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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2018
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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For the transition period from__________ to __________
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VIRGINIA
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54-1162807
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer ☑
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company☐
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Emerging growth company☐
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Page
Numbers
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PART I.
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FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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-
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Item 2.
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-
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Item 3.
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||||
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Item 4.
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||||
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PART II.
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OTHER INFORMATION
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Item 1A.
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||||
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Item 2.
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||||
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Item 6.
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||||
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||||
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SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
|
|
|
|
|
||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
||||
(in thousands)
|
|
|
|
|
||||
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|
September 30,
2018 |
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
75,207
|
|
|
$
|
78,585
|
|
Accounts receivable, net
|
|
59,968
|
|
|
54,184
|
|
||
Income taxes receivable
|
|
2,545
|
|
|
17,311
|
|
||
Inventory, net
|
|
4,962
|
|
|
5,704
|
|
||
Prepaid expenses and other
|
|
63,383
|
|
|
17,111
|
|
||
Total current assets
|
|
206,065
|
|
|
172,895
|
|
||
Investments
|
|
12,296
|
|
|
11,472
|
|
||
Property, plant and equipment, net
|
|
669,709
|
|
|
686,327
|
|
||
Other assets:
|
|
|
|
|
||||
Intangible assets, net
|
|
381,537
|
|
|
380,979
|
|
||
Goodwill
|
|
146,497
|
|
|
146,497
|
|
||
Deferred charges and other assets, net
|
|
53,723
|
|
|
13,690
|
|
||
Total assets
|
|
$
|
1,469,827
|
|
|
$
|
1,411,860
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current maturities of long-term debt, net of unamortized loan fees
|
|
$
|
84,743
|
|
|
$
|
64,397
|
|
Accounts payable
|
|
23,868
|
|
|
28,953
|
|
||
Advanced billings and customer deposits
|
|
7,415
|
|
|
21,153
|
|
||
Accrued compensation
|
|
6,833
|
|
|
9,167
|
|
||
Accrued liabilities and other
|
|
14,756
|
|
|
13,914
|
|
||
Total current liabilities
|
|
137,615
|
|
|
137,584
|
|
||
Long-term debt, less current maturities, net of unamortized loan fees
|
|
694,045
|
|
|
757,561
|
|
||
Other long-term liabilities:
|
|
|
|
|
||||
Deferred income taxes
|
|
120,846
|
|
|
100,879
|
|
||
Deferred lease
|
|
22,162
|
|
|
15,782
|
|
||
Asset retirement obligations
|
|
22,372
|
|
|
21,211
|
|
||
Retirement plan obligations
|
|
13,235
|
|
|
13,328
|
|
||
Other liabilities
|
|
14,567
|
|
|
15,293
|
|
||
Total other long-term liabilities
|
|
193,182
|
|
|
166,493
|
|
||
Shareholders’ equity:
|
|
|
|
|
||||
Common stock, no par value, authorized 96,000; 49,559 and 49,328 issued and outstanding at September 30, 2018 and December 31, 2017, respectively
|
|
—
|
|
|
—
|
|
||
Additional paid in capital
|
|
47,350
|
|
|
44,787
|
|
||
Retained earnings
|
|
385,045
|
|
|
297,205
|
|
||
Accumulated other comprehensive income (loss), net of taxes
|
|
12,590
|
|
|
8,230
|
|
||
Total shareholders’ equity
|
|
444,985
|
|
|
350,222
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
1,469,827
|
|
|
$
|
1,411,860
|
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
|
|
|
|
|
|||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
(in thousands, except per share amounts)
|
|
|
|
|
|||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
Operating revenue:
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service revenue and other
|
$
|
142,768
|
|
|
$
|
149,788
|
|
|
$
|
419,819
|
|
|
$
|
450,617
|
|
Equipment revenue
|
15,963
|
|
|
1,994
|
|
|
49,551
|
|
|
8,303
|
|
||||
Total operating revenue
|
158,731
|
|
|
151,782
|
|
|
469,370
|
|
|
458,920
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of services
|
47,886
|
|
|
48,552
|
|
|
146,362
|
|
|
145,744
|
|
||||
Cost of goods sold
|
15,036
|
|
|
7,282
|
|
|
46,007
|
|
|
17,232
|
|
||||
Selling, general and administrative
|
27,452
|
|
|
42,199
|
|
|
86,117
|
|
|
125,374
|
|
||||
Acquisition, integration and migration expenses
|
—
|
|
|
1,706
|
|
|
—
|
|
|
9,873
|
|
||||
Depreciation and amortization
|
40,028
|
|
|
42,568
|
|
|
124,632
|
|
|
132,297
|
|
||||
Total operating expenses
|
130,402
|
|
|
142,307
|
|
|
403,118
|
|
|
430,520
|
|
||||
Operating income (loss)
|
28,329
|
|
|
9,475
|
|
|
66,252
|
|
|
28,400
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(9,001
|
)
|
|
(9,823
|
)
|
|
(27,184
|
)
|
|
(28,312
|
)
|
||||
Gain (loss) on investments, net
|
88
|
|
|
202
|
|
|
112
|
|
|
395
|
|
||||
Non-operating income (loss), net
|
966
|
|
|
1,003
|
|
|
2,770
|
|
|
3,482
|
|
||||
Income (loss) before income taxes
|
20,382
|
|
|
857
|
|
|
41,950
|
|
|
3,965
|
|
||||
Income tax expense (benefit)
|
4,848
|
|
|
(2,677
|
)
|
|
10,207
|
|
|
(1,830
|
)
|
||||
Net income (loss)
|
15,534
|
|
|
3,534
|
|
|
31,743
|
|
|
5,795
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on interest rate hedge, net of tax
|
465
|
|
|
6
|
|
|
4,360
|
|
|
(770
|
)
|
||||
Comprehensive income (loss)
|
$
|
15,999
|
|
|
$
|
3,540
|
|
|
$
|
36,103
|
|
|
$
|
5,025
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share, basic and diluted:
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per share
|
$
|
0.31
|
|
|
$
|
0.07
|
|
|
$
|
0.64
|
|
|
$
|
0.12
|
|
Diluted net income (loss) per share
|
$
|
0.31
|
|
|
$
|
0.07
|
|
|
$
|
0.63
|
|
|
$
|
0.12
|
|
Weighted average shares outstanding, basic
|
49,559
|
|
|
49,133
|
|
|
49,527
|
|
|
49,100
|
|
||||
Weighted average shares outstanding, diluted
|
50,117
|
|
|
49,959
|
|
|
50,044
|
|
|
49,869
|
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
|
|||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
|
|||||||||||||||||||
(in thousands, except share amounts)
|
|||||||||||||||||||
|
|
Shares of Common Stock (no par value)
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
|||||||||
Balance, December 31, 2017
|
|
49,328
|
|
|
$
|
44,787
|
|
|
$
|
297,205
|
|
|
$
|
8,230
|
|
|
$
|
350,222
|
|
Change in accounting principle - adoption of accounting standard (Note 2)
|
|
—
|
|
|
—
|
|
|
56,097
|
|
|
—
|
|
|
56,097
|
|
||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
31,743
|
|
|
—
|
|
|
31,743
|
|
||||
Other comprehensive gain (loss), net of tax of $1,441
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,360
|
|
|
4,360
|
|
||||
Stock based compensation
|
|
206
|
|
|
4,578
|
|
|
—
|
|
|
—
|
|
|
4,578
|
|
||||
Stock options exercised
|
|
15
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
104
|
|
||||
Common stock issued
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||
Shares retired for settlement of employee taxes upon issuance of vested equity awards
|
|
(66
|
)
|
|
(2,137
|
)
|
|
—
|
|
|
—
|
|
|
(2,137
|
)
|
||||
Common stock issued to acquire non-controlling interest in nTelos
|
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, September 30, 2018
|
|
49,559
|
|
|
$
|
47,350
|
|
|
$
|
385,045
|
|
|
$
|
12,590
|
|
|
$
|
444,985
|
|
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
|
|
|
|
|
||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
||||
(in thousands)
|
|
|
|
|
||||
|
|
Nine Months Ended
September 30, |
||||||
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
31,743
|
|
|
$
|
5,795
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
106,002
|
|
|
113,437
|
|
||
Amortization
|
|
18,630
|
|
|
18,860
|
|
||
Amortization reflected as rent expense in cost of services
|
|
372
|
|
|
2,173
|
|
||
Bad debt expense
|
|
1,362
|
|
|
1,479
|
|
||
Stock based compensation expense, net of amount capitalized
|
|
4,578
|
|
|
3,053
|
|
||
Waived management fee
|
|
28,164
|
|
|
27,068
|
|
||
Deferred income taxes
|
|
(1,989
|
)
|
|
(12,251
|
)
|
||
(Gain) loss on investments
