Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Apr. 30, 2015 |
Entity Registrant Name | GENERAL COMMUNICATION INC | |
Entity Central Index Key | 808461 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | FALSE | |
Common Stock - Class A [Member] | ||
Entity Common Stock Shares Outstanding | 37,421 | |
Common Stock - Class B [Member] | ||
Entity Common Stock Shares Outstanding | 3,158 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $42,807 | $15,402 |
Receivables (including $0 and $27,944 from a related party at March 31, 2015 and December 31, 2014, respectively) | 198,721 | 212,441 |
Less allowance for doubtful receivables | 6,152 | 4,542 |
Net receivables | 192,569 | 207,899 |
Deferred income taxes | 64,620 | 56,120 |
Inventories | 14,537 | 17,032 |
Prepaid expenses | 13,644 | 12,179 |
Other current assets | 3,146 | 153 |
Total current assets | 331,323 | 308,785 |
Property and equipment in service, net of depreciation | 995,343 | 1,013,242 |
Construction in progress | 88,048 | 99,240 |
Net property and equipment | 1,083,391 | 1,112,482 |
Goodwill | 233,335 | 229,560 |
Cable certificates | 191,635 | 191,635 |
Wireless licenses | 86,347 | 86,347 |
Other intangible assets, net of amortization | 65,573 | 66,015 |
Deferred loan and senior notes costs, net of amortization of $9,157 and $8,644 at March 31, 2015 and December 31, 2014, respectively | 16,758 | 10,949 |
Other assets | 37,819 | 52,725 |
Total other assets | 631,467 | 637,231 |
Total assets | 2,046,181 | 2,058,498 |
Current liabilities: | ||
Current maturities of obligations under long-term debt and capital leases | 11,594 | 8,722 |
Accounts payable (including $0 and $7,447 to a related party at March 31, 2015 and December 31, 2014, respectively) | 54,699 | 76,918 |
Deferred revenue | 30,129 | 29,314 |
Accrued payroll and payroll related obligations | 27,153 | 32,803 |
Accrued interest | 24,265 | 6,654 |
Accrued liabilities | 18,381 | 14,457 |
Subscriber deposits | 1,537 | 1,212 |
Total current liabilities | 167,758 | 170,080 |
Long-term debt, net | 1,322,826 | 1,036,056 |
Obligations under capital leases, excluding current maturities | 64,388 | 66,499 |
Obligation under capital lease due to related party, excluding current maturity | 1,849 | 1,857 |
Deferred income taxes | 189,571 | 187,872 |
Long-term deferred revenue | 99,364 | 85,734 |
Other liabilities | 67,494 | 43,178 |
Total liabilities | 1,913,250 | 1,591,276 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Paid-in capital | -9,140 | 26,773 |
Retained earnings | 105,163 | 124,547 |
Total General Communication, Inc. stockholders' equity | 98,441 | 167,356 |
Non-controlling interests | 34,490 | 299,866 |
Total stockholders’ equity | 132,931 | 467,222 |
Total liabilities and stockholders’ equity | 2,046,181 | 2,058,498 |
Common Stock - Class A [Member] | ||
Stockholders' equity: | ||
Common stock | 0 | 13,617 |
Less cost of 26 Class A common shares held in treasury at March 31, 2015 and December 31, 2014 | -249 | -249 |
Total stockholders’ equity | 0 | 13,617 |
Common Stock - Class B [Member] | ||
Stockholders' equity: | ||
Common stock | 2,667 | 2,668 |
Total stockholders’ equity | $2,667 | $2,668 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Related party receivable | $0 | $27,944 |
Deferred loan and senior notes costs, accumulated amortization | 9,157 | 8,644 |
Related party payable | $0 | $7,447 |
Common Stock - Class A [Member] | ||
Common Stock, no par (USD per share) | ||
Common stock authorized (shares) | 100,000,000 | 100,000,000 |
Common stock (shares) | 37,458,000 | 37,998,000 |
Common stock outstanding (shares) | 37,432,000 | 37,972,000 |
Treasury stock (shares) | 26,000 | 26,000 |
Common Stock - Class B [Member] | ||
Common Stock, no par (USD per share) | ||
Common stock authorized (shares) | 10,000,000 | 10,000,000 |
Common stock (shares) | 3,158,000 | 3,159,000 |
Common stock outstanding (shares) | 3,158,000 | 3,159,000 |
CONSOLIDATED_INCOME_STATEMENTS
CONSOLIDATED INCOME STATEMENTS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Non-related party | $225,806 | $200,503 |
Related party | 5,283 | 15,780 |
Total revenues | 231,089 | 216,283 |
Cost of goods sold (exclusive of depreciation and amortization shown separately below): | ||
Non-related party | 73,887 | 69,143 |
Related party | 881 | 2,631 |
Total cost of goods sold | 74,768 | 71,774 |
Selling, general and administrative expenses: | ||
Non-related party | 83,388 | 70,742 |
Related party | 540 | 1,150 |
Total selling, general and administrative expenses | 83,928 | 71,892 |
Depreciation and amortization expense | 45,235 | 42,352 |
Software impairment charge | 26,417 | 0 |
Operating income | 741 | 30,265 |
Other income (expense): | ||
Interest expense (including amortization of deferred loan fees) | -20,985 | -18,211 |
Derivative instruments unrealized loss | -2,120 | 0 |
Other | -3,147 | -97 |
Other expense, net | -26,252 | -18,308 |
Income (loss) before income taxes | -25,511 | 11,957 |
Income tax (expense) benefit | 6,786 | -1,196 |
Net income (loss) | -18,725 | 10,761 |
Net income attributable to non-controlling interests | 544 | 9,621 |
Net income (loss) attributable to General Communication, Inc. | -19,269 | 1,140 |
Common Stock - Class A [Member] | ||
Other income (expense): | ||
Net income (loss) attributable to General Communication, Inc. | -17,723 | 1,052 |
Net income per common share | ||
Basic net income attributable to General Communication, Inc. common stockholders (USD per share) | ($0.49) | $0.03 |
Diluted net income attributable to General Communication, Inc. common stockholders (USD per share) | ($0.49) | $0.03 |
Common Stock - Class B [Member] | ||
Other income (expense): | ||
Net income (loss) attributable to General Communication, Inc. | ($1,546) | $88 |
Net income per common share | ||
Basic net income attributable to General Communication, Inc. common stockholders (USD per share) | ($0.49) | $0.03 |
Diluted net income attributable to General Communication, Inc. common stockholders (USD per share) | ($0.49) | $0.03 |
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 Interest [Member] | Common Stock - Class A [Member] | Common Stock - Class B [Member] |
In Thousands, unless otherwise specified | |||||||
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 | 10,761 | 1,140 | 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 | 100 | 2 | -2 | |||
Ending balances, total stockholders' equity at Mar. 31, 2014 | 457,830 | -249 | 27,835 | 118,130 | 297,431 | 12,012 | 2,671 |
Beginning balances, total stockholders' equity at Dec. 31, 2014 | 467,222 | -249 | 26,773 | 124,547 | 299,866 | 13,617 | 2,668 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | -18,725 | -19,269 | 544 | ||||
Common stock repurchases and retirements | -16,993 | -115 | -16,878 | ||||
Shares issued under stock option plan | 295 | 295 | |||||
Issuance of restricted stock awards | -2,965 | 2,965 | |||||
Share-based compensation expense | 2,749 | 2,749 | |||||
Investment by non-controlling interest | 3,209 | 3,209 | |||||
AWN non-controlling interest acquisition | -303,831 | -35,467 | -268,364 | ||||
Distribution to non-controlling interest | -765 | -765 | |||||
Other | -230 | -230 | 1 | -1 | |||
Ending balances, total stockholders' equity at Mar. 31, 2015 | $132,931 | ($249) | ($9,140) | $105,163 | $34,490 | $0 | $2,667 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income (loss) | ($18,725) | $10,761 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization expense | 45,235 | 42,352 |
Software impairment charge | 26,417 | 0 |
Deferred income tax expense (benefit) | -6,786 | 1,196 |
Share-based compensation expense | 2,801 | 1,778 |
Other noncash income and expense items | 6,938 | 1,664 |
Change in operating assets and liabilities | 18,837 | 7,151 |
Net cash provided by operating activities | 74,717 | 64,902 |
Cash flows from investing activities: | ||
Purchase of AWN non-controlling interest and ACS wireless assets | -285,392 | 0 |
Purchases of property and equipment | -49,332 | -28,174 |
Grant proceeds | 14,007 | 716 |
Note receivable issued to an equity method investee | -3,000 | 0 |
Purchases of other assets and intangible assets | -2,808 | -1,463 |
Purchase of investments | 0 | -15,000 |
Restricted cash | 10 | 2,672 |
Other | -2,167 | 49 |
Net cash used for investing activities | -328,682 | -41,200 |
Cash flows from financing activities: | ||
Borrowing on Amended Senior Credit Facility | 295,000 | 0 |
Issuance of Searchlight note payable and derivative stock appreciation rights | 75,000 | 0 |
Repayment of debt and capital lease obligations | -61,350 | -2,185 |
Purchase of treasury stock to be retired | -16,993 | -529 |
Payment of debt issuance costs | -5,853 | 0 |
Distribution to non-controlling interest | -4,932 | -12,500 |
Proceeds from stock option exercises | 295 | 157 |
Borrowing on other long-term debt | 203 | 0 |
Net cash (used for) provided by financing activities | 281,370 | -15,057 |
Net increase in cash and cash equivalents | 27,405 | 8,645 |
Cash and cash equivalents at beginning of period | 15,402 | 44,971 |
Cash and cash equivalents at end of period | $42,807 | $53,616 |
Business_and_Summary_of_Signif
Business and Summary of Significant Accounting Principles | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
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: | ||||||||||||||
• | Wireless telephone services and sale of wireless telephone handsets and accessories, | |||||||||||||
• | Video services, | |||||||||||||
• | Internet access services, | |||||||||||||
• | Local and long-distance telephone service, | |||||||||||||
• | 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 owned a two-third interest through February 2, 2015 when we purchased the remaining one-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. 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 February 2, 2015, we purchased Alaska Communications Systems Group, Inc.'s (“ACS”) interest in AWN ("AWN NCI Acquisition") and substantially all the assets of ACS and its affiliates related to ACS’s wireless business (“Acquired ACS Assets”) (collectively the "Wireless Acquisition"). Under the terms of the agreement, we paid ACS $293.2 million, excluding working capital adjustments and subject to possible post-closing adjustments, and agreed to terminate certain agreements related to the use of ACS network assets that were included as part of the original transaction that closed in July 2013. The Acquired ACS Assets include substantially all of ACS’s wireless subscriber assets, including subscriber contracts, and certain of ACS’s CDMA network assets, including fiber strands and associated cell site electronics and microwave facilities and associated electronics. We assumed from ACS post-closing liabilities of ACS and its affiliates under contracts assumed by us and liabilities with respect to the ownership by ACS of its equity interest in AWN to the extent accruing and related to the period after closing. All other liabilities were retained by ACS and its affiliates. | ||||||||||||||
