XML 26 R15.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Note 8 - Debt | 9 Months Ended
--- | ---
Sep. 30, 2022
Notes to Financial Statements |
Long-Term Debt [Text Block] | 8. DEBT The carrying amount of long-term debt consisted of the following (in thousands):
|  | September 30, 2022 |  |  | December 31, 2021 |
Senior Credit Facilities (as defined below) |  | $ | 2,286,592 |  |  | $ | 2,311,890 |
Senior Notes (as defined below) |  |  | 650,000 |  |  |  | 650,000 |
Convertible Notes (as defined below) |  |  | 920,000 |  |  |  | 920,000 |
Finance lease liabilities |  |  | 5,226 |  |  |  | 5,621 |
Total debt |  |  | 3,861,818 |  |  |  | 3,887,511 |
Less: Unamortized debt discount |  |  | (17,395 | ) |  |  | (20,602 | )
Less: Unamortized debt issuance costs |  |  | (25,087 | ) |  |  | (28,572 | )
Less: Current portion of long-term debt |  |  | (51,659 | ) |  |  | (38,837 | )
Total long-term debt |  | $ | 3,767,677 |  |  | $ | 3,799,500 |
Senior Credit Facilities. The Company has in place a credit agreement (the "Credit Agreement") that provides for senior secured term loans in original aggregate principal amounts of $700.0 million maturing in 2025 (the “Term Loan A-2”), $250.0 million maturing in 2027 (the “Term Loan B-2”), $625.0 million maturing in 2027 (the “Term Loan B-3”) and $800.0 million maturing in 2028 (the "Term Loan B-4"), as well as a $500.0 million revolving credit facility maturing in 2025 (the “Revolving Credit Facility” and, together with the Term Loan A-2, the Term Loan B-2, the Term Loan B-3 and the Term Loan B-4, the “Senior Credit Facilities”). The Revolving Credit Facility also gives the Company the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility. Refer to the table below summarizing the Company’s outstanding term loans as of September 30, 2022 and note 10 to the Company’s audited consolidated financial statements included in the 2021 Form 10-K for further details on the Senior Credit Facilities. As of September 30, 2022, the Company had approximately $2.3 billion of aggregate outstanding term loans, $44.1 million of outstanding letters of credit and $455.9 million available for borrowing under the Revolving Credit Facility. A summary of the Company’s outstanding term loans as of September 30, 2022 is as follows (dollars in thousands):
Instrument |  | Draw Date(s) |  | Original Principal |  |  | Amortization Per Annum(1) |  |  | Outstanding Principal |  | Final Maturity Date |  | Final Scheduled Principal Payment |  | Benchmark Rate |  | Applicable Margin(2) |  |  | Interest Rate |
Term Loan A-2 |  | 5/8/2019(3) 10/1/2019(3) |  | $ | 700,000 |  |  | Varies(4) |  |  | $ | 646,823 |  | 10/30/2025 |  | $ | 476,607 |  | LIBOR |  | 1.75% |  |  | 4.87% |
Term Loan B-2 |  | 1/7/2019 |  |  | 250,000 |  |  | 1.0% |  |  |  | 241,250 |  | 10/30/2027 |  |  | 228,750 |  | LIBOR |  | 2.00% |  |  | 5.12% |
Term Loan B-3 |  | 6/14/2019(5) 10/30/2020(5) |  |  | 625,000 |  |  | 1.0% |  |  |  | 608,519 |  | 10/30/2027 |  |  | 577,472 |  | LIBOR |  | 2.00% |  |  | 5.12% |
Term Loan B-4 |  | 5/3/2021 |  |  | 800,000 |  |  | 1.0% |  |  |  | 790,000 |  | 5/3/2028 |  |  | 746,000 |  | LIBOR |  | 2.00% |  |  | 5.12% |
Total |  | $ | 2,375,000 |  |  |  |  |  | $ | 2,286,592 |  |  |  | $ | 2,028,829 |  |  |  |  |  |  |  |
(1) | Payable in equal quarterly installments (expressed as a percentage of the original principal amount and subject to customary adjustments in the event of any prepayment). All loans may be prepaid at any time without penalty or premium (subject to customary LIBOR breakage provisions).