|
|
(112
|
)
|
|
(308
|
)
|
||
Net (gain) loss from patronage and equity investments
|
|
(2,300
|
)
|
|
(2,315
|
)
|
||
Amortization of long-term debt issuance costs
|
|
3,472
|
|
|
3,572
|
|
||
Accrued interest and other
|
|
205
|
|
|
1,633
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(5,492
|
)
|
|
6,418
|
|
||
Inventory, net
|
|
741
|
|
|
31,604
|
|
||
Income taxes receivable
|
|
14,932
|
|
|
(8,704
|
)
|
||
Other assets
|
|
(13,393
|
)
|
|
(162
|
)
|
||
Accounts payable
|
|
(1,913
|
)
|
|
(30,795
|
)
|
||
Income taxes payable
|
|
—
|
|
|
(435
|
)
|
||
Deferred lease
|
|
4,159
|
|
|
3,729
|
|
||
Other deferrals and accruals
|
|
(361
|
)
|
|
(5,146
|
)
|
||
Net cash provided by (used in) operating activities
|
|
188,800
|
|
|
158,705
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Acquisition of property, plant and equipment
|
|
(92,309
|
)
|
|
(109,435
|
)
|
||
Proceeds from sale of assets
|
|
540
|
|
|
356
|
|
||
Cash distributions (contributions) from investments and other
|
|
(1
|
)
|
|
4
|
|
||
Sprint expansion
|
|
(52,000
|
)
|
|
(6,000
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(143,770
|
)
|
|
(115,075
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Principal payments on long-term debt
|
|
(46,375
|
)
|
|
(24,250
|
)
|
||
Proceeds from revolving credit facility borrowings
|
|
15,000
|
|
|
—
|
|
||
Proceeds from credit facility borrowings
|
|
—
|
|
|
25,000
|
|
||
Principal payments on revolving credit facility
|
|
(15,000
|
)
|
|
—
|
|
||
Taxes paid for equity award issuances
|
|
(2,033
|
)
|
|
(5,106
|
)
|
||
Net cash provided by (used in) financing activities
|
|
(48,408
|
)
|
|
(4,356
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
(3,378
|
)
|
|
39,274
|
|
||
Cash and cash equivalents, beginning of period
|
|
78,585
|
|
|
36,193
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
75,207
|
|
|
$
|
75,467
|
|
|
|
|
|
|
||||
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
||||
Cash payments for:
|
|
|
|
|
||||
Interest, net of capitalized interest of $1,187 and $1,266, respectively
|
|
$
|
25,067
|
|
|
$
|
25,934
|
|
Income tax (refunds received) payments, net
|
|
$
|
(2,736
|
)
|
|
$
|
19,567
|
|
Capital expenditures payable
|
|
$
|
11,919
|
|
|
$
|
3,800
|
|
|
As of January 1, 2018
|
||||||||||
(in thousands)
|
As Reported
|
|
Correction of Error
|
|
As Adjusted
|
||||||
Prepaid expenses and other
|
$
|
53,688
|
|
|
$
|
(6,701
|
)
|
|
$
|
46,987
|
|
Deferred charges and other assets, net
|
29,797
|
|
|
14,964
|
|
|
44,761
|
|
|||
Deferred income taxes
|
119,030
|
|
|
2,201
|
|
|
121,231
|
|
|||
Retained earnings
|
347,240
|
|
|
6,062
|
|
|
353,302
|
|
|
As of March 31, 2018
|
||||||||||
(in thousands)
|
As Reported
|
|
Correction of Error
|
|
As Adjusted
|
||||||
Prepaid expenses and other
|
$
|
64,200
|
|
|
$
|
(5,741
|
)
|
|
$
|
58,459
|
|
Deferred charges and other assets, net
|
33,934
|
|
|
16,410
|
|
|
50,344
|
|
|||
Deferred income taxes
|
115,809
|
|
|
2,853
|
|
|
118,662
|
|
|||
Retained earnings
|
352,069
|
|
|
7,816
|
|
|
359,885
|
|
|
As of June 30, 2018
|
||||||||||
(in thousands)
|
As Reported
|
|
Correction of Error
|
|
As Adjusted
|
||||||
Prepaid expenses and other
|
$
|
64,163
|
|
|
$
|
(4,756
|
)
|
|
$
|
59,407
|
|
Deferred charges and other assets, net
|
34,021
|
|
|
17,896
|
|
|
51,917
|
|
|||
Deferred income taxes
|
111,125
|
|
|
3,522
|
|
|
114,647
|
|
|||
Retained earnings
|
359,893
|
|
|
9,618
|
|
|
369,511
|
|
|
For the Three Months Ended March 31, 2018
|
||||||||||
(in thousands)
|
As Reported
|
|
Correction of Error
|
|
As Adjusted
|
||||||
Service revenue and other
|
$
|
134,153
|
|
|
$
|
2,406
|
|
|
$
|
136,559
|
|
Income tax expense (benefit)
|
1,176
|
|
|
652
|
|
|
1,828
|
|
|||
Net income (loss)
|
4,829
|
|
|
1,754
|
|
|
6,583
|
|
|||
Earnings per share - basic
|
$
|
0.10
|
|
|
$
|
0.03
|
|
|
$
|
0.13
|
|
Earnings per share - diluted
|
$
|
0.10
|
|
|
$
|
0.03
|
|
|
$
|
0.13
|
|
|
For the Three Months Ended June 30, 2018
|
||||||||||
(in thousands)
|
As Reported
|
|
Correction of Error
|
|
As Adjusted
|
||||||
Service revenue and other
|
$
|
138,021
|
|
|
$
|
2,471
|
|
|
$
|
140,492
|
|
Income tax expense (benefit)
|
2,862
|
|
|
669
|
|
|
3,531
|
|
|||
Net income (loss)
|
7,824
|
|
|
1,802
|
|
|
9,626
|
|
|||
Earnings per share - basic
|
$
|
0.16
|
|
|
$
|
0.03
|
|
|
$
|
0.19
|
|
Earnings per share - diluted
|
$
|
0.16
|
|
|
$
|
0.03
|
|
|
$
|
0.19
|
|
|
For the Six Months Ended June 30, 2018
|
||||||||||
(in thousands)
|
As Reported
|
|
Correction of Error
|
|
As Adjusted
|
||||||
Service revenue and other
|
$
|
272,174
|
|
|
$
|
4,877
|
|
|
$
|
277,051
|
|
Income tax expense (benefit)
|
4,038
|
|
|
1,321
|
|
|
5,359
|
|
|||
Net income (loss)
|
12,653
|
|
|
3,556
|
|
|
16,209
|
|
|||
Earnings per share - basic
|
$
|
0.26
|
|
|
$
|
0.07
|
|
|
$
|
0.33
|
|
Earnings per share - diluted
|
$
|
0.25
|
|
|
$
|
0.07
|
|
|
$
|
0.32
|
|
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Consolidated
|
||||||||
Wireless service
|
|
$
|
96,299
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
96,299
|
|
Equipment
|
|
15,666
|
|
|
234
|
|
|
63
|
|
|
15,963
|
|
||||
Business, residential and enterprise
|
|
—
|
|
|
29,334
|
|
|
10,702
|
|
|
40,036
|
|
||||
Tower and other
|
|
4,134
|
|
|
2,614
|
|
|
8,857
|
|
|
15,605
|
|
||||
Total revenue
|
|
116,099
|
|
|
32,182
|
|
|
19,622
|
|
|
167,903
|
|
||||
Internal revenue
|
|
(1,263
|
)
|
|
(1,266
|
)
|
|
(6,643
|
)
|
|
(9,172
|
)
|
||||
Total operating revenue
|
|
$
|
114,836
|
|
|
$
|
30,916
|
|
|
$
|
12,979
|
|
|
$
|
158,731
|
|
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Consolidated
|
||||||||
Wireless service
|
|
$
|
284,154
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
284,154
|
|
Equipment
|
|
48,859
|
|
|
537
|
|
|
155
|
|
|
49,551
|
|
||||
Business, residential and enterprise
|
|
—
|
|
|
87,931
|
|
|
31,906
|
|
|
119,837
|
|
||||
Tower and other
|
|
10,643
|
|
|
7,536
|
|
|
26,380
|
|
|
44,559
|
|
||||
Total revenue
|
|
343,656
|
|
|
96,004
|
|
|
58,441
|
|
|
498,101
|
|
||||
Internal revenue
|
|
(3,746
|
)
|
|
(3,394
|
)
|
|
(21,591
|
)
|
|
(28,731
|
)
|
||||
Total operating revenue
|
|
$
|
339,910
|
|
|
$
|
92,610
|
|
|
$
|
36,850
|
|
|
$
|
469,370
|
|
(in thousands)
|
|
Balance at December 31, 2017
|
|
Adjustments due to Topic 606
|
|
Balance at January 1, 2018
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Prepaid expenses and other
|
|
$
|
17,111
|
|
|
$
|
29,876
|
|
|
$
|
46,987
|
|
Deferred charges and other assets, net
|
|
13,690
|
|
|
31,071
|
|
|
44,761
|
|
|||
Liabilities
|
|
|
|
|
|
|
||||||
Advanced billing and customer deposits
|
|
21,153
|
|
|
(14,302
|
)
|
|
6,851
|
|
|||
Deferred income taxes
|
|
100,879
|
|
|
20,352
|
|
|
121,231
|
|
|||
Other long-term liabilities
|
|
15,293
|
|
|
(1,200
|
)
|
|
14,093
|
|
|||
Retained earnings
|
|
297,205
|
|
|
56,097
|
|
|
353,302
|
|
|
|
Three Months Ended September 30, 2018
|
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without Adoption of Topic 606
|
|
Effect of Change Higher/(Lower)
|
||||||
Operating revenue:
|
|
|
|
|
|
|
||||||
Service revenue and other
|
|
$
|
142,768
|
|
|
$
|
161,076
|
|
|
$
|
(18,308
|
)
|
Equipment revenue
|
|
15,963
|
|
|
2,178
|
|
|
13,785
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Cost of services
|
|
47,886
|
|
|
48,001
|
|
|
(115
|
)
|
|||
Cost of goods sold
|
|
15,036
|
|
|
7,870
|
|
|
7,166
|
|
|||
Selling, general and administrative
|
|
27,452
|
|
|
44,164
|
|
|
(16,712
|
)
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without Adoption of Topic 606
|
|
Effect of Change Higher/(Lower)
|
||||||
Operating revenue:
|
|
|
|
|
|
|
||||||
Service revenue and other
|
|
$
|
419,819
|
|
|
$
|
471,155
|
|
|
$
|
(51,336
|
)
|
Equipment revenue
|
|
49,551
|
|
|
6,036
|
|
|
43,515
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Cost of services
|
|
146,362
|
|
|
146,199
|
|
|
163
|
|
|||
Cost of goods sold
|
|
46,007
|
|
|
20,316
|
|
|
25,691
|
|
|||
Selling, general and administrative
|
|
86,117
|
|
|
132,711
|
|
|
(46,594
|
)
|
|
|
As of September 30, 2018
|
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without Adoption of Topic 606
|
|
Effect of Change Higher/(Lower)
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Prepaid expenses and other
|
|
$
|
63,383
|
|
|
$
|
27,765
|
|
|
$
|
35,618
|
|
Deferred charges and other assets, net
|
|
53,723
|
|
|
17,496
|
|
|
36,227
|
|
|||
Liabilities
|
|
|
|
|
|
|
||||||
Advanced billing and customer deposits
|
|
7,415
|
|
|
23,744
|
|
|
(16,329
|
)
|
|||
Deferred income taxes
|
|
120,846
|
|
|
97,029
|
|
|
23,817
|
|
|||
Other long-term liabilities
|
|
14,567
|
|
|
15,759
|
|
|
(1,192
|
)
|
|||
Retained earnings
|
|
385,045
|
|
|
319,496
|
|
|
65,549
|
|
($ in thousands)
|
|
Estimated Useful Life (in years)
|
|
February 1, 2018
