Line of Credit Facility, Commitment Fee Percentage | 0.25% | |||||
Secured Debt [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Debt Instrument, Covenant Description | Our loan agreements include restrictions on our ability to pay cash dividends to our stockholders. However, we are allowed to pay dividends in an amount up to $3,000,000 in any year as long as no default or event of default has occurred. Our current Total Leverage Ratio as of September 30, 2023, was 4.67, which exceeded our maximum total leverage of 4.25 per our existing covenants with CoBank. On November 10, 2023, Nuvera received a waiver from CoBank to increase our maximum leverage ratio to 5.50 to accommodate our increased leverage ratio as of September 30, 2023 | |||||
Debt Instrument Threshold Amount Dividends | $ 3,000,000 | |||||
Ratio of Indebtedness to Net Capital | 4.67 | |||||
Secured Debt [Member] | Maximum [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Ratio of Indebtedness to Net Capital | 4.25 | |||||
Subsequent Event [Member] | Secured Debt [Member] | Maximum [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Ratio of Indebtedness to Net Capital | 5.5 | |||||
Revolving Credit Facility [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 20,000,000 | $ 30,000,000 | ||||
Line of Credit [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Long-Term Debt, Gross | $ 74,600,000 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 8.48% | |||||
First IRSA With Co Bank [Member] | Interest Rate Swap [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Derivative, Notional Amount | $ 10,086,350 | $ 16,137,500 | ||||
Debt, Weighted Average Interest Rate | 6.11% | |||||
Second IRSA CoBank [Member] | Interest Rate Swap [Member] | ||||||
Secured Credit Facility (Details) [Line Items] | ||||||
Derivative, Notional Amount | $ 28,270,239 | $ 42,000,000 | ||||
Debt, Weighted Average Interest Rate | 4.44% |
Interest Rate Swaps (Details)
Interest Rate Swaps (Details) - Interest Rate Swap [Member] - USD ($) | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Aug. 29, 2019 | Aug. 01, 2018 | |
Interest Rate Swaps (Details) [Line Items] | ||||
Derivative Liability, Noncurrent | $ 1,991,769 | $ 2,356,042 | ||
Deferred Income Tax Expense (Benefit) | 568,451 | 672,414 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 1,423,318 | $ 1,683,628 | ||
First IRSA With Co Bank [Member] | ||||
Interest Rate Swaps (Details) [Line Items] | ||||
Derivative, Notional Amount | $ 16,137,500 | |||
Derivative, Variable Interest Rate | 25% | |||
Second IRSA CoBank [Member] | ||||
Interest Rate Swaps (Details) [Line Items] | ||||
Derivative, Notional Amount | $ 42,000,000 |
Other Investments (Details)
Other Investments (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Other Investments [Abstract] | |
Gain (Loss) on Sale of Other Investments | $ 4,060,775 |
Guarantees (Details)
Guarantees (Details) - FiberComm [Member] | Mar. 31, 2023 |
Guarantees (Details) [Line Items] | |
Sale of Stock, Percentage of Ownership before Transaction | 100% |
Equity Method Investment, Ownership Percentage | 20% |
Incentive and Retirement Plans
Incentive and Retirement Plans (Details) | Sep. 30, 2023 shares |
Retirement Benefits [Abstract] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 200,000 |
Employee Incentive Plan Percentage Of Compensation In Lieu Of Cash | 50% |
Management Incentive Plan Percentage Of Compensation In Lieu Of Cash | 50% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 149,747 |
Segment Information (Details)
Segment Information (Details) | Sep. 30, 2023 |
Broadband Visions LLC [Member] | |
Segment Information (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 24.30% |
Independent Emergency Services LLC [Member] | |
Segment Information (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 14.29% |
Fiber Minnesota LLC [Member] | |
Segment Information (Details) [Line Items] | |
Equity Method Investment, Ownership Percentage | 7.54% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Commitments and Contingencies (Details) [Line Items] | |
Capital Budget | $ 49.3 |
Outstanding Commitments for Material [Member] | |
Commitments and Contingencies (Details) [Line Items] | |
Other Commitment | 0.1 |
Outstanding Contract [Member] | |
Commitments and Contingencies (Details) [Line Items] | |
Contractual Obligation, to be Paid, Remainder of Fiscal Year | 12.2 |
Contractual Obligation, to be Paid, Year One | $ 14.9 |
Broadband Grants (Details)
Broadband Grants (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Broadband Grants (Details) [Line Items] | |
Number Of Grants | 4 |
December 2022 Grant [Member] | |
Broadband Grants (Details) [Line Items] | |
Grants Receivable (in Dollars) | $ 8,594,688 |
Project Cost (in Dollars) | $ 18,139,749 |
January 2021 Grant [Member] | |
Broadband Grants (Details) [Line Items] | |
Number Of Grants | 5 |
Grants Percentage | 35.40% |
Grants Receivable (in Dollars) | $ 1,918,037 |
Project Cost (in Dollars) | $ 5,419,617 |
Matching Fund Percentage Provided By Grantee | 64.60% |
Proceeds from Grantors (in Dollars) | $ 1,918,037 |
Minimum [Member] | December 2022 Grant [Member] | |
Broadband Grants (Details) [Line Items] | |
Grants Percentage | 45% |
Matching Fund Percentage Provided By Grantee | 50% |