We have accounted for the AWN NCI Acquisition as the acquisition of a non-controlling interest in accordance with Accounting Standards Codification ("ASC") 810, Consolidation, and the Acquired ACS Assets as the acquisition of assets that do not constitute a business in accordance with ASC 805-50, Business Combinations - Related Issues. Total consideration transferred to ACS in the transaction consisted of the cash payment, settlement of working capital, and the fair market value of certain rights to receive future capacity as part of the Wireless Acquisition agreement. The future capacity receivable assets transferred as consideration were adjusted to fair value as of the acquisition date resulting in a gain of $1.2 million recorded in our Consolidated Statements of Operations for the three months ended March 31, 2015. We allocated the total consideration transferred to ACS between the AWN NCI Acquisition and the Acquired ACS Assets based on the relative fair values of the assets and non-controlling interest received. | ||||||||||||||
The following table summarizes the allocation of total consideration transferred to ACS between the AWN NCI Acquisition and the Acquired ACS Assets (amounts in thousands): | ||||||||||||||
Total consideration transfered to ACS | $ | 304,838 | ||||||||||||
Allocation of consideration between wireless assets and non-controlling interest acquired: | ||||||||||||||
AWN non-controlling interest | $ | 303,831 | ||||||||||||
Property and equipment | 746 | |||||||||||||
Other intangible assets | 261 | |||||||||||||
Total consideration | $ | 304,838 | ||||||||||||
We have accounted for the AWN NCI Acquisition as an equity transaction, with the carrying amount of the non-controlling interest adjusted to reflect the change in ownership of AWN. The difference between the fair value of consideration paid and the carrying amount of the non-controlling interest has been recognized as additional paid-in capital in our Consolidated Statement of Stockholders' Equity. The impact of the AWN NCI Acquisition is summarized in the following table (amounts in thousands): | ||||||||||||||
Reduction of non-controlling interest | $ | 268,364 | ||||||||||||
Additional paid-in capital | 35,467 | |||||||||||||
Fair value of consideration paid for acquisition of equity interest | $ | 303,831 | ||||||||||||
Pursuant to the accounting guidance in ASC 805-50, we determined that the Acquired ACS Assets did not meet the criteria necessary to constitute a business combination and was therefore accounted for as an asset purchase. We recognized the assets acquired in our Consolidated Balance Sheets at their allocated cost on the day of acquisition. | ||||||||||||||
In conjunction with the Wireless Acquisition, we amended certain agreements related to the right to use ACS network assets. We adjusted the related right to use asset to fair value as of the acquisition date resulting in a loss of $3.8 million recorded in our Consolidated Statements of Operations for the three months ended March 31, 2015. | ||||||||||||||
(e) | Recently Issued Accounting Pronouncements | |||||||||||||
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under GAAP. The standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. In April 2015, the FASB tentatively decided to defer for one year the effective date of ASU 2014-09 for public and non public entities reporting under GAAP. The FASB also tentatively decided to permit entities to early adopt the standard. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. | ||||||||||||||
In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The update is in response to accounting complexity concerns, particularly from the asset management industry. ASU 2015-02 modifies the consolidation evaluation for reporting organizations that are required to determine whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including early adoption in an interim period. The adoption of this guidance is not expected to have a material effect on our financial position or results of operations. | ||||||||||||||
In April 2015, the FASB issued ASU No. 2015-03, Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. An entity should apply the new guidance on a retrospective basis. We expect to adopt this guidance when effective, and do not expect this guidance to have a significant impact on our financial position or results of operation, although it will change the financial statement classification of our debt issuance costs. | ||||||||||||||
(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 (Loss) per Common Share | |||||||||||||
We compute net income (loss) attributable to GCI per share of Class A and Class B common stock using the “two class” method. Therefore, basic net income (loss) per share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the dilutive net income (loss) 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 (loss) 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. | ||||||||||||||
We allocate undistributed earnings in periods of net income based on the contractual participation rights of Class A common shares, Class B common shares and participating securities as if the earnings for the period had been distributed. We do not allocate undistributed earnings to participating securities in periods in which we have a net loss. 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, including participating securities. 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 (loss) 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, | ||||||||||||||
2015 | 2014 | |||||||||||||
Class A | Class B | Class A | Class B | |||||||||||
Basic net income (loss) per share: | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) available to common stockholders | $ | (17,723 | ) | (1,546 | ) | $ | 1,052 | 88 | ||||||
Less: Undistributed income allocable to participating securities | — | — | (53 | ) | — | |||||||||
Undistributed income (loss) allocable to common stockholders | (17,723 | ) | (1,546 | ) | 999 | 88 | ||||||||
Denominator: | ||||||||||||||
Weighted average common shares outstanding | 36,217 | 3,159 | 36,081 | 3,163 | ||||||||||
Basic net income (loss) attributable to GCI common stockholders per common share | $ | (0.49 | ) | (0.49 | ) | $ | 0.03 | 0.03 | ||||||
Diluted net income per share: | ||||||||||||||
Numerator: | ||||||||||||||
Allocation of undistributed earnings (loss) for basic computation | $ | (17,723 | ) | (1,546 | ) | $ | 999 | 88 | ||||||
Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares | (1,546 | ) | — | 88 | — | |||||||||
Net income (loss) adjusted for allocation of undistributed earnings and effect of contracts that may be settled in cash or shares | $ | (19,269 | ) | (1,546 | ) | $ | 1,087 | 88 | ||||||
Denominator: | ||||||||||||||
Number of shares used in basic computation | 36,217 | 3,159 | 36,081 | 3,163 | ||||||||||
Conversion of Class B to Class A common shares outstanding | 3,159 | — | 3,163 | — | ||||||||||
Unexercised stock options | — | — | 118 | — | ||||||||||
Number of shares used in per share computation | 39,376 | 3,159 | 39,362 | 3,163 | ||||||||||
Diluted net income (loss) attributable to GCI common stockholders per common share | $ | (0.49 | ) | (0.49 | ) | $ | 0.03 | 0.03 | ||||||
Weighted average shares associated with outstanding securities for the three months ended March 31, 2015 and 2014, which have been excluded from the computations of diluted EPS, because the effect of including these securities would have been anti-dilutive, consist of the following (shares, in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
Derivative instruments that may be settled in cash or shares, the effect of which is anti-dilutive | 342 | — | ||||||||||||
Shares associated with anti-dilutive unexercised stock options | 118 | 33 | ||||||||||||
Share-based compensation that may be settled in cash or shares, the effect of which is anti-dilutive | 26 | 26 | ||||||||||||
Total excluded | 486 | 59 | ||||||||||||
(h) | Common Stock | |||||||||||||
Following are the changes in issued common stock for the three months ended March 31, 2015 and 2014 (shares, in thousands): | ||||||||||||||
Class A | Class B | |||||||||||||
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 withholding requirements | (24 | ) | — | |||||||||||
Balances at March 31, 2014 | 38,389 | 3,163 | ||||||||||||
Balances at December 31, 2014 | 37,998 | 3,159 | ||||||||||||
Class B shares converted to Class A | 1 | (1 | ) | |||||||||||
Shares issued upon stock option exercises | 38 | — | ||||||||||||
Share awards issued | 572 | — | ||||||||||||
Shares retired | (1,091 | ) | ||||||||||||
Shares acquired to settle minimum statutory tax withholding requirements | (60 | ) | — | |||||||||||
Balances at March 31, 2015 | 37,458 | 3,158 | ||||||||||||
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 and Retained Earnings on our Consolidated Balance Sheets. | ||||||||||||||
During the three months ended March 31, 2015, we repurchased 1.1 million shares of our Class A common stock under the stock buyback program at a cost of $16.1 million. We had no common stock repurchases during the three months ended March 31, 2014. The stock was constructively retired as of March 31, 2015. Under this program we are currently authorized to make up to $111.4 million of repurchases as of March 31, 2015. | ||||||||||||||
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 believe it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposure related to our customers. | ||||||||||||||
(j) | Derivative Financial Instruments | |||||||||||||
We account for our derivative instruments in accordance with ASC 815-10, Derivatives and Hedging. ASC 815-10 establishes accounting and reporting standards requiring that derivative instruments, including derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at its fair value. ASC 815-10 also requires that changes in the fair value of derivative instruments be recognized currently in results of operations unless specific hedge accounting criteria are met. We have not entered into any hedging activities to date. We recognize all derivative instruments as either assets or liabilities in our Consolidated Balance Sheets at their respective fair values. Our derivative instrument (as described in Note 5) include stock appreciation rights, all of which have been recorded as a liability at fair value, and will be revalued at each reporting date, with changes in the fair value of the instruments included in our Consolidated Statements of Operations as Derivative instrument unrealized loss. | ||||||||||||||
