Price | 18.99 | EPS | 1 | |
Shares | 5 | P/E | 15 | |
MCap | 99 | P/FCF | 6 | |
Net Debt | 53 | EBIT | 12 | |
TEV | 151 | TEV/EBIT | 13 | TTM 2019-09-30, in MM, except price, ratios |
10-Q | 2020-09-30 | Filed 2020-11-09 |
10-Q | 2020-06-30 | Filed 2020-08-10 |
10-Q | 2020-03-31 | Filed 2020-05-11 |
10-K | 2019-12-31 | Filed 2020-03-16 |
10-Q | 2019-09-30 | Filed 2019-11-12 |
10-Q | 2019-06-30 | Filed 2019-08-09 |
10-Q | 2019-03-31 | Filed 2019-05-10 |
10-K | 2018-12-31 | Filed 2019-03-14 |
10-Q | 2018-09-30 | Filed 2018-11-14 |
10-Q | 2018-06-30 | Filed 2018-08-14 |
10-Q | 2018-03-31 | Filed 2018-05-15 |
10-K | 2017-12-31 | Filed 2018-03-15 |
10-Q | 2017-09-30 | Filed 2017-11-14 |
10-Q | 2017-06-30 | Filed 2017-08-14 |
10-Q | 2017-03-31 | Filed 2017-05-15 |
10-K | 2016-12-31 | Filed 2017-03-15 |
10-Q | 2016-09-30 | Filed 2016-11-14 |
10-Q | 2016-06-30 | Filed 2016-08-15 |
10-Q | 2016-03-31 | Filed 2016-05-16 |
10-K | 2015-12-31 | Filed 2016-03-15 |
10-Q | 2015-09-30 | Filed 2015-11-16 |
10-Q | 2015-06-30 | Filed 2015-08-14 |
10-Q | 2015-03-31 | Filed 2015-05-15 |
10-K | 2014-12-31 | Filed 2015-03-16 |
10-Q | 2014-09-30 | Filed 2014-11-14 |
10-Q | 2014-06-30 | Filed 2014-08-14 |
10-Q | 2014-03-31 | Filed 2014-05-15 |
10-K | 2013-12-31 | Filed 2014-03-14 |
10-Q | 2013-09-30 | Filed 2013-11-12 |
10-Q | 2013-06-30 | Filed 2013-08-14 |
10-Q | 2013-03-31 | Filed 2013-05-15 |
10-K | 2012-12-31 | Filed 2013-03-22 |
10-Q | 2012-09-30 | Filed 2012-11-09 |
10-Q | 2012-06-30 | Filed 2012-08-14 |
10-Q | 2012-03-31 | Filed 2012-05-14 |
10-K | 2011-12-31 | Filed 2012-03-26 |
10-Q | 2011-09-30 | Filed 2011-11-14 |
10-Q | 2011-06-30 | Filed 2011-08-15 |
10-Q | 2011-03-31 | Filed 2011-05-13 |
10-K | 2010-12-31 | Filed 2011-03-28 |
10-Q | 2010-09-30 | Filed 2010-11-12 |
10-Q | 2010-06-30 | Filed 2010-08-12 |
10-Q | 2010-03-31 | Filed 2010-05-12 |
10-K | 2009-12-31 | Filed 2010-03-29 |
8-K | 2020-09-02 | Other Events, Exhibits |
8-K | 2020-05-21 | |
8-K | 2020-04-01 | |
8-K | 2019-08-27 | |
8-K | 2019-05-23 | |
8-K | 2019-05-23 | |
8-K | 2019-04-15 | |
8-K | 2019-03-08 | |
8-K | 2018-11-15 | |
8-K | 2018-07-31 | |
8-K | 2018-07-31 | |
8-K | 2018-06-04 | |
8-K | 2018-05-24 | |
8-K | 2018-05-23 | |
8-K | 2018-03-26 | |
8-K | 2018-02-22 |
Part I - Financial Information |
Item 1. Financial Statements |
Note 1 - Basis of Presentation and Consolidation |
Note 2 - Revenue Recognition |
Note 3 - Leases |
Note 4 - Fair Value Measurements |
Note 5 - Goodwill and Intangibles |
Note 6 - Secured Credit Facility |
Note 7 - Interest Rate Swaps |
Note 8 - Other Investments |
Note 9 - Guarantees |
Note 10 - Restricted Stock Units (Rsu) |
Note 11 - Segment Information |
Note 12 - Commitments and Contingencies |
Note 13 - Broadband Grants |
Note 14 - Subsequent Events |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
Item 4. Controls and Procedures |
Part II. Other Information |
Item 1. Legal Proceedings. |
Item 1A. Risk Factors. |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 3. Defaults Upon Senior Securities. |
Item 4. Mine Safety Disclosures |
Item 5. Other Information. |
Item 6. Exhibits. |
EX-31.1 | exhibit31_1.htm |
EX-31.2 | exhibit31_2.htm |
EX-32.1 | exhibit32_1.htm |
EX-32.2 | exhibit32_2.htm |
Balance Sheet | Income Statement | Cash Flow |
---|---|---|
Assets, Equity
|
Rev, G Profit, Net Income
|
Ops, Inv, Fin
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM
(Mark One)
For the quarterly period ended
For the transition period from_____to_____.