|
||
Affiliate contract expansion
|
|
12
|
|
$
|
45,148
|
|
Prepayment of tangible assets
|
|
0
|
|
6,497
|
|
|
Off-market leases - favorable
|
|
16.5
|
|
3,665
|
|
|
Off-market leases - unfavorable
|
|
4.2
|
|
(3,310
|
)
|
|
Total
|
|
|
|
$
|
52,000
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Calculation of net income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
15,534
|
|
|
$
|
3,534
|
|
|
$
|
31,743
|
|
|
$
|
5,795
|
|
Weighted average shares outstanding
|
|
49,559
|
|
|
49,133
|
|
|
49,527
|
|
|
49,100
|
|
||||
Basic income (loss) per share
|
|
$
|
0.31
|
|
|
$
|
0.07
|
|
|
$
|
0.64
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
||||||||
Effect of stock options outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
|
49,559
|
|
|
49,133
|
|
|
49,527
|
|
|
49,100
|
|
||||
Effect from dilutive shares and options outstanding
|
|
558
|
|
|
826
|
|
|
517
|
|
|
769
|
|
||||
Diluted weighted average shares outstanding
|
|
50,117
|
|
|
49,959
|
|
|
50,044
|
|
|
49,869
|
|
||||
Diluted income (loss) per share
|
|
$
|
0.31
|
|
|
$
|
0.07
|
|
|
$
|
0.63
|
|
|
$
|
0.12
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive
|
|
13
|
|
|
—
|
|
|
60
|
|
|
94
|
|
(in thousands)
|
9/30/2018
|
|
12/31/2017
|
||||
Cost method:
|
|
|
|
||||
CoBank
|
$
|
7,441
|
|
|
$
|
6,818
|
|
Other – equity in other telecommunications partners
|
784
|
|
|
811
|
|
||
|
8,225
|
|
|
7,629
|
|
||
Equity method:
|
|
|
|
||||
Other
|
575
|
|
|
564
|
|
||
|
575
|
|
|
564
|
|
||
Total other investments
|
$
|
8,800
|
|
|
$
|
8,193
|
|
(in thousands)
|
9/30/2018
|
|
12/31/2017
|
||||
Cash and Equivalents
|
$
|
1,408
|
|
|
$
|
—
|
|
Domestic equity funds
|
1,675
|
|
|
2,856
|
|
||
International equity funds
|
413
|
|
|
423
|
|
||
Total investments carried at fair value
|
$
|
3,496
|
|
|
$
|
3,279
|
|
(in thousands)
|
September 30, 2018
|
||||||||||||||
Balance sheet location:
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Prepaid expenses and other:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
—
|
|
|
$
|
5,447
|
|
|
$
|
—
|
|
|
$
|
5,447
|
|
Deferred charges and other assets, net:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
13,541
|
|
|
—
|
|
|
13,541
|
|
||||
Total
|
$
|
—
|
|
|
$
|
18,988
|
|
|
$
|
—
|
|
|
$
|
18,988
|
|
(in thousands)
|
December 31, 2017
|
||||||||||||||
Balance sheet location:
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150
|
|
Prepaid expenses and other:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
2,411
|
|
|
—
|
|
|
2,411
|
|
||||
Deferred charges and other assets, net:
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
10,776
|
|
|
—
|
|
|
10,776
|
|
||||
Total
|
$
|
150
|
|
|
$
|
13,187
|
|
|
$
|
—
|
|
|
$
|
13,337
|
|
(in thousands)
|
|
Estimated Useful Lives
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Land
|
|
|
|
$
|
6,568
|
|
|
$
|
6,418
|
|
Buildings and structures
|
|
10 - 40 years
|
|
207,647
|
|
|
195,540
|
|
||
Cable and wire
|
|
4 - 40 years
|
|
302,592
|
|
|
286,999
|
|
||
Equipment and software
|
|
2 - 17 years
|
|
763,089
|
|
|
730,228
|
|
||
Plant in service
|
|
|
|
1,279,896
|
|
|
1,219,185
|
|
||
Plant under construction
|
|
|
|
74,422
|
|
|
62,202
|
|
||
Total property, plant and equipment
|
|
|
|
1,354,318
|
|
|
1,281,387
|
|
||
Less accumulated amortization and depreciation
|
|
|
|
684,609
|
|
|
595,060
|
|
||
Property, plant and equipment, net
|
|
|
|
$
|
669,709
|
|
|
$
|
686,327
|
|
(in thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Goodwill - wireless
|
$
|
146,383
|
|
|
$
|
146,383
|
|
Goodwill - cable
|
104
|
|
|
104
|
|
||
Goodwill - wireline
|
10
|
|
|
10
|
|
||
Goodwill
|
$
|
146,497
|
|
|
$
|
146,497
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in thousands)
|
Gross
Carrying Amount |
|
Accumulated Amortization and Other
|
|
Net
|
|
Gross
Carrying Amount |
|
Accumulated Amortization and Other
|
|
Net
|
||||||||||||
Non-amortizing intangibles:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cable franchise rights
|
$
|
64,334
|
|
|
$
|
—
|
|
|
$
|
64,334
|
|
|
$
|
64,334
|
|
|
$
|
—
|
|
|
$
|
64,334
|
|
Railroad crossing rights
|
141
|
|
|
—
|
|
|
141
|
|
|
141
|
|
|
—
|
|
|
141
|
|
||||||
Total non-amortizing intangibles
|
64,475
|
|
|
—
|
|
|
64,475
|
|
|
64,475
|
|
|
—
|
|
|
64,475
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Finite-lived intangibles:
|
|||||||||||||||||||||||
Affiliate contract expansion - wireless
|
455,305
|
|
|
(152,603
|
)
|
|
302,702
|
|
|
410,157
|
|
|
(105,964
|
)
|
|
304,193
|
|
||||||
Favorable leases - wireless
|
15,816
|
|
|
(1,754
|
)
|
|
14,062
|
|
|
13,103
|
|
|
(1,222
|
)
|
|
11,881
|
|
||||||
Acquired subscribers - cable
|
25,265
|
|
|
(25,213
|
)
|
|
52
|
|
|
25,265
|
|
|
(25,100
|
)
|
|
165
|
|
||||||
Other intangibles
|
464
|
|
|
(218
|
)
|
|
246
|
|
|
463
|
|
|
(198
|
)
|
|
265
|
|
||||||
Total finite-lived intangibles
|
496,850
|
|
|
(179,788
|
)
|
|
317,062
|
|
|
448,988
|
|
|
(132,484
|
)
|
|
316,504
|
|
||||||
Total intangible assets
|
$
|
561,325
|
|
|
$
|
(179,788
|
)
|
|
$
|
381,537
|
|
|
$
|
513,463
|
|
|
$
|
(132,484
|
)
|
|
$
|
380,979
|
|
(in thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Balance sheet location of derivative financial instruments:
|
|
|
|
|
||||
Prepaid expenses and other
|
|
$
|
5,447
|
|
|
$
|
2,411
|
|
Deferred charges and other assets, net
|
|
13,541
|
|
|
10,776
|
|
||
Total derivatives designated as hedging instruments
|
|
$
|
18,988
|
|
|
$
|
13,187
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||
(in thousands)
|
Gains (Losses) on
Cash Flow Hedges |
|
Income Tax
(Expense) Benefit |
|
Accumulated
Other Comprehensive Income (Loss), net of taxes |
||||||
Balance as of December 31, 2017
|
$
|
13,187
|
|
|
$
|
(4,957
|
)
|
|
$
|
8,230
|
|
Net change in unrealized gain (loss)
|
5,801
|
|
|
(1,441
|
)
|
|
4,360
|
|
|||
Net current period other comprehensive income (loss)
|
5,801
|
|
|
(1,441
|
)
|
|
4,360
|
|
|||
Balance as of September 30, 2018
|
$
|
18,988
|
|
|
$
|
(6,398
|
)
|
|
$
|
12,590
|
|
(in thousands)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Prepaid rent
|
|
$
|
10,058
|
|
|
$
|
10,519
|
|
Prepaid maintenance expenses
|
|
3,546
|
|
|
3,062
|
|
||
Interest rate swaps
|
|
5,447
|
|
|
2,411
|
|
||
Deferred contract asset
|
|
35,617
|
|
|
—
|
|
||
Other
|
|
8,715
|
|
|
1,119
|
|
||
Prepaid expenses and other
|
|
$
|
63,383
|
|
|
$
|
17,111
|
|
(in thousands)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Interest rate swaps
|
|
$
|
13,541
|
|
|
$
|
10,776
|
|
Deferred contract asset
|
|
36,260
|
|
|
—
|
|
||
Other
|
|
3,922
|
|
|
2,914
|
|
||
Deferred charges and other assets, net
|
|
$
|
53,723
|
|
|
$
|
13,690
|
|
(in thousands)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Sales and property taxes payable
|
|
$
|
3,513
|
|
|
$
|
3,872
|
|
Severance accrual
|
|
—
|
|
|
1,028
|
|
||
Asset retirement obligations
|
|
582
|
|
|
492
|
|
||
Accrued programming costs
|
|
2,927
|
|
|
2,805
|
|
||
Other current liabilities
|
|
7,734
|
|
|
5,717
|
|
||
Accrued liabilities and other
|
|
$
|
14,756
|
|
|
$
|
13,914
|
|
(in thousands)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Non-current portion of deferred revenues
|
|
$
|
12,659
|
|
|
$
|
14,030
|
|
Other
|
|
1,908
|
|
|
1,263
|
|
||
Other liabilities
|
|
$
|
14,567
|
|
|
$
|
15,293
|
|
(in thousands)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Term loan A-1
|
|
$
|
400,125
|
|
|
$
|
436,500
|
|
Term loan A-2
|
|
390,000
|
|
|
400,000
|
|
||
|
|
790,125
|
|
|
836,500
|
|
||
Less: unamortized loan fees
|
|
11,337
|
|
|
14,542
|
|
||
Total debt, net of unamortized loan fees
|
|
$
|
778,788
|
|
|
$
|
821,958
|
|
|
|
|
|
|
||||
Current maturities of long-term debt, net of current unamortized loan fees
|
|
$
|
84,743
|
|
|
$
|
64,397
|
|
Long-term debt, less current maturities, net of unamortized loan fees
|
|
$
|
694,045
|
|
|
$
|
757,561
|
|
•
|
a limitation on the Company’s total leverage ratio, defined as indebtedness divided by earnings before interest, taxes, depreciation and amortization, or EBITDA, of less than or equal to
3.75
to 1.00 from the closing date through December 30, 2018, then
3.25
to 1.00 through December 30, 2019, and
3.00
to 1.00 thereafter;
|
•
|
a minimum debt service coverage ratio, defined as EBITDA minus certain cash taxes divided by the sum of all scheduled principal payments on the Term Loans and scheduled principal payments on other indebtedness plus cash interest expense, greater than
2.00
to 1.00; and
|
•
|
maintain a minimum liquidity balance of greater than
$25 million
. The balance includes amounts available under the revolver facility plus unrestricted cash and cash equivalents on deposit in a deposit account for which a control agreement has been delivered to the administrative agent under the 2016 credit agreement.
