Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | ||
Mar. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | |
Common Stock - Class A [Member] | Common Stock - Class B [Member] | ||
Entity Registrant Name | 'GENERAL COMMUNICATION INC | ' | ' |
Entity Central Index Key | '0000808461 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Accelerated Filer | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Common Stock Shares Outstanding | ' | 38,360,000 | 3,162,000 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
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 |
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: | ' | ' |
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 stockholdersb equity | 458,811 | 457,354 |
Total liabilities and stockholdersb equity | 2,009,800 | 2,011,807 |
Common Stock - Class A [Member] | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 12,012 | 11,467 |
Less cost of 26 and 90 Class A common shares held in treasury at March 31, 2014 and December 31, 2013, respectively | -249 | -866 |
Total stockholdersb equity | 12,012 | 11,467 |
Common Stock - Class B [Member] | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 2,671 | 2,673 |
Total stockholdersb equity | $2,671 | $2,673 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Related party receivable | $31,600 | $28,000 |
Deferred loan and senior notes costs, accumulated amortization | 7,087 | 6,545 |
Related party payable | $12,500 | $11,200 |
Common Stock - Class A [Member] | ' | ' |
Common Stock, no par (USD per share) | ' | ' |
Common Stock, Shares Authorized | 100,000 | 100,000 |
Common Stock, Shares Issued | 38,389 | 37,299 |
Common Stock, Shares Outstanding | 38,363 | 37,209 |
Treasury Stock, Shares | 26 | 90 |
Common Stock - Class B [Member] | ' | ' |
Common Stock, no par (USD per share) | ' | ' |
Common Stock, Shares Authorized | 10,000 | 10,000 |
Common Stock, Shares Issued | 3,163 | 3,165 |
Common Stock, Shares Outstanding | 3,163 | 3,165 |
CONSOLIDATED_INCOME_STATEMENTS
CONSOLIDATED INCOME STATEMENTS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Non-related party | $200,503 | $186,216 |
Related party | 15,780 | 0 |
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 | 0 |
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 | 0 |
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 |
Common Stock - Class A [Member] | ' | ' |
Other expense: | ' | ' |
Net income attributable to General Communication, Inc. | 1,958 | 2,996 |
Net income per common share | ' | ' |
Basic net income attributable to General Communication, Inc. common stockholders (USD per share) | $0.05 | $0.08 |
Diluted net income attributable to General Communication, Inc. common stockholders (USD per share) | $0.05 | $0.08 |
Common Stock - Class B [Member] | ' | ' |
Other expense: | ' | ' |
Net income attributable to General Communication, Inc. | $163 | $248 |
Net income per common share | ' | ' |
Basic net income attributable to General Communication, Inc. common stockholders (USD per share) | $0.05 | $0.08 |
Diluted net income attributable to General Communication, Inc. common stockholders (USD per share) | $0.05 | $0.08 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Class A Shares held in Treasury [Member] | Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interests [Member] | Common Stock - Class A [Member] | Common Stock - Class B [Member] |
In Thousands, unless otherwise specified | |||||||
Beginning balances, total stockholders' equity at Dec. 31, 2012 | $189,436 | ($1,617) | $25,832 | $107,584 | $32,258 | $22,703 | $2,676 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income | 3,127 | ' | ' | 3,244 | -117 | ' | ' |
Common stock repurchases and retirements | -6,714 | 90 | ' | ' | ' | -6,804 | ' |
Shares issued under stock option plan | 301 | ' | ' | ' | ' | 301 | ' |
Issuance of restricted stock awards | 0 | ' | -397 | ' | ' | 397 | ' |
Share-based compensation expense | 1,325 | ' | 1,325 | ' | ' | ' | ' |
Issuance of treasury shares related to deferred compensation payment | 621 | 621 | ' | ' | ' | ' | ' |
Other | 0 | ' | ' | ' | ' | 1 | -1 |
Ending balances, total stockholders' equity at Mar. 31, 2013 | 188,096 | -906 | 26,760 | 110,828 | 32,141 | 16,598 | 2,675 |
Beginning balances, total stockholders' equity at Dec. 31, 2013 | 457,354 | -866 | 26,880 | 116,990 | 300,210 | 11,467 | 2,673 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income | 11,742 | ' | ' | 2,121 | 9,621 | ' | ' |
Common stock repurchases and retirements | -529 | ' | ' | ' | ' | -529 | ' |
Shares issued under stock option plan | 157 | ' | ' | ' | ' | 157 | ' |
Issuance of restricted stock awards | 0 | ' | -915 | ' | ' | 915 | ' |
Share-based compensation expense | 1,772 | ' | 1,772 | ' | ' | ' | ' |
Issuance of treasury shares related to deferred compensation payment | 715 | 617 | 98 | ' | ' | ' | ' |
Distribution to non-controlling interest | -12,500 | ' | ' | ' | -12,500 | ' | ' |
Other | 100 | ' | ' | ' | ' | 2 | -2 |
Ending balances, total stockholders' equity at Mar. 31, 2014 | $458,811 | ($249) | $27,835 | $119,111 | $297,431 | $12,012 | $2,671 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $11,742 | $3,127 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization expense | 42,352 | 33,999 |
Share-based compensation expense | 1,778 | 1,259 |
Deferred income tax expense | 214 | 3,029 |
Other noncash income and expense items | 1,665 | 1,835 |
Change in operating assets and liabilities | 7,151 | -714 |
Net cash provided by operating activities | 64,902 | 42,535 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -28,174 | -38,316 |
Purchase of investments | -15,000 | 0 |
Restricted cash | 2,672 | 0 |
Purchases of other assets and intangible assets | -1,463 | -1,065 |
Grant proceeds | 716 | 0 |
Other | 49 | 886 |
Net cash used in investing activities | -41,200 | -38,495 |
Cash flows from financing activities: | ' | ' |
Distribution to non-controlling interest | -12,500 | 0 |
Repayment of debt and capital lease obligations | -2,185 | -1,949 |
Purchase of treasury stock to be retired | -529 | -6,714 |
Proceeds from stock option exercises | 157 | 301 |
Borrowing on Senior Credit Facility | 0 | 10,000 |
Borrowing on other long-term debt | 0 | 604 |
Net cash provided by (used in) financing activities | -15,057 | 2,242 |
Net increase in cash and cash equivalents | 8,645 | 6,282 |
Cash and cash equivalents at beginning of period | 44,971 | 24,491 |
Cash and cash equivalents at end of period | $53,616 | $30,773 |
Business_and_Summary_of_Signif
Business and Summary of Significant Accounting Policies | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||||||||
Business and Summary of Significant Accounting Principles | ' | |||||||||||||
Business and Summary of Significant Accounting Principles | ||||||||||||||
In the following discussion, GCI and its direct and indirect subsidiaries are referred to as “we,” “us” and “our.” | ||||||||||||||
(a) | Business | |||||||||||||
GCI, an Alaska corporation, was incorporated in 1979. We offer the following services primarily in Alaska: | ||||||||||||||
• | Postpaid and prepaid wireless services and sale of wireless handsets and accessories, | |||||||||||||
• | Video services, | |||||||||||||
• | Internet access services, | |||||||||||||
• | Wholesale wireless, including postpaid and prepaid wireless plans for resale by other carriers and roaming for certain wireless carriers, | |||||||||||||
• | Local and long-distance voice services, | |||||||||||||
• | Data network services, | |||||||||||||
• | Broadband services, including our SchoolAccess® offering to rural school districts, our ConnectMD® offering to rural hospitals and health clinics, and managed video conferencing, | |||||||||||||
• | Managed services to certain commercial customers, | |||||||||||||
• | Sales and service of dedicated communications systems and related equipment, and | |||||||||||||
• | Lease, service arrangements and maintenance of capacity on our fiber optic cable systems used in the transmission of services within Alaska and between Alaska and the remaining United States and foreign countries. | |||||||||||||
(b) | Principles of Consolidation | |||||||||||||
Our consolidated financial statements include the consolidated accounts of GCI and its wholly owned subsidiaries, The Alaska Wireless Network, LLC ("AWN") of which we own a two-third interest and four variable interest entities (“VIEs”) for which we are the primary beneficiary after providing certain loans and guarantees. These VIEs are Terra GCI Investment Fund, LLC (“TIF”), Terra GCI 2 Investment Fund, LLC (“TIF 2”), Terra GCI 2-USB Investment Fund, LLC (“TIF 2-USB”) and Terra GCI 3 Investment Fund, LLC (“TIF 3”). We also include in our consolidated financial statements non-controlling interests in consolidated subsidiaries for which our ownership is less than 100 percent. We use the equity method to account for our investments in entities that we do not control, but where we have the ability to exercise significant influence over operating and financial policies. | ||||||||||||||
All significant intercompany transactions between non-regulated affiliates of our company are eliminated. Intercompany transactions generated between regulated and non-regulated affiliates of our company are not eliminated in consolidation. | ||||||||||||||
(c) | Non-controlling Interests | |||||||||||||
Non-controlling interests represent the equity ownership interests in consolidated subsidiaries not owned by us. Non-controlling interests are adjusted for contributions, distributions, and income and loss attributable to the non-controlling interest partners of the consolidated entities. Income and loss is allocated to the non-controlling interests based on the respective governing documents. | ||||||||||||||
(d) | Acquisition | |||||||||||||
On July 22, 2013, we closed the transactions for our two-thirds ownership interest in AWN. Alaska Communications Systems Group, Inc. ("ACS") owns the other one-third ownership interest in AWN. | ||||||||||||||
We have not completed our analysis of the valuation, therefore, the amounts recorded and classifications used for the assets acquired and liabilities assumed are provisional and subject to change. We will finalize the amounts recognized as we obtain the information necessary to complete our analysis. The following table summarizes the preliminary purchase price and the estimated fair value of ACS’s assets acquired and liabilities assumed, effective July 23, 2013 (amounts in thousands): | ||||||||||||||