Commission File Number
(Exact name of Registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices)
Registrant’s telephone number, including area code: (
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 and posted 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 and post such files). Yes No ☐
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
Securities registered pursuant to Section 12(b) of the Act: None.
Title of each class | Trading Symbol | Name of each exchange on which registered |
| | OTCQB Marketplace |
The total number of shares of the registrant’s common stock outstanding as of November 9, 2020:
1
table of contents
3-9 | ||
3 | ||
4 | ||
Consolidated Balance Sheets (unaudited) as of September 30, 2020 and December 31, 2019 | 5-6 | |
7 | ||
8-9 | ||
Condensed Notes to Consolidated Financial Statements (unaudited) | 10-27 | |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28-41 | |
41 | ||
41 | ||
41 | ||
42 | ||
42 | ||
42 | ||
42 | ||
42-43 | ||
43 | ||
44 | ||
| Exhibits |
|
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
NUVERA COMMUNICATIONS, INC. | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
OPERATING REVENUES: | |||||||||||
Local Service | $ | | $ | | $ | | $ | | |||
Network Access | | | | | |||||||
Video | | | | | |||||||
Data | | | | | |||||||
A-CAM/FUSF | | | | | |||||||
Other Non-Regulated |
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Total Operating Revenues |
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OPERATING EXPENSES: | |||||||||||
Plant Operations (Excluding Depreciation | | | | | |||||||
Cost of Video | | | | | |||||||
Cost of Data | | | | | |||||||
Cost of Other Nonregulated Services | | | | | |||||||
Depreciation and Amortization | | | | | |||||||
Selling, General and Administrative |
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Total Operating Expenses |
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OPERATING INCOME |
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OTHER (EXPENSE) INCOME | |||||||||||
Interest Expense | ( | ( | ( | ( | |||||||
Interest/Dividend Income | | | | | |||||||
Interest During Construction | | | | | |||||||
Gain (Loss) on Investments | - | - | | ( | |||||||
CoBank Patronage Dividends | - | - | | | |||||||
Other Investment Income |
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Total Other Income (Expense) |
| ( |
| ( |
| ( |
| ( | |||
INCOME BEFORE INCOME TAXES | | | | | |||||||
INCOME TAXES |
| |
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NET INCOME | $ | | $ | | $ | | $ | | |||
NET INCOME PER SHARE | |||||||||||
Basic | $ | | $ | | $ | | $ | | |||
Diluted | $ | |
| $ | |
| $ | |
| $ | |
DIVIDENDS PER SHARE | $ | | $ | | $ | | $ | | |||
WEIGHTED AVERAGE SHARES OUTSTANDING |
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Basic | | | | | |||||||
Diluted |
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The accompanying notes are an integral part of these consolidated financial statements. |
3
NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | |||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Net Income | $ | |
| $ | |
| $ | |
| $ | |
Other Comprehensive Income (Loss): |
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Unrealized Gains (Losses) on Interest Rate Swaps |
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| ( |
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| ( |
Income Tax Benefit (Expense) Related to Unrealized |
| ( |
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| ( |
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Other Comprehensive Income (Loss): |
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| ( |
| ( | |||
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Comprehensive Income | $ | | $ | | $ | | $ | | |||
The accompanying notes are an integral part of these consolidated financial statements. |
4
NUVERA COMMUNICATIONS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||
ASSETS | |||||
September 30, 2020 | December 31, 2019 | ||||
CURRENT ASSETS: |
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Cash | $ | | $ | | |
Receivables, Net of Allowance for |
| |
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| |
Income Taxes Receivable | | ||||
Materials, Supplies, and Inventories |
| |
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Prepaid Expenses and Other Current Assets |
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Total Current Assets |
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INVESTMENTS & OTHER ASSETS: |
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Goodwill | | | |||
Intangibles |
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Other Investments | | | |||
Right of Use Asset |
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Other Assets |
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Total Investments and Other Assets |
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PROPERTY, PLANT & EQUIPMENT: |
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Communications Plant | | | |||
Other Property & Equipment |
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Video Plant |
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Total Property, Plant and Equipment |
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Less Accumulated Depreciation |
| |
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Net Property, Plant & Equipment |
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TOTAL ASSETS | $ | |
| $ | |
The accompanying notes are an integral part of these consolidated financial statements. |
5
NUVERA COMMUNICATIONS, INC. CONSOLIDATED BALANCE SHEETS (continued) (Unaudited) | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
September 30, 2020 | December 31, 2019 | ||||
CURRENT LIABILITIES: |
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Current Portion of Long-Term Debt, Net of | $ | | $ | | |
Accounts Payable |
| |
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Accrued Income Taxes | | ||||
Other Accrued Taxes |
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Deferred Compensation | | | |||