|
|
|
Actual
|
|
Covenant Requirement
|
||
Total leverage ratio
|
|
2.61
|
|
|
3.75 or Lower
|
|
Debt service coverage ratio
|
|
3.25
|
|
|
2.00 or Higher
|
|
Minimum liquidity balance (in millions)
|
|
$
|
149.1
|
|
|
$25.0 or Higher
|
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
External revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenue
|
|
$
|
96,299
|
|
|
$
|
28,578
|
|
|
$
|
5,443
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130,320
|
|
Equipment revenue
|
|
15,666
|
|
|
234
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
15,963
|
|
||||||
Other
|
|
2,871
|
|
|
2,104
|
|
|
7,473
|
|
|
—
|
|
|
—
|
|
|
12,448
|
|
||||||
Total external revenue
|
|
114,836
|
|
|
30,916
|
|
|
12,979
|
|
|
—
|
|
|
—
|
|
|
158,731
|
|
||||||
Internal revenue
|
|
1,263
|
|
|
1,266
|
|
|
6,643
|
|
|
—
|
|
|
(9,172
|
)
|
|
—
|
|
||||||
Total operating revenue
|
|
116,099
|
|
|
32,182
|
|
|
19,622
|
|
|
—
|
|
|
(9,172
|
)
|
|
158,731
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
|
32,253
|
|
|
14,837
|
|
|
9,266
|
|
|
(12
|
)
|
|
(8,458
|
)
|
|
47,886
|
|
||||||
Cost of goods sold
|
|
14,940
|
|
|
78
|
|
|
19
|
|
|
(1
|
)
|
|
—
|
|
|
15,036
|
|
||||||
Selling, general and administrative
|
|
11,191
|
|
|
5,331
|
|
|
1,780
|
|
|
9,864
|
|
|
(714
|
)
|
|
27,452
|
|
||||||
Depreciation and amortization
|
|
30,363
|
|
|
6,102
|
|
|
3,435
|
|
|
128
|
|
|
—
|
|
|
40,028
|
|
||||||
Total operating expenses
|
|
88,747
|
|
|
26,348
|
|
|
14,500
|
|
|
9,979
|
|
|
(9,172
|
)
|
|
130,402
|
|
||||||
Operating income (loss)
|
|
$
|
27,352
|
|
|
$
|
5,834
|
|
|
$
|
5,122
|
|
|
$
|
(9,979
|
)
|
|
$
|
—
|
|
|
$
|
28,329
|
|
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
External revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenue
|
|
$
|
107,395
|
|
|
$
|
26,934
|
|
|
$
|
5,126
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
139,455
|
|
Equipment revenue
|
|
1,742
|
|
|
219
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
1,994
|
|
||||||
Other
|
|
2,129
|
|
|
1,937
|
|
|
6,267
|
|
|
—
|
|
|
—
|
|
|
10,333
|
|
||||||
Total external revenue
|
|
111,266
|
|
|
29,090
|
|
|
11,426
|
|
|
—
|
|
|
—
|
|
|
151,782
|
|
||||||
Internal revenue
|
|
1,239
|
|
|
999
|
|
|
8,425
|
|
|
—
|
|
|
(10,663
|
)
|
|
—
|
|
||||||
Total operating revenue
|
|
112,505
|
|
|
30,089
|
|
|
19,851
|
|
|
—
|
|
|
(10,663
|
)
|
|
151,782
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
|
33,825
|
|
|
14,858
|
|
|
9,796
|
|
|
—
|
|
|
(9,927
|
)
|
|
48,552
|
|
||||||
Cost of goods sold
|
|
7,216
|
|
|
55
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
7,282
|
|
||||||
Selling, general and administrative
|
|
30,099
|
|
|
5,358
|
|
|
1,706
|
|
|
5,772
|
|
|
(736
|
)
|
|
42,199
|
|
||||||
Acquisition, integration and migration expenses
|
|
1,691
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
1,706
|
|
||||||
Depreciation and amortization
|
|
32,929
|
|
|
6,192
|
|
|
3,249
|
|
|
198
|
|
|
—
|
|
|
42,568
|
|
||||||
Total operating expenses
|
|
105,760
|
|
|
26,463
|
|
|
14,762
|
|
|
5,985
|
|
|
(10,663
|
)
|
|
142,307
|
|
||||||
Operating income (loss)
|
|
$
|
6,745
|
|
|
$
|
3,626
|
|
|
$
|
5,089
|
|
|
$
|
(5,985
|
)
|
|
$
|
—
|
|
|
$
|
9,475
|
|
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
External revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenue
|
|
$
|
284,154
|
|
|
$
|
85,797
|
|
|
$
|
16,052
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
386,003
|
|
Equipment revenue
|
|
48,859
|
|
|
537
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
49,551
|
|
||||||
Other
|
|
6,897
|
|
|
6,276
|
|
|
20,643
|
|
|
—
|
|
|
—
|
|
|
33,816
|
|
||||||
Total external revenue
|
|
339,910
|
|
|
92,610
|
|
|
36,850
|
|
|
—
|
|
|
—
|
|
|
469,370
|
|
||||||
Internal revenue
|
|
3,746
|
|
|
3,394
|
|
|
21,591
|
|
|
—
|
|
|
(28,731
|
)
|
|
—
|
|
||||||
Total operating revenue
|
|
343,656
|
|
|
96,004
|
|
|
58,441
|
|
|
—
|
|
|
(28,731
|
)
|
|
469,370
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
|
99,491
|
|
|
45,118
|
|
|
28,441
|
|
|
—
|
|
|
(26,688
|
)
|
|
146,362
|
|
||||||
Cost of goods sold
|
|
45,749
|
|
|
197
|
|
|
61
|
|
|
—
|
|
|
—
|
|
|
46,007
|
|
||||||
Selling, general and administrative
|
|
35,693
|
|
|
14,940
|
|
|
5,183
|
|
|
32,344
|
|
|
(2,043
|
)
|
|
86,117
|
|
||||||
Depreciation and amortization
|
|
95,853
|
|
|
18,305
|
|
|
10,069
|
|
|
405
|
|
|
—
|
|
|
124,632
|
|
||||||
Total operating expenses
|
|
276,786
|
|
|
78,560
|
|
|
43,754
|
|
|
32,749
|
|
|
(28,731
|
)
|
|
403,118
|
|
||||||
Operating income (loss)
|
|
$
|
66,870
|
|
|
$
|
17,444
|
|
|
$
|
14,687
|
|
|
$
|
(32,749
|
)
|
|
$
|
—
|
|
|
$
|
66,252
|
|
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
External revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenue
|
|
$
|
323,262
|
|
|
$
|
80,229
|
|
|
$
|
15,301
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
418,792
|
|
Equipment revenue
|
|
7,666
|
|
|
547
|
|
|
90
|
|
|
—
|
|
|
—
|
|
|
8,303
|
|
||||||
Other
|
|
7,467
|
|
|
5,736
|
|
|
18,622
|
|
|
—
|
|
|
—
|
|
|
31,825
|
|
||||||
Total external revenue
|
|
338,395
|
|
|
86,512
|
|
|
34,013
|
|
|
—
|
|
|
—
|
|
|
458,920
|
|
||||||
Internal revenue
|
|
3,707
|
|
|
2,153
|
|
|
24,568
|
|
|
—
|
|
|
(30,428
|
)
|
|
—
|
|
||||||
Total operating revenue
|
|
342,102
|
|
|
88,665
|
|
|
58,581
|
|
|
—
|
|
|
(30,428
|
)
|
|
458,920
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services
|
|
100,745
|
|
|
44,956
|
|
|
28,357
|
|
|
—
|
|
|
(28,314
|
)
|
|
145,744
|
|
||||||
Cost of goods sold
|
|
17,084
|
|
|
96
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
17,232
|
|
||||||
Selling, general and administrative
|
|
88,201
|
|
|
15,083
|
|
|
5,065
|
|
|
19,139
|
|
|
(2,114
|
)
|
|
125,374
|
|
||||||
Acquisition, integration and migration expenses
|
|
9,607
|
|
|
—
|
|
|
—
|
|
|
266
|
|
|
—
|
|
|
9,873
|
|
||||||
Depreciation and amortization
|
|
104,231
|
|
|
18,070
|
|
|
9,536
|
|
|
460
|
|
|
—
|
|
|
132,297
|
|
||||||
Total operating expenses
|
|
319,868
|
|
|
78,205
|
|
|
43,010
|
|
|
19,865
|
|
|
(30,428
|
)
|
|
430,520
|
|
||||||
Operating income (loss)
|
|
$
|
22,234
|
|
|
$
|
10,460
|
|
|
$
|
15,571
|
|
|
$
|
(19,865
|
)
|
|
$
|
—
|
|
|
$
|
28,400
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total consolidated operating income (loss)
|
|
$
|
28,329
|
|
|
$
|
9,475
|
|
|
$
|
66,252
|
|
|
$
|
28,400
|
|
Interest expense
|
|
(9,001
|
)
|
|
(9,823
|
)
|
|
(27,184
|
)
|
|
(28,312
|
)
|
||||
Gain (loss) on investments, net
|
|
88
|
|
|
202
|
|
|
112
|
|
|
395
|
|
||||
Non-operating income (loss), net
|
|
966
|
|
|
1,003
|
|
|
2,770
|
|
|
3,482
|
|
||||
Income (loss) before income taxes
|
|
$
|
20,382
|
|
|
$
|
857
|
|
|
$
|
41,950
|
|
|
$
|
3,965
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
|
|
Topic 606 Impact - CONSOLIDATED
|
|
||||||||||||
($ in thousands, except per share amounts)
|
Prior to Adoption of Topic 606
|
Changes in Presentation (1)
|
Equipment Revenue (2)
|
Deferred Costs (3)
|
As Reported 09/30/2018
|
||||||||||
Service revenue and other
|
$
|
161,076
|
|
$
|
(23,174
|
)
|
$
|
—
|
|
$
|
4,866
|
|
$
|
142,768
|
|
Equipment revenue
|
2,178
|
|
—
|
|
13,785
|
|
—
|
|
15,963
|
|
|||||
Total operating revenue
|
163,254
|
|
(23,174
|
)
|
13,785
|
|
4,866
|
|
158,731
|
|
|||||
Cost of services
|
48,001
|
|
—
|
|
—
|
|
(115
|
)
|
47,886
|
|
|||||
Cost of goods sold
|
7,870
|
|
(6,619
|
)
|
13,785
|
|
—
|
|
15,036
|
|
|||||
Selling, general & administrative
|
44,164
|
|
(16,555
|
)
|
—
|
|
(157
|
)
|
27,452
|
|
|||||
Depreciation and amortization
|
40,028
|
|
—
|
|
—
|
|
—
|
|
40,028
|
|
|||||
Total operating expenses
|
140,063
|
|
(23,174
|
)