(k) | Guarantee Liabilities | |||||||||||||
We offer a device trade-in program, "Upgrade Now", which provides eligible customers a specified-price trade-in right to upgrade their device. Participating customers must have purchased a financed device using an Equipment Installment Plan ("EIP") from us and have a qualifying monthly wireless service plan with us. Upon qualifying for an Upgrade Now device trade-in, the customer's remaining EIP balance is settled provided they trade in their eligible used device in good working condition and purchase a new device from us on a new EIP. | ||||||||||||||
For customers who enroll in Upgrade Now, we defer the portion of equipment sales revenue which represents the estimated value of the trade-in right guarantee. The guarantee liabilities are valued based on various economic and customer behavioral assumptions, including the customer's estimated remaining EIP balance at trade-in, the expected fair value of the used handset at trade-in and the probability and timing of a trade-in. The fair value measurements used are considered Level 3 under the Fair Value Measurements framework. | ||||||||||||||
We assess facts and circumstances at each reporting date to determine if we need to adjust the guarantee liability. The recognition of subsequent adjustments to the guarantee liability as a result of these assessments are recorded as adjustments to revenue. When customers upgrade their devices, the difference between the trade-in credit to the customer and the fair value of the returned devices is recorded against the guarantee liabilities. | ||||||||||||||
(l) | Revenue Recognition | |||||||||||||
Wireless | ||||||||||||||
We offer new and existing wireless customers the option to participate in Upgrade Now, a program that that is described above in Note 1(k). Upgrade Now is a multiple-element arrangement typically consisting of the trade-in right, handset, and one month of wireless service. At the inception of the arrangement, revenue is allocated between the separate units of accounting based upon each components' relative selling price on a standalone basis. This is subject to the requirement that revenue recognized is limited to the amounts already received from the customer that are not contingent on the delivery of additional products or services to the customer in the future. | ||||||||||||||
We recognize the full amount of the trade-in right’s fair value (not an allocated value) as the guarantee liability and the remaining allocable consideration is allocated to the handset and wireless service. We recognize revenue for the entire amount of the EIP receivable at the time of sale, net of the fair value of the trade-in right guarantee and imputed interest. See Note 1(k) for more information on guarantee liabilities. | ||||||||||||||
Remote and Urban High Cost Support | ||||||||||||||
We recorded high cost support revenue under the Universal Service Fund (“USF”) program of $17.3 million and $16.5 million for the three months ended March 31, 2015 and 2014, respectively. At March 31, 2015, we have $47.1 million in high cost support accounts receivable. | ||||||||||||||
(m) | 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, imputed interest rate, purchase price allocations, deferred lease expense, asset retirement obligations, the accrual of cost of goods sold (exclusive of depreciation and amortization expense), depreciation, the derivative stock appreciation rights liability, guarantee liability, and the accrual of contingencies and litigation. Actual results could differ from those estimates. | ||||||||||||||
(n) | 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 Statements of Operations. The following are certain surcharges reported on a gross basis in our Consolidated Statements of Operations (amounts in thousands): | ||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
Surcharges reported gross | $ | 1,148 | 1,134 | |||||||||||
(o) | Reclassifications | |||||||||||||
Reclassifications have been made to the 2014 financial statements to make them comparable with the 2015 presentation. |
Recovered_Sheet1
Consolidated Statements of Cash Flows Supplemental Disclosures | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
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, | 2015 | 2014 | |||||
Decrease in accounts receivable, net | $ | 7,859 | 8,295 | ||||
Increase in prepaid expenses | (308 | ) | (3,581 | ) | |||
Decrease in inventories | 2,495 | 3,653 | |||||
Decrease in other current assets | 7 | 26 | |||||
Increase in other assets | (1,250 | ) | (142 | ) | |||
Decrease in accounts payable | (2,470 | ) | (8,594 | ) | |||
Increase (decrease) in deferred revenues | (2,256 | ) | 1,462 | ||||
Decrease in accrued payroll and payroll related obligations | (6,083 | ) | (8,476 | ) | |||
Increase in accrued liabilities | 3,891 | 1,015 | |||||
Increase in accrued interest | 17,611 | 14,363 | |||||
Decrease in subscriber deposits | (153 | ) | (140 | ) | |||
Decrease in long-term deferred revenue | (251 | ) | (1,375 | ) | |||
Increase (decrease) in components of other long-term liabilities | (255 | ) | 645 | ||||
Total change in operating assets and liabilities | $ | 18,837 | 7,151 | ||||
The following item is for the three months ended March 31, 2015 and 2014 (amounts in thousands): | |||||||
Net cash paid or received: | 2015 | 2014 | |||||
Interest paid including capitalized interest | $ | 3,382 | 4,412 | ||||
The following items are non-cash investing and financing activities for the three months ended March 31, 2015 and 2014 (amounts in thousands): | |||||||
2015 | 2014 | ||||||
Non-cash consideration for Wireless Acquisition | $ | 19,446 | — | ||||
Non-cash additions for purchases of property and equipment | $ | 17,817 | 9,779 | ||||
Asset retirement obligation additions to property and equipment | $ | 243 | 361 | ||||
Net capital lease obligation | $ | — | 9,385 | ||||
Distribution to non-controlling interest | $ | — | 4,167 | ||||
Deferred compensation distribution denominated in shares | $ | — | 617 | ||||
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill | ||||||
Goodwill increased $3.8 million during the three months ended March 31, 2015 as a result of an immaterial business combination. | |||||||
Amortization expense for amortizable intangible assets was as follows (amounts in thousands): | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2015 | 2014 | ||||||
Amortization expense | $ | 2,686 | 2,411 | ||||
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, | |||||||
2015 | $ | 9,897 | |||||
2016 | $ | 7,808 | |||||
2017 | $ | 5,510 | |||||
2018 | $ | 3,938 | |||||
2019 | $ | 3,068 | |||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt |
Amended Senior Credit Facility | |
On February 2, 2015, GCI Holdings, Inc. ("Holdings"), our wholly owned subsidiary, entered into a Fourth Amended and Restated Credit and Guarantee Agreement with MUFG Union Bank, N.A., Suntrust Bank, Bank of America, N.A., as documentation agent, and Credit Agricole Corporate and Investment Bank, as administrative agent ("Amended Senior Credit Facility"). The Amended Senior Credit Facility added a $275.0 million Term B loan to the existing Senior Credit Facility described in Note 6(c) of our December 31, 2014 annual report on Form 10-K. The interest rate under the Term B loan is London Interbank Offered Rate | |
("LIBOR") plus 3.75%, with a 1% LIBOR floor. The Term B loan requires principal payments of 0.25% of the original principal amount on the last day of each calendar quarter beginning June 30, 2015 with the full amount maturing on February 2, 2022 or December 3, 2020 if our Senior Notes due 2021 are not refinanced prior to such date. The interest rate, maturity, and other terms of the existing Senior Credit Facility as described in Note 6(c) of our December 31, 2014 annual report on Form 10-K did not change as a result of this amendment. | |
In connection with the Amended Senior Credit Facility, we paid loan fees and other expenses of $5.9 million that were deferred and are being amortized over the life of the Amended Senior Credit Facility. | |
Searchlight Note | |
On February 2, 2015, we sold an unsecured promissory note to Searchlight ALX, L.P. ("Searchlight") in the principal amount of $75.0 million that will mature on February 2, 2023 and bears interest at a rate of 7.5% per year ("Searchlight Note"). We may not prepay the Searchlight Note prior to February 2, 2019. | |
In conjunction with the Searchlight Note, we entered into a stock appreciation rights agreement pursuant to which we issued to Searchlight three million stock appreciation rights which entitles Searchlight to receive, upon exercise, an amount payable at our election in either cash or shares of GCI's Class A common stock equal in value to the excess of the fair market value of a share of GCI Class A common stock on the date of exercise over the price of $13.00. We allocated the $75.0 million in total proceeds received to the stock appreciation rights based on the fair value of the stock appreciation rights on the day of issuance with the remainder allocated to the Searchlight Note. The allocation resulted in a $21.7 million discount for the Searchlight Note that will be amortized over the term of the note using the effective interest method. Please see note 5 for additional information on the stock appreciation rights. | |
We have the option to pay the annual interest obligation on the Searchlight Note in cash or by capitalizing such interest and adding it to the outstanding principal amount of the note. If we elect to capitalize interest in a given year, we are also required to issue additional stock appreciation rights in the amount of four hundredths of a stock appreciation right for each dollar of interest being capitalized. |
Fair_Value_Measurements_and_De
Fair Value Measurements and Derivative Instruments | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value Measurements and Derivative Instruments | Fair Value Measurements and Derivative Instruments | ||||||||||||
Recurring Fair Value Measurements | |||||||||||||
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014 are as follows (amounts in thousands): | |||||||||||||
31-Mar-15 | Level 1 (1) | Level 2 (2) | Level 3 (3) | Total | |||||||||
Assets: | |||||||||||||
Deferred compensation plan assets (mutual funds) | $ | 1,899 | — | — | 1,899 | ||||||||
Liabilities: | |||||||||||||