Purchase price: | ||||||||||||||
Cash consideration paid | $ | 100,000 | ||||||||||||
Fair value of the one-third ownership interest of AWN | 267,642 | |||||||||||||
Total purchase price | $ | 367,642 | ||||||||||||
Assets acquired and liabilities assumed: | ||||||||||||||
Acquired assets | ||||||||||||||
Current assets | $ | 16,952 | ||||||||||||
Property and equipment, including construction in progress | 82,473 | |||||||||||||
Goodwill | 140,081 | |||||||||||||
Wireless licenses | 65,433 | |||||||||||||
Rights to use capacity | 52,636 | |||||||||||||
Other assets | 16,078 | |||||||||||||
Fair value of liabilities assumed | (6,011 | ) | ||||||||||||
Total fair value of assets acquired and liabilities assumed | $ | 367,642 | ||||||||||||
Unaudited pro forma financial information does not purport to be indicative of the actual results that would have occurred if the acquisition had actually been completed on January 1, 2013, nor is it necessarily indicative of the future revenue of the combined company as it includes estimates of the acquired entity revenue. The following unaudited pro forma financial information is presented as if the acquisition occurred on January 1, 2013 (amounts in thousands): | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2013 | ||||||||||||||
Pro forma consolidated revenue | $ | 218,098 | ||||||||||||
Supplemental pro forma earnings have not been provided as it would be impracticable due to the nature of GCI's and ACS's respective wireless operations prior to the business combination. GCI and ACS were unable to disaggregate the components of expenses related to their wireless operations contributed to AWN and thus the amounts would require estimates so significant that the resulting information would not be meaningful. | ||||||||||||||
(e) | Recently Issued Accounting Pronouncements | |||||||||||||
There were various updates recently issued which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on our consolidated financial position, results of operations or cash flows. | ||||||||||||||
(f) | Regulatory Accounting | |||||||||||||
We account for our regulated operations in accordance with the accounting principles for regulated enterprises. These accounting principles recognize the economic effects of rate regulation by recording cost and a return on investment as such amounts are recovered through rates authorized by regulatory authorities. Accordingly, plant and equipment is depreciated over lives approved by regulators and certain costs and obligations are deferred based upon approvals received from regulators to permit recovery of such amounts in future years. Our cost studies and depreciation rates for our regulated operations are subject to periodic audits that could result in a change to recorded revenues. | ||||||||||||||
(g) Earnings per Common Share | ||||||||||||||
We compute net income attributable to GCI per share of Class A and Class B common stock using the “two class” method. Therefore, basic net income per share is computed by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the dilutive net income per share of Class A common stock assumes the conversion of Class B common stock to Class A common stock, while the dilutive net income per share of Class B common stock does not assume the conversion of those shares. Additionally, in applying the “two-class” method, undistributed earnings are allocated to both common shares and participating securities. Our restricted stock grants are entitled to dividends and meet the criteria of a participating security. | ||||||||||||||
Undistributed earnings for each year are allocated based on the contractual participation rights of Class A and Class B common shares as if the earnings for the year had been distributed. In accordance with our Articles of Incorporation, if and when dividends are declared on our common stock in accordance with Alaska corporate law, equivalent dividends shall be paid with respect to the shares of Class A and Class B common stock. Both classes of common stock have identical dividend rights and would therefore share equally in our net assets in the event of liquidation. As such, we have allocated undistributed earnings on a proportionate basis. | ||||||||||||||
Earnings per common share (“EPS”) and common shares used to calculate basic and diluted EPS consist of the following (amounts in thousands, except per share amounts): | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Class A | Class B | Class A | Class B | |||||||||||
Basic net income per share: | ||||||||||||||
Numerator: | ||||||||||||||
Allocation of undistributed earnings | $ | 1,958 | 163 | $ | 2,996 | 248 | ||||||||
Denominator: | ||||||||||||||
Weighted average common shares | 37,987 | 3,163 | 38,264 | 3,167 | ||||||||||
outstanding | ||||||||||||||
Basic net income attributable to GCI | $ | 0.05 | 0.05 | $ | 0.08 | 0.08 | ||||||||
common stockholders per common share | ||||||||||||||
Diluted net income per share: | ||||||||||||||
Numerator: | ||||||||||||||
Allocation of undistributed earnings for | $ | 1,958 | 163 | $ | 2,996 | 248 | ||||||||
basic computation | ||||||||||||||
Reallocation of undistributed earnings as a | 163 | — | 248 | — | ||||||||||
result of conversion of Class B to Class A | ||||||||||||||
shares | ||||||||||||||
Reallocation of undistributed earnings as a | — | — | (4 | ) | ||||||||||
result of conversion of dilutive securities | ||||||||||||||
Effect of share based compensation that may be | $ | — | — | $ | (34 | ) | — | |||||||
settled in cash or shares | ||||||||||||||
Net income adjusted for allocation of | $ | 2,121 | 163 | $ | 3,210 | 244 | ||||||||
undistributed earnings and effect of | ||||||||||||||
share based compensation that may be settled | ||||||||||||||
in cash or shares | ||||||||||||||
Denominator: | ||||||||||||||
Number of shares used in basic computation | 37,987 | 3,163 | 38,264 | 3,167 | ||||||||||
Conversion of Class B to Class A common | 3,163 | — | 3,167 | — | ||||||||||
shares outstanding | ||||||||||||||
Unexercised stock options | 118 | — | 173 | — | ||||||||||
Effect of share based compensation that may be | — | — | 91 | — | ||||||||||
settled in cash or shares | ||||||||||||||
Number of shares used in per share computation | 41,268 | 3,163 | 41,695 | 3,167 | ||||||||||
Diluted net income attributable to GCI | $ | 0.05 | 0.05 | $ | 0.08 | 0.08 | ||||||||
common stockholders per common share | ||||||||||||||
Weighted average shares associated with outstanding share awards for the three months ended March 31, 2014 and 2013, which have been excluded from the computations of diluted EPS, because the effect of including these share awards would have been anti-dilutive, consist of the following (shares, in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Shares associated with anti-dilutive unexercised | 33 | 88 | ||||||||||||
stock options | ||||||||||||||
Share based compensation that may be settled in cash or shares, the effect of which is anti-dillutive | 26 | — | ||||||||||||
Total excluded from diluted EPS calculation | 59 | 88 | ||||||||||||
There were no shares associated with contingent awards for the three months ended March 31, 2014. There were 58,000 shares associated with contingent awards for the three months ended March 31, 2013, which have been excluded from the computation of diluted EPS because the contingencies of these awards were not met at March 31, 2013. | ||||||||||||||
(h) Common Stock | ||||||||||||||
Following are the changes in issued common stock for the three months ended March 31, 2014 and 2013 (shares, in thousands): | ||||||||||||||
Class A | Class B | |||||||||||||
Balances at December 31, 2012 | 38,534 | 3,169 | ||||||||||||
Class B shares converted to Class A | 2 | (2 | ) | |||||||||||
Shares issued upon stock option exercises | 50 | — | ||||||||||||
Share awards issued | 621 | — | ||||||||||||
Shares retired | (795 | ) | — | |||||||||||
Shares acquired to settle minimum statutory tax | (14 | ) | — | |||||||||||
withholding requirements | ||||||||||||||
Other | (2 | ) | — | |||||||||||
Balances at March 31, 2013 | 38,396 | 3,167 | ||||||||||||
Balances at December 31, 2013 | 37,299 | 3,165 | ||||||||||||
Class B shares converted to Class A | 2 | (2 | ) | |||||||||||
Shares issued upon stock option exercises | 19 | — | ||||||||||||
Share awards issued | 1,119 | — | ||||||||||||
Shares retired | (26 | ) | — | |||||||||||
Shares acquired to settle minimum statutory tax | (24 | ) | — | |||||||||||
withholding requirements | ||||||||||||||
Balances at March 31, 2014 | 38,389 | 3,163 | ||||||||||||
GCI’s Board of Directors has authorized a common stock buyback program for the repurchase of GCI’s Class A and Class B common stock in order to reduce the outstanding shares of Class A and Class B common stock. We are authorized to increase our repurchase limit $5.0 million per quarter indefinitely and to use stock option exercise proceeds to repurchase additional shares. If stock repurchases are less than the total approved quarterly amount the difference may be carried forward and used to repurchase additional shares in future quarters. The cost of the repurchased common stock reduced Common Stock on our Consolidated Balance Sheets. | ||||||||||||||
We had no common stock repurchases during the three months ended March 31, 2014. During the three months ended March 31, 2013, we repurchased 764,000 shares of our Class A common stock under the stock buyback program at a cost of $6.6 million. Under this program we are currently authorized to make up to $111.1 million of repurchases as of March 31, 2014. The stock repurchased during the three months ended March 31, 2013 was constructively retired as of March 31, 2013. | ||||||||||||||
We expect to continue the repurchases for an indefinite period dependent on leverage, liquidity, company performance, and market conditions and subject to continued oversight by GCI’s Board of Directors. | ||||||||||||||
(i) Accounts Receivable and Allowance for Doubtful Receivables | ||||||||||||||
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful receivables is our best estimate of the amount of probable credit losses in our existing accounts receivable. We base our estimates on the aging of our accounts receivable balances, financial health of specific customers, regional economic data, changes in our collections process, regulatory requirements and our customers’ compliance with Universal Service Administrative Company rules. We review our allowance for doubtful receivables methodology at least annually. | ||||||||||||||
