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8-K - 8-K - GRIZZLY MERGER SUB 1, LLC | gciform8k05072014.htm |
Exhibit 99.1
GCI REPORTS FIRST QUARTER 2014 FINANCIAL RESULTS
Consolidated Revenues of $216 million, Adjusted EBITDA of $75 million
May 7, 2014, Anchorage AK - General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported performance for the first quarter of 2014, with consolidated revenues of $216 million, adjusted EBITDA of $75 million, and net income of $2 million or $0.05 per share.
Consolidated revenues of $216 million declined four percent on a sequential basis and increased sixteen percent on a year over year basis. Adjusted EBITDA of $75 million represented a ten percent increase on a sequential basis and a twenty seven percent increase on a year over year basis.
“Our first quarter results provide a solid foundation for growth in 2014,” said Ron Duncan, GCI president and chief executive officer. “We are particularly pleased with progress in our cable modem and managed broadband service offerings. Our 2014 capital investment plan is well under way with particular emphasis on expanding our 4G LTE footprint throughout Alaska and continuing expansion of the TERRA network.”
Important Notes
It should be noted that both Wireless and Wireline segment results are materially affected by The Alaska Wireless Network (“AWN”) transaction, which was effective July 23, 2013.
Also, under the AWN operating agreement, each partner is allowed to receive certain reimbursements for customer equipment, commonly known as “handset subsidies,” according to a schedule for qualified devices. In the fourth quarter of 2013, GCI elected not to seek any handset subsidies at this time, and reversed the preliminary subsidies booked in the third quarter of 2013. This decision was made due to internal system limitations on tracking the subsidies with the level of precision required. GCI expects to
resume seeking handset subsidies before year-end. There was no economic impact, but rather a shift of EBITDA between segments.
Segment adjusted EBITDA performance on a pro forma basis, using a standard subsidy recovery rate, is shown below.
Operating Highlights
Wireless:
The Wireless segment, reflecting the results of AWN, posted revenues of $63 million, a slight increase on a sequential basis, and an eighty five percent increase on a year over year basis, reflecting the results of the AWN transaction, which was effective July 23, 2013. Wireless adjusted EBITDA for the period was $38 million, reflecting an eleven percent decline on a sequential basis and a one hundred fifty percent increase on a year over year basis.
Removing the handset subsidy reversal in the first and fourth quarters of 2013 and providing an estimated handset subsidy for all of the quarters would result in a pro forma adjusted EBITDA as follows:
($millions) | 1Q 2014 | 4Q 2013 | 1Q 2013 |
Wireless Reported Adjusted EBITDA | 38.0 | 42.9 | 15.2 |
Wireless Reported Subsidy to Wireline | 0.0 | (5.2) | 5.5 |
Wireless Adjusted EBITDA Without Subsidy | 38.0 | 37.7 | 20.7 |
Estimated Subsidy @ 75% of Gross Handsets | (5.5) | (9.8) | (5.6) |
Wireless Pro Forma Adjusted EBITDA | 32.5 | 27.9 | 15.1 |
Thus, on a pro forma basis, Wireless adjusted EBITDA increased seventeen percent on a sequential basis and one hundred fifteen percent on a year over year basis.
For the first quarter of 2014, the revenue detail was as follows:
($ millions) | 1Q 2014 | 4Q 2013 | 1Q 2013 |
Wholesale Wireless | 25 | 24 | 16 |
Roaming and Backhaul | 25 | 25 | 10 |
USF Support | 13 | 13 | 8 |
Total Wireless Revenue | 63 | 62 | 34 |
Since the beginning of the year, the company implemented many enhancements and improvements to the wireless network, including:
• | The Fairbanks market was substantially upgraded with LTE service going live April 30th. Also on April 30th, 3G service was launched in Bethel. In all, 11 new LTE sites and four new 3G sites were put into service across the state. |
• | Turbozone has continued to expand, and now covers 1,146 venues with 1,843 access points. |
• | The Company acknowledged the preliminary award of $41.4 million in the Tribal Mobility Fund I auction, which, upon final FCC approval, will support the expanded provision of 3G and 4G service in rural Alaska. |
Wireline:
The Wireline segment posted revenues of $154 million, a one percent decline on a sequential basis, and a one percent increase on a year over year basis. Adjusted EBITDA for the segment was $37 million, representing a forty eight percent increase on a sequential basis, and a fifteen percent decline on a year over year basis. The year over year decline is due to labor and healthcare cost increases.