Derivative stock appreciation rights | $ | — | — | 23,780 | 23,780 | ||||||||
31-Dec-14 | Level 1 (1) | Level 2 (2) | Level 3 (3) | Total | |||||||||
Assets: | |||||||||||||
Deferred compensation plan assets (mutual funds) | $ | 2,068 | — | — | 2,068 | ||||||||
(1) Quoted prices in active markets for identical assets or liabilities | |||||||||||||
(2) Observable inputs other than quoted prices in active markets for identical assets and liabilities | |||||||||||||
(3) Inputs that are generally unobservable and not corroborated by market data | |||||||||||||
The fair value of our mutual funds is determined using quoted market prices in active markets utilizing market observable inputs. | |||||||||||||
The fair value of our derivative stock appreciation rights was determined using a lattice-based valuation model (see the section "Derivative Financial Instruments" below for more information). | |||||||||||||
Current and Long-Term Debt | |||||||||||||
The carrying amounts and approximate fair values of our current and long-term debt, excluding capital leases, at March 31, 2015 and December 31, 2014 are as follows (amounts in thousands): | |||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Current and long-term debt | $ | 1,326,172 | 1,376,834 | 1,036,678 | 1,055,952 | ||||||||
The following methods and assumptions were used to estimate fair values: | |||||||||||||
• | The fair values of the 6.75% Senior Notes due 2021 and the 8.63% Senior Notes due 2019 both issued by GCI, Inc., our wholly owned subsidiary, are based upon quoted market prices for the same or similar issues (Level 2). | ||||||||||||
• | The fair value of our Searchlight Note Payable is based on the current rates offered to us for similar remaining maturities (Level 3). | ||||||||||||
• | The fair value of our Amended Senior Credit Facility and Wells Fargo note payable are estimated to approximate their carrying value because the instruments are subject to variable interest rates (Level 2). | ||||||||||||
Derivative Financial Instruments | |||||||||||||
In connection with the $75.0 million unsecured promissory note issued to Searchlight on February 2, 2015, we entered into a stock appreciation rights agreement pursuant to which we issued to Searchlight three million stock appreciation rights. Each stock appreciation right entitles Searchlight to receive, upon exercise, an amount payable at our election in either cash or shares of GCI's Class A common stock equal in value to the excess of the fair market value of a share of GCI Class A common stock on the date of exercise over the price of $13.00. The instruments are exercisable on the fourth anniversary of the grant date and will expire eight years from the date of grant. We have determined that the stock appreciation rights are required to be separately accounted for as derivative instruments and subject to fair value liability accounting under ASC 815-10. | |||||||||||||
We use a lattice based valuation model to value the stock appreciation rights liability at each reporting date. The model incorporates transaction details such as our stock price, instrument term and settlement provisions, as well as highly complex and subjective assumptions about volatility, risk-free interest rates, issuer behavior and holder behavior. The lattice model uses highly subjective assumptions and the use of other reasonable assumptions could provide different results. | |||||||||||||
We revalue our derivative liability at each reporting period and recognize gains or losses in our Consolidated Statements of Operations attributable to the change in the fair value of the instruments. The stock appreciation rights liability is included within Other Liabilities on our Consolidated Balance Sheets and are classified as Level 3 within the fair value hierarchy. | |||||||||||||
The following table summarizes the changes in fair value of all financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2015: | |||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||
Derivative Stock Appreciation Rights | |||||||||||||
Balance, January 1, 2015 | $ | — | |||||||||||
Issuance | 21,660 | ||||||||||||
Fair value adjustment at end of period, included in Other Income (Expense) | 2,120 | ||||||||||||
Balance, March 31, 2015 | $ | 23,780 | |||||||||||
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stockholders’ Equity | Stockholders’ Equity | ||||||||||||
Share-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 not issued any new options since 2010 when we transitioned to issuing restricted stock awards. We have 1.9 million shares available for grant under the Stock Option Plan at March 31, 2015. | |||||||||||||
A summary of option activity under the Stock Option Plan as of March 31, 2015 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, 2015 | 308 | $ | 6.86 | ||||||||||
Exercised | (38 | ) | $ | 7.77 | |||||||||
Outstanding at March 31, 2015 | 270 | $ | 6.74 | 3.9 years | $ | 2,438 | |||||||
Exercisable at March 31, 2015 | 270 | $ | 6.74 | 3.9 years | $ | 2,438 | |||||||
A summary of nonvested restricted stock award activity under the Stock Option Plan as of March 31, 2015 and changes during the period then ended is presented below: | |||||||||||||
Shares (in thousands) | Weighted | ||||||||||||
Average | |||||||||||||
Grant Date | |||||||||||||
Fair Value | |||||||||||||
Nonvested at January 1, 2015 | 1,744 | $ | 9.11 | ||||||||||
Granted | 572 | $ | 14.56 | ||||||||||
Vested | (207 | ) | $ | 8.05 | |||||||||
Forfeited | (2 | ) | $ | 14.56 | |||||||||
Nonvested at March 31, 2015 | 2,107 | ||||||||||||
The weighted average grant date fair value of awards granted during the three months ended March 31, 2015 and 2014, were $14.56 and $9.81, respectively. We have recorded share-based compensation expense of $2.8 million and $1.8 million for the three months ended March 31, 2015 and 2014, respectively. Share-based compensation expense is classified as Selling, General and Administrative Expense in our Consolidated Statements of Operations. Unrecognized share-based compensation expense was $15.4 million relating to 2.1 million restricted stock awards as of March 31, 2015. We expect to recognize share-based compensation expense over a weighted average period of 2.0 years for restricted stock awards. |
Segments
Segments | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
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 customers, businesses, governmental entities and 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 net interest expense, income taxes, depreciation and amortization expense, software impairment charge, derivative instrument unrealized loss, share-based compensation expense, accretion expense, loss attributable to non-controlling interest resulting from New Markets Tax Credit ("NMTC") transactions, and other non-cash adjustments, plus imputed interest on financed devices (“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, 2015 and 2014 follows (amounts in thousands): | ||||||||||
Three Months Ended | ||||||||||
Wireless | Wireline | Total Reportable Segments | ||||||||
March 31, 2015 | ||||||||||
Revenues | $ | 59,204 | 171,885 | 231,089 | ||||||
Adjusted EBITDA | $ | 37,387 | 37,916 | 75,303 | ||||||
March 31, 2014 | ||||||||||
Revenues | $ | 62,517 | 153,766 | 216,283 | ||||||
Adjusted EBITDA | $ | 38,022 | 36,775 | 74,797 | ||||||
A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands): | ||||||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Reportable segment Adjusted EBITDA | $ | 75,303 | 74,797 | |||||||
Less depreciation and amortization | (45,235 | ) | (42,352 | ) | ||||||
expense | ||||||||||
Less software impairment charge | (26,417 | ) | — | |||||||
Less share-based compensation | (2,801 | ) | (1,778 | ) | ||||||
expense | ||||||||||
Less accretion expense | (450 | ) | (301 | ) | ||||||
Other | 341 | (101 | ) | |||||||
Consolidated operating income | 741 | 30,265 | ||||||||
Less other expense, net | (26,252 | ) | (18,308 | ) | ||||||
Consolidated income (loss) before | $ | (25,511 | ) | 11,957 | ||||||
income tax expense | ||||||||||
Related_Party_Transaction
Related Party Transaction | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party Transaction |
ACS was a related party for financial statement reporting purposes through the date of the Wireless Acquisition on February 2, 2015. Included in our related party disclosures were ACS' provision to us of local service lines and network capacity in locations where we do not have our own facilities, our provision to ACS of wholesale wireless services for their use of our network to sell services to their respective retail customers, and our receipt of ACS' high cost support from USF for its wireless customers. For the period January 1, 2015 to February 2, 2015, we paid ACS $6.2 million and received $8.1 million in payments from ACS. For the three months ended March 31, 2014, we paid $16.2 million and received $10.3 million in payments from 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, 2015 | |
Noncontrolling Interest [Abstract] | |
Variable Interest Entities | Variable Interest Entities |
New Markets Tax Credit Entities | |
We have entered into several arrangements under the NMTC program with US Bancorp to help fund a $59.3 million project that extended terrestrial broadband service for the first time to rural Northwestern Alaska communities via a high capacity hybrid fiber optic and microwave network ("TERRA-NW"). 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, our wholly owned subsidiary, net of syndication and arrangement fees, were restricted for use on TERRA-NW. We completed construction of TERRA-NW and placed the final phase into service in 2014. | |
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, 2015. 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, 2015 and December 31, 2014. | |
Equity Method Investment | |
We own a 40.8% interest in a next generation carrier-class communications services firm that specializes in serving the energy exploration and production, oilfield service and midstream industries. We account for our investment using the equity method. Due to a decrease in oil prices, additional financing was needed for the company to maintain its business plan. In March 2015, the existing owners provided financial support in the form of a loan of which our portion is $3.0 million. We determined that the additional financing provided to the company was a reconsideration event under ASC 810 and have subsequently determined that the entity is a VIE due to insufficient equity to finance its operations as a result of the decline in oil prices. | |
