shen-20200930
NASDAQ000035496312/312020Q3FALSE00003549632020-01-012020-09-30xbrli:shares00003549632020-11-02iso4217:USD00003549632020-09-3000003549632019-12-31iso4217:USDxbrli:shares00003549632020-07-012020-09-3000003549632019-07-012019-09-3000003549632019-01-012019-09-300000354963us-gaap:CommonStockMember2020-06-300000354963us-gaap:AdditionalPaidInCapitalMember2020-06-300000354963us-gaap:RetainedEarningsMember2020-06-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000003549632020-06-300000354963us-gaap:RetainedEarningsMember2020-07-012020-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000354963us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300000354963us-gaap:CommonStockMember2020-09-300000354963us-gaap:AdditionalPaidInCapitalMember2020-09-300000354963us-gaap:RetainedEarningsMember2020-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300000354963us-gaap:CommonStockMember2019-12-310000354963us-gaap:AdditionalPaidInCapitalMember2019-12-310000354963us-gaap:RetainedEarningsMember2019-12-310000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000354963us-gaap:RetainedEarningsMember2020-01-012020-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000354963us-gaap:CommonStockMember2020-01-012020-09-300000354963us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300000354963us-gaap:CommonStockMember2019-06-300000354963us-gaap:AdditionalPaidInCapitalMember2019-06-300000354963us-gaap:RetainedEarningsMember2019-06-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-3000003549632019-06-300000354963us-gaap:RetainedEarningsMember2019-07-012019-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000354963us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300000354963us-gaap:CommonStockMember2019-09-300000354963us-gaap:AdditionalPaidInCapitalMember2019-09-300000354963us-gaap:RetainedEarningsMember2019-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-3000003549632019-09-300000354963us-gaap:CommonStockMember2018-12-310000354963us-gaap:AdditionalPaidInCapitalMember2018-12-310000354963us-gaap:RetainedEarningsMember2018-12-310000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-3100003549632018-12-310000354963us-gaap:RetainedEarningsMember2019-01-012019-09-300000354963us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000354963us-gaap:CommonStockMember2019-01-012019-09-300000354963us-gaap:AdditionalPaidInCapitalMember2019-01-012019-09-300000354963srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMembershen:PriorPeriodErrorsMember2019-12-310000354963srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMembershen:PriorPeriodErrorsMember2019-10-012019-12-310000354963srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMembershen:PriorPeriodErrorsMember2019-01-012019-12-31xbrli:pure0000354963srt:AffiliatedEntityMember2020-08-262020-08-260000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-12-310000354963shen:ServiceandOtherMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-07-012020-09-300000354963shen:ServiceandOtherMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-07-012019-09-300000354963shen:ServiceandOtherMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-012020-09-300000354963shen:ServiceandOtherMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMembershen:EquipmentProductAndServiceMember2020-07-012020-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMembershen:EquipmentProductAndServiceMember2019-07-012019-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMembershen:EquipmentProductAndServiceMember2020-01-012020-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMembershen:EquipmentProductAndServiceMember2019-01-012019-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-07-012020-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-07-012019-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-012020-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-09-300000354963us-gaap:ServiceMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-07-012020-09-300000354963us-gaap:ServiceMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-07-012019-09-300000354963us-gaap:ServiceMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2020-01-012020-09-300000354963us-gaap:ServiceMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2019-01-012019-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberus-gaap:ProductMember2020-07-012020-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberus-gaap:ProductMember2019-07-012019-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberus-gaap:ProductMember2020-01-012020-09-300000354963us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberus-gaap:ProductMember2019-01-012019-09-3000003549632019-01-012019-12-310000354963srt:MinimumMember2020-01-012020-09-300000354963srt:MaximumMember2020-01-012020-09-300000354963shen:CobankMember2020-09-300000354963shen:CobankMember2019-12-310000354963shen:CobankMember2020-07-012020-09-300000354963shen:CobankMember2019-07-012019-09-300000354963shen:CobankMember2020-01-012020-09-300000354963shen:CobankMember2019-01-012019-09-300000354963shen:CobankMember2019-09-300000354963shen:ValleyNetworkPartnershipMember2020-09-300000354963us-gaap:EquityMethodInvesteeMember2020-07-012020-09-300000354963us-gaap:EquityMethodInvesteeMember2019-07-012019-09-300000354963us-gaap:EquityMethodInvesteeMember2019-01-012019-09-300000354963us-gaap:EquityMethodInvesteeMember2020-01-012020-09-300000354963us-gaap:LandMember2020-09-300000354963us-gaap:LandMember2019-12-310000354963srt:MinimumMemberus-gaap:BuildingAndBuildingImprovementsMember2020-01-012020-09-300000354963srt:MaximumMemberus-gaap:BuildingAndBuildingImprovementsMember2020-01-012020-09-300000354963us-gaap:BuildingAndBuildingImprovementsMember2020-09-300000354963us-gaap:BuildingAndBuildingImprovementsMember2019-12-310000354963srt:MinimumMemberus-gaap:OtherMachineryAndEquipmentMember2020-01-012020-09-300000354963us-gaap:OtherMachineryAndEquipmentMembersrt:MaximumMember2020-01-012020-09-300000354963us-gaap:OtherMachineryAndEquipmentMember2020-09-300000354963us-gaap:OtherMachineryAndEquipmentMember2019-12-310000354963srt:MinimumMembershen:EquipmentAndSoftwareMember2020-01-012020-09-300000354963shen:EquipmentAndSoftwareMembersrt:MaximumMember2020-01-012020-09-300000354963shen:EquipmentAndSoftwareMember2020-09-300000354963shen:EquipmentAndSoftwareMember2019-12-310000354963us-gaap:OtherPlantInServiceMember2020-09-300000354963us-gaap:OtherPlantInServiceMember2019-12-310000354963us-gaap:AssetUnderConstructionMember2020-09-300000354963us-gaap:AssetUnderConstructionMember2019-12-310000354963shen:BroadbandSegmentMember2020-09-300000354963shen:BroadbandSegmentMember2019-12-310000354963us-gaap:FranchiseRightsMember2020-09-300000354963us-gaap:FranchiseRightsMember2019-12-310000354963shen:FCCSpectrumLicensesMember2020-09-300000354963shen:FCCSpectrumLicensesMember2019-12-310000354963shen:RailroadCrossingRightsMember2020-09-300000354963shen:RailroadCrossingRightsMember2019-12-310000354963shen:FCCSpectrumLicensesMember2020-09-300000354963shen:FCCSpectrumLicensesMember2019-12-310000354963shen:AcquiredSubscribersCableMember2020-09-300000354963shen:AcquiredSubscribersCableMember2019-12-310000354963us-gaap:OtherIntangibleAssetsMember2020-09-300000354963us-gaap:OtherIntangibleAssetsMember2019-12-310000354963shen:FCCSpectrumLicensesMember2020-07-012020-09-300000354963shen:BigSandyAcquisitionMember2019-02-282019-02-280000354963shen:BigSandyAcquisitionMember2019-02-280000354963us-gaap:CustomerRelationshipsMembershen:BigSandyAcquisitionMember2019-02-280000354963us-gaap:RevolvingCreditFacilityMember2020-09-300000354963us-gaap:RevolvingCreditFacilityMember2020-01-012020-09-300000354963shen:TermLoanA1Member2020-09-300000354963shen:TermLoanA1Member2019-12-310000354963shen:TermLoanA2Member2020-09-300000354963shen:TermLoanA2Member2019-12-310000354963us-gaap:LondonInterbankOfferedRateLIBORMembershen:TermLoanA1Member2020-01-012020-09-300000354963shen:TermLoanA2Memberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-09-300000354963us-gaap:InterestRateSwapMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2020-09-300000354963us-gaap:InterestRateSwapMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2019-12-310000354963us-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2020-07-012020-09-300000354963us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000354963us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000354963shen:DeferredChargesandOtherAssetsNetMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000354963shen:DeferredChargesandOtherAssetsNetMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000354963shen:AccruedLiabilitiesAndOtherMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000354963shen:AccruedLiabilitiesAndOtherMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000354963us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-09-300000354963us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-310000354963us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310000354963us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-09-300000354963us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-09-300000354963us-gaap:RestrictedStockUnitsRSUMembershen:EmployeeMember2020-01-012020-09-300000354963us-gaap:RestrictedStockUnitsRSUMembershen:EmployeeMember2020-01-012020-03-310000354963us-gaap:RestrictedStockUnitsRSUMembershen:EmployeeMember2020-04-012020-06-300000354963us-gaap:RestrictedStockUnitsRSUMembersrt:DirectorMember2020-01-012020-03-310000354963shen:RelativeTotalShareholderReturnAwardsMembershen:EmployeeMember2020-01-012020-03-310000354963shen:RelativeTotalShareholderReturnAwardsMember2020-01-012020-09-300000354963srt:MinimumMembershen:RelativeTotalShareholderReturnAwardsMember2020-01-012020-09-300000354963srt:MaximumMembershen:RelativeTotalShareholderReturnAwardsMember2020-01-012020-09-300000354963shen:FCCSpectrumLicensesMember2020-09-300000354963shen:BroadbandSegmentMembershen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:CableResidentialandSMBMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:BroadbandSegmentMembershen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:FiberEnterpriseandWholesaleMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:BroadbandSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:CarrierAccessRevenueMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:BroadbandSegmentMemberus-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963us-gaap:ProductAndServiceOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963us-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:BroadbandSegmentMembershen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:BroadbandSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:ServiceandOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2020-07-012020-09-300000354963us-gaap:IntersegmentEliminationMembershen:TowerSegmentMember2020-07-012020-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2020-07-012020-09-300000354963us-gaap:IntersegmentEliminationMember2020-07-012020-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963us-gaap:ServiceMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963us-gaap:ServiceMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2020-07-012020-09-300000354963us-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963us-gaap:CorporateNonSegmentMember2020-07-012020-09-300000354963us-gaap:OperatingSegmentsMember2020-07-012020-09-300000354963shen:BroadbandSegmentMembershen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:CableResidentialandSMBMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:BroadbandSegmentMembershen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:FiberEnterpriseandWholesaleMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:BroadbandSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:CarrierAccessRevenueMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:BroadbandSegmentMemberus-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963us-gaap:ProductAndServiceOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963us-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:BroadbandSegmentMembershen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:BroadbandSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:ServiceandOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2019-07-012019-09-300000354963us-gaap:IntersegmentEliminationMembershen:TowerSegmentMember2019-07-012019-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2019-07-012019-09-300000354963us-gaap:IntersegmentEliminationMember2019-07-012019-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963us-gaap:ServiceMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963us-gaap:ServiceMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2019-07-012019-09-300000354963us-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963us-gaap:CorporateNonSegmentMember2019-07-012019-09-300000354963us-gaap:OperatingSegmentsMember2019-07-012019-09-300000354963shen:BroadbandSegmentMembershen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:CableResidentialandSMBMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:BroadbandSegmentMembershen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:FiberEnterpriseandWholesaleMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:BroadbandSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:CarrierAccessRevenueMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:BroadbandSegmentMemberus-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963us-gaap:ProductAndServiceOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963us-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:BroadbandSegmentMembershen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:BroadbandSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:ServiceandOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2020-01-012020-09-300000354963us-gaap:IntersegmentEliminationMembershen:TowerSegmentMember2020-01-012020-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2020-01-012020-09-300000354963us-gaap:IntersegmentEliminationMember2020-01-012020-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963us-gaap:ServiceMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963us-gaap:ServiceMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2020-01-012020-09-300000354963us-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963us-gaap:CorporateNonSegmentMember2020-01-012020-09-300000354963us-gaap:OperatingSegmentsMember2020-01-012020-09-300000354963shen:BroadbandSegmentMembershen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:CableResidentialandSMBMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:CableResidentialandSMBMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:BroadbandSegmentMembershen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:FiberEnterpriseandWholesaleMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:FiberEnterpriseandWholesaleMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:BroadbandSegmentMembershen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:CarrierAccessRevenueMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:CarrierAccessRevenueMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:BroadbandSegmentMemberus-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963us-gaap:ProductAndServiceOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963us-gaap:ProductAndServiceOtherMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:BroadbandSegmentMembershen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:TowerLeaseMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:TowerLeaseMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:BroadbandSegmentMembershen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:ServiceandOtherMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:ServiceandOtherMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:BroadbandSegmentMemberus-gaap:IntersegmentEliminationMember2019-01-012019-09-300000354963us-gaap:IntersegmentEliminationMembershen:TowerSegmentMember2019-01-012019-09-300000354963us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2019-01-012019-09-300000354963us-gaap:IntersegmentEliminationMember2019-01-012019-09-300000354963shen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963shen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963us-gaap:ServiceMembershen:BroadbandSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963us-gaap:ServiceMembershen:TowerSegmentMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963us-gaap:ServiceMemberus-gaap:CorporateNonSegmentMember2019-01-012019-09-300000354963us-gaap:ServiceMemberus-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963us-gaap:CorporateNonSegmentMember2019-01-012019-09-300000354963us-gaap:OperatingSegmentsMember2019-01-012019-09-300000354963us-gaap:SubsequentEventMember2020-10-27

UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedSeptember 30, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________ to __________
Commission File No.: 000-09881
https://cdn.kscope.io/22b79dc31d92ab6991f0a51e9e60a86f-shen-20200930_g1.jpg
SHENANDOAH TELECOMMUNICATIONS COMPANY
(Exact name of registrant as specified in its charter)
Virginia
 54-1162807
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

500 Shentel Way, Edinburg, Virginia   22824
(Address of principal executive offices) (Zip Code)

(540) 984-4141
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Common Stock (No Par Value)SHEN
NASDAQ Global Select Market
49,852,361
(Title of Class)(Trading Symbol)(Name of Exchange on which Registered)(The number of shares of the registrant's common stock outstanding on November 02, 2020)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes    No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer Non-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes   No 




SHENANDOAH TELECOMMUNICATIONS COMPANY
INDEX
  Page
Numbers
PART I.FINANCIAL INFORMATION 
   
Item 1.Financial Statements 
   
 
  
 
  
 
  
 
  
 
  
Item 2.
  
Item 3.
  
Item 4.
  
PART II.OTHER INFORMATION
  
Item 1A.
  
Item 2.
  
Item 6.
  
 
  



2

Table of Contents


SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30,
2020
December 31,
2019
ASSETS
Current assets:
Cash and cash equivalents$184,050 $101,651 
Accounts receivable, net of allowance for doubtful accounts of $469 and $533, respectively
67,667 63,641 
Income taxes receivable94 10,306 
Prepaid expenses and other10,579 11,146 
Current assets held for sale1,148,601 55,109 
Total current assets1,410,991 241,853 
Investments13,034 12,388 
Property, plant and equipment, net413,602 363,087 
Intangible assets, net and Goodwill103,856 88,241 
Operating lease right-of-use assets48,844 42,568 
Deferred charges and other assets10,972 9,267 
Non-current assets held for sale 1,141,498 
Total assets$2,001,299 $1,898,902 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt, net of unamortized loan fees$696,378 $31,650 
Accounts payable25,602 40,295 
Advanced billings and customer deposits8,304 8,189 
Accrued compensation15,154 10,075 
Current operating lease liabilities1,875 1,731 
Accrued liabilities and other13,854 7,391 
Current liabilities held for sale470,943 54,246 
Total current liabilities1,232,110 153,577 
Long-term debt, less current maturities, net of unamortized loan fees 688,464 
Other long-term liabilities:
Deferred income taxes146,771 137,567 
Asset retirement obligations4,870 6,152 
Benefit plan obligations2,255 2,277 
Non-current operating lease liabilities44,808 42,625 
Other liabilities22,303 16,776 
Non-current liabilities held for sale 379,036 
Total other long-term liabilities221,007 584,433 
Shareholders’ equity:
Common stock, no par value, authorized 96,000; 49,852 and 49,671 issued and outstanding at September 30, 2020 and December 31, 2019, respectively
  
Additional paid in capital45,925 42,110 
Retained earnings507,458 430,010 
Accumulated other comprehensive (loss) income, net of taxes(5,201)308 
Total shareholders’ equity548,182 472,428 
Total liabilities and shareholders’ equity$2,001,299 $1,898,902 

