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Discontinued Operations | 3 Months Ended
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Mar. 31, 2021
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations On August 26, 2020, Sprint Corporation ("Sprint"), an indirect subsidiary of T-Mobile US, Inc., ("T-Mobile"), 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 operations for 90% of the “Entire Business Value” (as defined under our affiliate agreement and determined pursuant to the appraisal process set forth therein). Shortly thereafter, the Company committed to a plan to sell the discontinued Wireless operations. The final and binding appraisal process that determined the transaction price was completed on February 1, 2021. Expected sale proceeds are $1.95 billion based upon the appraisal process and other agreements between the parties. The closing of the sale is now expected to occur in the third quarter of 2021, subject to execution of the definitive asset purchase agreement, securing required regulatory approvals and customary closing conditions. The Company and T-Mobile submitted required regulatory filings to the Department of Justice (DOJ), the Federal Communications Commission (FCC), and the Public Service Commission of West Virginia (PSCWV), in March 2021. The premerger notification waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, expired on April 26, 2021, without the DOJ’s Antitrust Division or the Federal Trade Commission taking any action in connection with the proposed transaction thus allowing the parties to consummate the transaction upon receipt of pending regulatory approvals from the FCC and the PSCWV. 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, and discontinued operations within our unaudited condensed consolidated statements of comprehensive income. This disposal group excludes the accounts receivable and certain current liabilities generated by our Wireless operations because they are expected to be settled separately from the sale. Such accounts receivable totaled $49.4 million and $51.7 million at March 31, 2021 and December 31, 2020, respectively, and such current liabilities totaled $4.9 million and $6.1 million at March 31, 2021 and December 31, 2020, respectively. Our identification of assets and liabilities held for sale could change based on the terms of the final asset purchase agreement. The transaction is 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 December 31, 2020. Our related interest rate swap liabilities are also presented outside of the disposal group as a current liability at December 31, 2020, because management intends to settle them at consummation. 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. The carrying amounts of the major classes of assets and liabilities, which are classified as held for sale in the consolidated balance sheets, are as follows:
(in thousands) | March 31, 2021 |  | December 31, 2020
ASSETS |  |  |
Inventory | $ | 3,651 |  |  | $ | 5,746 |
Prepaid expenses and other | 42,942 |  |  | 47,003 |
Property, plant and equipment, net | 299,246 |  |  | 299,647 |
Intangible assets, net | 166,103 |  |  | 176,459 |
Goodwill | 146,383 |  |  | 146,383 |
Operating lease right-of-use assets | 420,410 |  |  | 421,586 |
Deferred charges and other assets | 38,793 |  |  | 36,470 |
Current assets held for sale | $ | 1,117,528 |  |  | $ | 1,133,294 |
LIABILITIES |  |  |
Current operating lease liabilities | $ | 398,340 |  |  | $ | 409,887 |
Accrued liabilities and other | 10,775 |  |  | 8,770 |
Asset retirement obligations | 33,974 |  |  | 33,545 |
Current liabilities held for sale | $ | 443,089 |  |  | $ | 452,202 |
Income from discontinued operations, net of tax in the consolidated statements of comprehensive income consist of the following:
(in thousands) | Three Months Ended March 31,
Revenue: | 2021 |  | 2020
Service revenue and other | $ | 100,674 |  |  | $ | 91,388 |
Equipment revenue | 6,399 |  |  | 12,750 |
Total revenue | 107,073 |  |  | 104,138 |
Operating expenses: |  |  |
Cost of services | 19,427 |  |  | 33,439 |
Cost of goods sold | 6,221 |  |  | 12,528 |
Selling, general and administrative | 10,702 |  |  | 8,930 |
Restructuring expense | 211 |  |  | — |
Depreciation and amortization | — |  |  | 24,826 |
Total operating expenses | 36,561 |  |  | 79,723 |
Operating income | 70,512 |  |  | 24,415 |
Other (expense) income: |  |  |
Interest expense | (4,384) |  |  | (6,228) |
Income before income taxes | 66,128 |  |  | 18,187 |
Income tax expense | 17,656 |  |  | 5,057 |
Income from discontinued operations, net of tax | $ | 48,472 |  |  | $ | 13,130 |
Under the relevant authoritative guidance, consummation of the sale will trigger or accelerate the recognition of certain expense related to contingent deal advisory fees, severance costs, 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 $36 million.

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- References No definition available. + Details
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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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