We concluded that the company's board has the power to direct the significant activities of the entity. The board is comprised of five members of which we may choose two of the board members. As we do not control the board, we concluded that we do not have the power to direct the significant activities of the entity and are not the primary beneficiary. Our investment of $13.1 million as of March 31, 2015 is recorded in Other Assets on our Consolidated Balance Sheets. We also have a note receivable of $3.0 million as of March 31, 2015 that is recorded in Other Current Assets on our Consolidated Balance Sheets. We do not have a contractual obligation to provide additional financing. Our maximum exposure to loss is the combination of the investment and note receivable. |
Software_Impairment_Notes
Software Impairment (Notes) | 3 Months Ended |
Mar. 31, 2015 | |
Research and Development [Abstract] | |
Software Impairment | Software Impairment |
During the years ended December 31, 2013 and 2014, we internally developed computer software in our Wireline segment to replace our wireless, Internet, video, local service, and long distance customer billing systems. During the three months ended March 31, 2015, we completed a detailed assessment of our progress to date and determined it is no longer probable that the computer software being developed will be completed and placed in service. Our assessment concluded that the cost of continuing the development will be much higher than originally estimated, and the timing and scope risks are substantial. We have begun a search for an established packaged customer billing solution and expect to identify a replacement in the third quarter of 2015. We identified development work, hardware, and software recorded as Construction in Progress through March 31, 2015, that may be applicable to our replacement customer billing solution, future internally developed software, and other system needs and therefore should remain capital assets. We consider the remaining capital expenditures for this billing system to have a fair value of $0 and have taken an impairment charge of $19.8 million during the three months ended March 31, 2015, by recording an expense which is included in Software Impairment Charge on our Consolidated Statements of Operations. | |
During the three months ended March 31, 2015, we reassessed our plans for our internally developed machine-to-machine billing system in our Wireline segment, and decided to no longer market this system to third parties. Accordingly we recognized an impairment of $6.6 million during the three months ended March 31, 2015, by recording an expense which is included in Software Impairment Charge on our Consolidated Statements of Operations. |
Subsequent_Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event |
On April 1 2015, we closed on the issuance of $450.0 million of new 6.875% Senior Notes due 2025 at an issue price of 99.105% issued by our wholly owned subsidiary, GCI, Inc. ("2025 Notes"). The net proceeds of the offering will be used to retire our existing 2019 Notes (see Note 6(b) of our December 31, 2014 annual report on Form 10-K). We paid closing costs totaling $7.7 million in connection with the offering, which will be recorded as deferred loan costs and will be amortized over the term of the 2025 Notes. We expect to record a $27.7 million loss on extinguishment of debt on our Consolidated Statements of Operations in the second quarter of 2015. |
Business_and_Summary_of_Signif1
Business and Summary of Significant Accounting Principles (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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 owned a two-third interest through February 2, 2015 when we purchased the remaining one-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. 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 | |
Acquisitions | We have accounted for the AWN NCI Acquisition as the acquisition of a non-controlling interest in accordance with Accounting Standards Codification ("ASC") 810, Consolidation, and the Acquired ACS Assets as the acquisition of assets that do not constitute a business in accordance with ASC 805-50, Business Combinations - Related Issues. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements |
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers. This new standard provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under GAAP. The standard is effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. In April 2015, the FASB tentatively decided to defer for one year the effective date of ASU 2014-09 for public and non public entities reporting under GAAP. The FASB also tentatively decided to permit entities to early adopt the standard. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. | |
In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The update is in response to accounting complexity concerns, particularly from the asset management industry. ASU 2015-02 modifies the consolidation evaluation for reporting organizations that are required to determine whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including early adoption in an interim period. The adoption of this guidance is not expected to have a material effect on our financial position or results of operations. | |
In April 2015, the FASB issued ASU No. 2015-03, Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. For public business entities, this update is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. An entity should apply the new guidance on a retrospective basis. We expect to adopt this guidance when effective, and do not expect this guidance to have a significant impact on our financial position or results of operation, although it will change the financial statement classification of our debt issuance costs. | |
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 (Loss) per Common Share |
We compute net income (loss) attributable to GCI per share of Class A and Class B common stock using the “two class” method. Therefore, basic net income (loss) per share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the dilutive net income (loss) 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 (loss) 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. | |
We allocate undistributed earnings in periods of net income based on the contractual participation rights of Class A common shares, Class B common shares and participating securities as if the earnings for the period had been distributed. We do not allocate undistributed earnings to participating securities in periods in which we have a net loss. 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, including participating securities. 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 believe it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposure related to our customers. | |
Derivative Financial Instruments | Derivative Financial Instruments |
We account for our derivative instruments in accordance with ASC 815-10, Derivatives and Hedging. ASC 815-10 establishes accounting and reporting standards requiring that derivative instruments, including derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at its fair value. ASC 815-10 also requires that changes in the fair value of derivative instruments be recognized currently in results of operations unless specific hedge accounting criteria are met. We have not entered into any hedging activities to date. We recognize all derivative instruments as either assets or liabilities in our Consolidated Balance Sheets at their respective fair values. Our derivative instrument (as described in Note 5) include stock appreciation rights, all of which have been recorded as a liability at fair value, and will be revalued at each reporting date, with changes in the fair value of the instruments included in our Consolidated Statements of Operations as Derivative instrument unrealized loss. | |
Guarantee Liabilities | Guarantee Liabilities |
We offer a device trade-in program, "Upgrade Now", which provides eligible customers a specified-price trade-in right to upgrade their device. Participating customers must have purchased a financed device using an Equipment Installment Plan ("EIP") from us and have a qualifying monthly wireless service plan with us. Upon qualifying for an Upgrade Now device trade-in, the customer's remaining EIP balance is settled provided they trade in their eligible used device in good working condition and purchase a new device from us on a new EIP. | |
For customers who enroll in Upgrade Now, we defer the portion of equipment sales revenue which represents the estimated value of the trade-in right guarantee. The guarantee liabilities are valued based on various economic and customer behavioral assumptions, including the customer's estimated remaining EIP balance at trade-in, the expected fair value of the used handset at trade-in and the probability and timing of a trade-in. The fair value measurements used are considered Level 3 under the Fair Value Measurements framework. | |
We assess facts and circumstances at each reporting date to determine if we need to adjust the guarantee liability. The recognition of subsequent adjustments to the guarantee liability as a result of these assessments are recorded as adjustments to revenue. When customers upgrade their devices, the difference between the trade-in credit to the customer and the fair value of the returned devices is recorded against the guarantee liabilities. | |
Revenue Recognition | Revenue Recognition |
Wireless | |
We offer new and existing wireless customers the option to participate in Upgrade Now, a program that that is described above in Note 1(k). Upgrade Now is a multiple-element arrangement typically consisting of the trade-in right, handset, and one month of wireless service. At the inception of the arrangement, revenue is allocated between the separate units of accounting based upon each components' relative selling price on a standalone basis. This is subject to the requirement that revenue recognized is limited to the amounts already received from the customer that are not contingent on the delivery of additional products or services to the customer in the future. | |
We recognize the full amount of the trade-in right’s fair value (not an allocated value) as the guarantee liability and the remaining allocable consideration is allocated to the handset and wireless service. We recognize revenue for the entire amount of the EIP receivable at the time of sale, net of the fair value of the trade-in right guarantee and imputed interest. See Note 1(k) for more information on guarantee liabilities. | |