Depending upon the type of account receivable our allowance is calculated using a pooled basis with an allowance for all accounts greater than 120 days past due or a specific identification method. When a specific identification method is used, potentially uncollectible accounts due to bankruptcy or other issues are reviewed individually for collectability. Account balances are charged off against the allowance when we feel it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposure related to our customers. | ||||||||||||||
(j) Revenue Recognition | ||||||||||||||
We recorded high cost support revenue under the Universal Service Fund (“USF”) program of $16.5 million and $10.6 million for the three months ended March 31, 2014 and 2013, respectively. At March 31, 2014, we have $46.4 million in high cost support accounts receivable. | ||||||||||||||
(k) Use of Estimates | ||||||||||||||
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to estimates and assumptions include the allowance for doubtful receivables, unbilled revenues, accrual of the USF high cost Remote area program support, share-based compensation, inventory at lower of cost or market, reserve for future customer credits, liability for incurred but not reported medical insurance claims, valuation allowances for deferred income tax assets, depreciable and amortizable lives of assets, the carrying value of long-lived assets including goodwill, cable certificates, wireless licenses,and broadcast licenses, our effective tax rate, purchase price allocations, deferred lease expense, asset retirement obligations, the accrual of cost of goods sold (exclusive of depreciation and amortization expense) (“Cost of Goods Sold”), depreciation and the accrual of contingencies and litigation. Actual results could differ from those estimates. | ||||||||||||||
(l) Classification of Taxes Collected from Customers | ||||||||||||||
We report sales, use, excise, and value added taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between us and a customer on a net basis in our Consolidated Income Statements. The following are certain surcharges reported on a gross basis in our Consolidated Income Statements (amounts in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Surcharges reported gross | $ | 1,134 | 1,228 | |||||||||||
(m) | Reclassifications | |||||||||||||
Reclassifications have been made to the 2013 financial statements to make them comparable with the 2014 presentation. |
Recovered_Sheet1
Consolidated Statements of Cash Flows and Supplemental Disclosures | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||
Consolidated Statements of Cash Flows Supplemental Disclosures | ' | ||||||
Consolidated Statements of Cash Flows Supplemental Disclosures | |||||||
Changes in operating assets and liabilities consist of (amounts in thousands): | |||||||
Three Months Ended March 31, | 2014 | 2013 | |||||
(Increase) decrease in accounts receivable, net | $ | 8,295 | (14,243 | ) | |||
Increase in prepaid expenses | (3,581 | ) | (2,311 | ) | |||
(Increase) decrease in inventories | 3,653 | (590 | ) | ||||
Decrease in other current assets | 26 | 516 | |||||
Increase in other assets | (142 | ) | (107 | ) | |||
Decrease in accounts payable | (8,594 | ) | (333 | ) | |||
Increase in deferred revenues | 1,462 | 325 | |||||
Increase (decrease) in accrued payroll and payroll related obligations | (8,476 | ) | 1,210 | ||||
Increase in accrued liabilities | 1,015 | 667 | |||||
Increase in accrued interest | 14,363 | 14,722 | |||||
Increase (decrease) in subscriber deposits | (140 | ) | 116 | ||||
Increase (decrease) in long-term deferred revenue | (1,375 | ) | 265 | ||||
Increase (decrease) in components of other long-term liabilities | 645 | (951 | ) | ||||
Total change in operating assets and liabilities | $ | 7,151 | (714 | ) | |||
The following items are for the three months ended March 31, 2014 and 2013 (amounts in thousands): | |||||||
Net cash paid or received: | 2014 | 2013 | |||||
Interest paid, net of amounts capitalized | $ | 4,412 | 2,704 | ||||
The following items are non-cash investing and financing activities for the three months ended March 31, 2014 and 2013 (amounts in thousands): | |||||||
2014 | 2013 | ||||||
Non-cash additions for purchases of property and | $ | 9,779 | 8,322 | ||||
equipment | |||||||
Net capital lease obligation adjustment | $ | 9,385 | — | ||||
Distribution to non-controlling interest | $ | 4,167 | — | ||||
Asset retirement obligation additions to property and | $ | 361 | 989 | ||||
equipment | |||||||
Deferred compensation distribution denominated in | $ | 617 | 621 | ||||
shares |
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||
Intangible Assets and Goodwill | ' | ||||||
Intangible Assets and Goodwill | |||||||
Amortization expense for amortizable intangible assets was as follows (amounts in thousands): | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
Amortization expense | $ | 2,411 | 1,456 | ||||
Amortization expense for amortizable intangible assets for each of the five succeeding fiscal years is estimated to be (amounts in thousands): | |||||||
Years Ending December 31, | |||||||
2014 | $ | 9,047 | |||||
2015 | 7,158 | ||||||
2016 | 5,470 | ||||||
2017 | 4,263 | ||||||
2018 | 3,416 | ||||||
Financial_Instruments
Financial Instruments | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Financial Instruments | ' | ||||||||||||
Financial Instruments | |||||||||||||
Fair Value of Financial Instruments | |||||||||||||
The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. At March 31, 2014 and December 31, 2013, the fair values of cash and cash equivalents, net receivables, inventories, accounts payable, accrued payroll and payroll related obligations, accrued interest, accrued liabilities, and subscriber deposits approximate their carrying value due to the short-term nature of these financial instruments. The carrying amounts and approximate fair values of our financial instruments at March 31, 2014 and December 31, 2013 follow (amounts in thousands): | |||||||||||||
March 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Current and long-term debt | $ | 1,047,706 | 1,081,547 | 1,047,980 | 1,058,431 | ||||||||
The following methods and assumptions were used to estimate fair values: | |||||||||||||
Current and long-term debt: The fair values of the 6.75% Senior Notes due 2021 issued by GCI, Inc., our wholly owned subsidiary and the 8.63% Senior Notes due 2019 issued by GCI, Inc. are based upon quoted market prices for the same or similar issues (Level 2). The fair value of our Rural Utilities Service debt is based on the current rates offered to us for the same remaining maturities (Level 3). The fair value of our Senior Credit Facility is estimated to approximate the carrying value because this instrument is subject to variable interest rates (Level 2). | |||||||||||||
Fair Value Measurements | |||||||||||||
Assets measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013 are as follows (amounts in thousands): | |||||||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||
March 31, 2014 Assets | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||
Deferred compensation plan assets | $ | 1,871 | — | — | |||||||||
(mutual funds) | |||||||||||||
Total assets at fair value | $ | 1,871 | — | — | |||||||||
December 31, 2013 Assets | |||||||||||||
Deferred compensation plan assets | $ | 2,183 | — | — | |||||||||
(mutual funds) | |||||||||||||
Total assets at fair value | $ | 2,183 | — | — | |||||||||
The valuation of our mutual funds is determined using quoted market prices in active markets utilizing market observable inputs. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
Stockholdersb Equity | ' | ||||||||||||
Stockholders’ Equity | |||||||||||||
Shared-Based Compensation | |||||||||||||
Our Amended and Restated 1986 Stock Option Plan ("Stock Option Plan"), provides for the grant of options and restricted stock awards (collectively "award") for a maximum of 15.7 million shares of GCI Class A common stock, subject to adjustment upon the occurrence of stock dividends, stock splits, mergers, consolidations or certain other changes in corporate structure or capitalization. If an award expires or terminates, the shares subject to the award will be available for further grants of awards under the Stock Option Plan. The Compensation Committee of GCI’s Board of Directors administers the Stock Option Plan. Substantially all restricted stock awards granted vest over periods of up to three years. Substantially all options vest in equal installments over a period of five years and expire ten years from the date of grant. The requisite service period of our awards is generally the same as the vesting period. Options granted pursuant to the Stock Option Plan are only exercisable if at the time of exercise the option holder is our employee, non-employee director, or a consultant or advisor working on our behalf. New shares are issued when stock option agreements are exercised or restricted stock awards are granted. We have 2.3 million shares available for grant under the Stock Option Plan at March 31, 2014. | |||||||||||||
A summary of option activity under the Stock Option Plan as of March 31, 2014 and changes during the period then ended is presented below: | |||||||||||||
Shares (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (in thousands) | ||||||||||
Outstanding at January 1, 2014 | 620 | $ | 7.74 | ||||||||||
Exercised | (19 | ) | $ | 8.76 | |||||||||
Options forfeited and retired | (250 | ) | $ | 8.4 | |||||||||
Expired | (12 | ) | $ | 10.69 | |||||||||
Outstanding at March 31, 2014 | 339 | $ | 7.09 | 4.7 years | $ | 1,492 | |||||||
Exercisable at March 31, 2014 | 329 | $ | 7.11 | 4.7 years | $ | 1,443 | |||||||
The total fair value of options vesting during the three months ended March 31, 2014 and 2013, was $27,000 and $32,000, respectively. The total intrinsic values, determined as of the date of exercise, of options exercised in the three months ended March 31, 2014 and 2013, were $43,000 and $0.1 million, respectively. We received $0.2 million and $0.3 million in cash from stock option exercises in the three months ended March 31, 2014 and 2013, respectively. | |||||||||||||
A summary of nonvested restricted stock award activity under the Stock Option Plan for the three months ended March 31, 2014, follows (share amounts in thousands): | |||||||||||||