|
13,785
|
|
(272
|
)
|
130,402
|
|
|||||
Operating income (loss)
|
23,191
|
|
—
|
|
—
|
|
5,138
|
|
28,329
|
|
|||||
Other income (expense)
|
(7,947
|
)
|
—
|
|
—
|
|
—
|
|
(7,947
|
)
|
|||||
Income tax expense (benefit)
|
3,486
|
|
—
|
|
—
|
|
1,362
|
|
4,848
|
|
|||||
Net income (loss)
|
$
|
11,758
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,776
|
|
$
|
15,534
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.24
|
|
|
|
$
|
0.07
|
|
$
|
0.31
|
|
||||
Diluted
|
$
|
0.23
|
|
|
|
$
|
0.08
|
|
$
|
0.31
|
|
||||
Weighted average shares outstanding, basic
|
49,559
|
|
|
|
|
49,559
|
|
||||||||
Weighted average shares outstanding, diluted
|
50,117
|
|
|
|
|
50,117
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||
|
|
Topic 606 Impact - CONSOLIDATED
|
|
||||||||||||
($ in thousands, except per share amounts)
|
Prior to Adoption of Topic 606
|
Changes in Presentation (1)
|
Equipment Revenue (2)
|
Deferred Costs (3)
|
As Reported 09/30/2018
|
||||||||||
Service revenue and other
|
$
|
471,155
|
|
$
|
(64,069
|
)
|
$
|
—
|
|
$
|
12,733
|
|
$
|
419,819
|
|
Equipment revenue
|
6,036
|
|
—
|
|
43,515
|
|
—
|
|
49,551
|
|
|||||
Total operating revenue
|
477,191
|
|
(64,069
|
)
|
43,515
|
|
12,733
|
|
469,370
|
|
|||||
Cost of services
|
146,199
|
|
—
|
|
—
|
|
163
|
|
146,362
|
|
|||||
Cost of goods sold
|
20,316
|
|
(17,824
|
)
|
43,515
|
|
—
|
|
46,007
|
|
|||||
Selling, general & administrative
|
132,711
|
|
(46,245
|
)
|
—
|
|
(349
|
)
|
86,117
|
|
|||||
Depreciation and amortization
|
124,632
|
|
—
|
|
—
|
|
—
|
|
124,632
|
|
|||||
Total operating expenses
|
423,858
|
|
(64,069
|
)
|
43,515
|
|
(186
|
)
|
403,118
|
|
|||||
Operating income (loss)
|
53,333
|
|
—
|
|
—
|
|
12,919
|
|
66,252
|
|
|||||
Other income (expense)
|
(24,302
|
)
|
—
|
|
—
|
|
—
|
|
(24,302
|
)
|
|||||
Income tax expense (benefit)
|
6,740
|
|
—
|
|
—
|
|
3,467
|
|
10,207
|
|
|||||
Net income (loss)
|
$
|
22,291
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9,452
|
|
$
|
31,743
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.45
|
|
|
|
$
|
0.19
|
|
$
|
0.64
|
|
||||
Diluted
|
$
|
0.45
|
|
|
|
$
|
0.18
|
|
$
|
0.63
|
|
||||
Weighted average shares outstanding, basic
|
49,527
|
|
|
|
|
49,527
|
|
||||||||
Weighted average shares outstanding, diluted
|
50,044
|
|
|
|
|
50,044
|
|
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||||
Operating revenue
|
|
$
|
158,731
|
|
100.0
|
|
|
$
|
151,782
|
|
100.0
|
|
|
$
|
6,949
|
|
|
4.6
|
|
Operating expenses
|
|
130,402
|
|
82.2
|
|
|
142,307
|
|
93.8
|
|
|
(11,905
|
)
|
|
(8.4
|
)
|
|||
Operating income (loss)
|
|
28,329
|
|
17.8
|
|
|
9,475
|
|
6.2
|
|
|
18,854
|
|
|
199.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
|
(9,001
|
)
|
(5.7
|
)
|
|
(9,823
|
)
|
(6.5
|
)
|
|
822
|
|
|
8.4
|
|
|||
Other income (expense), net
|
|
1,054
|
|
0.7
|
|
|
1,205
|
|
0.8
|
|
|
(151
|
)
|
|
(12.5
|
)
|
|||
Income (loss) before taxes
|
|
20,382
|
|
12.8
|
|
|
857
|
|
0.6
|
|
|
19,525
|
|
|
2,278.3
|
|
|||
Income tax expense (benefit)
|
|
4,848
|
|
3.1
|
|
|
(2,677
|
)
|
(1.8
|
)
|
|
7,525
|
|
|
(281.1
|
)
|
|||
Net income (loss)
|
|
$
|
15,534
|
|
9.8
|
|
|
$
|
3,534
|
|
2.3
|
|
|
$
|
12,000
|
|
|
339.6
|
|
|
|
Nine Months Ended
September 30, |
|
Change
|
|||||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||||
Operating revenue
|
|
$
|
469,370
|
|
100.0
|
|
|
$
|
458,920
|
|
100.0
|
|
|
$
|
10,450
|
|
|
2.3
|
|
Operating expenses
|
|
403,118
|
|
85.9
|
|
|
430,520
|
|
93.8
|
|
|
(27,402
|
)
|
|
(6.4
|
)
|
|||
Operating income (loss)
|
|
66,252
|
|
14.1
|
|
|
28,400
|
|
6.2
|
|
|
37,852
|
|
|
133.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense
|
|
(27,184
|
)
|
(5.8
|
)
|
|
(28,312
|
)
|
(6.2
|
)
|
|
1,128
|
|
|
4.0
|
|
|||
Other income (expense), net
|
|
2,882
|
|
0.6
|
|
|
3,877
|
|
0.8
|
|
|
(995
|
)
|
|
(25.7
|
)
|
|||
Income (loss) before taxes
|
|
41,950
|
|
8.9
|
|
|
3,965
|
|
0.9
|
|
|
37,985
|
|
|
958.0
|
|
|||
Income tax expense (benefit)
|
|
10,207
|
|
2.2
|
|
|
(1,830
|
)
|
(0.4
|
)
|
|
12,037
|
|
|
(657.8
|
)
|
|||
Net income (loss)
|
|
$
|
31,743
|
|
6.8
|
|
|
$
|
5,795
|
|
1.3
|
|
|
$
|
25,948
|
|
|
447.8
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
|
|
Topic 606 Impact - WIRELESS
|
|
||||||||||||
($ in thousands)
|
Prior to Adoption of Topic 606
|
Changes in Presentation (1)
|
Equipment Revenue (2)
|
Deferred Costs (3)
|
As Reported 09/30/2018
|
||||||||||
Service revenue
|
$
|
114,615
|
|
$
|
(23,174
|
)
|
$
|
—
|
|
$
|
4,858
|
|
$
|
96,299
|
|
Equipment revenue
|
1,881
|
|
—
|
|
13,785
|
|
—
|
|
15,666
|
|
|||||
Tower and other revenue
|
4,134
|
|
—
|
|
—
|
|
—
|
|
4,134
|
|
|||||
Total operating revenue
|
120,630
|
|
(23,174
|
)
|
13,785
|
|
4,858
|
|
116,099
|
|
|||||
Cost of services
|
32,253
|
|
—
|
|
—
|
|
—
|
|
32,253
|
|
|||||
Cost of goods sold
|
7,774
|
|
(6,619
|
)
|
13,785
|
|
—
|
|
14,940
|
|
|||||
Selling, general & administrative
|
27,746
|
|
(16,555
|
)
|
—
|
|
—
|
|
11,191
|
|
|||||
Depreciation and amortization
|
30,363
|
|
—
|
|
—
|
|
—
|
|
30,363
|
|
|||||
Total operating expenses
|
98,136
|
|
(23,174
|
)
|
13,785
|
|
—
|
|
88,747
|
|
|||||
Operating income (loss)
|
$
|
22,494
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,858
|
|
$
|
27,352
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||
|
|
Topic 606 Impact - WIRELESS
|
|
||||||||||||
($ in thousands)
|
Prior to Adoption of Topic 606
|
Changes in Presentation (1)
|
Equipment Revenue (2)
|
Deferred Costs (3)
|
As Reported 09/30/2018
|
||||||||||
Service revenue
|
$
|
335,548
|
|
$
|
(64,069
|
)
|
$
|
—
|
|
$
|
12,675
|
|
$
|
284,154
|
|
Equipment revenue
|
5,344
|
|
—
|
|
43,515
|
|
—
|
|
48,859
|
|
|||||
Tower and other revenue
|
10,643
|
|
—
|
|
—
|
|
—
|
|
10,643
|
|
|||||
Total operating revenue
|
351,535
|
|
(64,069
|
)
|
43,515
|
|
12,675
|
|
343,656
|
|
|||||
Cost of services
|
99,491
|
|
—
|
|
—
|
|
—
|
|
99,491
|
|
|||||
Cost of goods sold
|
20,058
|
|
(17,824
|
)
|
43,515
|
|
—
|
|
45,749
|
|
|||||
Selling, general & administrative
|
81,938
|
|
(46,245
|
)
|
—
|
|
—
|
|
35,693
|
|
|||||
Depreciation and amortization
|
95,853
|
|
—
|
|
—
|
|
—
|
|
95,853
|
|
|||||
Total operating expenses
|
297,340
|
|
(64,069
|
)
|
43,515
|
|
—
|
|
276,786
|
|
|||||
Operating income (loss)
|
$
|
54,195
|
|
$
|
—
|
|
$
|
—
|
|
$
|
12,675
|
|
$
|
66,870
|
|
|
|
September 30, 2018 (3)
|
|
December 31, 2017 (4)
|
|
September 30, 2017 (4)
|
|||
Retail PCS subscribers - postpaid
|
|
785,537
|
|
|
736,597
|
|
|
727,954
|
|
Retail PCS subscribers - prepaid (1)
|
|
255,462
|
|
|
225,822
|
|
|
224,609
|
|
PCS market POPS (000) (2)
|
|
7,024
|
|
|
5,942
|
|
|
6,047
|
|
PCS covered POP (000) (2)
|
|
5,921
|
|
|
5,272
|
|
|
5,157
|
|
CDMA base stations (sites)
|
|
1,788
|
|
|
1,623
|
|
|
1,544
|
|
Towers owned
|
|
193
|
|
|
192
|
|
|
201
|
|
Non-affiliate cell site leases
|
|
192
|
|
|
192
|
|
|
192
|
|
(1)
|
As of September 2017, the Company is no longer including Lifeline subscribers to be consistent with Sprint's policy. Historical customer counts have been adjusted accordingly.
|
(2)
|
"POPS" refers to the estimated population of a given geographic area. Market POPS are those within a market area which we are authorized to serve under our Sprint PCS affiliate agreements, and Covered POPS are those covered by our network. As of December 31, 2017, the data source for POPS is U.S. census data. Historical periods previously referred to other third party population data and have been recast to refer to U.S. census data.
|
(3)
|
Beginning February 1, 2018 includes Richmond Expansion Area.
|
(4)
|
Beginning April 6, 2017 includes Parkersburg Expansion Area.