(2) | The Term Loan A-2 interest rate spread can vary between 1.25% and 1.75%, determined on a quarterly basis by reference to a pricing grid based on the Company’s Total Net Leverage Ratio (as defined in the Credit Agreement). All other applicable margins are fixed.
(3) | On May 8, 2019, $250.0 million was drawn. On October 1, 2019, an additional $450.0 million was drawn. On October 30, 2020, the amortization schedule was reset.
(4) | Per annum amortization rates for years one through five following October 30, 2020 are 2.5%, 2.5%, 5.0%, 7.5% and 12.5%, respectively.
(5) | On June 14, 2019, $325.0 million was drawn. On October 30, 2020, an additional $300.0 million was drawn.
Senior Notes. In November 2020, the Company issued $650.0 million aggregate principal amount of 4.00% senior notes due 2030 (the “Senior Notes”). The Senior Notes bear interest at a rate of 4.00% per annum payable semi-annually in arrears on May 15th and November 15th of each year. The terms of the Senior Notes are governed by an indenture dated as of November 9, 2020 (the “Senior Notes Indenture”), among the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (“BNY”), as trustee. At any time and from time to time prior to November 15, 2025, the Company may redeem some or all of the Senior Notes for cash at a redemption price equal to 100% of their principal amount, plus the “make-whole” premium described in the Senior Notes Indenture and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. Beginning on November 15, 2025, the Company may redeem some or all of the Senior Notes at any time and from time to time at the applicable redemption prices listed in the Senior Notes Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time and from time to time prior to November 15, 2023, the Company may redeem up to 40% of the aggregate principal amount of Senior Notes with funds in an aggregate amount not exceeding the net cash proceeds from one or more equity offerings at a redemption price equal to 104% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. Upon the occurrence of a Change of Control and a Below Investment Grade Rating Event (each as defined in the Senior Notes Indenture), the Company is required to offer to repurchase the Senior Notes at 101% of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. Convertible Notes. In March 2021, the Company issued $575.0 million aggregate principal amount of 0.000% convertible senior notes due 2026 (the “2026 Notes”) and $345.0 million aggregate principal amount of 1.125% convertible senior notes due 2028 (the “2028 Notes” and, together with the 2026 Notes, the “Convertible Notes,” and the Convertible Notes collectively with the Senior Notes, the “Notes”). The terms of the 2026 Notes and the 2028 Notes are each governed by a separate indenture dated as of March 5, 2021 (collectively, the “Convertible Notes Indentures” and together with the Senior Notes Indenture, the “Indentures”), in each case, among the Company, the guarantors party thereto and BNY, as trustee. The 2026 Notes do not bear regular interest, and the principal amount of the 2026 Notes does not accrete. The 2028 Notes bear interest at a rate of 1.125% per annum. Interest on the 2028 Notes is payable semiannually in arrears on March 15th and September 15th of each year, unless earlier repurchased, converted or redeemed. The 2026 Notes are scheduled to mature on March 15, 2026, and the 2028 Notes are scheduled to mature on March 15, 2028. The initial conversion rate for each of the 2026 Notes and the 2028 Notes is 0.4394 shares of the Company’s common stock per $1,000 principal amount of 2026 Notes and 2028 Notes, as applicable (equivalent to an initial conversion price of $2,275.83 per share of common stock). The Convertible Notes are convertible at the option of the holders. The method of conversion into cash, shares of the Company’s common stock or a combination thereof is at the election of the Company. Prior to the close of business on the business day immediately preceding December 15, 2025, the 2026 Notes will be convertible at the option of the holders only upon the satisfaction of specified conditions and during certain periods. On or after December 15, 2025, holders may convert their 2026 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the relevant maturity date. Prior to