See accompanying notes to unaudited condensed consolidated financial statements.
3

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Service revenue and other$55,173 $51,814 $162,643 $153,285 
Operating expenses:
Cost of services22,669 20,947 65,167 62,030 
Selling, general and administrative20,039 19,445 64,227 57,600 
Depreciation and amortization11,995 10,741 36,010 33,807 
Total operating expenses54,703 51,133 165,404 153,437 
Operating income (loss)470 681 (2,761)(152)
Other income:
Other income, net1,083 994 3,103 3,328 
Income before income taxes1,553 1,675 342 3,176 
Income tax expense (benefit)141 507 (684)(108)
Income from continuing operations1,412 1,168 1,026 3,284 
Income from discontinued operations, net of tax33,509 13,186 76,422 38,130 
Net Income34,921 14,354 77,448 41,414 
Other comprehensive income:
Unrealized income (loss) on interest rate hedge, net of tax539 (1,494)(5,509)(8,434)
Comprehensive income$35,460 $12,860 $71,939 $32,980 
Net income per share, basic and diluted:
Basic - Income from continuing operations$0.03 $0.02 $0.02 $0.07 
Basic - Income from discontinued operations, net of tax$0.67 $0.27 $1.53 $0.76 
Basic net income per share$0.70 $0.29 $1.55 $0.83 
Diluted - Income from continuing operations$0.03 $0.02 $0.02 $0.07 
Diluted - Income from discontinued operations, net of tax$0.67 $0.27 $1.53 $0.76 
Diluted net income per share$0.70 $0.29 $1.55 $0.83 
Weighted average shares outstanding, basic49,911 49,857 49,889 49,827 
Weighted average shares outstanding, diluted50,105 50,129 50,049 50,110 

See accompanying notes to unaudited condensed consolidated financial statements.
4

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive (Loss) Income Total
Balance, June 30, 202049,852 $44,659 $472,537 $(5,739)$511,457 
Net income— — 34,921 — 34,921 
Other comprehensive gain, net of tax— — — 538 538 
Stock-based compensation— 1,259 — — 1,259 
Common stock issued— 7 — — 7 
Balance, September 30, 202049,852 $45,925 $507,458 $(5,201)$548,182 
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Balance, December 31, 201949,671 $42,110 $430,010 $308 $472,428 
Net income — — 77,448 — 77,448 
Other comprehensive loss, net of tax— — — (5,509)(5,509)
Stock-based compensation152 5,974 — — 5,974 
Common stock issued— 23 — — 23 
Shares retired for settlement of employee taxes upon issuance of vested equity awards(47)(2,182)— — (2,182)
Common stock issued to acquire non-controlling interest in nTelos76 — — — — 
Balance, September 30, 202049,852 $45,925 $507,458 $(5,201)$548,182 
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Balance, June 30, 201949,857 $47,138 $415,556 $1,340 $464,034 
Net income— — 14,354 — 14,354 
Other comprehensive loss, net of tax— — — (1,494)(1,494)
Stock-based compensation— 936 — — 936 
Stock options exercised— — — —  
Common stock issued— 9 — — 9 
Balance, September 30, 201949,857 $48,083 $429,910 $(154)$477,839 
Shares of Common Stock (no par value)Additional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Balance, December 31, 201849,630 $47,456 $388,496 $8,280 $444,232 
Net income — — 41,414 — 41,414 
Other comprehensive loss, net of tax— — — (8,434)(8,434)
Stock-based compensation184 3,433 — — 3,433 
Stock options exercised29 81 — — 81 
Common stock issued— 25 — — 25 
Shares retired for settlement of employee taxes upon issuance of vested equity awards(62)(2,912)— — (2,912)
Common stock issued to acquire non-controlling interest in nTelos76 — — — — 
Balance, September 30, 201949,857 $48,083 $429,910 $(154)$477,839 

See accompanying notes to unaudited condensed consolidated financial statements.
5

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30, 2020
20202019
Cash flows from operating activities:
Net income$77,448 $41,414 
Income from operations of discontinued operations, net of tax76,422 38,130 
Income from continuing operations1,026 3,284 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation35,522 33,500 
Amortization488 307 
Accretion of asset retirement obligations247 332 
Bad debt expense514 1,215 
Stock based compensation expense, net of amount capitalized5,306 2,769 
Deferred income taxes(279) 
Gain from patronage and investments(596)(3,035)
Changes in assets and liabilities:
Accounts receivable(1,189)(269)
Current income taxes(261) 
Operating lease right-of-use assets2,966 2,829 
Other assets(4,122)(1,382)
Accounts payable(276)(2,956)
Lease liabilities(1,890)(961)
Other deferrals and accruals7,344 (4,150)
Net cash provided by operating activities – continuing operations44,800 31,483 
Net cash provided by operating activities – discontinued operations182,499 161,976 
Net cash provided by operating activities227,299 193,459 
Cash flows used in investing activities:
Capital expenditures$(82,740)$(48,826)
Cash disbursed for acquisitions (10,000)
Cash disbursed for deposit on FCC spectrum leases(16,118)(16,742)
Proceeds from sale of assets and other252 100 
Net cash used in investing activities – continuing operations(98,606)(75,468)
Net cash used in investing activities – discontinued operations(17,794)(58,156)
Net cash used in investing activities(116,400)(133,624)
Cash flows used in financing activities:
Principal payments on long-term debt$ $ 
Taxes paid for equity award issuances(2,182)(2,912)
Other(727)72 
Net cash used in financing activities – continuing operations(2,909)(2,840)
Net cash used in financing activities – discontinued operations (25,591)(44,666)
Net cash used in financing activities(28,500)(47,506)
Net increase in cash and cash equivalents82,399 12,329 
Cash and cash equivalents, beginning of period101,651 85,086 
Cash and cash equivalents, end of period$184,050 $97,415 
See accompanying notes to unaudited condensed consolidated financial statements.
6

Table of Contents
SHENANDOAH TELECOMMUNICATIONS COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Basis of Presentation and Other Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. All normal recurring adjustments considered necessary for a fair presentation have been included. Certain disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2019.