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Gross PCS subscriber additions - postpaid
|
|
48,111
|
|
|
43,320
|
|
|
135,817
|
|
|
122,429
|
|
Net PCS subscriber additions (losses) - postpaid
|
|
4,879
|
|
|
(4,710
|
)
|
|
48,940
|
|
|
5,392
|
|
Gross PCS subscriber additions - prepaid (1)
|
|
38,486
|
|
|
37,653
|
|
|
112,437
|
|
|
112,201
|
|
Net PCS subscriber additions (losses) - prepaid (1)
|
|
3,408
|
|
|
2,571
|
|
|
29,640
|
|
|
17,937
|
|
PCS average monthly retail churn % - postpaid
|
|
1.84
|
%
|
|
2.19
|
%
|
|
1.80
|
%
|
|
2.08
|
%
|
PCS average monthly retail churn % - prepaid (1)
|
|
4.62
|
%
|
|
5.25
|
%
|
|
4.42
|
%
|
|
5.06
|
%
|
(1)
|
As of September 2017, the Company is no longer including Lifeline subscribers to be consistent with Sprint's policy. Historical customer counts and churn % have been adjusted accordingly.
|
|
|
February 1, 2018
|
|
April 6, 2017
|
|
May 6, 2016
|
|||
|
|
Richmond Expansion Area
|
|
Parkersburg Expansion Area
|
|
nTelos Area
|
|||
PCS subscribers - postpaid
|
|
38,343
|
|
|
19,067
|
|
|
404,965
|
|
PCS subscribers - prepaid (1)
|
|
15,691
|
|
|
4,517
|
|
|
154,944
|
|
Acquired PCS market POPS (000)
|
|
1,082
|
|
|
511
|
|
|
3,099
|
|
Acquired PCS covered POPS (000)
|
|
602
|
|
|
244
|
|
|
2,298
|
|
Acquired CDMA base stations (sites) (2)
|
|
105
|
|
|
—
|
|
|
868
|
|
Towers
|
|
—
|
|
|
—
|
|
|
20
|
|
Non-affiliate cell site leases
|
|
—
|
|
|
—
|
|
|
10
|
|
(1)
|
Excludes Lifeline subscribers.
|
(2)
|
As of
September 30, 2018
we have shut down
107
overlap sites associated with the nTelos Area.
|
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||
Wireless operating revenue
|
|
|
|
|
|
|
|
|
|
|
|||||||
Wireless service revenue
|
|
$
|
96,299
|
|
82.9
|
|
$
|
107,395
|
|
95.5
|
|
$
|
(11,096
|
)
|
|
(10.3
|
)
|
Tower lease revenue
|
|
2,902
|
|
2.5
|
|
2,933
|
|
2.6
|
|
(31
|
)
|
|
(1.1
|
)
|
|||
Equipment revenue
|
|
15,666
|
|
13.5
|
|
1,742
|
|
1.5
|
|
13,924
|
|
|
799.3
|
|
|||
Other revenue
|
|
1,232
|
|
1.1
|
|
435
|
|
0.4
|
|
797
|
|
|
183.2
|
|
|||
Total wireless operating revenue
|
|
116,099
|
|
100.0
|
|
112,505
|
|
100.0
|
|
3,594
|
|
|
3.2
|
|
|||
Wireless operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
|
32,253
|
|
27.8
|
|
33,825
|
|
30.1
|
|
(1,572
|
)
|
|
(4.6
|
)
|
|||
Cost of goods sold
|
|
14,940
|
|
12.9
|
|
7,216
|
|
6.4
|
|
7,724
|
|
|
107.0
|
|
|||
Selling, general and administrative
|
|
11,191
|
|
9.6
|
|
30,099
|
|
26.8
|
|
(18,908
|
)
|
|
(62.8
|
)
|
|||
Acquisition, integration and migration expenses
|
|
—
|
|
—
|
|
1,691
|
|
1.5
|
|
(1,691
|
)
|
|
(100.0
|
)
|
|||
Depreciation and amortization
|
|
30,363
|
|
26.2
|
|
32,929
|
|
29.3
|
|
(2,566
|
)
|
|
(7.8
|
)
|
|||
Total wireless operating expenses
|
|
88,747
|
|
76.4
|
|
105,760
|
|
94.0
|
|
(17,013
|
)
|
|
(16.1
|
)
|
|||
Wireless operating income (loss)
|
|
$
|
27,352
|
|
23.6
|
|
$
|
6,745
|
|
6.0
|
|
$
|
20,607
|
|
|
305.5
|
|
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||
($ in thousands)
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Wireless service revenue:
|
|
|
|
|
|
|
|
|
|||||||
Postpaid billings (1)
|
|
$
|
96,813
|
|
|
$
|
94,013
|
|
|
$
|
2,800
|
|
|
3.0
|
|
Amortization of deferred contract and other costs (3)
|
|
(4,708
|
)
|
|
—
|
|
|
(4,708
|
)
|
|
—
|
|
|||
Management fee
|
|
(7,763
|
)
|
|
(7,460
|
)
|
|
(303
|
)
|
|
(4.1
|
)
|
|||
Net service fee
|
|
(8,345
|
)
|
|
(7,872
|
)
|
|
(473
|
)
|
|
(6.0
|
)
|
|||
Total postpaid service revenue
|
|
75,997
|
|
|
78,681
|
|
|
(2,684
|
)
|
|
(3.4
|
)
|
|||
Prepaid billings (2)
|
|
28,460
|
|
|
24,155
|
|
|
4,305
|
|
|
17.8
|
|
|||
Amortization of deferred contract and other costs (3)
|
|
(13,594
|
)
|
|
—
|
|
|
(13,594
|
)
|
|
100.0
|
|
|||
Sprint management fee
|
|
(1,795
|
)
|
|
(1,502
|
)
|
|
(293
|
)
|
|
(19.5
|
)
|
|||
Total prepaid service revenue
|
|
13,071
|
|
|
22,653
|
|
|
(9,582
|
)
|
|
(42.3
|
)
|
|||
Travel and other revenue (2)
|
|
7,231
|
|
|
6,061
|
|
|
1,170
|
|
|
19.3
|
|
|||
Total service revenue
|
|
$
|
96,299
|
|
|
$
|
107,395
|
|
|
$
|
(11,096
|
)
|
|
(10.3
|
)
|
(1)
|
Postpaid net billings are defined under the terms of the affiliate contract with Sprint to be the gross billings to customers within our wireless network coverage area less billing credits and adjustments and allocated write-offs of uncollectible accounts.
|
(2)
|
The Company includes Lifeline subscribers revenue within travel and other revenue to be consistent with Sprint. The above table reflects the reclassification of the related Assurance Wireless prepaid revenue from prepaid gross billings to travel and other revenue.
|
(3)
|
Due to the adoption of Topic 606, costs reimbursed to Sprint for commission and acquisition cost incurred in their national sales channel are recorded as a reduction of revenue and amortized over the period of benefit. Additionally, costs reimbursed to Sprint for the support of their prepaid customer base are recorded as a reduction of revenue. These costs were previously recorded in cost of goods sold, and selling, general and administrative.
|
|
|
Nine Months Ended
September 30, |
|
Change
|
|||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||
Wireless operating revenue
|
|
|
|
|
|
|
|
|
|
|
|||||||
Wireless service revenue
|
|
$
|
284,154
|
|
82.7
|
|
$
|
323,262
|
|
94.5
|
|
$
|
(39,108
|
)
|
|
(12.1
|
)
|
Tower lease revenue
|
|
8,676
|
|
2.5
|
|
8,676
|
|
2.5
|
|
—
|
|
|
—
|
|
|||
Equipment revenue
|
|
48,859
|
|
14.2
|
|
7,666
|
|
2.2
|
|
41,193
|
|
|
537.3
|
|
|||
Other revenue
|
|
1,967
|
|
0.6
|
|
2,498
|
|
0.8
|
|
(531
|
)
|
|
(21.3
|
)
|
|||
Total wireless operating revenue
|
|
343,656
|
|
100.0
|
|
342,102
|
|
100.0
|
|
1,554
|
|
|
0.5
|
|
|||
Wireless operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
|
99,491
|
|
29.0
|
|
100,745
|
|
29.4
|
|
(1,254
|
)
|
|
(1.2
|
)
|
|||
Cost of goods sold
|
|
45,749
|
|
13.3
|
|
17,084
|
|
5.0
|
|
28,665
|
|
|
167.8
|
|
|||
Selling, general and administrative
|
|
35,693
|
|
10.4
|
|
88,201
|
|
25.8
|
|
(52,508
|
)
|
|
(59.5
|
)
|
|||
Acquisition, integration and migration expenses
|
|
—
|
|
—
|
|
9,607
|
|
2.8
|
|
(9,607
|
)
|
|
(100.0
|
)
|
|||
Depreciation and amortization
|
|
95,853
|
|
27.9
|
|
104,231
|
|
30.5
|
|
(8,378
|
)
|
|
(8.0
|
)
|
|||
Total wireless operating expenses
|
|
276,786
|
|
80.5
|
|
319,868
|
|
93.5
|
|
(43,082
|
)
|
|
(13.5
|
)
|
|||
Wireless operating income (loss)
|
|
$
|
66,870
|
|
19.5
|
|
$
|
22,234
|
|
6.5
|
|
$
|
44,636
|
|
|
200.8
|
|
|
|
Nine Months Ended
September 30, |
|
Change
|
|||||||||||
($ in thousands)
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Wireless service revenue:
|
|
|
|
|
|
|
|
|
|||||||
Postpaid billings (1)
|
|
$
|
286,230
|
|
|
$
|
280,724
|
|
|
$
|
5,506
|
|
|
2.0
|
|
Amortization of deferred contract and other costs (3)
|
|
(13,788
|
)
|
|
—
|
|
|
(13,788
|
)
|
|
100.0
|
|
|||
Management fee
|
|
(22,966
|
)
|
|
(22,465
|
)
|
|
(501
|
)
|
|
(2.2
|
)
|
|||
Net service fee
|
|
(24,603
|
)
|
|
(22,852
|
)
|
|
(1,751
|
)
|
|
(7.7
|
)
|
|||
Total postpaid service revenue
|
|
224,873
|
|
|
235,407
|
|
|
(10,534
|
)
|
|
(4.5
|
)
|
|||
Prepaid billings (2)
|
|
82,716
|
|
|
74,609
|
|
|
8,107
|
|
|
10.9
|
|
|||
Amortization of deferred contract and other costs (3)
|
|
(39,258
|
)
|
|
—
|
|
|
(39,258
|
)
|
|
100.0
|
|
|||
Sprint management fee
|
|
(5,198
|
)
|
|
(4,622
|
)
|
|
(576
|
)
|
|
(12.5
|
)
|
|||
Total prepaid service revenue
|
|
38,260
|
|
|
69,987
|
|
|
(31,727
|
)
|
|
(45.3
|
)
|
|||
Travel and other revenue (2)
|
|
21,021
|
|
|
17,868
|
|
|
3,153
|
|
|
17.6
|
|
|||
Total service revenue
|
|
$
|
284,154
|
|
|
$
|
323,262
|
|
|
$
|
(39,108
|
)
|
|
(12.1
|
)
|
(1)
|
Postpaid net billings are defined under the terms of the affiliate contract with Sprint to be the gross billings to customers within our wireless network coverage area less billing credits and adjustments and allocated write-offs of uncollectible accounts.
|
(2)
|
The Company includes Lifeline subscribers revenue within travel and other revenue to be consistent with Sprint. The above table reflects the reclassification of the related Assurance Wireless prepaid revenue from prepaid gross billings to travel and other revenue.
|
(3)
|
Due to the adoption of Topic 606, costs reimbursed to Sprint for commission and acquisition cost incurred in their national sales channel are recorded as a reduction of revenue and amortized over the period of benefit. Additionally, costs reimbursed to Sprint for the support of their prepaid customer base are recorded as a reduction of revenue. These costs were previously recorded in cost of goods sold, and selling, general and administrative.