the close of business on the business day immediately preceding December 15, 2027, the 2028 Notes will be convertible at the option of the holders only upon the satisfaction of specified conditions and during certain periods. On or after December 15, 2027, holders may convert their 2028 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the relevant maturity date. If the Company undergoes a “fundamental change” (as defined in the applicable Convertible Notes Indenture), holders of the applicable series of Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes of such series at a purchase price equal to 100% of the principal amount of the Convertible Notes of such series to be repurchased, plus accrued and unpaid interest to, but not including, the fundamental change repurchase date. The Company may not redeem the 2026 Notes prior to March 20, 2024 and it may not redeem the 2028 Notes prior to March 20, 2025. No “sinking fund” is provided for the Convertible Notes. On or after March 20, 2024 and prior to December 15, 2025, the Company may redeem for cash all or any portion of the 2026 Notes, at its option, and on or after March 20, 2025 and prior to December 15, 2027, the Company may redeem for cash all or any portion of the 2028 Notes, at its option, in each case, if the last reported sale price per share of common stock has been at least 130% of the conversion price for such series of Convertible Notes then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes of such series to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date. In addition, following a “make-whole fundamental change” (as defined in the applicable Convertible Notes Indenture) or if the Company delivers a notice of redemption in respect of any Convertible Notes of a series, in certain circumstances, the conversion rate applicable to such series of Convertible Notes will be increased for a holder who elects to convert any of such Convertible Notes in connection with such a make-whole fundamental change or convert any of such Convertible Notes called (or deemed called) for redemption during the related redemption period, as the case may be. The carrying amounts of the Convertible Notes consisted of the following (in thousands):
|  | September 30, 2022 |  |  | December 31, 2021 |
|  | 2026 Notes |  |  | 2028 Notes |  |  | Total |  |  | 2026 Notes |  |  | 2028 Notes |  |  | Total |
Gross carrying amount |  | $ | 575,000 |  |  | $ | 345,000 |  |  | $ | 920,000 |  |  | $ | 575,000 |  |  | $ | 345,000 |  |  | $ | 920,000 |
Less: Unamortized discount |  |  | (10,367 | ) |  |  | (7,028 | ) |  |  | (17,395 | ) |  |  | (12,611 | ) |  |  | (7,991 | ) |  |  | (20,602 | )
Less: Unamortized debt issuance costs |  |  | (283 | ) |  |  | (198 | ) |  |  | (481 | ) |  |  | (344 | ) |  |  | (226 | ) |  |  | (570 | )
Net carrying amount |  | $ | 564,350 |  |  | $ | 337,774 |  |  | $ | 902,124 |  |  | $ | 562,045 |  |  | $ | 336,783 |  |  | $ | 898,828 |
Interest expense on the Convertible Notes consisted of the following (dollars in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
|  | 2026 Notes |  |  | 2028 Notes |  |  | Total |  |  | 2026 Notes |  |  | 2028 Notes |  |  | Total |  |  | 2026 Notes |  |  | 2028 Notes |  |  | Total |  |  | 2026 Notes |  |  | 2028 Notes |  |  | Total |
Contractual interest expense |  | $ | - |  |  | $ | 970 |  |  | $ | 970 |  |  | $ | - |  |  | $ | 970 |  |  | $ | 970 |  |  | $ | - |  |  | $ | 2,911 |  |  | $ | 2,911 |  |  | $ | - |  |  | $ | 2,232 |  |  | $ | 2,232 |
Amortization of discount |  |  | 756 |  |  |  | 325 |  |  |  | 1,081 |  |  |  | 756 |  |  |  | 325 |  |  |  | 1,081 |  |  |  | 2,244 |  |  |  | 963 |  |  |  | 3,207 |  |  |  | 1,726 |  |  |  | 741 |  |  |  | 2,467 |
Amortization of debt issuance costs |  |  | 21 |  |  |  | 9 |  |  |  | 30 |  |  |  | 21 |  |  |  | 9 |  |  |  | 30 |  |  |  | 61 |  |  |  | 28 |  |  |  | 89 |  |  |  | 47 |  |  |  | 21 |  |  |  | 68 |
Total interest expense |  | $ | 777 |  |  | $ | 1,304 |  |  | $ | 2,081 |  |  | $ | 777 |  |  | $ | 1,304 |  |  | $ | 2,081 |  |  | $ | 2,305 |  |  | $ | 3,902 |  |  | $ | 6,207 |  |  | $ | 1,773 |  |  | $ | 2,994 |  |  | $ | 4,767 |
Effective interest rate |  |  | 0.5 | % |  |  | 1.5 | % |  |  |  |  |  |  | 0.5 | % |  |  | 1.5 | % |  |  |  |  |  |  | 0.5 | % |  |  | 1.5 | % |  |  |  |  |  |  | 0.5 | % |  |  | 1.5 | % |  |  |  |