Removing the handset subsidy reversal in the first and fourth quarters of 2013 and providing an estimated handset subsidy for all of the quarters would result in a pro forma adjusted EBITDA as follows:
($millions) | 1Q 2014 | 4Q 2013 | 1Q 2013 |
Wireline Reported Adjusted EBITDA | 36.8 | 24.9 | 43.5 |
Reported Subsidy from Wireless | 0.0 | 5.2 | (5.5) |
Wireline Adjusted EBITDA Without Subsidy | 36.8 | 30.1 | 38.0 |
Estimated Subsidy @ 75% of Gross Handsets | 5.5 | 9.8 | 5.6 |
Wireline Pro Forma Adjusted EBITDA | 42.3 | 39.9 | 43.6 |
Thus, on a pro forma basis, Wireline adjusted EBITDA increased six percent on a sequential basis and decreased three percent on a year over year basis.
The year over year decline is due to labor and healthcare cost increases.
Wireline - Consumer:
Consumer revenues for the first quarter of 2014 were $70 million, a one percent increase on a sequential basis and a three percent increase on a year over year basis. Product groups that grew quarter over quarter included wireless, data and a slight increase in voice, offset by a decline in video revenues.
During the quarter, the Company announced several campaigns and new programs:
• | Progress to gigabit broadband service has continued. Re:D speeds were doubled from 50 Mbps to 100 Mbps in the fourth quarter of 2013, and then to 200 Mbps in the first quarter of 2014. Furthermore, the Company is driving towards 400 Mbps in some markets by the end of 2014. |
• | TiVo service has been expanded to thirteen markets within Alaska, with the markets having been doubled in the first quarter of 2014. |
• | FastPhone, GCI’s new prepaid wireless service launched late in the fourth quarter of 2013, is showing continued customer adoption. |
Wireline - Business Services:
Business Services revenues for the first quarter of 2014 were $52 million, a six percent decline on a sequential basis and a seven percent decline on a year over year basis. These
decreases were driven by a decline in voice products and professional services, offsetting increases in data transport/storage, video and wireless.
The sequential decline in voice products is the result of a one time resolution of a billing dispute with a carrier customer that we received in the fourth quarter of 2013. In addition, Professional Services declined due to the slowing of one particularly active oil and gas project from early 2013 levels. The improvements can be attributed in part to the continued adoption of virtualization by our customers, validating the strength of our cloud and data center products.
Data revenues can be better understood by the following detail:
($ millions) | 1Q 2014 | 4Q 2013 | 1Q 2013 |
Data Transport and Storage | 24 | 24 | 22 |
Professional Services | 11 | 12 | 18 |
Total Data Revenue | 35 | 36 | 40 |
Wireline - Managed Broadband:
Managed Broadband revenues for the first quarter of 2014 were $31 million, a three percent increase over the fourth quarter of 2013, and an eleven percent increase over the first quarter of 2013. The increases are attributable to continued demand in the School Access and Telehealth programs, as well as positive momentum in the regulated business.
The Company has recently announced a number of positive developments in this area, including:
• | The Company continues to be on track with the terrestrial broadband network, TERRA, and particularly with the extension of TERRA to Kotzebue by early 2015. |
Corporate Highlights
• | Cash capital expenditures for the quarter were $20 million, exclusive of grant funded capital expenditures and a satellite capital lease. |
Guidance
The Company continues its guidance of annual consolidated revenues in the range of $910 million to $930 million, and adjusted EBITDA in the range of $285 million to $305 million, though there are increased pressures on the top line. Further, the company continues its guidance for cash capital expenditures of approximately $170 million, excluding real estate and the extension of a satellite lease which was capitalized, as well as any grant-funded capital expenditures.