Maximum [Member] | December 2022 Grant [Member] | |
Broadband Grants (Details) [Line Items] | |
Grants Percentage | 50% |
Matching Fund Percentage Provided By Grantee | 55% |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 11, 2022 | Mar. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Mar. 13, 2023 | |
Stock Based Compensation (Details) [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 200,000 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 149,747 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price (in Dollars per share) | $ 21.2 | $ 14.7 | |||
Omnibus Stock Plan [Member] | |||||
Stock Based Compensation (Details) [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 625,000 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant | 221,984 | ||||
Share-Based Payment Arrangement, Option [Member] | |||||
Stock Based Compensation (Details) [Line Items] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized | 100,000 | 50,000 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 3.24 | $ 2.9 | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures | 573,923 | 299,434 | |||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 1 month 28 days | 2 years 3 months 10 days |
Stock Based Compensation (Det_2
Stock Based Compensation (Details) - RSUs currently issued, excercised and outstanding - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stock Based Compensation (Details) - RSUs currently issued, excercised and outstanding [Line Items] | ||
Balance | 121,743 | |
Exercised (in Dollars per share) | $ 17.18 | |
Exercised | Dec. 31, 2022 | |
Balance | 276,037 | 121,743 |
Time Based RSUs [Member] | ||
Stock Based Compensation (Details) - RSUs currently issued, excercised and outstanding [Line Items] | ||
Balance | 3,364 | 9,440 |
Forfeited | (1,685) | |
Exercised | (4,391) | |
Balance | 3,364 | 3,364 |
Targeted Performance Based RSUs [Member] | ||
Stock Based Compensation (Details) - RSUs currently issued, excercised and outstanding [Line Items] | ||
Balance | 4,701 | 13,270 |
Forfeited | (4,325) | |
Exercised | (4,244) | |
Balance | 4,701 | 4,701 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details) - Number of Options awarded - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stock Based Compensation (Details) - Number of Options awarded [Line Items] | ||
Balance | 121,743 | |
Balance | 276,037 | 121,743 |
Share-Based Payment Arrangement, Tranche One [Member] | ||
Stock Based Compensation (Details) - Number of Options awarded [Line Items] | ||
Options,Issued | 51,431 | 40,577 |
Options,Issued Closing Stock Price (in Dollars per share) | $ 14.7 | $ 21.2 |
Options,Issued Vesting Date | Mar. 31, 2024 | Apr. 11, 2023 |
Share-Based Payment Arrangement, Tranche Two [Member] | ||
Stock Based Compensation (Details) - Number of Options awarded [Line Items] | ||
Options,Issued | 51,431 | 40,583 |
Options,Issued Closing Stock Price (in Dollars per share) | $ 14.7 | $ 21.2 |
Options,Issued Vesting Date | Mar. 31, 2025 | Apr. 11, 2024 |
Share-Based Payment Arrangement, Tranche Three [Member] | ||
Stock Based Compensation (Details) - Number of Options awarded [Line Items] | ||
Options,Issued | 51,432 | 40,583 |
Options,Issued Closing Stock Price (in Dollars per share) | $ 14.7 | $ 21.2 |
Options,Issued Vesting Date | Mar. 31, 2026 | Apr. 11, 2025 |
Stock Based Compensation (Det_4
Stock Based Compensation (Details) - Grant date fair value of employee stock option awards assumptions - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Grant Date Fair Value Of Employee Stock Option Awards Assumptions Abstract | ||
Exercise Price (in Dollars per share) | $ 14.7 | $ 21.2 |
Risk-Free Rate of Interest | 2.957% | 1.515% |
Expected Term (Years) | 10 years | 10 years |
Expected Stock Price Volatility | 20.70% | 18.10% |
Dividend Yield | 2.83% | 2.44% |
Stock Based Compensation (Det_5
Stock Based Compensation (Details) - Summaries of Company`s employee stock option activity - Share-Based Payment Arrangement, Option [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stock Based Compensation (Details) - Summaries of Company`s employee stock option activity [Line Items] | ||
Outstanding, Number of Shares | 121,743 | |
Outstanding, Weighted Average Exercise Price | $ 21.2 | |
Outstanding, Aggregate Intrinsic Value | ||
Granted, Number of Shares | 154,294 | 121,743 |
Granted, Weighted Average Exercise Price | $ 14.7 | $ 21.2 |
Granted, Weighted Average Remaining Term | 9 years 9 months | 9 years |
Forfeited, Number of Shares | ||
Forfeited, Weighted Average Exercise Price | ||
Outstanding, Number of Shares | 276,037 | 121,743 |
Outstanding, Weighted Average Exercise Price | $ 17.57 | $ 21.2 |
Outstanding, Weighted Average Remaining Term | 9 years 5 months 1 day | 9 years |
Outstanding, Aggregate Intrinsic Value |
Subsequent Events (Details)
Subsequent Events (Details) - Secured Debt [Member] | Nov. 10, 2023 | Sep. 30, 2023 |
Subsequent Events (Details) [Line Items] | ||
Ratio of Indebtedness to Net Capital | 4.67 | |
Maximum [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Ratio of Indebtedness to Net Capital | 4.25 | |
Subsequent Event [Member] | Maximum [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Ratio of Indebtedness to Net Capital | 5.5 |