Shares | Weighted | ||||||||||||
Average | |||||||||||||
Grant Date | |||||||||||||
Fair Value | |||||||||||||
Nonvested at January 1, 2014 | 1,209 | $ | 8.6 | ||||||||||
Granted | 1,119 | $ | 9.81 | ||||||||||
Vested | (83 | ) | $ | 10.58 | |||||||||
Forfeited | (3 | ) | $ | 9.44 | |||||||||
Nonvested at March 31, 2014 | 2,242 | ||||||||||||
The weighted average grant date fair value of awards granted during the three months ended March 31, 2014 and 2013, were $9.81 and $8.17, respectively. We have recorded share-based compensation expense of $1.8 million and $1.3 million for the three months ended March 31, 2014 and 2013, respectively. Share-based compensation expense is classified as Selling, General and Administrative Expense in our Consolidated Income Statements. Unrecognized share-based compensation expense was $14.5 million relating to 2.2 million restricted stock awards and $16,000 relating to 10,000 unvested stock options as of March 31, 2014. We expect to recognize share-based compensation expense over a weighted average period of 0.5 year for stock options and 2.4 years for restricted stock awards. |
Segments
Segments | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Segment Reporting [Abstract] | ' | |||||||||
Segments | ' | |||||||||
Segments | ||||||||||
Our reportable segments are business units that offer different products and are each managed separately. | ||||||||||
A description of our reportable segments follows: | ||||||||||
Wireless - We offer wholesale wireless services. | ||||||||||
Wireline - We offer a full range of retail wireless, data, video and voice services to residential, local, national and global businesses, governmental entities and public and private educational institutions; wholesale data and voice services to common carrier customers; Internet, data network and managed services to rural schools and health organizations and regulated voice services to residential and commercial customers in rural communities primarily in Southwest Alaska. | ||||||||||
We evaluate performance and allocate resources based on earnings before depreciation and amortization expense, net interest expense, income taxes, share-based compensation expense, accretion expense, income or loss attributable to non-controlling interest resulting from New Markets Tax Credit ("NMTC") transactions, and non-cash contribution adjustment (“Adjusted EBITDA”). Management believes that this measure is useful to investors and other users of our financial information in evaluating operating profitability as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected earnings before depreciation and amortization, net interest expense, and income taxes (“EBITDA”) are used to estimate current or prospective enterprise value. The accounting policies of the reportable segments are the same as those described in Note 1, “Business and Summary of Significant Accounting Policies” of this Form 10-Q. We have no intersegment sales. | ||||||||||
We earn all revenues through sales of services and products within the United States. All of our long-lived assets are located within the United States of America, except approximately 82% of our undersea fiber optic cable systems which transit international waters and all of our satellite transponders. | ||||||||||
Summarized financial information for our reportable segments for the three months ended March 31, 2014 and 2013 follows (amounts in thousands): | ||||||||||
Three Months Ended | ||||||||||
Wireless | Wireline | Total Reportable Segments | ||||||||
March 31, 2014 | ||||||||||
Revenues | $ | 62,517 | 153,766 | 216,283 | ||||||
Adjusted EBITDA | $ | 38,022 | 36,775 | 74,797 | ||||||
March 31, 2013 | ||||||||||
Revenues | $ | 33,837 | 152,379 | 186,216 | ||||||
Adjusted EBITDA | $ | 15,189 | 43,460 | 58,649 | ||||||
A reconciliation of reportable segment Adjusted EBITDA to consolidated income before income taxes follows (amounts in thousands): | ||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||
Reportable segment Adjusted EBITDA | $ | 74,797 | 58,649 | |||||||
Less depreciation and amortization | (42,352 | ) | (33,999 | ) | ||||||
expense | ||||||||||
Less share-based compensation | (1,778 | ) | (1,259 | ) | ||||||
expense | ||||||||||
Less accretion expense | (301 | ) | (127 | ) | ||||||
Other | (101 | ) | (204 | ) | ||||||
Consolidated operating income | 30,265 | 23,060 | ||||||||
Less other expense | (18,308 | ) | (16,904 | ) | ||||||
Consolidated income before | $ | 11,957 | 6,156 | |||||||
income tax expense | ||||||||||
Related_Party_Transaction_Note
Related Party Transaction (Notes) | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transaction | ' |
Related Party Transaction | |
Upon closing of the AWN acquisition on July 22, 2013, ACS became a related party for financial statement reporting purposes. ACS provides us with local service lines and network capacity in locations where we do not have our own facilities. We provide wholesale services to ACS who uses our network to sell services to its respective retail customers and we receive ACS' high cost support from USF for its wireless customers. For the three months ended March 31, 2014, we have paid ACS $16.2 million and received $10.3 million in payments from ACS. At March 31, 2014 we have $31.6 million in receivables from ACS and $12.5 million in payables to ACS. We also have long term capacity exchange agreements with ACS for which no money is exchanged. |
Variable_Interest_Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2014 | |
Noncontrolling Interest [Abstract] | ' |
Variable Interest Entities | ' |
Variable Interest Entities | |
We have entered into several arrangements under the NMTC program with US Bancorp to help fund a $59.3 million project to extend terrestrial broadband service for the first time to rural Northwestern Alaska communities via a high capacity hybrid fiber optic and microwave network. When completed, the project, called TERRA-Northwest (“TERRA-NW”), will connect to the TERRA-Southwest ("TERRA-SW") network and provide a high capacity backbone connection from the served communities to the Internet. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the “Act”) to induce capital investment in qualified lower income communities. The Act permits taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments. | |
On August 30, 2011, we entered into the first arrangement (“NMTC #1”). In connection with the NMTC #1 transaction we loaned $58.3 million to TIF, a special purpose entity created to effect the financing arrangement, at 1% interest due August 30, 2041. Simultaneously, US Bancorp invested $22.4 million in TIF. TIF then contributed US Bancorp’s contribution and the loan proceeds to certain CDEs. The CDEs, in turn, loaned the $76.8 million in funds less payment of placement fees, at interest rates varying from 1% to 3.96%, to Unicom, as partial financing for TERRA-NW. | |
On October 3, 2012, we entered into the second arrangement (“NMTC #2”). In connection with the NMTC #2 transaction we loaned $37.7 million to TIF 2 and TIF 2-USB, special purpose entities created to effect the financing arrangement, at 1% interest due October 2, 2042. Simultaneously, US Bancorp invested $17.5 million in TIF 2 and TIF 2-USB. TIF 2 and TIF 2-USB then contributed US Bancorp’s contributions and the loan proceeds to certain CDEs. The CDEs, in turn, loaned the $55.2 million in funds less payment of placement fees, at interest rates varying from 0.7099% to 0.7693%, to Unicom, as partial financing for TERRA-NW. | |
On December 11, 2012, we entered into the third arrangement (“NMTC #3”). In connection with the NMTC #3 transaction we loaned $8.2 million to TIF 3, a special purpose entity created to effect the financing arrangement, at 1% interest due December 10, 2042. Simultaneously, US Bancorp invested $3.8 million in TIF 3. TIF 3 then contributed US Bancorp’s contributions and the loan proceeds to a CDE. The CDE, in turn, loaned the $12.0 million in funds less payment of placement fees, at an interest rate of 1.35%, to Unicom, as partial financing for TERRA-NW. | |
US Bancorp is the sole investor in TIF, TIF 2, TIF 2-USB and TIF 3, and as such, is entitled to substantially all of the benefits derived from the NMTCs. All of the loan proceeds to Unicom (“Unicom”), our wholly owned subsidiary, net of syndication and arrangement fees, are restricted for use on TERRA-NW. Restricted cash of $4.3 million and $6.9 million was held by Unicom at March 31, 2014 and December 31, 2013, respectively, and is included in our Consolidated Balance Sheets. We began construction on TERRA-NW in 2012 and expect to complete all current phases of the project in early 2015. We began offering service on Phases 1 and 2 of this new facility in 2013. | |
These transactions include put/call provisions whereby we may be obligated or entitled to repurchase US Bancorp’s interests in TIF, TIF 2, TIF 2-USB and/or TIF 3. We believe that US Bancorp will exercise the put options in August 2018, October 2019 and December 2019, at the end of the compliance periods for NMTC #1, NMTC #2 and NMTC #3, respectively. The NMTCs are subject to 100% recapture for a period of seven years as provided in the Internal Revenue Code. We are required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangements. Non-compliance with applicable requirements could result in projected tax benefits not being realized by US Bancorp. We have agreed to indemnify US Bancorp for any loss or recapture of NMTCs until such time as our obligation to deliver tax benefits is relieved. There have been no credit recaptures as of March 31, 2014. The value attributed to the puts/calls is nominal. | |
We have determined that TIF, TIF 2, TIF 2-USB and TIF 3 are VIEs. The consolidated financial statement of TIF, TIF 2, TIF 2-USB and TIF 3 include the CDEs discussed above. The ongoing activities of the VIEs – collecting and remitting interest and fees and NMTC compliance – were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the VIEs. Management considered the contractual arrangements that obligate us to deliver tax benefits and provide various other guarantees to US Bancorp; US Bancorp’s lack of a material interest in the underlying economics of the project; and the fact that we are obligated to absorb losses of the VIEs. We concluded that we are the primary beneficiary of each and consolidated the VIEs in accordance with the accounting standard for consolidation. | |