The Company will hold a conference call to discuss the quarter’s results on Thursday, May 8th, at 2:00 p.m. (Eastern). To access the call, call the conference operator between 1:50-2:00 p.m. (Eastern) at 888-390-0685 (International callers should dial +1-773-756-4700) and identify your call as “GCI”. In addition to dial-up access, GCI will make available net conferencing. To access the call via net conference, log on to gci.com and follow the instructions. A replay of the call will be available for 72-hours by dialing 866-373-1992, access code 7461 (International callers should dial +1-203-369-0266).
About GCI
GCI is the largest Alaska-based and -operated, integrated telecommunications provider, offering voice, data, and video services statewide. Learn more about GCI at www.gci.com/about.
Forward Looking Statement Disclosure
The foregoing contains forward-looking statements regarding GCI’s expected results that are based on management’s expectations as well as on a number of assumptions concerning future events. Actual results might differ materially from those projected in the forward looking statements due to uncertainties and other factors, many of which are outside GCI’s control. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in GCI’s cautionary statement sections on Forms 10-K and 10-Q filed with the Securities and Exchange Commission.
# # #
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Amounts in thousands) | ||||||
March 31, | December 31, | |||||
ASSETS | 2014 | 2013 | ||||
Current assets: | ||||||
Cash and cash equivalents | $ | 53,616 | 44,971 | |||
Receivables (including $31,600 and $28,000 from a related party at March 31, 2014 and December 31, 2013, respectively) | 219,050 | 228,372 | ||||
Less allowance for doubtful receivables | 2,445 | 2,346 | ||||
Net receivables | 216,605 | 226,026 | ||||
Deferred income taxes | 36,167 | 39,753 | ||||
Prepaid expenses | 11,306 | 7,725 | ||||
Inventories | 6,694 | 10,347 | ||||
Other current assets | 204 | 230 | ||||
Total current assets | 324,592 | 329,052 | ||||
Property and equipment in service, net of depreciation | 967,044 | 969,578 | ||||
Construction in progress | 81,245 | 87,476 | ||||
Net property and equipment | 1,048,289 | 1,057,054 | ||||
Goodwill | 219,041 | 219,041 | ||||
Cable certificates | 191,635 | 191,635 | ||||
Wireless licenses | 91,400 | 91,400 | ||||
Other intangible assets, net of amortization | 70,564 | 71,435 | ||||
Deferred loan and senior notes costs, net of amortization of $7,087 and $6,545 at March 31, 2014 and December 31, 2013, respectively | 11,772 | 12,129 | ||||
Other assets | 52,507 | 40,061 | ||||
Total other assets | 636,919 | 625,701 | ||||
Total assets | $ | 2,009,800 | 2,011,807 | |||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Continued) | ||||||
(Amounts in thousands) | ||||||
March 31, | December 31, | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | 2014 | 2013 | ||||
Current liabilities: | ||||||
Current maturities of obligations under long-term debt and capital leases | $ | 10,520 | 9,301 | |||
Accounts payable (including $12,500 and $11,200 to a related party at March 31, 2014 and December 31, 2013, respectively) | 50,102 | 65,095 | ||||
Deferred revenue | 29,048 | 27,586 | ||||
Accrued interest | 21,451 | 7,088 | ||||
Accrued payroll and payroll related obligations | 21,327 | 29,855 | ||||
Accrued liabilities | 15,352 | 14,359 | ||||
