3. Property and Equipment:

Property and equipment consist of the following (Dollar amounts in thousands of U.S. dollars): 

(1) Fiber network is presented net of $0.1 million government grants (2024: $1.6 million), with an impact of $0.1 million on accumulated depreciation (2024: $0.1 million). 

Depreciation of property and equipment (Dollar amounts in thousands of U.S. dollars):

Impairment of Property and Equipment

During the year ended December 31, 2025, the Company recognized a total impairment expense of $11.5 million, related to abandoned materials and supplies held for capital projects and right-of-use ("ROU") assets. For financial statement presentation purposes, depending on the nature and stage of deployment, materials and supplies held for capital projects is included within "Assets under construction," and "Computer equipment" in the Consolidated Financial Statements. 

2025 Impairment Charges

In the third quarter of 2025, management completed a review of remaining construction assets following the implementation of the 2024 Capital Efficiency Plan (as discussed and defined in "Note 21. Restructuring Costs") as well as the disposal of certain assets under construction in the second and third quarters of Fiscal 2025. As part of this review, certain assets were determined to no longer be usable or recoverable in ongoing operations or future network builds. Management concluded that these assets met the definition of ‘assets disposed of by abandonment’ under ASC 360-10 - Impairment and Disposal of Long-Lived Assets ("ASC 360-10").

Management also reassessed its estimated salvage values of the abandoned materials and supplies held for capital projects in 2024, based on current market conditions and updated expected recoveries. This reassessment resulted in a reduction in estimated recoverable amounts, and a corresponding write-down was recorded to reflect the updated estimates.

In total, assets with a carrying value of $14.9 million were impaired, with an estimated salvage value of $4.9 million, resulting in a recorded impairment charge of $10.0 million during the year ended December 31, 2025. These assets consisted of materials and supplies held for capital projects that were no longer intended for deployment in the Company’s fiber network expansion. Additionally an impairment loss of $0.7 million was recognized related to ROU assets which is discussed under the "Note 12. Leases."

The remaining $0.8 million of impairment charges relate to specific network assets that were identified through routine inspections as being damaged and no longer in use and are recorded under “Network, other costs” in the Consolidated Statements of Comprehensive Income (Loss).

2024 Impairment Charges

During the year ended December 31, 2024, as part of the 2024 Capital Efficiency plan, management conducted a review of Assets under construction, Computer equipment, Fiber network and Customer and equipment installation to determine if there were specific assets that would no longer contribute to future operations.

This review resulted in the identification of assets within Assets under construction and Computer equipment that are no longer intended for deployment in the Company's fiber network expansion. These assets relate to specific work zones under construction, related capitalized design costs, and materials held for construction (“the impaired construction assets”). Prior to the 2024 Capital Efficiency Plan, the impaired construction assets were planned for future deployment in the operations of the Company's Ting reportable segment.

The impaired construction assets were deemed to be abandoned in accordance with ASC 360-10 and recorded at their salvage value, and the impairment charge was recognized immediately. In total, $33.6 million in assets were impaired, with an estimated salvage value of $15.9 million, resulting in a recorded impairment charge of $17.7 million. This charge is recorded under “Impairment of property and equipment” in the Consolidated Statements of Comprehensive Income (Loss).

The remaining $1.4 million impairment charges relate to specific network assets that were identified through routine inspections as being damaged and no longer in use and are recorded under “Network, other costs” in the Consolidated Statements of Comprehensive Income (Loss).

2023 Impairment Charges

During the year ended December 31, 2023, property and equipment with a net book value of $4.8 million were written off and included in "Network, other costs" in the Consolidated Statement of Comprehensive Income (Loss). The impairment losses incurred in 2023 related to specific network assets that were identified as being damaged and no longer in use. The full cost of the identified assets was recorded as an impairment loss.

Asset Dispositions

During the year ended December 31, 2025, the Company sold property and equipment and intangibles for gross proceeds of $20.8 million, comprising cash proceeds and a $1.0 million indemnification holdback. The net book value of the assets at the time of the sales was $15.0 million, resulting in a gain of $5.9 million, which is included in "Gain on disposition of property and equipment" in the Consolidated Statements of Operations and Comprehensive Income (Loss).