US Bancorp’s contributions, net of syndication fees and other direct costs incurred in structuring the NMTC arrangements, are included in Non-controlling Interests on the Consolidated Balance Sheets. Incremental costs to maintain the structure during the compliance period are recognized as incurred to selling, general and administrative expense. | |
The assets and liabilities of our consolidated VIEs were $140.9 million and $104.2 million, respectively, as of March 31, 2014 and December 31, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Commitments and Contingencies | ' | |||
Commitments and Contingencies | ||||
Capital Leases as Lessee | ||||
We have a capital lease agreement for transponder capacity on Intelsat, Ltd.’s (“Intelsat”) Galaxy 18 spacecraft. The Intelsat Galaxy 18 C-band and Ku-Band transponders are being leased over an expected term of 14 years. At lease inception the present value of the lease payments, excluding telemetry, tracking and command services and back-up protection, was $98.6 million. We amended our transponder capacity lease agreement with Intelsat in October 2013 to lease additional transponder capacity on Intelsat's Galaxy 18 spacecraft with a term of 7 years. As a result, on January 1, 2014, we increased our existing capital lease asset and liability by $9.4 million. | ||||
A summary of future minimum capital lease payments follows (amounts in thousands): | ||||
Years ending December 31: | ||||
2014 | $ | 10,076 | ||
2015 | 13,444 | |||
2016 | 13,454 | |||
2017 | 13,433 | |||
2018 | 13,440 | |||
2019 and thereafter | 46,658 | |||
Total minimum lease payments | 110,505 | |||
Less amount representing interest | 28,347 | |||
Less current maturity of obligations under capital leases | 7,673 | |||
Long-term obligations under capital leases, excluding current maturity | $ | 74,485 | ||
Tribal Mobility Fund I Grant | ||||
On February 28, 2014, the Federal Communications Commission ("FCC") announced our winning bids in the Tribal Mobility Fund I auction for a $41.4 million grant to partially fund expansion of our 3G wireless network, or better, to locations in Alaska where we would not otherwise be able to construct within our return-on-investment requirements. We filed a long-form application with the FCC by their deadline of April 4, 2014, and this form must be reviewed for final approval, before the award can be issued. |
Subsequent_Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Event | |
On May 2, 2014, we purchased real property and a building located in Anchorage for $14.5 million. |
Business_and_Summary_of_Signif1
Business and Summary of Significant Accounting Principles (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
Our consolidated financial statements include the consolidated accounts of GCI and its wholly owned subsidiaries, The Alaska Wireless Network, LLC ("AWN") of which we own a two-third interest and four variable interest entities (“VIEs”) for which we are the primary beneficiary after providing certain loans and guarantees. These VIEs are Terra GCI Investment Fund, LLC (“TIF”), Terra GCI 2 Investment Fund, LLC (“TIF 2”), Terra GCI 2-USB Investment Fund, LLC (“TIF 2-USB”) and Terra GCI 3 Investment Fund, LLC (“TIF 3”). We also include in our consolidated financial statements non-controlling interests in consolidated subsidiaries for which our ownership is less than 100 percent. We use the equity method to account for our investments in entities that we do not control, but where we have the ability to exercise significant influence over operating and financial policies. | |
All significant intercompany transactions between non-regulated affiliates of our company are eliminated. Intercompany transactions generated between regulated and non-regulated affiliates of our company are not eliminated in consolidation. | |
Non-controlling Interests | ' |
Non-controlling Interests | |
Non-controlling interests represent the equity ownership interests in consolidated subsidiaries not owned by us. Non-controlling interests are adjusted for contributions, distributions, and income and loss attributable to the non-controlling interest partners of the consolidated entities. Income and loss is allocated to the non-controlling interests based on the respective governing documents | |
Recently Issued Accounting Pronouncements | ' |
Recently Issued Accounting Pronouncements | |
There were various updates recently issued which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on our consolidated financial position, results of operations or cash flows. | |
Regulatory Accounting | ' |
Regulatory Accounting | |
We account for our regulated operations in accordance with the accounting principles for regulated enterprises. These accounting principles recognize the economic effects of rate regulation by recording cost and a return on investment as such amounts are recovered through rates authorized by regulatory authorities. Accordingly, plant and equipment is depreciated over lives approved by regulators and certain costs and obligations are deferred based upon approvals received from regulators to permit recovery of such amounts in future years. Our cost studies and depreciation rates for our regulated operations are subject to periodic audits that could result in a change to recorded revenues. | |
Earnings per Common Share | ' |
Earnings per Common Share | |
We compute net income attributable to GCI per share of Class A and Class B common stock using the “two class” method. Therefore, basic net income per share is computed by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the dilutive net income per share of Class A common stock assumes the conversion of Class B common stock to Class A common stock, while the dilutive net income per share of Class B common stock does not assume the conversion of those shares. Additionally, in applying the “two-class” method, undistributed earnings are allocated to both common shares and participating securities. Our restricted stock grants are entitled to dividends and meet the criteria of a participating security. | |
Undistributed earnings for each year are allocated based on the contractual participation rights of Class A and Class B common shares as if the earnings for the year had been distributed. In accordance with our Articles of Incorporation, if and when dividends are declared on our common stock in accordance with Alaska corporate law, equivalent dividends shall be paid with respect to the shares of Class A and Class B common stock. Both classes of common stock have identical dividend rights and would therefore share equally in our net assets in the event of liquidation. As such, we have allocated undistributed earnings on a proportionate basis. | |
Accounts Receivable and Allowance for Doubtful Receivables | ' |
Accounts Receivable and Allowance for Doubtful Receivables | |
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful receivables is our best estimate of the amount of probable credit losses in our existing accounts receivable. We base our estimates on the aging of our accounts receivable balances, financial health of specific customers, regional economic data, changes in our collections process, regulatory requirements and our customers’ compliance with Universal Service Administrative Company rules. We review our allowance for doubtful receivables methodology at least annually. | |
Depending upon the type of account receivable our allowance is calculated using a pooled basis with an allowance for all accounts greater than 120 days past due or a specific identification method. When a specific identification method is used, potentially uncollectible accounts due to bankruptcy or other issues are reviewed individually for collectability. Account balances are charged off against the allowance when we feel it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposure related to our customers. | |
Revenue Recognition | ' |
Revenue Recognition | |
We recorded high cost support revenue under the Universal Service Fund (“USF”) program of $16.5 million and $10.6 million for the three months ended March 31, 2014 and 2013, respectively. At March 31, 2014, we have $46.4 million in high cost support accounts receivable. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to estimates and assumptions include the allowance for doubtful receivables, unbilled revenues, accrual of the USF high cost Remote area program support, share-based compensation, inventory at lower of cost or market, reserve for future customer credits, liability for incurred but not reported medical insurance claims, valuation allowances for deferred income tax assets, depreciable and amortizable lives of assets, the carrying value of long-lived assets including goodwill, cable certificates, wireless licenses,and broadcast licenses, our effective tax rate, purchase price allocations, deferred lease expense, asset retirement obligations, the accrual of cost of goods sold (exclusive of depreciation and amortization expense) (“Cost of Goods Sold”), depreciation and the accrual of contingencies and litigation. Actual results could differ from those estimates | |
Classification of Taxes Collected from Customers | ' |
Classification of Taxes Collected from Customers | |
We report sales, use, excise, and value added taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between us and a customer on a net basis in our Consolidated | |
Reclassifications | ' |
Reclassifications | |
Reclassifications have been made to the 2013 financial statements to make them comparable with the 2014 presentation. |
Business_and_Summary_of_Signif2
Business and Summary of Significant Accounting Principles (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | ' | |||||||||||||
The following table summarizes the preliminary purchase price and the estimated fair value of ACS’s assets acquired and liabilities assumed, effective July 23, 2013 (amounts in thousands): | ||||||||||||||
Purchase price: | ||||||||||||||
Cash consideration paid | $ | 100,000 | ||||||||||||
Fair value of the one-third ownership interest of AWN | 267,642 | |||||||||||||
Total purchase price | $ | 367,642 | ||||||||||||
Assets acquired and liabilities assumed: | ||||||||||||||
Acquired assets | ||||||||||||||
Current assets | $ | 16,952 | ||||||||||||
Property and equipment, including construction in progress | 82,473 | |||||||||||||
Goodwill | 140,081 | |||||||||||||
Wireless licenses | 65,433 | |||||||||||||
Rights to use capacity | 52,636 | |||||||||||||
Other assets | 16,078 | |||||||||||||
Fair value of liabilities assumed | (6,011 | ) | ||||||||||||
Total fair value of assets acquired and liabilities assumed | $ | 367,642 | ||||||||||||
Schedule of Pro Forma Information | ' | |||||||||||||
The following unaudited pro forma financial information is presented as if the acquisition occurred on January 1, 2013 (amounts in thousands): | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2013 | ||||||||||||||
Pro forma consolidated revenue | $ | 218,098 | ||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ' | |||||||||||||
Earnings per common share (“EPS”) and common shares used to calculate basic and diluted EPS consist of the following (amounts in thousands, except per share amounts): | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Class A | Class B | Class A | Class B | |||||||||||
Basic net income per share: | ||||||||||||||
Numerator: | ||||||||||||||
Allocation of undistributed earnings | $ | 1,958 | 163 | $ | 2,996 | 248 | ||||||||
Denominator: | ||||||||||||||
Weighted average common shares | 37,987 | 3,163 | 38,264 | 3,167 | ||||||||||
outstanding | ||||||||||||||
Basic net income attributable to GCI | $ | 0.05 | 0.05 | $ | 0.08 | 0.08 | ||||||||
common stockholders per common share | ||||||||||||||
Diluted net income per share: | ||||||||||||||
Numerator: | ||||||||||||||
Allocation of undistributed earnings for | $ | 1,958 | 163 | $ | 2,996 | 248 | ||||||||
basic computation | ||||||||||||||
Reallocation of undistributed earnings as a | 163 | — | 248 | — | ||||||||||
result of conversion of Class B to Class A | ||||||||||||||
shares | ||||||||||||||
Reallocation of undistributed earnings as a | — | — | (4 | ) | ||||||||||
result of conversion of dilutive securities | ||||||||||||||
Effect of share based compensation that may be | $ | — | — | $ | (34 | ) | — | |||||||
settled in cash or shares | ||||||||||||||
Net income adjusted for allocation of | $ | 2,121 | 163 | $ | 3,210 | 244 | ||||||||
undistributed earnings and effect of | ||||||||||||||
share based compensation that may be settled | ||||||||||||||
in cash or shares | ||||||||||||||
Denominator: | ||||||||||||||
Number of shares used in basic computation | 37,987 | 3,163 | 38,264 | 3,167 | ||||||||||
Conversion of Class B to Class A common | 3,163 | — | 3,167 | — | ||||||||||
shares outstanding | ||||||||||||||
Unexercised stock options | 118 | — | 173 | — | ||||||||||
Effect of share based compensation that may be | — | — | 91 | — | ||||||||||
settled in cash or shares | ||||||||||||||
Number of shares used in per share computation | 41,268 | 3,163 | 41,695 | 3,167 | ||||||||||
Diluted net income attributable to GCI | $ | 0.05 | 0.05 | $ | 0.08 | 0.08 | ||||||||
common stockholders per common share | ||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | |||||||||||||
Weighted average shares associated with outstanding share awards for the three months ended March 31, 2014 and 2013, which have been excluded from the computations of diluted EPS, because the effect of including these share awards would have been anti-dilutive, consist of the following (shares, in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Shares associated with anti-dilutive unexercised | 33 | 88 | ||||||||||||
stock options | ||||||||||||||
Share based compensation that may be settled in cash or shares, the effect of which is anti-dillutive | 26 | — | ||||||||||||
Total excluded from diluted EPS calculation | 59 | 88 | ||||||||||||
Schedule Of Contingent Awards | ' | |||||||||||||
There were no shares associated with contingent awards for the three months ended March 31, 2014. There were 58,000 shares associated with contingent awards for the three months ended March 31, 2013, which have been excluded from the computation of diluted EPS because the contingencies of these awards were not met at March 31, 2013. | ||||||||||||||
Schedule of Stock by Class | ' | |||||||||||||
Following are the changes in issued common stock for the three months ended March 31, 2014 and 2013 (shares, in thousands): | ||||||||||||||
Class A | Class B | |||||||||||||
Balances at December 31, 2012 | 38,534 | 3,169 | ||||||||||||
Class B shares converted to Class A | 2 | (2 | ) | |||||||||||
Shares issued upon stock option exercises | 50 | — | ||||||||||||
Share awards issued | 621 | — | ||||||||||||
Shares retired | (795 | ) | — | |||||||||||
Shares acquired to settle minimum statutory tax | (14 | ) | — | |||||||||||
withholding requirements | ||||||||||||||
Other | (2 | ) | — | |||||||||||
Balances at March 31, 2013 | 38,396 | 3,167 | ||||||||||||
Balances at December 31, 2013 | 37,299 | 3,165 | ||||||||||||
Class B shares converted to Class A | 2 | (2 | ) | |||||||||||
Shares issued upon stock option exercises | 19 | — | ||||||||||||
Share awards issued | 1,119 | — | ||||||||||||
Shares retired | (26 | ) | — | |||||||||||
Shares acquired to settle minimum statutory tax | (24 | ) | — | |||||||||||
withholding requirements | ||||||||||||||
Balances at March 31, 2014 | 38,389 | 3,163 | ||||||||||||
Excise And Sales Taxes | ' | |||||||||||||
The following are certain surcharges reported on a gross basis in our Consolidated Income Statements (amounts in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Surcharges reported gross | $ | 1,134 | 1,228 | |||||||||||
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows Supplemental Disclosures (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||
Cash Flow Operating Capital | ' | ||||||
Changes in operating assets and liabilities consist of (amounts in thousands): | |||||||
Three Months Ended March 31, | 2014 | 2013 | |||||
(Increase) decrease in accounts receivable, net | $ | 8,295 | (14,243 | ) | |||
Increase in prepaid expenses | (3,581 | ) | (2,311 | ) | |||
(Increase) decrease in inventories | 3,653 | (590 | ) | ||||
Decrease in other current assets | 26 | 516 | |||||
Increase in other assets | (142 | ) | (107 | ) | |||
Decrease in accounts payable | (8,594 | ) | (333 | ) | |||
Increase in deferred revenues | 1,462 | 325 | |||||
Increase (decrease) in accrued payroll and payroll related obligations | (8,476 | ) | 1,210 | ||||
Increase in accrued liabilities | 1,015 | 667 | |||||
Increase in accrued interest | 14,363 | 14,722 | |||||
Increase (decrease) in subscriber deposits | (140 | ) | 116 | ||||
Increase (decrease) in long-term deferred revenue | (1,375 | ) | 265 | ||||
Increase (decrease) in components of other long-term liabilities | 645 | (951 | ) | ||||
Total change in operating assets and liabilities | $ | 7,151 | (714 | ) | |||
Cash Payments for Interest | ' | ||||||
The following items are for the three months ended March 31, 2014 and 2013 (amounts in thousands): | |||||||
Net cash paid or received: | 2014 | 2013 | |||||
Interest paid, net of amounts capitalized | $ | 4,412 | 2,704 | ||||
Schedule of Other Significant Noncash Transactions | ' | ||||||
The following items are non-cash investing and financing activities for the three months ended March 31, 2014 and 2013 (amounts in thousands): | |||||||
2014 | 2013 | ||||||
Non-cash additions for purchases of property and | $ | 9,779 | 8,322 | ||||
equipment | |||||||
Net capital lease obligation adjustment | $ | 9,385 | — | ||||
Distribution to non-controlling interest | $ | 4,167 | — | ||||
Asset retirement obligation additions to property and | $ | 361 | 989 | ||||
equipment | |||||||
Deferred compensation distribution denominated in | $ | 617 | 621 | ||||
shares |
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 3 Months Ended | ||||||
Mar. 31, 2014 | |||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||
Schedule Of Amortization Expense | ' | ||||||
Amortization expense for amortizable intangible assets was as follows (amounts in thousands): | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2014 | 2013 | ||||||
Amortization expense | $ | 2,411 | 1,456 | ||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | ' | ||||||
Amortization expense for amortizable intangible assets for each of the five succeeding fiscal years is estimated to be (amounts in thousands): | |||||||
Years Ending December 31, | |||||||
2014 | $ | 9,047 | |||||
2015 | 7,158 | ||||||
2016 | 5,470 | ||||||
2017 | 4,263 | ||||||
2018 | 3,416 | ||||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Fair Value, by Balance Sheet Grouping | ' | ||||||||||||
The carrying amounts and approximate fair values of our financial instruments at March 31, 2014 and December 31, 2013 follow (amounts in thousands): | |||||||||||||
March 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Current and long-term debt | $ | 1,047,706 | 1,081,547 | 1,047,980 | 1,058,431 | ||||||||
Fair Value Assets And Liabilities Measured On Recurring Basis | ' | ||||||||||||
Assets measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013 are as follows (amounts in thousands): | |||||||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||
March 31, 2014 Assets | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||
Deferred compensation plan assets | $ | 1,871 | — | — | |||||||||
(mutual funds) | |||||||||||||
Total assets at fair value | $ | 1,871 | — | — | |||||||||
December 31, 2013 Assets | |||||||||||||
Deferred compensation plan assets | $ | 2,183 | — | — | |||||||||
(mutual funds) | |||||||||||||
Total assets at fair value | $ | 2,183 | — | — | |||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||
Schedule of Option Activity | ' | ||||||||||||
A summary of option activity under the Stock Option Plan as of March 31, 2014 and changes during the period then ended is presented below: | |||||||||||||
Shares (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (in thousands) | ||||||||||
Outstanding at January 1, 2014 | 620 | $ | 7.74 | ||||||||||
Exercised | (19 | ) | $ | 8.76 | |||||||||
Options forfeited and retired | (250 | ) | $ | 8.4 | |||||||||
Expired | (12 | ) | $ | 10.69 | |||||||||
Outstanding at March 31, 2014 | 339 | $ | 7.09 | 4.7 years | $ | 1,492 | |||||||
Exercisable at March 31, 2014 | 329 | $ | 7.11 | 4.7 years | $ | 1,443 | |||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | ' | ||||||||||||
A summary of nonvested restricted stock award activity under the Stock Option Plan for the three months ended March 31, 2014, follows (share amounts in thousands): | |||||||||||||
Shares | Weighted | ||||||||||||
Average | |||||||||||||
Grant Date | |||||||||||||
Fair Value | |||||||||||||
Nonvested at January 1, 2014 | 1,209 | $ | 8.6 | ||||||||||
Granted | 1,119 | $ | 9.81 | ||||||||||
Vested | (83 | ) | $ | 10.58 | |||||||||
Forfeited | (3 | ) | $ | 9.44 | |||||||||
Nonvested at March 31, 2014 | 2,242 | ||||||||||||
Segments_Tables
Segments (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2014 | ||||||||||
Segment Reporting [Abstract] | ' | |||||||||
Schedule of Segment Reporting Information, by Segment | ' | |||||||||
Summarized financial information for our reportable segments for the three months ended March 31, 2014 and 2013 follows (amounts in thousands): | ||||||||||
Three Months Ended | ||||||||||
Wireless | Wireline | Total Reportable Segments | ||||||||
March 31, 2014 | ||||||||||
Revenues | $ | 62,517 | 153,766 | 216,283 | ||||||
Adjusted EBITDA | $ | 38,022 | 36,775 | 74,797 | ||||||
March 31, 2013 | ||||||||||
Revenues | $ | 33,837 | 152,379 | 186,216 | ||||||
Adjusted EBITDA | $ | 15,189 | 43,460 | 58,649 | ||||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | ' | |||||||||
A reconciliation of reportable segment Adjusted EBITDA to consolidated income before income taxes follows (amounts in thousands): | ||||||||||
Three Months Ended March 31, | 2014 | 2013 | ||||||||
Reportable segment Adjusted EBITDA | $ | 74,797 | 58,649 | |||||||
Less depreciation and amortization | (42,352 | ) | (33,999 | ) | ||||||
expense | ||||||||||
Less share-based compensation | (1,778 | ) | (1,259 | ) | ||||||
expense | ||||||||||
Less accretion expense | (301 | ) | (127 | ) | ||||||
Other | (101 | ) | (204 | ) | ||||||
Consolidated operating income | 30,265 | 23,060 | ||||||||
Less other expense | (18,308 | ) | (16,904 | ) | ||||||
Consolidated income before | $ | 11,957 | 6,156 | |||||||
income tax expense | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | |||
Mar. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of Future Minimum Lease Payments for Capital Leases | ' | |||
A summary of future minimum capital lease payments follows (amounts in thousands): | ||||
Years ending December 31: | ||||
2014 | $ | 10,076 | ||
2015 | 13,444 | |||
2016 | 13,454 | |||
2017 | 13,433 | |||
2018 | 13,440 | |||
2019 and thereafter | 46,658 | |||
Total minimum lease payments | 110,505 | |||
Less amount representing interest | 28,347 | |||
Less current maturity of obligations under capital leases | 7,673 | |||
Long-term obligations under capital leases, excluding current maturity | $ | 74,485 | ||
Business_and_Summary_of_Signif3
Business and Summary of Significant Accounting Principles (Narratives) (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Jul. 22, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
entity | Total High Cost Support Program [Member] | Total High Cost Support Program [Member] | Common Stock - Class A [Member] | Common Stock - Class A [Member] | ACS [Member] | Stock Buyback Program [Member] | Stock Buyback Program [Member] | |||
Common Stock - Class A [Member] | ||||||||||
Business | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Year founded | '1979 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principles of Consolidation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of VIEs | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired | ' | ' | ' | ' | ' | ' | ' | 33.33% | ' | ' |
Earnings Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares contingently issuable | 0 | 58,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized amount, repurchase of stock | $5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock repurchased during period, shares | ' | ' | ' | ' | ' | 26,000 | 795,000 | ' | ' | 764,000 |
Stock repurchased during period, value | 529,000 | 6,714,000 | ' | ' | ' | 529,000 | 6,804,000 | ' | ' | 6,600,000 |
Stock repurchase program, remaining value authorized to be repurchased | ' | ' | ' | ' | ' | ' | ' | ' | 111,100,000 | ' |
Accounts Receivable and Allowance for Doubtful Receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period past due for write-off of trade accounts receivable | '120 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue Recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | 216,283,000 | 186,216,000 | ' | 16,500,000 | 10,600,000 | ' | ' | ' | ' | ' |
Receivables | $219,050,000 | ' | $228,372,000 | $46,400,000 | ' | ' | ' | ' | ' | ' |
Business_and_Summary_of_Signif4
Business and Summary of Significant Accounting Principles (Business Acquisition) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 22, 2013 | Jul. 22, 2013 | Jul. 22, 2013 |
In Thousands, unless otherwise specified | ACS [Member] | Wireless Licenses [Member] | Rights to Use Capacity [Member] | ||
ACS [Member] | ACS [Member] | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Cash consideration paid | ' | ' | $100,000 | ' | ' |
Fair value of the one-third ownership interest of AWN | ' | ' | 267,642 | ' | ' |
Total purchase price | ' | ' | 367,642 | ' | ' |
Assets acquired and liabilities assumed: | ' | ' | ' | ' | ' |
Current assets | ' | ' | 16,952 | ' | ' |
Property and equipment, including construction in progress | ' | ' | 82,473 | ' | ' |
Goodwill | 219,041 | 219,041 | 140,081 | ' | ' |
Finite-lived intangibles | ' | ' | ' | 65,433 | 52,636 |
Other assets | ' | ' | 16,078 | ' | ' |
Fair value of liabilities assumed | ' | ' | -6,011 | ' | ' |
Total fair value of assets acquired and liabilities assumed | ' | ' | $367,642 | ' | ' |
Business_and_Summary_of_Signif5
Business and Summary of Significant Accounting Principles (Pro-Forma Information) (Details) (ACS [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
ACS [Member] | ' |
Business Acquisition [Line Items] | ' |
Pro forma consolidated revenue | $218,098 |
Business_and_Summary_of_Signif6
Business and Summary of Significant Accounting Principles (Basic EPS calculations) (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Allocation of undistributed earnings | $2,121 | $3,244 |
Common Stock - Class A [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Allocation of undistributed earnings | 1,958 | 2,996 |
Weighted average common shares outstanding | 37,987 | 38,264 |
Basic net income attributable to GCI common stockholders per common share (USD per share) | $0.05 | $0.08 |
Common Stock - Class B [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Allocation of undistributed earnings | $163 | $248 |
Weighted average common shares outstanding | 3,163 | 3,167 |
Basic net income attributable to GCI common stockholders per common share (USD per share) | $0.05 | $0.08 |
Business_and_Summary_of_Signif7
Business and Summary of Significant Accounting Principles (Diluted EPS calculations) (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Allocation of undistributed earnings for basic computation | $2,121 | $3,244 |
Common Stock - Class A [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Allocation of undistributed earnings for basic computation | 1,958 | 2,996 |
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares | 163 | 248 |
Reallocation of undistributed earnings as a result of conversion of dilutive securities | 0 | 0 |
Effect of share based compensation that may be settled in cash or shares | 0 | -34 |
Net income adjusted for allocation of undistributed earnings and effect of share based compensation that may be settled in cash or shares | 2,121 | 3,210 |
Number of shares used in basic computation | 37,987 | 38,264 |
Conversion of Class B to Class A common shares outstanding | 3,163 | 3,167 |
Unexercised stock options | 118 | 173 |
Effect of share based compensation that may be settled in cash or shares | 0 | 91 |
Number of shares used in per share computation | 41,268 | 41,695 |
Diluted net income attributable to General Communication, Inc. common stockholders per common share (USD per share) | $0.05 | $0.08 |
Common Stock - Class B [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Allocation of undistributed earnings for basic computation | 163 | 248 |
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares | 0 | 0 |
Reallocation of undistributed earnings as a result of conversion of dilutive securities | ' | -4 |
Effect of share based compensation that may be settled in cash or shares | 0 | 0 |
Net income adjusted for allocation of undistributed earnings and effect of share based compensation that may be settled in cash or shares | $163 | $244 |
Number of shares used in basic computation | 3,163 | 3,167 |
Conversion of Class B to Class A common shares outstanding | 0 | 0 |
Unexercised stock options | 0 | 0 |
Effect of share based compensation that may be settled in cash or shares | 0 | 0 |
Number of shares used in per share computation | 3,163 | 3,167 |
Diluted net income attributable to General Communication, Inc. common stockholders per common share (USD per share) | $0.05 | $0.08 |
Business_and_Summary_of_Signif8
Business and Summary of Significant Accounting Principles (Weighted Average Shares outstanding which are anti-dilutive) (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Shares associated with anti-dilutive unexercised stock options | 59 | 88 |
Unexercised Stock Options [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Shares associated with anti-dilutive unexercised stock options | 33 | 88 |
Stock Compensation Plan [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Shares associated with anti-dilutive unexercised stock options | 26 | 0 |
Business_and_Summary_of_Signif9
Business and Summary of Significant Accounting Principles (Changes in issued Common Stock) (Details) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Common Stock [Roll Forward] | ' | ' |
Shares issued upon stock option exercises | 19,000 | ' |
Common Stock - Class A [Member] | ' | ' |
Common Stock [Roll Forward] | ' | ' |
Balance, Beginning | 37,299,000 | 38,534,000 |
Class B shares converted to Class A | 2,000 | 2,000 |
Shares issued upon stock option exercises | 19,000 | 50,000 |
Share awards issued | 1,119,000 | 621,000 |
Shares retired | -26,000 | -795,000 |
Shares acquired to settle minimum statutory tax withholding requirements | -24,000 | -14,000 |
Other | ' | -2,000 |
Balance, Ending | 38,389,000 | 38,396,000 |
Common Stock - Class B [Member] | ' | ' |
Common Stock [Roll Forward] | ' | ' |
Balance, Beginning | 3,165,000 | 3,169,000 |
Class B shares converted to Class A | 2,000 | 2,000 |
Shares issued upon stock option exercises | 0 | 0 |
Share awards issued | 0 | 0 |
Shares retired | 0 | 0 |
Shares acquired to settle minimum statutory tax withholding requirements | 0 | 0 |
Other | ' | 0 |
Balance, Ending | 3,163,000 | 3,167,000 |
Recovered_Sheet2
Business and Summary of Significant Accounting Principles (Surcharges reported gross) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Taxes, Miscellaneous [Abstract] | ' | ' |