Subscriber deposits | 1,186 | 1,326 | ||||
Total current liabilities | 148,986 | 154,610 | ||||
Long-term debt, net | 1,044,860 | 1,045,144 | ||||
Obligations under capital leases, excluding current maturities | 72,610 | 66,261 | ||||
Obligation under capital lease due to related party, excluding current maturity | 1,875 | 1,880 | ||||
Deferred income taxes | 158,104 | 161,476 | ||||
Long-term deferred revenue | 87,102 | 88,259 | ||||
Other liabilities | 37,452 | 36,823 | ||||
Total liabilities | 1,550,989 | 1,554,453 | ||||
Commitments and contingencies | ||||||
Stockholders’ equity: | ||||||
Common stock (no par): | ||||||
Class A. Authorized 100,000 shares; issued 38,389 and 37,299 shares at March 31, 2014 and December 31, 2013, respectively; outstanding 38,363 and 37,209 shares at March 31, 2014 and December 31, 2013, respectively | 12,012 | 11,467 | ||||
Class B. Authorized 10,000 shares; issued and outstanding 3,163 and 3,165 shares at March 31, 2014 and December 31, 2013, respectively; convertible on a share-per-share basis into Class A common stock | 2,671 | 2,673 | ||||
Less cost of 26 and 90 Class A common shares held in treasury at March 31, 2014 and December 31, 2013, respectively | (249 | ) | (866 | ) | ||
Paid-in capital | 27,835 | 26,880 | ||||
Retained earnings | 119,111 | 116,990 | ||||
Total General Communication, Inc. stockholders' equity | 161,380 | 157,144 | ||||
Non-controlling interests | 297,431 | 300,210 | ||||
Total stockholders’ equity | 458,811 | 457,354 | ||||
Total liabilities and stockholders’ equity | $ | 2,009,800 | 2,011,807 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED INCOME STATEMENTS | ||||||
(Unaudited) | ||||||
Three Months Ended | ||||||
March 31, | ||||||
(Amounts in thousands, except per share amounts) | 2014 | 2013 | ||||
Revenues: | ||||||
Non-related party | $ | 200,503 | 186,216 | |||
Related party | 15,780 | — | ||||
Total revenues | 216,283 | 186,216 | ||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below): | ||||||
Non-related party | 69,143 | 64,610 | ||||
Related party | 2,631 | — | ||||
Total cost of goods sold | 71,774 | 64,610 | ||||
Selling, general and administrative expenses: | ||||||
Non-related party | 70,742 | 64,411 | ||||
Related party | 1,150 | 136 | ||||
Total selling, general and administrative expenses | 71,892 | 64,547 | ||||
Depreciation and amortization expense | 42,352 | 33,999 | ||||
Operating income | 30,265 | 23,060 | ||||
Other expense: | ||||||
Interest expense (including amortization of deferred loan fees) | (18,211 | ) | (16,904 | ) | ||
Other | (97 | ) | — | |||
Other expense | (18,308 | ) | (16,904 | ) | ||
Income before income tax expense | 11,957 | 6,156 | ||||
Income tax expense | (215 | ) | (3,029 | ) | ||
Net income | 11,742 | 3,127 | ||||
Net income (loss) attributable to non-controlling interests | 9,621 | (117 | ) | |||
Net income attributable to General Communication, Inc. | $ | 2,121 | 3,244 | |||
Basic net income attributable to General Communication, Inc. common stockholders per Class A common share | $ | 0.05 | 0.08 | |||
Basic net income attributable to General Communication, Inc. common stockholders per Class B common share | $ | 0.05 | 0.08 | |||
Diluted net income attributable to General Communication, Inc. common stockholders per Class A common share | $ | 0.05 | 0.08 | |||
Diluted net income attributable to General Communication, Inc. common stockholders per Class B common share | $ | 0.05 | 0.08 | |||