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|||
Homes passed (1)
|
|
185,119
|
|
|
184,910
|
|
|
184,881
|
|
Customer relationships (2)
|
|
|
|
|
|
|
|||
Video users
|
|
41,807
|
|
|
44,269
|
|
|
45,290
|
|
Non-video customers
|
|
37,619
|
|
|
33,559
|
|
|
32,663
|
|
Total customer relationships
|
|
79,426
|
|
|
77,828
|
|
|
77,953
|
|
Video
|
|
|
|
|
|
|
|||
Customers (3)
|
|
44,093
|
|
|
46,613
|
|
|
47,379
|
|
Penetration (4)
|
|
23.8
|
%
|
|
25.2
|
%
|
|
25.6
|
%
|
Digital video penetration (5)
|
|
77.8
|
%
|
|
76.2
|
%
|
|
76.0
|
%
|
Broadband
|
|
|
|
|
|
|
|||
Available homes (6)
|
|
185,119
|
|
|
184,910
|
|
|
184,881
|
|
Users (3)
|
|
67,089
|
|
|
63,918
|
|
|
63,442
|
|
Penetration (4)
|
|
36.2
|
%
|
|
34.6
|
%
|
|
34.3
|
%
|
Voice
|
|
|
|
|
|
|
|||
Available homes (6)
|
|
185,119
|
|
|
182,379
|
|
|
182,350
|
|
Users (3)
|
|
23,268
|
|
|
22,555
|
|
|
22,419
|
|
Penetration (4)
|
|
12.6
|
%
|
|
12.4
|
%
|
|
12.3
|
%
|
Total revenue generating units (7)
|
|
134,450
|
|
|
133,086
|
|
|
133,240
|
|
Fiber route miles
|
|
3,436
|
|
|
3,356
|
|
|
3,340
|
|
Total fiber miles (8)
|
|
134,411
|
|
|
122,011
|
|
|
121,331
|
|
Average revenue generating units
|
|
133,617
|
|
|
132,759
|
|
|
132,704
|
|
(1)
|
Homes and businesses are considered passed (“homes passed”) if we can connect them to our distribution system without further extending the transmission lines. Homes passed is an estimate based upon the best available information.
|
(2)
|
Customer relationships represent the number of billed customers who receive at least one of our services.
|
(3)
|
Generally, a dwelling or commercial unit with one or more television sets connected to our distribution system counts as one video customer. Where services are provided on a bulk basis, such as to hotels and some multi-dwelling units, the revenue charged to the customer is divided by the rate for comparable service in the local market to determine the number of customer equivalents included in the customer counts shown above.
|
(4)
|
Penetration is calculated by dividing the number of users by the number of homes passed or available homes, as appropriate.
|
(5)
|
Digital video penetration is calculated by dividing the number of digital video users by total video users. Digital video users are video customers who receive any level of video service via digital transmission. A dwelling with one or more digital set-top boxes or digital adapters counts as one digital video user.
|
(6)
|
Homes and businesses are considered available (“available homes”) if we can connect them to our distribution system without further extending the transmission lines and if we offer the service in that area.
|
(7)
|
Revenue generating units are the sum of video, voice and high-speed internet users.
|
(8)
|
Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.
|
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||
Cable operating revenue
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service revenue
|
|
$
|
28,578
|
|
88.8
|
|
$
|
26,934
|
|
89.5
|
|
$
|
1,644
|
|
|
6.1
|
|
Equipment revenue
|
|
234
|
|
0.7
|
|
219
|
|
0.7
|
|
15
|
|
|
6.8
|
|
|||
Other revenue
|
|
3,370
|
|
10.5
|
|
2,936
|
|
9.8
|
|
434
|
|
|
14.8
|
|
|||
Total cable operating revenue
|
|
32,182
|
|
100.0
|
|
30,089
|
|
100.0
|
|
2,093
|
|
|
7.0
|
|
|||
Cable operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
|
14,837
|
|
46.1
|
|
14,858
|
|
49.4
|
|
(21
|
)
|
|
(0.1
|
)
|
|||
Cost of goods sold
|
|
78
|
|
0.2
|
|
55
|
|
0.2
|
|
23
|
|
|
(41.8
|
)
|
|||
Selling, general, and administrative
|
|
5,331
|
|
16.6
|
|
5,358
|
|
17.8
|
|
(27
|
)
|
|
(0.5
|
)
|
|||
Depreciation and amortization
|
|
6,102
|
|
19.0
|
|
6,192
|
|
20.6
|
|
(90
|
)
|
|
(1.5
|
)
|
|||
Total cable operating expenses
|
|
26,348
|
|
81.9
|
|
26,463
|
|
87.9
|
|
(115
|
)
|
|
(0.4
|
)
|
|||
Cable operating income (loss)
|
|
$
|
5,834
|
|
18.1
|
|
$
|
3,626
|
|
12.1
|
|
$
|
2,208
|
|
|
60.9
|
|
|
|
Nine Months Ended
September 30, |
|
Change
|
|||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||
Cable operating revenue
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service revenue
|
|
$
|
85,797
|
|
89.4
|
|
$
|
80,229
|
|
90.5
|
|
$
|
5,568
|
|
|
6.9
|
|
Equipment revenue
|
|
537
|
|
0.6
|
|
547
|
|
0.6
|
|
(10
|
)
|
|
(1.8
|
)
|
|||
Other revenue
|
|
9,670
|
|
10.0
|
|
7,889
|
|
8.9
|
|
1,781
|
|
|
22.6
|
|
|||
Total cable operating revenue
|
|
96,004
|
|
100.0
|
|
88,665
|
|
100.0
|
|
7,339
|
|
|
8.3
|
|
|||
Cable operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
|
45,118
|
|
47.0
|
|
44,956
|
|
50.7
|
|
162
|
|
|
0.4
|
|
|||
Cost of goods sold
|
|
197
|
|
0.2
|
|
96
|
|
0.1
|
|
101
|
|
|
105.2
|
|
|||
Selling, general, and administrative
|
|
14,940
|
|
15.6
|
|
15,083
|
|
17.0
|
|
(143
|
)
|
|
(0.9
|
)
|
|||
Depreciation and amortization
|
|
18,305
|
|
19.1
|
|
18,070
|
|
20.4
|
|
235
|
|
|
1.3
|
|
|||
Total cable operating expenses
|
|
78,560
|
|
81.8
|
|
78,205
|
|
88.2
|
|
355
|
|
|
0.5
|
|
|||
Cable operating income (loss)
|
|
$
|
17,444
|
|
18.2
|
|
$
|
10,460
|
|
11.8
|
|
$
|
6,984
|
|
|
66.8
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|||
Telephone access lines
|
|
17,786
|
|
|
17,933
|
|
|
18,006
|
|
Long distance subscribers
|
|
9,107
|
|
|
9,078
|
|
|
9,107
|
|
Video customers (1)
|
|
4,796
|
|
|
5,019
|
|
|
5,110
|
|
Broadband customers
|
|
14,734
|
|
|
14,665
|
|
|
14,605
|
|
Fiber route miles
|
|
2,112
|
|
|
2,073
|
|
|
2,040
|
|
Total fiber miles (2)
|
|
158,526
|
|
|
154,165
|
|
|
149,944
|
|
(1)
|
Wireline’s video service passes approximately 16,500 homes.
|
(2)
|
Fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.
|
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||
Wireline operating revenue
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service revenue
|
|
$
|
5,824
|
|
29.7
|
|
$
|
5,724
|
|
28.8
|
|
$
|
100
|
|
|
1.7
|
|
Carrier access and fiber revenue
|
|
13,019
|
|
66.3
|
|
13,217
|
|
66.6
|
|
(198
|
)
|
|
(1.5
|
)
|
|||
Equipment revenue
|
|
63
|
|
0.3
|
|
33
|
|
0.2
|
|
30
|
|
|
90.9
|
|
|||
Other revenue
|
|
716
|
|
3.7
|
|
877
|
|
4.4
|
|
(161
|
)
|
|
(18.4
|
)
|
|||
Total wireline operating revenue
|
|
19,622
|
|
100.0
|
|
19,851
|
|
100.0
|
|
(229
|
)
|
|
(1.2
|
)
|
|||
Wireline operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
|
9,266
|
|
47.2
|
|
9,796
|
|
49.3
|
|
(530
|
)
|
|
(5.4
|
)
|
|||
Costs of goods sold
|
|
19
|
|
0.1
|
|
11
|
|
0.1
|
|
8
|
|
|
(72.7
|
)
|
|||
Selling, general, and administrative
|
|
1,780
|
|
9.1
|
|
1,706
|
|
8.6
|
|
74
|
|
|
4.3
|
|
|||
Depreciation and amortization
|
|
3,435
|
|
17.5
|
|
3,249
|
|
16.4
|
|
186
|
|
|
5.7
|
|
|||
Total wireline operating expenses
|
|
14,500
|
|
73.9
|
|
14,762
|
|
74.4
|
|
(262
|
)
|
|
(1.8
|
)
|
|||
Wireline operating income (loss)
|
|
$
|
5,122
|
|
26.1
|
|
$
|
5,089
|
|
25.6
|
|
$
|
33
|
|
|
0.6
|
|
|
|
Nine Months Ended
September 30, |
|
Change
|
|||||||||||||
($ in thousands)
|
|
2018
|
% of Revenue
|
|
2017
|
% of Revenue
|
|
$
|
|
%
|
|||||||
Wireline operating revenue
|
|
|
|
|
|
|
|
|
|
|
|||||||
Service revenue
|
|
$
|
17,439
|
|
29.8
|
|
$
|
17,002
|
|
29.0
|
|
$
|
437
|
|
|
2.6
|
|
Carrier access and fiber revenue
|
|
38,341
|
|
65.6
|
|
38,920
|
|
66.4
|
|
(579
|
)
|
|
(1.5
|
)
|
|||
Equipment revenue
|
|
155
|
|
0.3
|
|
90
|
|
0.2
|
|
65
|
|
|
72.2
|
|
|||
Other revenue
|
|
2,506
|
|
4.3
|
|
2,569
|
|
4.4
|
|
(63
|
)
|
|
(2.5
|
)
|
|||
Total wireline operating revenue
|
|
58,441
|
|
100.0
|
|
58,581
|
|
100.0
|
|
(140
|
)
|
|
(0.2
|
)
|
|||
Wireline operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of services
|
|
28,441
|
|
48.7
|
|
28,357
|
|
48.4
|
|
84
|
|
|
0.3
|
|
|||
Costs of goods sold
|
|
61
|
|
0.1
|
|
52
|
|
0.1
|
|
9
|
|
|
17.3
|
|
|||
Selling, general, and administrative
|
|
5,183
|
|
8.9
|
|
5,065
|
|
8.6
|
|
118
|
|
|
2.3
|
|
|||
Depreciation and amortization
|
|
10,069
|
|
17.2
|
|
9,536
|
|
16.3
|
|
533
|
|
|
5.6
|
|
|||
Total wireline operating expenses
|
|
43,754
|
|
74.9
|
|
43,010
|
|
73.4
|
|
744
|
|
|
1.7
|
|
|||
Wireline operating income (loss)
|
|
$
|
14,687
|
|
25.1
|
|
$
|
15,571
|
|
26.6
|
|
$
|
(884
|
)
|
|
(5.7
|
)
|
•
|
they do not reflect capital expenditures;
|
•
|
they do not reflect the impacts of adoption of Topic 606;
|
•
|
many of the assets being depreciated and amortized will have to be replaced in the future and Adjusted and Continuing OIBDA do not reflect cash requirements for such replacements;
|
•
|
they do not reflect costs associated with share-based awards exchanged for employee services;
|
•
|
they do not reflect interest expense necessary to service interest or principal payments on indebtedness;
|
•
|
they do not reflect gains, losses or dividends on investments;
|
•
|
they do not reflect expenses incurred for the payment of income taxes; and
|
•
|
other companies, including companies in our industry, may calculate Adjusted and Continuing OIBDA differently than we do, limiting its usefulness as a comparative measure.