Surcharges reported gross | $1,134 | $1,228 |
Consolidated_Statement_of_Cash
Consolidated Statement of Cash Flows Supplemental Disclosures ( Changes in operating assets and liabilities) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Supplemental Cash Flow Elements [Abstract] | ' | ' |
(Increase) decrease in accounts receivable, net | $8,295 | ($14,243) |
Increase in prepaid expenses | -3,581 | -2,311 |
(Increase) decrease in inventories | 3,653 | -590 |
Decrease in other current assets | 26 | 516 |
Increase in other assets | -142 | -107 |
Decrease in accounts payable | -8,594 | -333 |
Increase in deferred revenues | 1,462 | 325 |
Increase (decrease) in accrued payroll and payroll related obligations | -8,476 | 1,210 |
Increase in accrued liabilities | 1,015 | 667 |
Increase in accrued interest | 14,363 | 14,722 |
Increase (decrease) in subscriber deposits | -140 | 116 |
Increase (decrease) in long-term deferred revenue | -1,375 | 265 |
Increase (decrease) in components of other long-term liabilities | 645 | -951 |
Total change in operating assets and liabilities | $7,151 | ($714) |
Consolidated_Statement_of_Cash1
Consolidated Statement of Cash Flows Supplemental Disclosures (Net cash paid or received) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Supplemental Cash Flow Elements [Abstract] | ' | ' |
Interest paid, net of amounts capitalized | $4,412 | $2,704 |
Consolidated_Statement_of_Cash2
Consolidated Statement of Cash Flows Supplemental Disclosures ( Non-cash investing and financing activities) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Supplemental Cash Flow Elements [Abstract] | ' | ' |
Non-cash additions for purchases of property and equipment | $9,779 | $8,322 |
Net capital lease obligation adjustment | 9,385 | 0 |
Distribution to non-controlling interest | 4,167 | 0 |
Asset retirement obligation additions to property and equipment | 361 | 989 |
Deferred compensation distribution denominated in shares | $617 | $621 |
Intangible_Assets_Amortization
Intangible Assets (Amortization expense) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Amortization expense | $2,411 | $1,456 |
Intangible_Assets_5_year_Futur
Intangible Assets (5 year Future Amortization ) (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ' |
2014 | $9,047 |
2015 | 7,158 |
2016 | 5,470 |
2017 | 4,263 |
2018 | $3,416 |
Financial_Instruments_Carrying
Financial Instruments (Carrying amounts and fair value of the financial instruments) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Carrying Amount | ' | ' |
Current and long-term debt | $1,047,706 | $1,047,980 |
Fair Value | ' | ' |
Current and long-term debt | $1,081,547 | $1,058,431 |
Senior Notes Due 2021 [Member] | Line of Credit [Member] | ' | ' |
Fair Value | ' | ' |
Debt percentage | 6.75% | ' |
Senior Notes Due 2019 [Member] | Line of Credit [Member] | ' | ' |
Fair Value | ' | ' |
Debt percentage | 8.63% | ' |
Financial_Instruments_Assets_m
Financial Instruments (Assets measured at fair value on a recurring basics) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Deferred compensation plan assets (mutual funds) | $1,871 | $2,183 |
Total assets at fair value | 1,871 | 2,183 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Deferred compensation plan assets (mutual funds) | 0 | 0 |
Total assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Deferred compensation plan assets (mutual funds) | 0 | 0 |
Total assets at fair value | $0 | $0 |
Stockholders_Equity_Narratives
Stockholders' Equity (Narratives) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of shares authorized | 15,700,000 | ' |
Number of shares available for grant | 2,300,000 | ' |
Weighted average grant date fair value | $9.81 | $8.17 |
Share-based compensation expense | $1,800,000 | $1,300,000 |
Stock Options [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Vesting period | '5 years | ' |
Expiration period | '10 years | ' |
Options vested in period fair value | 27,000 | 32,000 |
Total intrinsic value | 43,000 | 100,000 |
Cash received from exercise of stock options | 200,000 | 300,000 |
Stock options not yet recognized | 16,000 | ' |
Unvested stock options | 10,000 | ' |
Weighted average period for recognition of unvested shares | '0 years 6 months | ' |
Restricted Stock [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Vesting period | '3 years | ' |
Unrecognized share-based compensation expense | $14,500,000 | ' |
Unvested restricted stock awards | 2,200,000 | ' |
Weighted average period for recognition of unvested shares | '2 years 4 months 25 days | ' |
Stockholders_Equity_Stock_Opti
Stockholders' Equity (Stock Option Activity) (Details) (USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 |
Shares | ' |
Beginning balance | 620 |
Exercised | -19 |
Options forfeited and retired | -250 |
Expired | -12 |
Ending balance | 339 |
Exercisable | 329 |
Weighted Average Exercise Price | ' |
Beginning balance (USD per share) | $7.74 |
Exercised (USD per share) | $8.76 |
Options forfeited and retired (USD per share) | $8.40 |
Expired (USD per share) | $10.69 |
Ending balance (USD per share) | $7.09 |
Exercisable | $7.11 |
Weighted average remaining contractual term, outstanding | '4 years 8 months |
Weighted average remaining contractual term, exercisable | '4 years 8 months |
Aggregate intrinsic value, outstanding | $1,492 |
Aggregate intrinsic value, exercisable | $1,443 |
Stockholders_Equity_Summary_of
Stockholders' Equity (Summary of nonvested restricted stock award activity) (Details) (USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 |
Shares | ' |
Nonvested, Beginning | 1,209 |
Granted | 1,119 |
Vested | -83 |
Forfeited | -3 |
Nonvested, Ending | 2,242 |
Weighted Average Grant Date Fair Value | ' |
Nonvested, Beginning (USD per share) | $8.60 |
Granted (USD per share) | $9.81 |
Vested (USD per share) | $10.58 |
Forfeited (USD per share) | $9.44 |
Segments_Narrative_Details
Segments (Narrative) (Details) (Fiber optic cable systems [Member]) | 3 Months Ended |
Mar. 31, 2014 | |
Fiber optic cable systems [Member] | ' |
Segment Reporting Information [Line Items] | ' |
Percentage of long-lived assets not in USA | 82.00% |
Segments_Reportable_segment_re
Segments (Reportable segment revenues) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | $216,283 | $186,216 |
Reportable segment Adjusted EBITDA | 74,797 | 58,649 |
Wireless [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 62,517 | 33,837 |
Reportable segment Adjusted EBITDA | 38,022 | 15,189 |
Wireline [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues | 153,766 | 152,379 |
Reportable segment Adjusted EBITDA | $36,775 | $43,460 |
Segments_Reconciliation_of_rep
Segments (Reconciliation of reportable segment adjusted EBITDA) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting [Abstract] | ' | ' |
Reportable segment Adjusted EBITDA | $74,797 | $58,649 |
Less depreciation and amortization expense | -42,352 | -33,999 |
Less share-based compensation expense | -1,778 | -1,259 |
Less accretion expense | -301 | -127 |
Other | -101 | -204 |
Operating income | 30,265 | 23,060 |
Less other expense | -18,308 | -16,904 |
Income before income tax expense | $11,957 | $6,156 |
Related_Party_Transaction_Deta
Related Party Transaction (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Related Party Transaction [Line Items] | ' | ' |
Revenue from related party | $15,780,000 | $0 |
ACS [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Payments to related party | 16,200,000 | ' |
Revenue from related party | 10,300,000 | ' |
Notes receivable, related parties | 31,600,000 | ' |
Accounts payable, related parties | $12,500,000 | ' |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (Primary Beneficiary [Member], USD $) | 3 Months Ended | 0 Months Ended | ||||||||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 | Aug. 30, 2011 | Aug. 30, 2011 | Aug. 30, 2011 | Oct. 03, 2012 | Oct. 03, 2012 | Oct. 03, 2012 | Dec. 11, 2012 | Dec. 11, 2012 | Aug. 30, 2011 | Oct. 03, 2012 | Dec. 11, 2012 | Aug. 30, 2011 | Oct. 03, 2012 | Dec. 11, 2012 |
NMTC 1 [Member] | NMTC 1 [Member] | NMTC 1 [Member] | NMTC 2 [Member] | NMTC 2 [Member] | NMTC 2 [Member] | NMTC 3 [Member] | NMTC 3 [Member] | US Bancorp [Member] | US Bancorp [Member] | US Bancorp [Member] | Community Development Entities [Member] | Community Development Entities [Member] | Community Development Entities [Member] | |||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | NMTC 1 [Member] | NMTC 2 [Member] | NMTC 3 [Member] | NMTC 1 [Member] | NMTC 2 [Member] | NMTC 3 [Member] | ||||||
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Project fund | $59.30 | ' | $58.30 | ' | ' | $37.70 | ' | ' | $8.20 | ' | ' | ' | ' | ' | ' | ' |
Tax credit percentage | 39.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount to other entity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22.4 | 17.5 | 3.8 | 76.8 | 55.2 | 12 |
Interest rate percentage | ' | ' | 1.00% | 1.00% | 3.96% | 1.00% | 0.71% | 0.77% | 1.00% | 1.35% | ' | ' | ' | ' | ' | ' |
Restricted cash | 4.3 | 6.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of recapture | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recapture period | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets and liabilities | $140.90 | $104.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Narrative) (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Feb. 28, 2014 | |
Favorable Regulatory Action [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' |
Capital lease term | '14 years | ' | ' |
Capital lease obligations | $98,600,000 | ' | ' |
Capital lease, amended term | '7 years | ' | ' |
Net capital lease obligation adjustment | 9,385,000 | 0 | ' |
Winning auction bid | ' | ' | $41,400,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Leases) (Details) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
2014 | $10,076 |
2015 | 13,444 |
2016 | 13,454 |
2017 | 13,433 |
2018 | 13,440 |
2019 and thereafter | 46,658 |
Total minimum lease payments | 110,505 |
Less amount representing interest | 28,347 |
Less current maturity of obligations under capital leases | 7,673 |
Long-term obligations under capital leases, excluding current maturity | $74,485 |
Subsequent_Event_Details
Subsequent Event (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | 2-May-14 |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | ' | ' | ' |
Purchases of property and building | $28,174 | $38,316 | $14,500 |