Accrued Compensation |
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Other Accrued Liabilities | | | |||
Total Current Liabilities |
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LONG-TERM DEBT, Net of Unamortized |
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NONCURRENT LIABILITIES: | |||||
Loan Guarantees |
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Deferred Income Taxes | | | |||
Other Accrued Liabilities |
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Financial Derivative Instruments | | | |||
Deferred Compensation |
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Total Noncurrent Liabilities |
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COMMITMENTS AND CONTINGENCIES | |||||
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STOCKHOLDERS' EQUITY: | |||||
Preferred Stock |
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Common Stock - $ | | | |||
Accumulated Other Comprehensive Loss |
| ( |
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| ( |
Unearned Compensation | | | |||
Retained Earnings |
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Total Stockholders' Equity |
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TOTAL LIABILITIES AND | $ | | $ | | |
The accompanying notes are an integral part of these consolidated financial statements. |
6
NUVERA COMMUNICATIONS, INC. | |||||
Nine Months Ended | |||||
September 30, 2020 | September 30, 2019 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net Income | $ | | $ | | |
Adjustments to Reconcile Net Income to Net Cash |
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Depreciation and Amortization | | | |||
Unrealized (Gains) Losses on Investments |
| ( |
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Undistributed Earnings of Other Equity Investments | ( | ( | |||
Noncash Patronage Refund |
| ( |
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| ( |
Stock Issued in Lieu of Cash Payment | | | |||
Distributions from Equity Investments |
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Stock-based Compensation | | | |||
Changes in Assets and Liabilities: |
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Receivables | | | |||
Income Taxes Receivable |
| ( |
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Materials, Supplies and Inventories | ( | ( | |||
Prepaid Expenses |
| ( |
|
| ( |
Other Assets | | ( | |||
Accounts Payable |
| ( |
|
| ( |
Accrued Income Taxes | ( | | |||
Other Accrued Taxes |
| ( |
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| ( |
Other Accrued Liabilities | ( | | |||
Deferred Compensation |
| ( |
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| ( |
Net Cash Provided by Operating Activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Additions to Property, Plant, and Equipment, Net |
| ( |
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| ( |
Grants Received for Construction of Plant | | | |||
Other, Net |
| ( |
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| ( |
Net Cash Used in Investing Activities |
| ( |
| ( | |
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CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Principal Payments of Long-Term Debt |
| ( |
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| ( |
Loan Proceeds | | ||||
Changes in Revolving Credit Facility |
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Repurchase of Common Stock | ( | ( | |||
Dividends Paid |
| ( |
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| ( |
Net Cash Used in Financing Activities |
| ( |
| ( | |
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NET INCREASE IN CASH | | | |||
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CASH at Beginning of Period |
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CASH at End of Period | $ | | $ | | |
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Supplemental cash flow information: | |||||
Cash paid for interest | $ | |
| $ | |
Net cash paid for income taxes | $ | | $ | | |
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The accompanying notes are an integral part of these consolidated financial statements. |
7
NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) | ||||||||||||||||
THREE MONTHS ENDED SEPTEMBER 30, 2020 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Common Stock | Unearned Compensation | Retained Earnings | Total Equity | |||||||||||||
Shares | Amount | |||||||||||||||
BALANCE on June 30, 2020 | |
| $ | |
| $ | ( |
| $ | |
| $ | |
| $ | |
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Restricted Stock Grant |
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Net Income |
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Unrealized Gain on Interest Rate Swap |
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BALANCE on September 30, 2020 | | $ | | $ | ( | $ | | $ | | $ | | |||||
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THREE MONTHS ENDED SEPTEMBER 30, 2019 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Common Stock | Unearned Compensation | Retained Earnings | Total Equity | |||||||||||||
Shares | Amount | |||||||||||||||
BALANCE on June 30, 2019 | |
| $ | |
| $ | ( |
| $ | |
| $ | |
| $ | |
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Restricted Stock Grant |
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Repurchase of Common Stock | ( | ( |
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Net Income |
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Dividends |
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| ( |
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Unrealized Gain on Interest Rate Swap |
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BALANCE on September 30, 2019 | | $ | | $ | ( | $ | | $ | | $ | | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
8
NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) | ||||||||||||||||
NINE MONTHS ENDED SEPTEMBER 30, 2020 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Common Stock | Unearned Compensation | Retained Earnings | Total Equity | |||||||||||||