General. The Notes are senior unsecured obligations of the Company and are guaranteed by the Company’s wholly owned domestic subsidiaries that guarantee the Senior Credit Facilities or that guarantee certain capital market debt of the Company in an aggregate principal amount in excess of $250.0 million. Each Indenture contains covenants that, among other things and subject to certain exceptions, limit (i) the Company’s ability to consolidate or merge with or into another person or sell or otherwise dispose of all or substantially all of the assets of the Company and its subsidiaries (taken as a whole) and (ii) the ability of the guarantors to consolidate with or merge with or into another person. The Senior Notes Indenture also contains a covenant that, subject to certain exceptions, limits the Company’s ability and the ability of its subsidiaries to incur any liens securing indebtedness for borrowed money. Each Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, default in payment of principal or interest, breach of other agreements or covenants in respect of the relevant Notes by the Company or any guarantors, failure to pay certain other indebtedness at final maturity, acceleration of certain indebtedness prior to final maturity, failure to pay certain final judgments, failure of certain guarantees to be enforceable and certain events of bankruptcy, insolvency or reorganization; and, in the case of each Convertible Notes Indenture, failure to comply with the Company’s obligation to convert the relevant Convertible Notes under the applicable Convertible Notes Indenture and failure to give a fundamental change notice or a notice of a make-whole fundamental change under the applicable Convertible Notes Indenture. Unamortized debt issuance costs consisted of the following (in thousands):
|  | September 30, 2022 |  |  | December 31, 2021 |
Revolving Credit Facility portion: |  |  |  |  |  |  |  |
Other noncurrent assets |  | $ | 2,073 |  |  | $ | 2,576 |
Term loans and Notes portion: |  |  |  |  |  |  |  |
Long-term debt (contra account) |  |  | 25,087 |  |  |  | 28,572 |
Total |  | $ | 27,160 |  |  | $ | 31,148 |
The Company recorded debt issuance cost amortization of $1.3 million and $1.4 million for the three months ended September 30, 2022 and 2021, respectively, and $4.0 million and $4.3 million for the nine months ended September 30, 2022 and 2021, respectively, within interest expense in the condensed consolidated statements of operations and comprehensive income. The future maturities of outstanding borrowings as of September 30, 2022 were as follows (in thousands):
Year Ending December 31, |  | Amount |
2022 (remaining three months) |  | $ | 12,688 |
2023 |  |  | 55,008 |
2024 |  |  | 76,285 |
2025 |  |  | 557,147 |
2026 |  |  | 591,709 |
Thereafter |  |  | 2,563,755 |
Total |  | $ | 3,856,592 |
The Company has issued letters of credit totaling $44.1 million on behalf of Wisper to guarantee its performance obligations under a Federal Communications Commission (“FCC”) broadband funding program, as of September 30, 2022. The fair value of the letters of credit approximates face value based on the short-term nature of the agreements. The Company would be liable for up to the total amount outstanding under the letters of credit if Wisper were to fail to satisfy all or some of its performance obligations under the FCC program. Wisper has guaranteed and indemnified the Company in connection with such letters of credit. As of September 30, 2022, the Company has assessed the likelihood of non-performance associated with the guarantee to be remote, and therefore, no liability has been accrued within the condensed consolidated balance sheets. Total letter of credit issuances under the Revolving Credit Facility were $44.1 million at September 30, 2022 and accrued fees at a rate of approximately 1.88% per annum. On May 3, 2022, the Company entered into a letter of credit agreement with MUFG Bank, Ltd. ("MUFG") which provides for an additional $75.0 million letter of credit issuing capacity, of which $62.9 million was utilized as of September 30, 2022. The Company was in compliance with all debt covenants as of September 30, 2022.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI https://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration