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8-K - FORM 8-K - GCI, LLC | incform8k03042015.htm |
Exhibit 99.1
GCI REPORTS FOURTH QUARTER 2014 FINANCIAL RESULTS
Consolidated Revenue of $229 Million and $910 million for the Year
Adjusted EBITDA of $71 million and $323 million for the year
March 4, 2015, Anchorage, Alaska - General Communication, Inc. (“GCI”) (NASDAQ: GNCMA) today reported record performance for 2014, with consolidated revenues for 2014 of $910 million, adjusted EBITDA of $323 million, and net income of $8 million or $0.18 per share. Strong performance in the quarter boosted revenues above guidance and brought adjusted EBITDA in at the high end of the previously increased guidance.
For the fourth quarter of 2014, consolidated revenues and adjusted EBITDA were $229 million and $71 million, respectively, with revenues and adjusted EBITDA growing five and four percent over the same period of 2013, respectively. This growth was driven, in part, by increases in subscribers and average revenue per user (ARPU) for both wireless and high speed data services.
Sequential quarter-over-quarter revenues and EBITDA declined, consistent with seasonal expectations of decreased wireless roaming activity, higher SG&A expenses and a decrease in political advertising revenue during the fourth quarter.
Core cash capital expenditures for the year totaled approximately $164 million, which included $47 million on wireless network and infrastructure projects and $90 million on other network and infrastructure projects. This is slightly less than the previously provided guidance of $170 million.
“2014 was a year of strong growth and continued investment for GCI,” said Ron Duncan, GCI’s president and chief executive officer. “We had substantial increases in both subscribers and ARPU for the wireless and the high-speed data businesses. We also made material investments in our infrastructure, positioning ourselves for the future. We now have the fastest LTE network and the broadest wireless coverage in Alaska, along with an unsurpassed wired high-speed data network for consumer and business customers. Going into 2015 our challenge will be to continue the growth in all of our businesses while integrating the AWN customers into a single, comprehensive wireless network.”
Operating Statistical Highlights
4Q14 | 4Q13 | 3Q14 | |
Wireless non-Lifeline Subscribers (GCI) | 124,600 | 112,200 | 121,300 |
Wireless ARPU (GCI) | $50.16 | $49.38 | $50.87 |
Cable Modem Subscribers | 133,200 | 129,300 | 131,200 |
Data ARPU | $83.01 | $74.65 | $80.20 |
GCI wireless subscribers grew substantially year-over-year and sequentially, while wireless ARPU has remained stable. Cable modem subscribers grew three percent year-over-year, with the “March to a Gig” and “re:D” programs driving growth in both subscribers and ARPU.
Operating and Financial Highlights
Both Wireless and Wireline segment results are materially affected by The Alaska Wireless Network (“AWN”) transaction, which was effective July 23, 2013. Year-over-year comparisons should take this into account.
Wireless:
The Wireless segment, which includes wholesale wireless services to GCI and, prior to February 2, 2015, to Alaska Communications, posted revenues of $62 million for the quarter, representing a slight decline over the fourth quarter of 2013 and declined 19 percent over the third quarter of 2014.
The Wireless revenue detail is as follows:
($ millions) | 4Q14 | 4Q13 | 3Q14 |
Wholesale wireless | 25 | 24 | 25 |
Roaming and Backhaul | 23 | 25 | 38 |
USF Support | 14 | 13 | 13 |
Total Wireless Revenue | 62 | 62 | 76 |
The sequential quarter-over-quarter decline in revenues is due to the seasonal nature of roaming activity, which is highest during the second and third quarters. However, GCI gained 3,300 non-Lifeline customers in the fourth quarter, for a total gain in the year of 12,400
As noted in previous quarters, under the AWN operating agreement, each operating partner is entitled to receive certain reimbursements for customer equipment, commonly known as “handset subsidies,” according to a schedule for qualified devices. GCI elected not to seek any handset subsidies beginning in the third quarter of 2013, and reversed the preliminary subsidies booked. This decision was made due to internal system limitations on tracking the subsidies with the level of precision required. GCI resumed seeking handset subsidies in the second quarter of 2014. There was no net financial impact on the consolidated results, but rather a shift of EBITDA between segments. To best understand the segment results, the reported results must be normalized for this.
Wireless adjusted EBITDA for the quarter was $33 million. Normalizing the reported results for the handset subsidy, the results would be instead:
($millions) | 4Q14 | 4Q13 | 3Q14 |
Wireless Reported Adjusted EBITDA | 33 | 43 | 47 |
Wireless Reported Subsidy to GCI Wireline | 7 | 0 | 6 |
Wireless Adjusted EBITDA without Subsidy | 40 | 43 | 53 |
Normalized Subsidy | 7 | 9 | 6 |
Wireless Pro Forma Adjusted EBITDA | 33 | 34 | 47 |
Wireless Pro Forma Adj. EBITDA Margin | 53% | 55% | 62% |
Thus, on a normalized basis, the Wireless adjusted EBITDA declined slightly on a year-over-year basis. Sequentially, adjusted EBITDA was down 30 percent, which is consistent with the prior year.
Recent service accomplishments and improvements in Wireless have included:
• | A recent independent test of wireless data network service in Juneau showed that the company is outperforming competitors in several key areas, including 4G LTE download speeds. |
• | The expansion of 3G wireless data service to over a dozen rural communities, including Bethel, Kotzebue, and Nome. |
Wireline:
The Wireline segment posted revenues of $167 million, a seven percent increase over the fourth quarter of 2013 and a two percent increase over the prior quarter. Adjusted EBITDA was reported at $38 million. Normalizing the reported results for the handset subsidy issue mentioned above, the results would be:
($millions) | 4Q14 | 4Q13 | 3Q14 |
Wireline Reported Adjusted EBITDA | 38 | 25 | 46 |
Wireline Reported Subsidy to GCI Wireline | 7 | 0 | 6 |
Wireline Adjusted EBITDA without Subsidy | 31 | 25 | 40 |
Normalized Subsidy | 7 | 9 | 6 |
Wireline Pro Forma Adjusted EBITDA | 38 | 34 | 46 |
Wireline Pro Forma Adj. EBITDA Margin | 23% | 22% | 28% |
Normalized adjusted EBITDA increased 12 percent on a year-over-year basis and decreased 17 percent on a sequential basis. The quarter-over-quarter decrease in EBITDA was consistent with seasonal expectations and driven by elevated SG&A and lower political advertising revenues experienced during the fourth quarter
Wireline - Consumer:
Consumer revenues were $76 million for the quarter, a year-over-year increase of ten percent, and a five percent increase on a sequential basis.
Of particular note has been the consistently strong growth of Consumer high speed data products, which continue to grow revenues year-over-year at a double digit rate, including growth in both high speed data subscribers and ARPU. This revenue growth was driven in part by the continued adoption of GCI’s industry-leading high speed data product “re:D”. Consumer wireless also showed consistent and strong growth.
Recent product and service announcements in Consumer have included:
• | The launch of the “No Worries” Broadband Internet plan, which provides customers the option to manage monthly bills with no surprises. |
• | Announcement that 1-gigabit high speed data service is being planned for Fairbanks and Juneau, and that 250 Mbps service has been expanded to seven markets within Alaska. |
• | The expansion of GCI TV powered by TiVo in Barrow, Bethel, Kotzebue and Nome. |
• | The UpgradeNow and “bring your own device” programs have shifted handsets-financed versus subsidized from less than 20 percent to over 50 percent in the last two months. |
• | Wireless shared data plans have been widely accepted, and, with customer retention tools, have brought wireless postpaid churn to under two percent for the fourth quarter. |
Wireline - Business Services:
Business Services revenues, which includes broadcast and cable advertising revenues, were $58 million for the quarter, representing four percent growth year-over-year and a two percent decline sequentially over the prior quarter.
The video products showed particular strength year-over-year due to the inclusion of Denali Media and the impact of political advertising on cable and Denali Media.
The Business Services Data products can be further detailed as follows:
($millions) | 4Q14 | 4Q13 | 3Q14 |
Data Transport and Storage | 26 | 24 | 25 |
Professional Services | 12 | 12 | 12 |
Total Data Revenue | 38 | 36 | 37 |
Although Professional Services for oil and gas were stable during the fourth quarter, low oil prices continue to put pressure on this sector.
Wireline - Managed Broadband:
Managed Broadband revenues were $32 million for the quarter, representing seven percent growth year-over-year and one percent growth sequentially. This growth derives from the continued success of the TERRA project in serving the rural communities of western Alaska. Within the past quarter, the TERRA project has been extended north as far as Kotzebue, and the TERRA-Yukon system has been extended to Galena from the east.
Significant Events
On December 4, 2014, GCI announced that it would be purchasing the wireless subscriber base of Alaska Communications (ACS), as well as purchasing ACS’ remaining one third interest in AWN, our wholesale wireless joint venture. This transaction closed on February 2, 2015. GCI now has sole ownership of the largest wireless network in Alaska.
As of September 30, 2014 ACS reported approximately 109,000 wireless subscribers. Due to a number of factors including subsequent subscriber losses, differences in methods of counting subscribers and exclusion of internal subscribers from the transaction, the actual number of customers in good standing we acquired on February 2, 2015 was approximately 20 percent lower, or about 87,000. These numbers are preliminary, and will be finalized in the first quarter 2015 financial release. The impact of these lower number of acquired subscribers is expected to be minimal due to a combination of low ARPU, reduced phone subsidy requirements and an estimated $4.4 million in purchase price reductions related to the subscriber attrition.
Also on February 2, 2015, GCI closed on two previously announced financings: a $275 million Term Loan B financing and a $75 million unsecured note. The Term Loan B financing has a seven year term, and is priced at LIBOR plus 375 basis points, with a one percent LIBOR floor. The unsecured note, with Searchlight Capital Partners, has an eight year term and bears a 7.5 percent annual coupon. Attached to this note are stock appreciation rights.
Guidance
GCI today announced the following guidance for 2015 financial performance:
• | Revenues will be in the range of $920 - 970 million. |
• | Adjusted EBITDA will be in the range of $310 - 335 million, which excludes one time costs of approximately $30 million for the transition of ACS wireless customers to GCI. |
• | Core cash capital expenditures will be approximately $170 million, of which approximately $45 million will be on wireless network projects, and approximately $85 million will be on other network and infrastructure projects. |
Conference Call
The Company will hold a conference call to discuss the financial results on Thursday, March 5th, at 2:00 p.m. (Eastern). To access the call, call the conference operator between
1:50-2:00 p.m. (Eastern) at 888-970-4173 (International callers should dial +1-517-308-9060) 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 888-296-6945, access code 7461 (International callers should dial +1-402-998-0535).
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 of Forms 10-K and 10-Q filed with the Securities and Exchange Commission.
About GCI
GCI is the largest Alaska-based and -operated, integrated telecommunications provider, offering wireless, voice, data, and video services statewide. Learn more about GCI at www.gci.com.
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Amounts in thousands) | ||||||
December 31, | December 31, | |||||
ASSETS | 2014 | 2013 | ||||
Current assets: | ||||||
Cash and cash equivalents | $ | 15,402 | 44,971 | |||
Receivables (including $27,944 and $28,029 from a related party at December 31, 2014 and 2013, respectively) | 212,441 | 228,372 | ||||
Less allowance for doubtful receivables | 4,542 | 2,346 | ||||
Net receivables | 207,899 | 226,026 | ||||
Deferred income taxes | 56,120 | 39,753 | ||||
Inventories | 17,032 | 10,347 | ||||
Prepaid expenses | 12,179 | 7,725 | ||||
Other current assets | 153 | 230 | ||||
Total current assets | 308,785 | 329,052 | ||||
Property and equipment in service, net of depreciation | 1,013,242 | 969,578 | ||||
Construction in progress | 99,240 | 87,476 | ||||
Net property and equipment | 1,112,482 | 1,057,054 | ||||
Goodwill | 229,560 | 219,041 | ||||
Cable certificates | 191,635 | 191,635 | ||||
Wireless licenses | 86,347 | 91,400 | ||||
Other intangible assets, net of amortization | 66,015 | 71,435 | ||||
Deferred loan and senior notes costs, net of amortization of $8,644 and $6,545 at December 31, 2014 and 2013, respectively | 10,949 | 12,129 | ||||
Other assets | 52,725 | 40,061 | ||||
Total other assets | 637,231 | 625,701 | ||||
Total assets | $ | 2,058,498 | 2,011,807 | |||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Continued) | ||||||
(Amounts in thousands) | ||||||
December 31, | December 31, | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | 2014 | 2013 | ||||
Current liabilities: | ||||||
Current maturities of obligations under long-term debt and capital leases | $ | 8,722 | 9,301 | |||
Accounts payable (including $7,447 and $11,221 to a related party at December 31, 2014 and 2013, respectively) | 76,918 | 65,095 | ||||
Accrued payroll and payroll related obligations | 32,803 | 29,855 | ||||
Deferred revenue | 29,314 | 27,586 | ||||
Accrued liabilities | 14,457 | 14,359 | ||||
Accrued interest | 6,654 | 7,088 | ||||
Subscriber deposits | 1,212 | 1,326 | ||||
Total current liabilities | 170,080 | 154,610 | ||||
Long-term debt, net | 1,036,056 | 1,045,144 | ||||
Obligations under capital leases, excluding current maturities | 66,499 | 66,261 | ||||
Obligation under capital lease due to related party, excluding current maturity | 1,857 | 1,880 | ||||
Deferred income taxes | 187,872 | 161,476 | ||||
Long-term deferred revenue | 85,734 | 88,259 | ||||
Other liabilities | 43,178 | 36,823 | ||||
Total liabilities | 1,591,276 | 1,554,453 | ||||
Commitments and contingencies | ||||||
Stockholders’ equity: | ||||||
Common stock (no par): | ||||||
Class A. Authorized 100,000 shares; issued 37,998 and 37,299 shares at December 31, 2014 and 2013, respectively; outstanding 37,972 and 37,209 shares at December 31, 2014 and 2013, respectively | 13,617 | 11,467 | ||||
Class B. Authorized 10,000 shares; issued and outstanding 3,159 and 3,165 shares at December 31, 2014 and 2013, respectively; convertible on a share-per-share basis into Class A common stock | 2,668 | 2,673 | ||||
Less cost of 26 and 90 Class A common shares held in treasury at December 31, 2014 and 2013, respectively | (249 | ) | (866 | ) | ||
Paid-in capital | 26,773 | 26,880 | ||||
Retained earnings | 124,547 | 116,990 | ||||
Total General Communication, Inc. stockholders' equity | 167,356 | 157,144 | ||||
Non-controlling interests | 299,866 | 300,210 | ||||
Total stockholders’ equity | 467,222 | 457,354 | ||||
Total liabilities and stockholders’ equity | $ | 2,058,498 | 2,011,807 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED INCOME STATEMENTS | |||||||||
YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012 | |||||||||
(Unaudited) | |||||||||
(Amounts in thousands, except per share amounts) | 2014 | 2013 | 2012 | ||||||
Revenues: | |||||||||
Non-related party | $ | 850,656 | 782,971 | 710,181 | |||||
Related party | 59,542 | 28,677 | — | ||||||
Total revenues | 910,198 | 811,648 | 710,181 | ||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below): | |||||||||
Non-related party | 291,770 | 275,701 | 247,501 | ||||||
Related party | 10,934 | 4,761 | — | ||||||
Total cost of goods sold | 302,704 | 280,462 | 247,501 | ||||||
Selling, general and administrative expenses: | |||||||||
Non-related party | 289,674 | 268,026 | 241,079 | ||||||
Related party | 3,973 | 3,039 | 2,169 | ||||||
Total selling, general and administrative expenses | 293,647 | 271,065 | 243,248 | ||||||
Depreciation and amortization expense | 170,285 | 147,259 | 130,452 | ||||||
Operating income | 143,562 | 112,862 | 88,980 | ||||||
Other expense: | |||||||||
Interest expense (including amortization of deferred loan fees) | (72,496 | ) | (69,725 | ) | (67,747 | ) | |||
Other | (1,793 | ) | (453 | ) | 17 | ||||
Other expense | (74,289 | ) | (70,178 | ) | (67,730 | ) | |||
Income before income tax expense | 69,273 | 42,684 | 21,250 | ||||||
Income tax expense | (10,029 | ) | (10,957 | ) | (12,088 | ) | |||
Net income | 59,244 | 31,727 | 9,162 | ||||||
Net income (loss) attributable to non-controlling interests | 51,687 | 22,321 | (511 | ) | |||||
Net income attributable to General Communication, Inc. | $ | 7,557 | 9,406 | 9,673 | |||||
Basic net income attributable to General Communication, Inc. common stockholders per Class A common share | $ | 0.18 | 0.23 | 0.23 | |||||
Basic net income attributable to General Communication, Inc. common stockholders per Class B common share | $ | 0.18 | 0.23 | 0.23 | |||||
Diluted net income attributable to General Communication, Inc. common stockholders per Class A common share | $ | 0.18 | 0.23 | 0.23 | |||||
Diluted net income attributable to General Communication, Inc. common stockholders per Class B common share | $ | 0.18 | 0.23 | 0.23 | |||||
Common shares used to calculate Class A basic EPS | 38,219 | 37,732 | 38,560 | ||||||
Common shares used to calculate Class A diluted EPS | 41,493 | 41,040 | 42,119 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Fourth Quarter 2014 | Fourth Quarter 2013 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 61,665 | 9,539 | 71,204 | 62,209 | 7,368 | 69,577 | |||||||
Data | — | 94,959 | 94,959 | — | 87,080 | 87,080 | ||||||||
Video | — | 39,227 | 39,227 | — | 32,867 | 32,867 | ||||||||
Voice | — | 23,401 | 23,401 | — | 28,304 | 28,304 | ||||||||
Total | 61,665 | 167,126 | 228,791 | 62,209 | 155,619 | 217,828 | ||||||||
Cost of goods sold | 24,686 | 56,961 | 81,647 | 13,333 | 65,137 | 78,470 | ||||||||
Contribution | 36,979 | 110,165 | 147,144 | 48,876 | 90,482 | 139,358 | ||||||||
Less SG&A | 4,443 | 74,712 | 79,155 | 6,259 | 66,841 | 73,100 | ||||||||
Plus share-based compensation | — | 2,268 | 2,268 | — | 1,909 | 1,909 | ||||||||
Plus accretion | 148 | 140 | 288 | 270 | (653 | ) | (383 | ) | ||||||
Other | — | 109 | 109 | — | (6 | ) | (6 | ) | ||||||
Adjusted EBITDA | $ | 32,684 | 37,970 | 70,654 | 42,887 | 24,891 | 67,778 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Fourth Quarter 2014 | Third Quarter 2014 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 61,665 | 9,539 | 71,204 | 76,398 | 8,823 | 85,221 | |||||||
Data | — | 94,959 | 94,959 | — | 92,208 | 92,208 | ||||||||
Video | — | 39,227 | 39,227 | — | 38,328 | 38,328 | ||||||||
Voice | — | 23,401 | 23,401 | — | 24,968 | 24,968 | ||||||||
Total | 61,665 | 167,126 | 228,791 | 76,398 | 164,327 | 240,725 | ||||||||
Cost of goods sold | 24,686 | 56,961 | 81,647 | 24,021 | 52,880 | 76,901 | ||||||||
Contribution | 36,979 | 110,165 | 147,144 | 52,377 | 111,447 | 163,824 | ||||||||
Less SG&A | 4,443 | 74,712 | 79,155 | 5,336 | 67,447 | 72,783 | ||||||||
Plus share-based compensation | — | 2,268 | 2,268 | — | 2,153 | 2,153 | ||||||||
Plus accretion | 148 | 140 | 288 | 238 | 121 | 359 | ||||||||
Other | — | 109 | 109 | — | (359 | ) | (359 | ) | ||||||
Adjusted EBITDA | $ | 32,684 | 37,970 | 70,654 | 47,279 | 45,915 | 93,194 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 269,977 | 33,747 | 303,724 | 197,218 | 30,903 | 228,121 | |||||||
Data | — | 363,255 | 363,255 | — | 349,883 | 349,883 | ||||||||
Video | — | 144,434 | 144,434 | — | 126,539 | 126,539 | ||||||||
Voice | — | 98,785 | 98,785 | — | 107,105 | 107,105 | ||||||||
Total | 269,977 | 640,221 | 910,198 | 197,218 | 614,430 | 811,648 | ||||||||
Cost of goods sold | 90,920 | 211,784 | 302,704 | 68,086 | 212,376 | 280,462 | ||||||||
Contribution | 179,057 | 428,437 | 607,494 | 129,132 | 402,054 | 531,186 | ||||||||
Less SG&A | 21,631 | 272,016 | 293,647 | 20,030 | 251,035 | 271,065 | ||||||||
Plus share-based compensation | — | 8,392 | 8,392 | — | 6,638 | 6,638 | ||||||||
Plus accretion | 733 | 516 | 1,249 | 507 | (430 | ) | 77 | |||||||
Other | — | (372 | ) | (372 | ) | — | 447 | 447 | ||||||
Adjusted EBITDA | $ | 158,159 | 164,957 | 323,116 | 109,609 | 157,674 | 267,283 |
General Communication, Inc. | ||||||||||||||||
Non-GAAP Financial Reconciliation Schedule | ||||||||||||||||
(Unaudited, Amounts in Thousands) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | September 30, | December 31, | December 31, | ||||||||||||
2014 | 2013 | 2014 (Note 2) | 2014 | 2013 | ||||||||||||
Net income | $ | 5,796 | 4,525 | 25,847 | 59,244 | 31,727 | ||||||||||
Income tax expense | 1,400 | 2,800 | 5,078 | 10,029 | 10,957 | |||||||||||
Income before income tax expense | 7,196 | 7,325 | 30,925 | 69,273 | 42,684 | |||||||||||
Other expense: | ||||||||||||||||
Interest expense (including amortization of deferred loan fees) | 18,267 | 17,875 | 17,848 | 72,496 | 69,725 | |||||||||||
Other | 84 | 223 | 563 | 1,793 | 453 | |||||||||||
Other expense | 18,351 | 18,098 | 18,411 | 74,289 | 70,178 | |||||||||||
Operating income | 25,547 | 25,423 | 49,336 | 143,562 | 112,862 | |||||||||||
Depreciation and amortization expense | 42,442 | 40,835 | 41,705 | 170,285 | 147,259 | |||||||||||
Share-based compensation | 2,268 | 1,909 | 2,153 | 8,392 | 6,638 | |||||||||||
Accretion | 288 | (383 | ) | 359 | 1,249 | 77 | ||||||||||
Other | 109 | (6 | ) | (359 | ) | (372 | ) | 447 | ||||||||
Adjusted EBITDA (Note 1) | $ | 70,654 | 67,778 | 93,194 | 323,116 | 267,283 | ||||||||||
(1) 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, Depreciation and Amortization Expense, share-based compensation, accretion expense, net income or loss attributable to non-controlling interests resulting from New Markets Tax Credit transactions, non-cash contribution adjustment, and other non-cash adjustments. Adjusted 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 Adjusted EBITDA to evaluate the operating performance of its business, and as a measure of performance for incentive compensation purposes. GCI believes Adjusted 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 Adjusted EBITDA are used to estimate current or prospective enterprise value. Adjusted 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. Adjusted EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies. | ||||||||||||||||
(2) Net income and income tax expense changed from what was previously reported due to an error in the calculation of our estimated effective tax rate for the year. Net income and income tax expense have been restated to report the correct amounts. |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||||||
WIRELINE SEGMENT SUPPLEMENTAL REVENUE SCHEDULES | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||
Fourth Quarter 2014 | Fourth Quarter 2013 | |||||||||||||||||
Business | Managed | Business | Managed | |||||||||||||||
Consumer | Services | Broadband | Total | Consumer | Services | Broadband | Total | |||||||||||
Revenues | ||||||||||||||||||
Wireless | $ | 9,158 | 381 | — | 9,539 | 6,724 | 644 | — | 7,368 | |||||||||
Data | 30,294 | 37,694 | 26,971 | 94,959 | 26,290 | 35,739 | 25,051 | 87,080 | ||||||||||
Video | 29,159 | 10,068 | — | 39,227 | 27,993 | 4,874 | — | 32,867 | ||||||||||
Voice | 7,839 | 10,253 | 5,309 | 23,401 | 8,348 | 14,741 | 5,215 | 28,304 | ||||||||||
Total | $ | 76,450 | 58,396 | 32,280 | 167,126 | 69,355 | 55,998 | 30,266 | 155,619 | |||||||||
(Amounts in thousands) | ||||||||||||||||||
Fourth Quarter 2014 | Third Quarter 2014 | |||||||||||||||||
Business | Managed | Business | Managed | |||||||||||||||
Consumer | Services | Broadband | Total | Consumer | Services | Broadband | Total | |||||||||||
Revenues | ||||||||||||||||||
Wireless | $ | 9,158 | 381 | — | 9,539 | 7,989 | 834 | — | 8,823 | |||||||||
Data | 30,294 | 37,694 | 26,971 | 94,959 | 28,755 | 36,857 | 26,596 | 92,208 | ||||||||||
Video | 29,159 | 10,068 | — | 39,227 | 27,896 | 10,432 | — | 38,328 | ||||||||||
Voice | 7,839 | 10,253 | 5,309 | 23,401 | 7,972 | 11,657 | 5,339 | 24,968 | ||||||||||
Total | $ | 76,450 | 58,396 | 32,280 | 167,126 | 72,612 | 59,780 | 31,935 | 164,327 | |||||||||
(Amounts in thousands) | ||||||||||||||||||
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 | |||||||||||||||||
Business | Managed | Business | Managed | |||||||||||||||
Consumer | Services | Broadband | Total | Consumer | Services | Broadband | Total | |||||||||||
Revenues | ||||||||||||||||||
Wireless | $ | 30,998 | 2,749 | — | 33,747 | 28,031 | 2,872 | — | 30,903 | |||||||||
Data | 113,306 | 144,945 | 105,004 | 363,255 | 99,740 | 154,498 | 95,645 | 349,883 | ||||||||||
Video | 111,175 | 33,259 | — | 144,434 | 111,368 | 15,171 | — | 126,539 | ||||||||||
Voice | 32,535 | 45,010 | 21,240 | 98,785 | 35,666 | 50,273 | 21,166 | 107,105 | ||||||||||
Total | $ | 288,014 | 225,963 | 126,244 | 640,221 | 274,805 | 222,814 | 116,811 | 614,430 | |||||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |||||||||||||||||
KEY PERFORMANCE INDICATORS | |||||||||||||||||
(Unaudited) | |||||||||||||||||
December 31, 2014 | December 31, 2014 | ||||||||||||||||
as compared to | as compared to | ||||||||||||||||
December 31, | December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | |||||||||||
Wireline Segment | |||||||||||||||||
Consumer | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 119,100 | 115,300 | 117,000 | 3,800 | 2,100 | 3.3 | % | 1.8 | % | ||||||||
Video | |||||||||||||||||
Basic subscribers | 116,400 | 117,900 | 115,900 | (1,500 | ) | 500 | (1.3 | )% | 0.4 | % | |||||||
Digital programming tier subscribers | 63,800 | 67,500 | 64,200 | (3,700 | ) | (400 | ) | (5.5 | )% | (0.6 | )% | ||||||
HD/DVR converter boxes | 108,400 | 96,900 | 105,600 | 11,500 | 2,800 | 11.9 | % | 2.7 | % | ||||||||
Homes passed | 248,200 | 247,400 | 248,000 | 800 | 200 | 0.3 | % | 0.1 | % | ||||||||
Voice | |||||||||||||||||
Local access lines in service | 54,600 | 61,000 | 55,900 | (6,400 | ) | (1,300 | ) | (10.5 | )% | (2.3 | )% | ||||||
Business Services | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 14,100 | 14,000 | 14,200 | 100 | (100 | ) | 0.7 | % | (0.7 | )% | |||||||
Video | |||||||||||||||||
Hotels and mini-headend subscribers | 17,100 | 16,800 | 19,800 | 300 | (2,700 | ) | 1.8 | % | (13.6 | )% | |||||||
Basic subscribers | 1,900 | 2,000 | 1,900 | (100 | ) | — | (5.0 | )% | — | % | |||||||
Total basic subscribers | 19,000 | 18,800 | 21,700 | 200 | (2,700 | ) | 1.1 | % | (12.4 | )% | |||||||
Voice | |||||||||||||||||
Local access lines in service | 47,400 | 48,800 | 47,400 | (1,400 | ) | — | (2.9 | )% | — | % | |||||||
Consumer and Business Services Combined | |||||||||||||||||
Wireless | |||||||||||||||||
Consumer Lifeline lines in service | 25,000 | 29,300 | 25,600 | (4,300 | ) | (600 | ) | (14.7 | )% | (2.3 | )% | ||||||
Consumer Non-Lifeline lines in service | 106,400 | 93,600 | 102,700 | 12,800 | 3,700 | 13.7 | % | 3.6 | % | ||||||||
Business Services Non-Lifeline lines in service | 18,200 | 18,600 | 18,600 | (400 | ) | (400 | ) | (2.2 | )% | (2.2 | )% | ||||||
Total wireless lines in service | 149,600 | 141,500 | 146,900 | 8,100 | 2,700 | 5.7 | % | 1.8 | % |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
KEY PERFORMANCE INDICATORS | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
December 31, 2014 | December 31, 2014 | |||||||||||||||||||||
Three Months Ended | as compared to | as compared to | ||||||||||||||||||||
December 31, | December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | ||||||||||||||||
Wireline segment | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||
Video | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 83.57 | $ | 78.84 | $ | 80.22 | $ | 4.73 | $ | 3.35 | 6.0 | % | 4.2 | % | ||||||||
Combined Consumer and Business Services | ||||||||||||||||||||||
Data | ||||||||||||||||||||||
Average monthly revenue per cable modem subscriber | $ | 83.01 | $ | 74.65 | $ | 80.20 | $ | 8.36 | $ | 2.81 | 11.2 | % | 3.5 | % | ||||||||
Wireless | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 50.16 | $ | 49.38 | $ | 50.87 | $ | 0.78 | $ | (0.71 | ) | 1.6 | % | (1.4 | )% |