Shares | Amount | |||||||||||||||
BALANCE on December 31, 2019 | |
| $ | |
| $ | ( |
| $ | |
| $ | |
| $ | |
Directors' Stock Plan | |
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Employee Stock Plan | | | | | ||||||||||||
Restricted Stock Grant |
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Exercise of RSU's | |
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Repurchase of Common Stock | ( | ( | ( | ( | ||||||||||||
Net Income |
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Dividends | ( | ( | ||||||||||||||
Unrealized Loss on Interest Rate Swap |
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BALANCE on September 30, 2020 | | $ | | $ | ( | $ | | $ | | $ | | |||||
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NINE MONTHS ENDED SEPTEMBER 30, 2019 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Common Stock | Unearned Compensation | Retained Earnings | Total Equity | |||||||||||||
Shares | Amount | |||||||||||||||
BALANCE on December 31, 2018 | |
| $ | |
| $ | ( |
| $ | |
| $ | |
| $ | |
Directors' Stock Plan | |
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Employee Stock Plan | | | | | ||||||||||||
Restricted Stock Grant |
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Repurchase of Common Stock | ( |
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Net Income | | | ||||||||||||||
Dividends |
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Unrealized Loss on Interest Rate Swap | ( | ( | ||||||||||||||
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BALANCE on September 30, 2019 | | $ | | $ | ( | $ | | $ | | $ | | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
9
September 30, 2020 (Unaudited)
Note 1 – Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements of Nuvera Communications, Inc. and its subsidiaries (Nuvera) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, rules and regulations of the Securities and Exchange Commission (SEC) and, where applicable, conform to the accounting principles as prescribed by federal and state telephone utility regulatory authorities. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted or condensed pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring accruals) considered necessary for the fair presentation of the financial statements and present fairly the results of operations, financial position and cash flows for the interim periods presented as required by Regulation S-X, Rule 10-01. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2019.
The preparation of our financial statements requires our management to make estimates and judgements that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities at the date of the financial statements and during the reporting period. Actual results may differ from these estimates. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year as a whole or any other interim period.
Our consolidated financial statements report the financial condition and results of operations for Nuvera and its subsidiaries in
Revenue Recognition
See Note 2 – “Revenue Recognition” for a discussion of our revenue recognition policies.
Cost of Services (excluding depreciation and amortization)
Cost of services includes all costs related to delivery of communication services and products. These operating costs include all costs of performing services and providing related products including engineering, network monitoring and transport cost.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include direct and indirect selling expenses, customer service, billing and collections, advertising and all other general and administrative costs associated with the operations of the business.
Depreciation and Amortization Expense
We use the group life method (mass asset accounting) to depreciate the assets of our telephone companies. Telephone plant acquired in a given year is grouped into similar categories and depreciated over the remaining estimated useful life of the group. When an asset is retired, both the asset and the accumulated depreciation associated with that asset are removed from the books. Due to rapid changes in technology, selecting the estimated economic life of communications plant and equipment requires a significant amount of judgment. We periodically review data on expected utilization of new equipment, asset retirement activity and net salvage values to determine adjustments to our depreciation rates. Depreciation expense was $
10
Income Taxes
The provision for income taxes consists of an amount for taxes currently payable and a provision for tax consequences deferred to future periods. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Significant components of our deferred taxes arise from differences (i) in the basis of property, plant and equipment due to the use of accelerated depreciation methods for tax purposes, as well as (ii) in partnership investments and intangible assets due to the difference between book and tax basis. Our effective income tax rate is normally higher than the United States tax rate due to state income taxes and permanent differences.
We account for income taxes in accordance with GAAP, which requires an asset and liability approach to financial accounting and reporting for income taxes. As required by GAAP, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
As of September 30, 2020 and December 31, 2019 we had
We are primarily subject to United States, Minnesota, Iowa, Nebraska, North Dakota and Wisconsin income taxes. Tax years subsequent to 2015 remain open to examination by federal and state tax authorities. Our policy is to recognize interest and penalties related to income tax matters as income tax expense. As of September 30, 2020 and December 31, 2019 we had no interest or penalties accrued that related to income tax matters.
Earnings and Dividends Per Share
The basic and diluted net income per share are calculated as follows:
Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | ||||||||||||||||||||
Basic | Diluted |
| Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||
Net Income | $ | | $ | | $ | | $ | |