The preparation of the unaudited interim consolidated financial statements requires management of the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingencies at the date of the unaudited interim condensed consolidated financial statements. These estimates are inherently subject to judgment and actual results could differ.

Revision of Prior Period Financial Statements

In connection with the preparation of our unaudited condensed consolidated financial statements for the three months ended March 31, 2020, we determined that certain errors existed in our previously issued financial statements. Specifically:
Prepaid and other assets, a component of current assets held for sale, as of December 31, 2019, were understated by $2.7 million, deferred tax liabilities were understated by $0.7 million, and retained earnings were understated by $2.0 million as the result of a failure to properly account for handsets that were utilized as demo phones in certain wireless retail stores within our area of operation. All of the impact to retained earnings is attributable to 2017 and prior years.
Property, plant and equipment, net, classified as held for sale, and deferred income tax liabilities, as of December 31, 2019 were understated by $1.4 million and $0.4 million, respectively. Depreciation, contained within discontinued operations, was overstated by $1.4 million for the year and quarter ended December 31, 2019. Income tax expense and net income were understated by $0.4 million and $1.0 million, respectively, for the year and quarter ended December 31, 2019.

We evaluated these errors under the U.S. Securities and Exchange Commission's ("SEC's") authoritative guidance on materiality and the quantification of the effect of prior period misstatements on financial statements, and we have determined that the impact of these errors on our prior period consolidated financial statements is immaterial. However, since the correction of these errors in the first quarter of 2020 could have become material to our results of operations for the year ending December 31, 2020, we revised our prior period financial statements to correct these errors herein. For the year and quarter ended December 31, 2019, the correction of these errors resulted in a $0.02 increase in both basic and diluted earnings per share from discontinued operations.

Adoption of New Accounting Principles

There have been no developments related to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company's unaudited condensed consolidated financial statements and note disclosures, from those disclosed in the Company's 2019 Annual Report on Form 10-K, that would be expected to impact the Company except for the following:

The Company adopted ASU No. 2016-13, Financial Instruments - Credit Losses ("ASC 326"): Measurement of Credit Losses on Financial Instruments, as of January 1, 2020 using the modified retrospective transition method. ASC 326 requires the application of a current expected credit loss (“CECL”) impairment model to financial assets measured at amortized cost including trade accounts receivable, net investments in leases, and certain off-balance-sheet credit exposures. Under the CECL model, lifetime expected credit losses on such financial assets are measured and recognized at each reporting date based on historical, current, and forecasted information. Furthermore, the CECL model requires financial assets with similar risk characteristics to be analyzed on a collective basis. There was no significant impact to unaudited condensed consolidated financial statements upon adoption.

7

Table of Contents
The Company adopted ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software ("ASC 350"): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, as of January 1, 2020. ASC 350 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Upon adoption of the standard, implementation costs were capitalized in the period incurred and will be amortized over the term of the hosting arrangement. There was no significant impact to unaudited condensed consolidated financial statements upon adoption.

In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This accounting update provides optional accounting relief to entities with contracts, hedge accounting relationships or other transactions that reference London Interbank Offering Rate (LIBOR) or other interest rate benchmarks for which the referenced rate is expected to be discontinued or replaced. This optional relief generally allows for contract modifications solely related to the replacement of the reference rate to be accounted for as a continuation of the existing contract instead of as an extinguishment of the contract, and therefore would not require reassessment of a previous accounting determination. The Company's Credit Agreement and interest rate swaps have LIBOR as a reference rate. We plan to apply the accounting relief as relevant contract modifications are made to our Credit Agreement and interest rate swap contracts during the course of the reference rate reform transition period. The optional relief can be applied beginning January 1, 2020, and ending December 31, 2022.

Note 2. Discontinued Operations

On August 26, 2020, Sprint Corporation (“Sprint”), an indirect subsidiary of T-Mobile US, Inc., on behalf of and as the direct or indirect owner of Sprint PCS, delivered notice to the Company exercising its option to purchase the assets and operations of our Wireless segment for 90% of the “Entire Business Value” (as defined under our affiliate agreement with Sprint PCS and determined pursuant to the appraisal process set forth therein). Shortly thereafter, the Company committed to a plan to sell the Wireless operations in a manner pursuant to the affiliate agreement’s terms. Our affiliate agreement provides a process and timeline for the sale that is expected to close within one year at a price to be determined through the appraisal process outlined in the affiliate agreement. Under the affiliate agreement, the appraised value should reflect the fair market value that a willing buyer would pay a willing seller for the entire on-going business in a change of control transaction.

On November 3, 2020, the parties aligned in principle on certain elements of the appraisal and sale process. Under the agreement in principle, the appraised valuation will be performed as of July 1, 2020. The appraisal will also value Shentel’s discontinued wireless operations as though Shentel were still an affiliate of Sprint with access to its brands and spectrum, without any regard to T-Mobile’s acquisition of Sprint or its subsequent integration efforts. It is currently expected that the appraisers will complete their assessment of the Entire Business Value on or about January 20, 2021. The transaction is expected to close in the second quarter of 2021, subject to receipt of customary regulatory approvals.

The assets and liabilities that are expected to transfer in the sale are presented as held for sale within our Unaudited Condensed Consolidated Balance Sheets. Under the affiliate agreement, the sale is to be structured as an asset sale for income tax purposes. As a result, no current or deferred tax assets or liabilities are included within the disposal group. While our long-term debt does not transfer in the sale, its provisions require us to repay all of the debt upon consummation of the sale. Our debt is therefore presented outside of the disposal group as a current liability at September 30, 2020. Our related swap liabilities are also presented outside of the disposal group as a current liability at September 30, 2020 because management intends to settle it at consummation.

The expected divestiture of our Wireless operations represents a strategic shift in the Company’s business and qualifies as a discontinued operation. As a result, the operating results and cash flows related to the Wireless segment have been reflected as discontinued operations in our Unaudited Condensed Consolidated Statements of Comprehensive Income and the Unaudited Condensed Consolidated Statements of Cash Flows. Similarly, the results of our Wireless operations are no longer presented as a reporting segment. Because repayment of the debt is contractually triggered by the sale, the related interest expense is presented within discontinued operations under the relevant authoritative guidance. Consistent with the internal reporting provided to our chief operating decision maker, we previously allocated certain corporate management overhead costs to the former Wireless segment which may no longer be allocated to discontinued operations under the relevant authoritative guidance. Accordingly, we have elected to recast our segment reporting footnote to reflect the reattribution of these expenses in all presented periods in a manner that is also consistent with our updated internal reporting.
8

Table of Contents

The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the unaudited condensed consolidated balance sheets, are as follows:
(in thousands)September 30,
2020
December 31,
2019
ASSETS
Inventory$4,240 $5,728 
Prepaid expenses and other48,555 49,381 
Property, plant and equipment, net300,098  
Intangible assets, net186,885  
Goodwill146,383  
Operating lease right-of-use assets421,868  
Deferred charges and other assets40,572  
Current assets held for sale$1,148,601 $55,109 
Property, plant and equipment, net$ $338,427 
Intangible assets, net 228,593 
Goodwill 146,383 
Operating lease right-of-use assets 384,010 
Deferred charges and other assets 44,085 
Non-current assets held for sale$ $1,141,498 
LIABILITIES
Advanced billings and customer deposits$ $169 
Current operating lease liabilities422,415 47,077 
Accrued liabilities and other5,333 7,000 
Asset retirement obligations33,168  
Retirement plan obligations10,027  
Current liabilities held for sale$470,943 $54,246 
Non-current operating lease liabilities$ $337,661 
Asset retirement obligations 30,762 
Retirement plan obligations 10,398 
Other non-current liabilities 215 
Non-current liabilities held for sale$ $379,036 

9

Table of Contents
Income (loss) from discontinued operations, net of tax in the consolidated statements of comprehensive income consist of the following:
(in thousands)Three Months Ended
September 30,
Nine Months Ended
September 30,
Revenue:2020201920202019
Service revenue and other$100,963 $91,314 $302,488 $283,214 
Equipment revenue9,862 15,975 32,222 47,814 
Total revenue110,825 107,289 334,710 331,028 
Operating expenses:
Cost of services28,567 32,277 95,242 95,846 
Cost of goods sold9,600 15,571 31,565 45,740 
Selling, general and administrative7,696 8,879 25,931 28,774 
Depreciation and amortization15,077 25,886 62,804 86,350 
Total operating expenses60,940 82,613 215,542 256,710 
Operating income49,885 24,676 119,168 74,318 
Other (expense) income:
Interest expense(4,638)(7,442)(15,868)(22,877)
Other130 44 391 130 
Income before income taxes45,377 17,278 103,691 51,571 
Income tax expense11,868 4,092 27,269 13,441 
Income from discontinued operations, net of tax$33,509 $13,186 $76,422 $38,130 

Our Broadband and Tower segments recognize revenue for their respective provision of cell site backhaul service and leased colocation space to the discontinued Wireless operations. That revenue is earned under contracts executed at our estimate of fair market value, which will transfer upon consummation of the sale. Accordingly, we expect to have a level of continuing involvement with the discontinued operations via these pre-existing contractual arrangements. Revenue recognized within continuing operations pursuant to these agreements is disclosed in Note 14, Segment Reporting. Because the right to use space on our owned cell towers and the related lease liability will be transferred in the sale, they have been included in our disposal group above under the relevant authoritative guidance. These right of use assets and lease liabilities were previously eliminated within our consolidated financial statements. Total assets and total liabilities as of December 31, 2019 therefore increased by $34 million as a result.

Under the relevant authoritative guidance, consummation of the sale will trigger or accelerate the recognition of certain expense related to: contingent deal advisory fees, recognition of our interest rate swap losses in net income, and loss on debt extinguishment. Our estimate of the related range of reasonably possible expense extends from $0 if the sale is not consummated to $40 million.

Note 3. Revenue from Contracts with Customers
Our Broadband segment provides broadband, video and voice services to residential and commercial customers in portions of Virginia, West Virginia, Maryland, and Kentucky, via fiber optic and hybrid fiber coaxial ("HFC") cable. The Broadband segment also provides voice and digital subscriber line (“DSL”) telephone services to customers in Virginia’s Shenandoah County as a Rural Local Exchange Carrier (“RLEC”).