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, imputed interest rate, purchase price allocations, deferred lease expense, asset retirement obligations, the accrual of cost of goods sold (exclusive of depreciation and amortization expense), depreciation, the derivative stock appreciation rights liability, guarantee liability, 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 Statements of Operations. | |
Reclassifications | Reclassifications |
Reclassifications have been made to the 2014 financial statements to make them comparable with the 2015 presentation. |
Business_and_Summary_of_Signif2
Business and Summary of Significant Accounting Principles (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of total consideration transferred to ACS between the AWN NCI Acquisition and the Acquired ACS Assets (amounts in thousands): | |||||||||||||
Total consideration transfered to ACS | $ | 304,838 | ||||||||||||
Allocation of consideration between wireless assets and non-controlling interest acquired: | ||||||||||||||
AWN non-controlling interest | $ | 303,831 | ||||||||||||
Property and equipment | 746 | |||||||||||||
Other intangible assets | 261 | |||||||||||||
Total consideration | $ | 304,838 | ||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The impact of the AWN NCI Acquisition is summarized in the following table (amounts in thousands): | |||||||||||||
Reduction of non-controlling interest | $ | 268,364 | ||||||||||||
Additional paid-in capital | 35,467 | |||||||||||||
Fair value of consideration paid for acquisition of equity interest | $ | 303,831 | ||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | Earnings (loss) 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, | ||||||||||||||
2015 | 2014 | |||||||||||||
Class A | Class B | Class A | Class B | |||||||||||
Basic net income (loss) per share: | ||||||||||||||
Numerator: | ||||||||||||||
Net income (loss) available to common stockholders | $ | (17,723 | ) | (1,546 | ) | $ | 1,052 | 88 | ||||||
Less: Undistributed income allocable to participating securities | — | — | (53 | ) | — | |||||||||
Undistributed income (loss) allocable to common stockholders | (17,723 | ) | (1,546 | ) | 999 | 88 | ||||||||
Denominator: | ||||||||||||||
Weighted average common shares outstanding | 36,217 | 3,159 | 36,081 | 3,163 | ||||||||||
Basic net income (loss) attributable to GCI common stockholders per common share | $ | (0.49 | ) | (0.49 | ) | $ | 0.03 | 0.03 | ||||||
Diluted net income per share: | ||||||||||||||
Numerator: | ||||||||||||||
Allocation of undistributed earnings (loss) for basic computation | $ | (17,723 | ) | (1,546 | ) | $ | 999 | 88 | ||||||
Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares | (1,546 | ) | — | 88 | — | |||||||||
Net income (loss) adjusted for allocation of undistributed earnings and effect of contracts that may be settled in cash or shares | $ | (19,269 | ) | (1,546 | ) | $ | 1,087 | 88 | ||||||
Denominator: | ||||||||||||||
Number of shares used in basic computation | 36,217 | 3,159 | 36,081 | 3,163 | ||||||||||
Conversion of Class B to Class A common shares outstanding | 3,159 | — | 3,163 | — | ||||||||||
Unexercised stock options | — | — | 118 | — | ||||||||||
Number of shares used in per share computation | 39,376 | 3,159 | 39,362 | 3,163 | ||||||||||
Diluted net income (loss) attributable to GCI common stockholders per common share | $ | (0.49 | ) | (0.49 | ) | $ | 0.03 | 0.03 | ||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Weighted average shares associated with outstanding securities for the three months ended March 31, 2015 and 2014, which have been excluded from the computations of diluted EPS, because the effect of including these securities would have been anti-dilutive, consist of the following (shares, in thousands): | |||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
Derivative instruments that may be settled in cash or shares, the effect of which is anti-dilutive | 342 | — | ||||||||||||
Shares associated with anti-dilutive unexercised stock options | 118 | 33 | ||||||||||||
Share-based compensation that may be settled in cash or shares, the effect of which is anti-dilutive | 26 | 26 | ||||||||||||
Total excluded | 486 | 59 | ||||||||||||
Schedule of Stock by Class | Following are the changes in issued common stock for the three months ended March 31, 2015 and 2014 (shares, in thousands): | |||||||||||||
Class A | Class B | |||||||||||||
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 withholding requirements | (24 | ) | — | |||||||||||
Balances at March 31, 2014 | 38,389 | 3,163 | ||||||||||||
Balances at December 31, 2014 | 37,998 | 3,159 | ||||||||||||
Class B shares converted to Class A | 1 | (1 | ) | |||||||||||
Shares issued upon stock option exercises | 38 | — | ||||||||||||
Share awards issued | 572 | — | ||||||||||||
Shares retired | (1,091 | ) | ||||||||||||
Shares acquired to settle minimum statutory tax withholding requirements | (60 | ) | — | |||||||||||
Balances at March 31, 2015 | 37,458 | 3,158 | ||||||||||||
Excise And Sales Taxes | The following are certain surcharges reported on a gross basis in our Consolidated Statements of Operations (amounts in thousands): | |||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2015 | 2014 | |||||||||||||
Surcharges reported gross | $ | 1,148 | 1,134 | |||||||||||
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows Supplemental Disclosures (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
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, | 2015 | 2014 | |||||
Decrease in accounts receivable, net | $ | 7,859 | 8,295 | ||||
Increase in prepaid expenses | (308 | ) | (3,581 | ) | |||
Decrease in inventories | 2,495 | 3,653 | |||||
Decrease in other current assets | 7 | 26 | |||||
Increase in other assets | (1,250 | ) | (142 | ) | |||
Decrease in accounts payable | (2,470 | ) | (8,594 | ) | |||
Increase (decrease) in deferred revenues | (2,256 | ) | 1,462 | ||||
Decrease in accrued payroll and payroll related obligations | (6,083 | ) | (8,476 | ) | |||
Increase in accrued liabilities | 3,891 | 1,015 | |||||
Increase in accrued interest | 17,611 | 14,363 | |||||
Decrease in subscriber deposits | (153 | ) | (140 | ) | |||
Decrease in long-term deferred revenue | (251 | ) | (1,375 | ) | |||
Increase (decrease) in components of other long-term liabilities | (255 | ) | 645 | ||||
Total change in operating assets and liabilities | $ | 18,837 | 7,151 | ||||
Cash Payments for Interest | The following item is for the three months ended March 31, 2015 and 2014 (amounts in thousands): | ||||||
Net cash paid or received: | 2015 | 2014 | |||||
Interest paid including capitalized interest | $ | 3,382 | 4,412 | ||||
Schedule of Other Significant Noncash Transactions | The following items are non-cash investing and financing activities for the three months ended March 31, 2015 and 2014 (amounts in thousands): | ||||||
2015 | 2014 | ||||||
Non-cash consideration for Wireless Acquisition | $ | 19,446 | — | ||||
Non-cash additions for purchases of property and equipment | $ | 17,817 | 9,779 | ||||
Asset retirement obligation additions to property and equipment | $ | 243 | 361 | ||||
Net capital lease obligation | $ | — | 9,385 | ||||
Distribution to non-controlling interest | $ | — | 4,167 | ||||
Deferred compensation distribution denominated in shares | $ | — | 617 | ||||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
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, | |||||||
2015 | 2014 | ||||||
Amortization expense | $ | 2,686 | 2,411 | ||||
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, | |||||||
2015 | $ | 9,897 | |||||
2016 | $ | 7,808 | |||||
2017 | $ | 5,510 | |||||
2018 | $ | 3,938 | |||||
2019 | $ | 3,068 | |||||
Fair_Value_Measurements_and_De1
Fair Value Measurements and Derivative Instruments (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value Assets And Liabilities Measured On Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014 are as follows (amounts in thousands): | ||||||||||||
31-Mar-15 | Level 1 (1) | Level 2 (2) | Level 3 (3) | Total | |||||||||
Assets: | |||||||||||||
Deferred compensation plan assets (mutual funds) | $ | 1,899 | — | — | 1,899 | ||||||||
Liabilities: | |||||||||||||
Derivative stock appreciation rights | $ | — | — | 23,780 | 23,780 | ||||||||
31-Dec-14 | Level 1 (1) | Level 2 (2) | Level 3 (3) | Total | |||||||||
Assets: | |||||||||||||
Deferred compensation plan assets (mutual funds) | $ | 2,068 | — | — | 2,068 | ||||||||
(1) Quoted prices in active markets for identical assets or liabilities | |||||||||||||
(2) Observable inputs other than quoted prices in active markets for identical assets and liabilities | |||||||||||||
(3) Inputs that are generally unobservable and not corroborated by market data | |||||||||||||
Fair Value, by Balance Sheet Grouping | The carrying amounts and approximate fair values of our current and long-term debt, excluding capital leases, at March 31, 2015 and December 31, 2014 are as follows (amounts in thousands): | ||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Current and long-term debt | $ | 1,326,172 | 1,376,834 | 1,036,678 | 1,055,952 | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the changes in fair value of all financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2015: | ||||||||||||
Fair Value Measurement Using Level 3 Inputs | |||||||||||||
Derivative Stock Appreciation Rights | |||||||||||||
Balance, January 1, 2015 | $ | — | |||||||||||
Issuance | 21,660 | ||||||||||||
Fair value adjustment at end of period, included in Other Income (Expense) | 2,120 | ||||||||||||
Balance, March 31, 2015 | $ | 23,780 | |||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Schedule of Option Activity | A summary of option activity under the Stock Option Plan as of March 31, 2015 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, 2015 | 308 | $ | 6.86 | ||||||||||
Exercised | (38 | ) | $ | 7.77 | |||||||||
Outstanding at March 31, 2015 | 270 | $ | 6.74 | 3.9 years | $ | 2,438 | |||||||
Exercisable at March 31, 2015 | 270 | $ | 6.74 | 3.9 years | $ | 2,438 | |||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | A summary of nonvested restricted stock award activity under the Stock Option Plan as of March 31, 2015 and changes during the period then ended is presented below: | ||||||||||||
Shares (in thousands) | Weighted | ||||||||||||
Average | |||||||||||||
Grant Date | |||||||||||||
Fair Value | |||||||||||||
Nonvested at January 1, 2015 | 1,744 | $ | 9.11 | ||||||||||
Granted | 572 | $ | 14.56 | ||||||||||
Vested | (207 | ) | $ | 8.05 | |||||||||
Forfeited | (2 | ) | $ | 14.56 | |||||||||
Nonvested at March 31, 2015 | 2,107 | ||||||||||||
Segments_Tables
Segments (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Segment Reporting [Abstract] | ||||||||||