Common shares used to calculate Class A basic EPS | 37,987 | 38,264 | ||||
Common shares used to calculate Class A diluted EPS | 41,268 | 41,695 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
First Quarter 2014 | First Quarter 2013 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 62,517 | 8,236 | 70,753 | 33,837 | 7,225 | 41,062 | |||||||
Data | — | 87,613 | 87,613 | — | 86,872 | 86,872 | ||||||||
Video | — | 32,401 | 32,401 | — | 31,086 | 31,086 | ||||||||
Voice | — | 25,516 | 25,516 | — | 27,196 | 27,196 | ||||||||
Total | 62,517 | 153,766 | 216,283 | 33,837 | 152,379 | 186,216 | ||||||||
Cost of goods sold | 18,713 | 53,061 | 71,774 | 14,412 | 50,198 | 64,610 | ||||||||
Contribution | 43,804 | 100,705 | 144,509 | 19,425 | 102,181 | 121,606 | ||||||||
Less SG&A | 5,958 | 65,934 | 71,892 | 4,417 | 60,130 | 64,547 | ||||||||
Less (plus) other expense | — | 97 | 97 | — | (4 | ) | (4 | ) | ||||||
EBITDA | 37,846 | 34,674 | 72,520 | 15,008 | 42,055 | 57,063 | ||||||||
Share-based compensation | — | 1,778 | 1,778 | 104 | 1,155 | 1,259 | ||||||||
Accretion | 176 | 125 | 301 | 77 | 50 | 127 | ||||||||
Other | — | 198 | 198 | — | 200 | 200 | ||||||||
Adjusted EBITDA | $ | 38,022 | 36,775 | 74,797 | 15,189 | 43,460 | 58,649 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |||||||||||||||
SUPPLEMENTAL SCHEDULES | |||||||||||||||
(Unaudited) | |||||||||||||||
(Amounts in thousands) | |||||||||||||||
First Quarter 2014 | Fourth Quarter 2013 | ||||||||||||||
Wireless | Wireline | Wireless | Wireline | ||||||||||||
Segment | Segment | Total | Segment | Segment | Total | ||||||||||
Revenues | |||||||||||||||
Wireless | $ | 62,517 | 8,236 | 70,753 | $ | 62,209 | 7,368 | 69,577 | |||||||
Data | — | 87,613 | 87,613 | — | 87,080 | 87,080 | |||||||||
Video | — | 32,401 | 32,401 | — | 32,867 | 32,867 | |||||||||
Voice | — | 25,516 | 25,516 | — | 28,304 | 28,304 | |||||||||
Total | 62,517 | 153,766 | 216,283 | 62,209 | 155,619 | 217,828 | |||||||||
Cost of goods sold | 18,713 | 53,061 | 71,774 | 13,333 | 65,137 | 78,470 | |||||||||
Contribution | 43,804 | 100,705 | 144,509 | 48,876 | 90,482 | 139,358 | |||||||||
Less SG&A | 5,958 | 65,934 | 71,892 | 6,259 | 66,841 | 73,100 | |||||||||
Less other expense | — | 97 | 97 | — | — | — | |||||||||
EBITDA | 37,846 | 34,674 | 72,520 | 42,617 | 23,641 | 66,258 | |||||||||
Share-based compensation | — | 1,778 | 1,778 | — | 1,909 | 1,909 | |||||||||
Accretion | 176 | 125 | 301 | 270 | (653 | ) | (383 | ) | |||||||
Other | — | 198 | 198 | — | (6 | ) | (6 | ) | |||||||
Adjusted EBITDA | $ | 38,022 | 36,775 | 74,797 | $ | 42,887 | 24,891 | 67,778 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||||||
WIRELINE SEGMENT SUPPLEMENTAL REVENUE SCHEDULES | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||
First Quarter 2014 | First Quarter 2013 | |||||||||||||||||
Business | Managed | Business | Managed | |||||||||||||||
Consumer | Services | Broadband | Total | Consumer | Services | Broadband | Total | |||||||||||
Revenues | ||||||||||||||||||
Wireless | $ | 7,491 | 745 | — | 8,236 | 6,546 | 679 | — | 7,225 | |||||||||
Data | 26,944 | 34,840 | 25,829 | 87,613 | 24,056 | 40,136 | 22,680 | 86,872 | ||||||||||
Video | 27,249 | 5,152 | — | 32,401 | 27,961 | 3,125 | — | 31,086 | ||||||||||
Voice | 8,445 | 11,741 | 5,330 | 25,516 | 9,530 | 12,327 | 5,339 | 27,196 | ||||||||||