These contracts are generally cancellable at the customer’s discretion without penalty at any time. We allocate the total transaction price in these transactions based upon the standalone selling price of each distinct good or service. We generally recognize these revenues over time as customers simultaneously receive and consume the benefits of the service, with the exception of equipment sales and home wiring, which are recognized as revenue at a point in time when control transfers and when installation is complete, respectively. Installation fees are allocated to services and are recognized ratably over the longer of the contract term or the period in which the unrecognized fee remains material to the contract, which we estimate to be about one year. Additionally, the Company incurs commission and installation costs related to in-house and third-party vendors which are capitalized and amortized over the expected weighted average customer life which is approximately five years.

10

Table of Contents
Our Broadband segment also provides Ethernet and Wavelength fiber optic services to enterprise and carrier customers under capacity agreements, and the related revenue is recognized over time. In some cases, non-refundable upfront fees are charged for connecting enterprise or carrier customers to our fiber network. Those amounts are recognized ratably over the longer of the contract term or the period in which the unrecognized fee remains material to the respective contract.

The Broadband segment also leases dedicated fiber optic strands to customers as part of “dark fiber” agreements, which are accounted for as leases under ASC 842 Leases.

Our Tower segment leases space on owned cell towers to our Wireless segment, and to other wireless carriers. Revenue from these leases is accounted for under ASC 842.

Refer to Note 14, Segment Reporting, for a summary of these revenue streams.

Below is a summary of the Broadband segment's capitalized contract acquisition and fulfillment costs:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in thousands)2020201920202019
Beginning Balance$12,780 $10,476 $11,005 $10,091 
Contract payments2,195 1,840 6,128 4,996 
Contract amortization(1,013)(1,399)(3,171)(4,170)
Ending Balance$13,962 $10,917 $13,962 $10,917 

Future performance obligations
On September 30, 2020, the Company had approximately $2.9 million allocated to unsatisfied performance obligations that will be satisfied at the rate of approximately $0.8 million per year.

Note 4.  Investments

Investments consist of the following:
(in thousands)September 30,
2020
December 31,
2019
SERP investments at fair value$2,255 $2,278 
Cost method investments10,240 9,497 
Equity method investments539 613 
Total investments$13,034 $12,388 

SERP Investments at Fair Value: The Supplemental Executive Retirement Plan (“SERP”) is a benefit plan that provides deferred compensation to certain employees. The Company holds the related investments in a rabbi trust as a source of funding for future payments under the plan. The SERP’s investments were designated as trading securities and will be liquidated and paid out to the participants upon retirement. The benefit obligation to participants is always equal to the value of the SERP assets under ASC 710 Compensation. Changes to the investments' fair value are presented in Other income (expense), while the reciprocal changes in the liability are presented in selling, general and administrative expense.

Cost Method Investments: Our investment in CoBank’s Class A common stock represented substantially all of our cost method investments with a balance of $9.5 million and $8.7 million at September 30, 2020 and December 31, 2019, respectively. We recognized approximately $1.0 million and $0.9 million of patronage income in Other income (expense) in the three months ended September 30, 2020 and 2019, respectively, and approximately $3.0 million and $2.7 million in the nine months ended September 30, 2020 and 2019, respectively. Historically, approximately 75% of the patronage distributions were in cash and 25% in equity.

Equity Method Investments: At September 30, 2020, the Company had a 20.0% ownership interest in Valley Network Partnership (“ValleyNet”). The Company and ValleyNet purchase capacity on one another’s fiber network. We recognized revenue of $0.2 million from providing service to ValleyNet during both of the three months ended September 30, 2020 and 2019, and approximately $0.7 million during both of the nine months ended September 30, 2020 and 2019. We recognized cost
11

Table of Contents
of service of $0.7 million and $0.8 million for the use of ValleyNet’s network during the three months ended September 30, 2020 and 2019, respectively, and approximately $2.2 million and $2.4 million in the nine months ended September 30, 2020 and 2019, respectively.

Note 5.  Property, Plant and Equipment

Property, plant and equipment consisted of the following:
($ in thousands)Estimated Useful LivesSeptember 30,
2020
December 31,
2019
Land$6,806 $6,297 
Buildings and structures10-40years88,996 85,835 
Cable and fiber15-30years368,144 334,260 
Equipment and software3-20years314,859 278,873 
Plant in service 778,805 705,265 
Plant under construction 54,678 31,226 
Total property, plant and equipment 833,483 736,491 
Less: accumulated amortization and depreciation419,881 373,404 
Property, plant and equipment, net $413,602 $363,087 

Note 6. Goodwill and Intangible Assets

Other intangible assets consisted of the following:
 September 30, 2020December 31, 2019
(in thousands)Gross
Carrying
Amount
Accumulated Amortization and OtherNetGross
Carrying
Amount
Accumulated Amortization and OtherNet
Goodwill - Broadband$2,687 $— $2,687 $2,687 $— $2,687 
Indefinite-lived intangibles:
Cable franchise rights$64,334 $— $64,334 $64,334 $— $64,334 
FCC spectrum licenses13,839 — 13,839 13,839 — 13,839 
Railroad crossing rights141 — 141 141 — 141 
Total indefinite-lived intangibles78,314 — 78,314 78,314 — 78,314 
Finite-lived intangibles:
FCC spectrum licenses20,777 (280)20,497 4,659 (97)4,562 
Acquired subscribers - Cable28,065 (25,900)2,165 28,065 (25,600)2,465 
Other intangibles463 (270)193 463 (250)213 
Total finite-lived intangibles49,305 (26,450)22,855 33,187 (25,947)7,240 
Total intangible assets$130,306 $(26,450)$103,856 $114,188 $(25,947)$88,241 