Schedule of Segment Reporting Information, by Segment | Summarized financial information for our reportable segments for the three months ended March 31, 2015 and 2014 follows (amounts in thousands): | |||||||||
Three Months Ended | ||||||||||
Wireless | Wireline | Total Reportable Segments | ||||||||
March 31, 2015 | ||||||||||
Revenues | $ | 59,204 | 171,885 | 231,089 | ||||||
Adjusted EBITDA | $ | 37,387 | 37,916 | 75,303 | ||||||
March 31, 2014 | ||||||||||
Revenues | $ | 62,517 | 153,766 | 216,283 | ||||||
Adjusted EBITDA | $ | 38,022 | 36,775 | 74,797 | ||||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands): | |||||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Reportable segment Adjusted EBITDA | $ | 75,303 | 74,797 | |||||||
Less depreciation and amortization | (45,235 | ) | (42,352 | ) | ||||||
expense | ||||||||||
Less software impairment charge | (26,417 | ) | — | |||||||
Less share-based compensation | (2,801 | ) | (1,778 | ) | ||||||
expense | ||||||||||
Less accretion expense | (450 | ) | (301 | ) | ||||||
Other | 341 | (101 | ) | |||||||
Consolidated operating income | 741 | 30,265 | ||||||||
Less other expense, net | (26,252 | ) | (18,308 | ) | ||||||
Consolidated income (loss) before | $ | (25,511 | ) | 11,957 | ||||||
income tax expense | ||||||||||
Business_and_Summary_of_Signif3
Business and Summary of Significant Accounting Principles (Narratives) (Details) (USD $) | 3 Months Ended | |||
Share data in Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Feb. 02, 2015 |
entity | ||||
Business | ||||
Year founded | 1979 | |||
Principles of Consolidation | ||||
Number of VIEs | 4 | |||
Common Stock | ||||
Stock repurchased during period, value | $16,993,000 | $529,000 | ||
Accounts Receivable and Allowance for Doubtful Receivables | ||||
Period past due for write-off of trade accounts receivable | 120 days | |||
Revenue Recognition | ||||
Revenues | 231,089,000 | 216,283,000 | ||
Receivables | 198,721,000 | 212,441,000 | ||
Total High Cost Support Program [Member] | ||||
Revenue Recognition | ||||
Revenues | 17,300,000 | 16,500,000 | ||
Receivables | 47,100,000 | |||
Common Stock - Class A [Member] | ||||
Common Stock | ||||
Stock repurchased during period, shares | 1,091 | 26 | ||
Stock repurchased during period, value | 16,878,000 | 529,000 | ||
Stock Buyback Program [Member] | ||||
Common Stock | ||||
Authorized amount, repurchase of stock | 5,000,000 | |||
Stock repurchase program, remaining value authorized to be repurchased | 111,400,000 | |||
Stock Buyback Program [Member] | Common Stock - Class A [Member] | ||||
Common Stock | ||||
Stock repurchased during period, shares | 1,100 | 0 | ||
Stock repurchased during period, value | $16,100,000 | |||
ACS Wireless [Member] | ||||
Principles of Consolidation | ||||
Voting interests acquired | 33.33% | |||
Interests acquired from noncontrolling interest | 66.67% |
Business_and_Summary_of_Signif4
Business and Summary of Significant Accounting Principles (Business Acquisition) (Details) (USD $) | 0 Months Ended | 3 Months Ended |
Feb. 02, 2015 | Mar. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Total consideration transfered to ACS | $304,838,000 | |
AWN non-controlling interest | 303,831,000 | 303,831,000 |
Property and equipment | 746,000 | |
Other intangible assets | 261,000 | |
Noncontrolling Interest [Member] | ||
Property, Plant and Equipment [Line Items] | ||
AWN non-controlling interest | 268,364,000 | 268,364,000 |
Additional Paid-in Capital [Member] | ||
Property, Plant and Equipment [Line Items] | ||
AWN non-controlling interest | 35,467,000 | 35,467,000 |
Rights to Receive Future Capacity [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Fair value adjustment to assets | 1,200,000 | |
Rights to Use Capacity [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Impairment of intangible assets | 3,800,000 | |
ACS Wireless [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Consideration paid | $293,200,000 |
Business_and_Summary_of_Signif5
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, 2015 | Mar. 31, 2014 |
Class of Stock [Line Items] | ||
Net income (loss) available to common stockholders | ($19,269) | $1,140 |
Common Stock - Class A [Member] | ||
Class of Stock [Line Items] | ||
Net income (loss) available to common stockholders | -17,723 | 1,052 |
Less: Undistributed income allocable to participating securities | 0 | -53 |
Undistributed income (loss) allocable to common stockholders | -17,723 | 999 |
Weighted average common shares outstanding | 36,217 | 36,081 |
Basic net income (loss) attributable to GCI common stockholders per common share | ($0.49) | $0.03 |
Common Stock - Class B [Member] | ||
Class of Stock [Line Items] | ||
Net income (loss) available to common stockholders | -1,546 | 88 |
Less: Undistributed income allocable to participating securities | 0 | 0 |
Undistributed income (loss) allocable to common stockholders | ($1,546) | $88 |
Weighted average common shares outstanding | 3,159 | 3,163 |
Basic net income (loss) attributable to GCI common stockholders per common share | ($0.49) | $0.03 |
Business_and_Summary_of_Signif6
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, 2015 | Mar. 31, 2014 |
Common Stock - Class A [Member] | ||
Class of Stock [Line Items] | ||
Allocation of undistributed earnings (loss) for basic computation | ($17,723) | $999 |
Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares | -1,546 | 88 |
Net income (loss) adjusted for allocation of undistributed earnings and effect of contracts that may be settled in cash or shares | -19,269 | 1,087 |
Number of shares used in basic computation | 36,217 | 36,081 |
Conversion of Class B to Class A common shares outstanding | 3,159 | 3,163 |
Unexercised stock options | 0 | 118 |
Number of shares used in per share computation | 39,376 | 39,362 |
Diluted net income (loss) attributable to GCI common stockholders per common share | ($0.49) | $0.03 |
Common Stock - Class B [Member] | ||
Class of Stock [Line Items] | ||
Allocation of undistributed earnings (loss) for basic computation | -1,546 | 88 |
Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares | 0 | 0 |
Net income (loss) adjusted for allocation of undistributed earnings and effect of contracts that may be settled in cash or shares | ($1,546) | $88 |
Number of shares used in basic computation | 3,159 | 3,163 |
Conversion of Class B to Class A common shares outstanding | 0 | 0 |
Unexercised stock options | 0 | 0 |
Number of shares used in per share computation | 3,159 | 3,163 |
Diluted net income (loss) attributable to GCI common stockholders per common share | ($0.49) | $0.03 |
Business_and_Summary_of_Signif7
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, 2015 | Mar. 31, 2014 |
Class of Stock [Line Items] | ||
Shares associated with anti-dilutive securities | 486 | 59 |
Stock Appreciation Rights (SARs) [Member] | ||
Class of Stock [Line Items] | ||
Shares associated with anti-dilutive securities | 342 | 0 |
Unexercised Stock Options [Member] | ||
Class of Stock [Line Items] | ||
Shares associated with anti-dilutive securities | 118 | 33 |
Stock Compensation Plan [Member] | ||
Class of Stock [Line Items] | ||
Shares associated with anti-dilutive securities | 26 | 26 |
Business_and_Summary_of_Signif8
Business and Summary of Significant Accounting Principles (Changes in issued Common Stock) (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Common Stock [Roll Forward] | ||
Shares issued upon stock option exercises | 38 | |
Common Stock - Class A [Member] | ||
Common Stock [Roll Forward] | ||
Balance, Beginning | 37,998 | 37,299 |
Class B shares converted to Class A | 1 | 2 |
Shares issued upon stock option exercises | 38 | 19 |
Share awards issued | 572 | 1,119 |
Shares retired | -1,091 | -26 |
Shares acquired to settle minimum statutory tax withholding requirements | -60 | -24 |
Balance, Ending | 37,458 | 38,389 |
Common Stock - Class B [Member] | ||
Common Stock [Roll Forward] | ||
Balance, Beginning | 3,159 | 3,165 |
Class B shares converted to Class A | -1 | -2 |
Shares issued upon stock option exercises | 0 | 0 |
Share awards issued | 0 | 0 |
Shares retired | 0 | |
Shares acquired to settle minimum statutory tax withholding requirements | 0 | 0 |
Balance, Ending | 3,158 | 3,163 |
Business_and_Summary_of_Signif9
Business and Summary of Significant Accounting Principles (Surcharges reported gross) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Surcharges reported gross | $1,148 | $1,134 |
Consolidated_Statements_of_Cas2
Consolidated Statements of Cash Flows Supplemental Disclosures (Changes in operating assets and liabilities) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Supplemental Cash Flow Elements [Abstract] | ||
Decrease in accounts receivable, net | $7,859 | $8,295 |
Increase in prepaid expenses | -308 | -3,581 |
Decrease in inventories | 2,495 | 3,653 |
Decrease in other current assets | 7 | 26 |
Increase in other assets | -1,250 | -142 |
Decrease in accounts payable | -2,470 | -8,594 |
Increase (decrease) in deferred revenues | -2,256 | 1,462 |
Decrease in accrued payroll and payroll related obligations | -6,083 | -8,476 |
Increase in accrued liabilities | 3,891 | 1,015 |
Increase in accrued interest | 17,611 | 14,363 |
Decrease in subscriber deposits | -153 | -140 |
Decrease in long-term deferred revenue | -251 | -1,375 |
Increase (decrease) in components of other long-term liabilities | -255 | 645 |
Total change in operating assets and liabilities | $18,837 | $7,151 |
Consolidated_Statements_of_Cas3
Consolidated Statements of Cash Flows Supplemental Disclosures (Net cash paid or received) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid including capitalized interest | $3,382 | $4,412 |
Consolidated_Statements_of_Cas4
Consolidated Statements of Cash Flows Supplemental Disclosures (Non-cash investing and financing activities) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Supplemental Cash Flow Elements [Abstract] | ||
Non-cash consideration for Wireless Acquisition | $19,446 | $0 |
Non-cash additions for purchases of property and equipment | 17,817 | 9,779 |
Asset retirement obligation additions to property and equipment | 243 | 361 |
Net capital lease obligation | 0 | 9,385 |
Distribution to non-controlling interest | 0 | 4,167 |
Deferred compensation distribution denominated in shares | $0 | $617 |
Intangible_Assets_Amortization
Intangible Assets (Amortization expense) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Increase in goodwill | $3,800,000 | |
Amortization expense | $2,686,000 | $2,411,000 |
Intangible_Assets_5_year_Futur
Intangible Assets (5 year Future Amortization ) (Details) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |
2015 | $9,897 |
2016 | 7,808 |
2017 | 5,510 |
2018 | 3,938 |
2019 | $3,068 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 02, 2015 | |
Debt Instrument [Line Items] | |||
Loan fees and other expenses | $5,853,000 | $0 | |
Medium-term Notes [Member] | Amended Senior Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt face amount | 275,000,000 | ||
Percentage of principal payable | 0.25% | ||
Loan fees and other expenses | 5,900,000 | ||
Medium-term Notes [Member] | Amended Senior Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Spread on variable rate | 3.75% | ||
Interest rate floor | 1.00% | ||
Unsecured Debt [Member] | Searchlight ALX, LP Promissory Note [Member] | |||
Debt Instrument [Line Items] | |||
Debt face amount | 75,000,000 | ||
Debt stated percentage | 7.50% | ||
Unamortized discount | $21,700,000 | ||
Common Stock - Class A [Member] | Stock Appreciation Rights (SARs) [Member] | |||
Debt Instrument [Line Items] | |||
Exercise price of stock appreciation rights (per share) | $13 | ||
Stock Appreciation Rights | 3,000,000 | ||
Stock Appreciation Rights issued for interest capitalization | 4.00% |
Fair_Value_Measurements_and_De2
Fair Value Measurements and Derivative Instruments (Assets measured at fair value on a recurring basics) (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (mutual funds) | $1,899 | $2,068 |
Derivative stock appreciation rights | 23,780 | |
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) | 1,899 | 2,068 |
Derivative stock appreciation rights | 0 | |
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 |
Derivative stock appreciation rights | 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 |
Derivative stock appreciation rights | $23,780 |
Fair_Value_Measurements_and_De3
Fair Value Measurements and Derivative Instruments (Carrying amounts and fair value of the financial instruments) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Senior Notes Due 2021 | Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt stated percentage | 6.75% | |
Senior Notes Due 2019 | Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt stated percentage | 8.63% | |
Carrying Amount | ||
Debt Instrument [Line Items] | ||
Current and long-term debt | $1,326,172 | $1,036,678 |
Fair Value | ||
Debt Instrument [Line Items] | ||
Current and long-term debt | $1,376,834 | $1,055,952 |
Fair_Value_Measurements_and_De4
Fair Value Measurements and Derivative Instruments Fair Value Measurements and Derivative Instruments (Derivative Financial Instruments) (Details) (USD $) | 0 Months Ended | 3 Months Ended |
Feb. 02, 2015 | Mar. 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Stock Appreciation Rights, Expiration Date | 8 years | |
Unsecured Debt [Member] | Searchlight ALX, LP Promissory Note [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Debt face amount | 75,000,000 | |
Stock Appreciation Rights (SARs) [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value measurement with unobservable inputs, beginning balance | 0 | |
Issuance | 21,660,000 | |
Fair value adjustment at end of period, included in Other Income (Expense) | 2,120,000 | |
Fair value measurement with unobservable inputs, ending balance | $23,780,000 | |
Stock Appreciation Rights (SARs) [Member] | Common Stock - Class A [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Stock Appreciation Rights | 3,000,000 | |
Exercise price of stock appreciation rights (per share) | 13 |
Stockholders_Equity_Narratives
Stockholders' Equity (Narratives) (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 1,900,000 | |
Weighted average grant date fair value (USD per share) | $14.56 | $9.81 |
Share-based compensation expense | $2.80 | $1.80 |
Unexercised Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 5 years | |
Expiration period | 10 years | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Unrecognized share-based compensation expense | $15.40 | |
Unvested restricted stock awards | 2,100,000 | |
Weighted average period for recognition of unvested shares | 2 years 0 months 7 days | |
Common Stock - Class A [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 15,700,000 |
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, 2015 |
Shares | |
Beginning balance (shares) | 308 |
Exercised (shares) | -38 |
Ending balance (shares) | 270 |
Exercisable (shares) | 270 |
Weighted Average Exercise Price | |
Beginning balance (USD per share) | $6.86 |
Exercised (USD per share) | $7.77 |
Ending balance (USD per share) | $6.74 |
Exercisable (USD per share) | $6.74 |
Weighted average remaining contractual term, outstanding | 3 years 11 months 5 days |
Weighted average remaining contractual term, exercisable | 3 years 11 months 5 days |
Aggregate intrinsic value, outstanding | $2,438 |
Aggregate intrinsic value, exercisable | $2,438 |
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, 2015 |
Shares (in thousands) | |
Nonvested beginning balance (shares) | 1,744 |
Granted (shares) | 572 |
Vested (shares) | -207 |
Forfeited (shares) | -2 |
Nonvested ending balance (shares) | 2,107 |
Weighted Average Grant Date Fair Value | |
Nonvested, Beginning (USD per share) | $9.11 |
Granted (USD per share) | $14.56 |
Vested (USD per share) | $8.05 |
Forfeited (USD per share) | $14.56 |
Nonvested, Ending (USD per share) |
Segments_Narrative_Details
Segments (Narrative) (Details) (Fiber optic cable systems [Member]) | 3 Months Ended |
Mar. 31, 2015 | |
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, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Revenues | $231,089 | $216,283 |
Adjusted EBITDA | 75,303 | 74,797 |
Wireless [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 59,204 | 62,517 |
Adjusted EBITDA | 37,387 | 38,022 |
Wireline [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 171,885 | 153,766 |
Adjusted EBITDA | $37,916 | $36,775 |
Segments_Reconciliation_of_rep
Segments (Reconciliation of reportable segment adjusted EBITDA) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Reportable segment Adjusted EBITDA | $75,303 | $74,797 |
Less depreciation and amortization expense | -45,235 | -42,352 |
Less share-based compensation expense | -2,801 | -1,778 |
Other | -3,147 | -97 |
Operating income | 741 | 30,265 |
Less other expense, net | -26,252 | -18,308 |
Income before income tax expense | -25,511 | 11,957 |
Segment Reconciling Items [Member] | ||
Segment Reporting Information [Line Items] | ||
Reportable segment Adjusted EBITDA | 75,303 | 74,797 |
Less depreciation and amortization expense | -45,235 | -42,352 |
Software write-off | -26,417 | 0 |
Less share-based compensation expense | -2,801 | -1,778 |
Less accretion expense | -450 | -301 |
Other | 341 | -101 |
Operating income | 741 | 30,265 |
Less other expense, net | -26,252 | -18,308 |
Income before income tax expense | ($25,511) | $11,957 |
Related_Party_Transaction_Deta
Related Party Transaction (Details) (USD $) | 3 Months Ended | 1 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 02, 2015 | |
Related Party Transaction [Line Items] | |||
Revenue from related party | $5,283,000 | $15,780,000 | |
ACS [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to related party | 16,200,000 | 6,200,000 | |
Revenue from related party | $10,300,000 | $8,100,000 |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Aug. 30, 2011 | Oct. 03, 2012 | Dec. 11, 2012 | Mar. 31, 2015 | Dec. 31, 2014 |
Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Project fund | $59.30 | |||||
Tax credit percentage | 39.00% | |||||
Percentage of recapture | 100.00% | |||||
Recapture period | 7 years | |||||
Assets | 140.9 | 140.9 | 140.9 | |||
Liabilities | 104.2 | 104.2 | 104.2 | |||
NMTC 1 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Project fund | 58.3 | |||||
Interest rate percentage | 1.00% | |||||
NMTC 1 [Member] | Minimum [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 1.00% | |||||
NMTC 1 [Member] | Maximum [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 3.96% | |||||
NMTC 2 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Project fund | 37.7 | |||||
Interest rate percentage | 1.00% | |||||
NMTC 2 [Member] | Minimum [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 0.71% | |||||
NMTC 2 [Member] | Maximum [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 0.77% | |||||
NMTC 3 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Project fund | 8.2 | |||||
Interest rate percentage | 1.00% | |||||
NMTC 3 [Member] | Maximum [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 1.35% | |||||
US Bancorp [Member] | NMTC 1 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | 22.4 | |||||
US Bancorp [Member] | NMTC 2 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | 17.5 | |||||
US Bancorp [Member] | NMTC 3 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | 3.8 | |||||
Community Development Entities [Member] | NMTC 1 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | 76.8 | |||||
Community Development Entities [Member] | NMTC 2 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | 55.2 | |||||
Community Development Entities [Member] | NMTC 3 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | 12 | |||||
Next Generation Carrier-Class Communications Services Firm [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Ownership percentage | 40.80% | 40.80% | ||||
Next Generation Carrier-Class Communications Services Firm [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Project fund | 3 | |||||
Other Current Assets [Member] | Next Generation Carrier-Class Communications Services Firm [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Cost method Investment | 13.1 | 13.1 | ||||
Notes receivable | $3 | $3 |
Software_Impairment_Details
Software Impairment (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Software impairment charge | $26,417,000 | $0 |
Wireless, Internet, Video, Local Service, and Long Distance Customer Billing Systems [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Fair Value of Future Capital Expenditures | 0 | |
Software impairment charge | 19,800,000 | |
Internally Developed Machine-To-Machine Billing System [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Software impairment charge | $6,600,000 |
Subsequent_Event_Details
Subsequent Event (Details) (Senior Notes, USD $) | 0 Months Ended | 3 Months Ended |
Apr. 01, 2015 | Jun. 30, 2015 | |
6.875% Senior Notes due 2025 | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt face amount | $450,000,000 | |
Debt stated percentage | 6.88% | |
Debt issuance price, percent | 99.11% | |
Closing costs | 7,700,000 | |
Scenario, Forecast | Senior Notes Due 2019 | ||
Subsequent Event [Line Items] | ||
Loss on extinguishment of debt | $27,700,000 |