Total | $ | 70,129 | 52,478 | 31,159 | 153,766 | 68,093 | 56,267 | 28,019 | 152,379 | |||||||||
(Amounts in thousands) | ||||||||||||||||||
First Quarter 2014 | Fourth Quarter 2013 | |||||||||||||||||
Business | Managed | Business | Managed | |||||||||||||||
Consumer | Services | Broadband | Total | Consumer | Services | Broadband | Total | |||||||||||
Revenues | ||||||||||||||||||
Wireless | $ | 7,491 | 745 | — | 8,236 | 6,724 | 644 | — | 7,368 | |||||||||
Data | 26,944 | 34,840 | 25,829 | 87,613 | 26,290 | 35,739 | 25,051 | 87,080 | ||||||||||
Video | 27,249 | 5,152 | — | 32,401 | 27,993 | 4,874 | — | 32,867 | ||||||||||
Voice | 8,445 | 11,741 | 5,330 | 25,516 | 8,348 | 14,741 | 5,215 | 28,304 | ||||||||||
Total | $ | 70,129 | 52,478 | 31,159 | 153,766 | 69,355 | 55,998 | 30,266 | 155,619 | |||||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |||||||||||||||||
KEY PERFORMANCE INDICATORS | |||||||||||||||||
(Unaudited) | |||||||||||||||||
March 31, 2014 | March 31, 2014 | ||||||||||||||||
as compared to | as compared to | ||||||||||||||||
March 31, | March 31, | December 31, | March 31, | December 31, | March 31, | December 31, | |||||||||||
2014 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||
Wireline Segment | |||||||||||||||||
Consumer | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 116,400 | 117,000 | 115,300 | (600 | ) | 1,100 | -0.5 | % | 1.0 | % | |||||||
Video | |||||||||||||||||
Basic subscribers | 118,000 | 122,000 | 117,900 | (4,000 | ) | 100 | -3.3 | % | 0.1 | % | |||||||
Digital programming tier subscribers | 66,900 | 72,200 | 67,500 | (5,300 | ) | (600 | ) | -7.3 | % | -0.9 | % | ||||||
HD/DVR converter boxes | 101,200 | 90,300 | 96,900 | 10,900 | 4,300 | 12.1 | % | 4.4 | % | ||||||||
Homes passed | 248,000 | 244,800 | 247,400 | 3,200 | 600 | 1.3 | % | 0.2 | % | ||||||||
Voice | |||||||||||||||||
Local access lines in service | 59,800 | 68,000 | 61,000 | (8,200 | ) | (1,200 | ) | -12.1 | % | -2.0 | % | ||||||
Local access lines in service on GCI facilities | 55,700 | 63,300 | 56,900 | (7,600 | ) | (1,200 | ) | -12.0 | % | -2.1 | % | ||||||
Business Services | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 14,000 | 13,400 | 14,000 | 600 | — | 4.5 | % | — | % | ||||||||
Video | |||||||||||||||||
Hotels and mini-headend subscribers | 17,000 | 16,700 | 16,800 | 300 | 200 | 1.8 | % | 1.2 | % | ||||||||
Basic subscribers | 2,000 | 1,900 | 2,000 | 100 | — | 5.3 | % | — | % | ||||||||
Total basic subscribers | 19,000 | 18,600 | 18,800 | 400 | 200 | 2.2 | % | 1.1 | % | ||||||||
Voice | |||||||||||||||||
Local access lines in service | 48,500 | 50,400 | 48,800 | (1,900 | ) | (300 | ) | -3.8 | % | -0.6 | % | ||||||
Local access lines in service on GCI facilities | 35,000 | 30,400 | 34,700 | 4,600 | 300 | 15.1 | % | 0.9 | % | ||||||||
Managed Broadband | |||||||||||||||||
Voice | |||||||||||||||||
Local access lines in service | 7,500 | 8,100 | 7,600 | (600 | ) | (100 | ) | -7.4 | % | -1.3 | % | ||||||
Consumer and Business Services Combined | |||||||||||||||||
Wireless | |||||||||||||||||
Consumer Lifeline lines in service | 29,500 | 32,700 | 29,300 | (3,200 | ) | 200 | -9.8 | % | 0.7 | % | |||||||
Consumer Non-Lifeline lines in service | 94,400 | 91,800 | 93,600 | 2,600 | 800 | 2.8 | % | 0.9 | % | ||||||||
Business Services Non-Lifeline lines in service | 18,500 | 17,100 | 18,600 | 1,400 | (100 | ) | 8.2 | % | -0.5 | % | |||||||