During the three months ended September 30, 2020, the Company completed the purchase of certain CBRS spectrum licenses for an aggregate cost of $16.1 million, within our Broadband segment. Spectrum licenses in the CBRS band are issued by the Federal Communications Commission (“FCC”) and provide us priority access rights over general access users other than incumbents, in that specific band, in accordance with the FCC’s three-tier CBRS band spectrum sharing framework to utilize designated radio frequency spectrum within specific geographic service areas to provide wireless communication services.

We acquired Big Sandy Broadband, Inc. (“Big Sandy”) on February 28, 2019. The $10 million acquisition price was allocated as follows within our Broadband segment: $4.6 million of property, plant and equipment; $2.8 million of subscriber relationships; and $2.6 million of goodwill.

12

Table of Contents
Amortization expense was $0.2 million and $0.1 million during the three months ended September 30, 2020 and 2019, respectively, and $0.5 million and $0.3 million for the nine months ended September 30, 2020 and 2019, respectively.

Note 7.     Other Assets and Accrued Liabilities

Prepaid expenses and other, classified as current assets, included the following:
(in thousands)September 30,
2020
December 31,
2019
Prepaid maintenance expenses$4,630 $3,065 
Broadband contract acquisition and fulfillment costs4,082 4,898 
Interest rate swaps 1,382 
Other1,867 1,801 
Prepaid expenses and other$10,579 $11,146 

Deferred charges and other assets, classified as long-term assets, included the following:
(in thousands)September 30,
2020
December 31,
2019
Broadband contract acquisition and fulfillment costs$9,880 $6,107 
Prepaid expenses and other1,092 1,908 
Interest rate swaps 1,252 
Deferred charges and other assets$10,972 $9,267 

Accrued liabilities and other, classified as current liabilities, included the following:
(in thousands)September 30,
2020
December 31,
2019
Interest rate swaps$4,710 $ 
Accrued programming costs2,997 3,023 
Sales and property taxes payable1,515 919 
Other current liabilities4,632 3,449 
Accrued liabilities and other$13,854 $7,391 

Other liabilities, classified as long-term liabilities, included the following:
(in thousands)September 30,
2020
December 31,
2019
Non-current portion of deferred lease revenue$18,420 $12,449 
FCC spectrum license obligations1,688 1,699 
Non-current portion of financing leases1,537 1,591 
Other658 1,037 
Other liabilities$22,303 $16,776 

Market expectations of the projected LIBOR decreased significantly during 2020, which drove the fair value of our interest rate swaps to a liability. Refer to Note 10, Derivatives and Hedging for more information.

Note 8. Leases

At September 30, 2020, our operating leases had a weighted average remaining lease term of 23 years and a weighted average discount rate of 4.7%. Our finance leases had a weighted average remaining lease term of 14 years and a weighted average discount rate of 5.2%.

13

Table of Contents
During the three and nine months ended September 30, 2020, we recognized $2.3 million and $5.1 million of operating lease expense, respectively. Comparatively, during the three and nine months ended September 30, 2019, we recognized $1.4 million and $2.9 million of operating lease expense, respectively.

We recognized $0.1 million and $0.4 million of interest and depreciation expense on finance leases during the three and nine months ended September 30, 2020 and $0.1 million and $0.5 million during the three and nine months ended September 30, 2019, respectively.

Operating lease expense is presented in cost of service or selling, general and administrative expense based on the use of the relevant facility. Variable lease payments and short-term lease expense were both immaterial. We remitted $1.2 million and $3.2 million of operating lease payments during the three and nine months ended September 30, 2020, respectively. We remitted $2.9 million of operating lease payments during the nine months ended September 30, 2019. We also obtained $2.4 million and $9.2 million of leased assets in exchange for new operating lease liabilities during the three and nine months ended September 30, 2020, respectively. We obtained $0.7 million of leased assets in exchange for new operating lease liabilities during the nine months ended September 30, 2019, respectively.

The following table summarizes the expected maturity of lease liabilities at September 30, 2020:
(in thousands)Operating LeasesFinance LeasesTotal
2020$755 $63 $818 
20214,174 174 4,348 
20223,959 174 4,133 
20233,548 174 3,722 
20243,193 174 3,367 
2025 and thereafter67,236 1,529 68,765 
Total lease payments82,865 2,288 85,153 
Less: Interest36,182 656 36,838 
Present value of lease liabilities$46,683 $1,632 $48,315 

We recognized $2.7 million and $6.9 million of operating lease revenue during the three and nine months ended September 30, 2020, respectively, and $2.1 million and $6.1 million during the three and nine months ended September 30, 2019, respectively, related to the cell site colocation space and dedicated fiber optic strands that we lease to our customers, which is included in Service and other revenue in the unaudited condensed consolidated statements of comprehensive income. Substantially all of our lease revenue relates to fixed lease payments.

Below is a summary of our minimum rental receipts under the lease agreements in place at September 30, 2020:
(in thousands)Operating Leases
2020$1,885 
20216,020 
20224,957 
20233,339 
20242,090 
2025 and thereafter4,722 
Total $