|
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Consolidated
|
||||||||||
Operating income
|
|
$
|
27,352
|
|
|
$
|
5,834
|
|
|
$
|
5,122
|
|
|
$
|
(9,979
|
)
|
|
$
|
28,329
|
|
Impact of ASC topic 606
|
|
(4,868
|
)
|
|
(172
|
)
|
|
(77
|
)
|
|
—
|
|
|
(5,117
|
)
|
|||||
Depreciation and amortization
|
|
30,363
|
|
|
6,102
|
|
|
3,435
|
|
|
128
|
|
|
40,028
|
|
|||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,171
|
|
|
1,171
|
|
|||||
Benefit received from the waived management fee (1)
|
|
9,558
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,558
|
|
|||||
Amortization of intangibles netted in rent expense
|
|
197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|||||
Actuarial (gains) losses on pension plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(82
|
)
|
|
(82
|
)
|
|||||
Adjusted OIBDA
|
|
62,602
|
|
|
11,764
|
|
|
8,480
|
|
|
(8,762
|
)
|
|
74,084
|
|
|||||
Waived management fee
|
|
(9,558
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,558
|
)
|
|||||
Continuing OIBDA
|
|
$
|
53,044
|
|
|
$
|
11,764
|
|
|
$
|
8,480
|
|
|
$
|
(8,762
|
)
|
|
$
|
64,526
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Consolidated
|
||||||||||
Operating income
|
|
$
|
6,745
|
|
|
$
|
3,626
|
|
|
$
|
5,089
|
|
|
$
|
(5,985
|
)
|
|
$
|
9,475
|
|
Depreciation and amortization
|
|
32,929
|
|
|
6,192
|
|
|
3,249
|
|
|
198
|
|
|
42,568
|
|
|||||
(Gain) loss on asset sales
|
|
193
|
|
|
(19
|
)
|
|
—
|
|
|
(10
|
)
|
|
164
|
|
|||||
Share-based compensation expense
|
|
277
|
|
|
172
|
|
|
73
|
|
|
118
|
|
|
640
|
|
|||||
Benefit received from the waived management fee (1)
|
|
8,961
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,961
|
|
|||||
Amortization of intangibles netted in rent expense
|
|
1,580
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,580
|
|
|||||
Temporary back-office costs to support the billing operations through migration (2)
|
|
1,209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,209
|
|
|||||
Integration and acquisition related expenses, and other
|
|
2,292
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
2,307
|
|
|||||
Adjusted OIBDA
|
|
54,186
|
|
|
9,971
|
|
|
8,411
|
|
|
(5,664
|
)
|
|
66,904
|
|
|||||
Waived management fee
|
|
(8,961
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,961
|
)
|
|||||
Continuing OIBDA
|
|
$
|
45,225
|
|
|
$
|
9,971
|
|
|
$
|
8,411
|
|
|
$
|
(5,664
|
)
|
|
$
|
57,943
|
|
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Consolidated
|
||||||||||
Operating income
|
|
$
|
66,870
|
|
|
$
|
17,444
|
|
|
$
|
14,687
|
|
|
$
|
(32,749
|
)
|
|
$
|
66,252
|
|
Impact of ASC topic 606
|
|
(11,022
|
)
|
|
(57
|
)
|
|
(139
|
)
|
|
—
|
|
|
(11,218
|
)
|
|||||
Depreciation and amortization
|
|
95,853
|
|
|
18,305
|
|
|
10,069
|
|
|
405
|
|
|
124,632
|
|
|||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,578
|
|
|
4,578
|
|
|||||
Benefit received from the waived management fee (1)
|
|
28,164
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,164
|
|
|||||
Amortization of intangibles netted in rent expense
|
|
372
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
372
|
|
|||||
Actuarial (gains) losses on pension plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(247
|
)
|
|
(247
|
)
|
|||||
Adjusted OIBDA
|
|
180,237
|
|
|
35,692
|
|
|
24,617
|
|
|
(28,013
|
)
|
|
212,533
|
|
|||||
Waived management fee
|
|
(28,164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,164
|
)
|
|||||
Continuing OIBDA
|
|
$
|
152,073
|
|
|
$
|
35,692
|
|
|
$
|
24,617
|
|
|
$
|
(28,013
|
)
|
|
$
|
184,369
|
|
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
Wireless
|
|
Cable
|
|
Wireline
|
|
Other
|
|
Consolidated
|
||||||||||
Operating income
|
|
$
|
22,234
|
|
|
$
|
10,460
|
|
|
$
|
15,571
|
|
|
$
|
(19,865
|
)
|
|
$
|
28,400
|
|
Depreciation and amortization
|
|
104,231
|
|
|
18,070
|
|
|
9,536
|
|
|
460
|
|
|
132,297
|
|
|||||
(Gain) loss on asset sales
|
|
208
|
|
|
(115
|
)
|
|
27
|
|
|
(40
|
)
|
|
80
|
|
|||||
Share-based compensation expense
|
|
1,354
|
|
|
766
|
|
|
319
|
|
|
614
|
|
|
3,053
|
|
|||||
Benefit received from the waived management fee (1)
|
|
27,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,068
|
|
|||||
Amortization of intangibles netted in rent expense
|
|
2,173
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,173
|
|
|||||
Temporary back-office costs to support the billing operations through migration (2)
|
|
5,495
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
5,496
|
|
|||||
Integration and acquisition related expenses, and other
|
|
11,062
|
|
|
—
|
|
|
—
|
|
|
266
|
|
|
11,328
|
|
|||||
Adjusted OIBDA
|
|
173,825
|
|
|
29,181
|
|
|
25,453
|
|
|
(18,564
|
)
|
|
209,895
|
|
|||||
Waived management fee
|
|
(27,068
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,068
|
)
|
|||||
Continuing OIBDA
|
|
$
|
146,757
|
|
|
$
|
29,181
|
|
|
$
|
25,453
|
|
|
$
|
(18,564
|
)
|
|
$
|
182,827
|
|
•
|
a limitation on the Company’s total leverage ratio, defined as indebtedness divided by earnings before interest, taxes, depreciation and amortization, or EBITDA, of less than or equal to 3.75 to 1.00 from the closing date through December 30, 2018, then 3.25 to 1.00 through December 30, 2019, and 3.00 to 1.00 thereafter;
|
•
|
a minimum debt service coverage ratio, defined as EBITDA minus certain cash taxes divided by the sum of all scheduled principal payments on the Term Loans and other indebtedness plus cash interest expense, greater than 2.00 to 1.00; and
|
•
|
maintain a minimum liquidity balance of greater than $25 million. The balance includes amounts available under the revolver facility plus unrestricted cash and cash equivalents on deposit in a deposit account for which a control agreement has been delivered to the administrative agent under the 2016 credit agreement.
|
|
|
Actual
|
|
Covenant Requirement
|
|
Total leverage ratio
|
|
2.61
|
|
|
3.75 or Lower
|
Debt service coverage ratio
|
|
3.25
|
|
|
2.00 or Higher
|
Minimum liquidity balance (in millions)
|
|
$149.1
|
|
$25.0 or Higher
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
PART II.
|
OTHER INFORMATION
|
ITEM 1A.
|
Risk Factors
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
ITEM 6.
|
Exhibits
|
(a)
|
The following exhibits are filed with this Quarterly Report on Form 10-Q:
|
31.1*
|
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
||
|
|
||
31.2*
|
Certification of Vice President - Finance and Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
||
|
|
||
32**
|
Certifications pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. § 1350.
|
||
|
|
||
99.1**
|
Consultant Agreement
|
||
|
|
||
(101)
|
Formatted in XBRL (Extensible Business Reporting Language)
|
||
|
|
|
|
|
101.INS*
|
XBRL Instance Document
|
|
|
|
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
**
|
This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act.
|
Exhibit No.
|
Exhibit
|
|
|
|
|
31.1
*
|
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
|
|
|
|
31.2
*
|
Certification of Vice President - Finance and Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
|
|
|
|
32
**
|
Certifications pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. § 1350.
|
|
|
|
|
99.1
**
|
Consultant Agreement
|
|
|
|
|
(101)
|
Formatted in XBRL (Extensible Business Reporting Language)
|
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
**
|
This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act.
|
|
SHENANDOAH TELECOMMUNICATIONS COMPANY
|
|
|
|
/s/JAMES F. WOODWARD
|
|
James F. Woodward
|
|
Senior Vice President – Finance and Chief Financial Officer
|
|
Date: November 6, 2018
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Shenandoah Telecommunications Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d‑15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Shenandoah Telecommunications Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d‑15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
/S/CHRISTOPHER E. FRENCH
|
|
Christopher E. French
|
|
President and Chief Executive Officer
|
|
November 6, 2018
|
|
|
|
/S/JAMES F. WOODWARD
|
|
James F. Woodward
|
|
Senior Vice President - Finance and
|
|
Chief Financial Officer
|
|
November 6, 2018
|
|