Total wireless lines in service | 142,400 | 141,600 | 141,500 | 800 | 900 | 0.6 | % | 0.6 | % |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
KEY PERFORMANCE INDICATORS | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
March 31, 2014 | March 31, 2014 | |||||||||||||||||||||
Three Months Ended | as compared to | as compared to | ||||||||||||||||||||
March 31, | March 31, | December 31, | March 31, | December 31, | March 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2013 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||
Wireline segment | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||
Data | ||||||||||||||||||||||
Average monthly revenue per cable modem subscriber | $ | 75.93 | $ | 67.85 | $ | 74.42 | $ | 8.08 | $ | 1.51 | 11.9 | % | 2.0 | % | ||||||||
Video | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 76.98 | $ | 76.45 | $ | 78.84 | $ | 0.53 | $ | (1.86 | ) | 0.7 | % | (2.4 | )% | |||||||
Combined Consumer and Business Services | ||||||||||||||||||||||
Wireless | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 51.48 | $ | 48.54 | $ | 50.46 | $ | 2.94 | $ | 1.02 | 6.1 | % | 2.0 | % |
General Communication, Inc. | ||||||||||
Non-GAAP Financial Reconciliation Schedule | ||||||||||
(Unaudited, Amounts in Thousands) | ||||||||||
Three Months Ended | ||||||||||
March 31, | March 31, | December 31, | ||||||||
2014 | 2013 | 2013 | ||||||||
Net income | $ | 11,742 | 3,127 | 4,525 | ||||||
Income tax expense | 215 | 3,029 | 2,800 | |||||||
Income before income tax expense | 11,957 | 6,156 | 7,325 | |||||||
Other expense: | ||||||||||
Interest expense (including amortization of deferred loan fees) | 18,211 | 16,904 | 17,875 | |||||||
Other | 97 | — | 223 | |||||||
Other expense | 18,308 | 16,904 | 18,098 | |||||||
Operating income | 30,265 | 23,060 | 25,423 | |||||||
Depreciation and amortization expense | 42,352 | 33,999 | 40,835 | |||||||
Other | (97 | ) | 4 | — | ||||||
EBITDA (Note 2) | 72,520 | 57,063 | 66,258 | |||||||
Share-based compensation | 1,778 | 1,259 | 1,909 | |||||||
Accretion | 301 | 127 | (383 | ) | ||||||
Other | 198 | 200 | (6 | ) | ||||||
Adjusted EBITDA (Note 1) | $ | 74,797 | 58,649 | 67,778 | ||||||
Notes: | ||||||||||
(1) EBITDA (as defined in Note 2 below) before deducting share-based compensation, accretion expense, net income or loss attributable to non-controlling interests resulting from New Markets Tax Credit transactions, and non-cash contribution adjustment. | ||||||||||
(2) Earnings Before Interest, Taxes, Depreciation and Amortization is the sum of Net Income, Interest Expense (including Amortization of Deferred Loan Fees), Interest Income, Income Tax Expense, and Depreciation and Amortization Expense. EBITDA is not presented as an alternative measure of net income, operating income or cash flow from operations, as determined in accordance with accounting principles generally accepted in the United States of America. GCI's management uses EBITDA to evaluate the operating performance of its business, and as a measure of performance for incentive compensation purposes. GCI believes EBITDA is a measure used as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected EBITDA are used to estimate current or prospective enterprise value. EBITDA does not give effect to cash used for debt service requirements, and thus does not reflect funds available for investment or other discretionary uses. EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies. |