GCI REPORTS SECOND QUARTER 2015 FINANCIAL RESULTS
Consolidated Revenue of $248 million
Adjusted EBITDA of $88 million
August 4, 2015, Anchorage, Alaska - General Communication, Inc. (“GCI”) (NASDAQ: GNCMA) today reported record financial and operational performance for the second quarter of 2015.
Strong wireless and data performance drove consolidated revenues for the second quarter of 2015 to $248 million, an increase of $23 million or ten percent when compared with the second quarter of 2014. Compared with the first quarter of 2015, consolidated revenues are up $16 million or seven percent.
Adjusted EBITDA for the quarter was $88 million, after the deduction of $6 million in transition costs associated with the Alaska Wireless Network (“AWN”) transaction. Adjusted EBITDA grew $4 million or four percent compared with the second quarter of 2014 and grew $13 million or 17 percent compared to the first quarter of 2015.
“We are pleased with GCI’s strong financial and operational performance during the second quarter. We remain on track for another record year at GCI,” said Ron Duncan, GCI’s president and chief executive officer. “I am particularly pleased with our team’s efforts in managing the transition of our recently acquired wireless customers. With much of the AWN integration completed, we can now focus on simplifying our business and driving long-term growth. In addition, following the quarter we made strides in optimizing our capital structure by amending our term loan to reduce the company’s annual interest expense.”
Transition Highlights
The second quarter was an important quarter for GCI as we transitioned approximately 87,000 wireless subscribers from ACS. The operating teams worked diligently to make sure that our new customers were served well. Through the quarter we transitioned approximately one-third of the customers from the legacy billing platform and onto GCI’s standard wireless billing platform. We will continue the conversion over the next several quarters but are pleased with the progress to date.
Operating and Financial Highlights
There are two factors that should be taken into account when comparing the second quarter with previous quarters:
| |
| • | AWN Transition Costs: During the first and second quarters of 2015 we had $7 million and $6 million in one-time transition costs that reduced adjusted EBITDA. There were no transition costs in the second quarter of 2014. |
| |
| • | Equipment Installment Plans: Beginning in the first quarter of 2015 GCI began aggressively promoting equipment installment plans on wireless handsets. These plans allow our customers to choose how frequently they would like to upgrade their handsets. However, moving a customer from the two-year contract device subsidy model to the equipment financing model does have a financial statement impact. Under the equipment finance model, the upfront handset revenue is higher and the monthly plan fee revenue is lower compared to the subsidy model. Thus, for the first couple of quarters as we move from the subsidy model to the equipment finance model the EBITDA will be substantially positively impacted by the equipment finance revenue. The equipment finance revenue was $4 million and $7 million in the first and second quarters of 2015 respectively. |
Wireless
The wireless segment posted revenues of $68 million for the quarter, representing a two percent decline over the second quarter of 2014 and a 15 percent increase over the prior quarter. The decrease in revenue year-over-year was related to a simplification in how we internally allocate revenues between segments, which became possible after the AWN transaction. Total wireless revenues, including wireless revenues generated in GCI’s wireline segment, grew on a year-over-year basis by $7 million or 10 percent exclusive of equipment installment plan differences. Sequential quarter growth was due to the seasonal roaming trends.
The Wireless segment revenue detail is as follows:
|
| | | |
| ($ millions) | 2Q15 | 2Q14 | 1Q15 |
| Wholesale Wireless | 21 | 25 | 21 |
| Roaming and Backhaul | 34 | 30 | 24 |
| USF Support | 13 | 14 | 14 |
| Total Wireless Revenue | 68 | 69 | 59 |
Wireless segment adjusted EBITDA was $46 million for the quarter, an increase of $6 million or 14 percent over the second quarter of 2014, and a sequential increase of $8 million or 22 percent over the first quarter of 2015. Adjusted EBITDA growth was improved on a sequential and year-over-year basis by strong roaming revenue.
Wireline
The wireline segment posted revenues of $180 million, an $18 million or 11 percent increase over the second quarter of 2014 and a $5 million or three percent increase over the prior quarter when adjusted for equipment installment plan revenue.
Adjusted EBITDA for the quarter was $42 million. EBITDA declined by $2 million or five percent year-over-year and was up $4 million or 11 percent sequentially.
Wireline - Consumer
Consumer revenues were $89 million for the quarter, a year-over-year increase of $21 million or 30 percent, and a sequential increase of $5 million or six percent. Much of this growth was from the acquired ACS wireless subscribers and wireless equipment sales but there was still strong growth in data of $5 million and $1 million on a year-over-year and sequential basis.
The company’s high-speed data product offerings remain a compelling choice in the marketplace, and annual revenue growth in this area remains strong. GCI remains on track to deliver 1 gigabit broadband service in Anchorage before year end.
Wireline - Business Services
Business Services revenues, which include broadcast and cable advertising revenues, were $53 million for the quarter, representing a $2 million or four percent decline over the second quarter of 2014 and a slight decline over the first quarter of 2015.
On a year-over-year basis, there was a $3 million decline in video revenues, driven in large part by a decline in advertising revenues as 2014 was a strong political year that drove elevated advertising spending.
Wireline - Managed Broadband
Managed broadband revenues were $37 million for the quarter, representing a $6 million or 21 percent increase year-over-year and a $3 million or 10 percent increase sequentially. Managed broadband is benefiting from significant investments in building infrastructure in rural Alaska.
SG&A
SG&A expenses were $83 million in the second quarter of 2015, up $13 million or 19 percent from a year ago and down one percent sequentially. The increase year-over-year is a result of transition costs and additional staffing both on the front line and in technical roles.
Significant Events
The conversion of former ACS customers to GCI’s network continues. Transition costs year-to-date total $13 million and represent the majority of the expected costs, which were originally estimated to be approximately $30 million.
On June 23rd, GCI launched a repricing of the company’s $275 million term loan B. The amendment closed on August 3, and will provide $2 million per year in interest savings.
Capital expenditures for the quarter totaled $40 million and remain in line with expectations.
During the quarter, GCI repurchased 1.2 million shares of its Class A common stock, at a cost of $19.7 million. This brings the total shares repurchased in 2015 to 2.3 million.
GCI completed the issuance of $450 million of senior notes due 2025 on April 1, and used the proceeds to repay and retire all outstanding senior notes due 2019. As a result of this refinancing, GCI recorded a $28 million loss on extinguishment of debt in the second quarter of 2015. This amount represents $20 million in call premiums to redeem the 2019 notes and $8 million in unamortized deferred loan costs and original issue discounts.
During the quarter GCI recorded a net loss of approximately $8 million from the write down of one investment and the sale of another investment.
2015 Guidance
| |
| • | Revenues are unchanged and in the range of $920 - 970 million. |
| |
| • | Adjusted EBITDA of $310 - $335 million. Previously this had been with the caveat that it would be less approximately $30 million in one-time transition costs. However, one-time transition expenses have totaled only $13 million thus far and are expected to be approximately $20 million for the year. Additionally, we are having good success with equipment installment plans which improved EBITDA by approximately $11 million on a year-to-date basis. |
| |
| • | Core capital expenditures are unchanged and will be approximately $170 million. |
Conference Call
The company will hold a conference call to discuss the financial results on Wednesday, August 5, at 2:00 p.m. (Eastern). To access the call, call the conference operator between 1:45-2:00 p.m. (Eastern) at 844-850-0551 (International callers should dial +1-412-902-4197) and identify your call as “GCI”.
In addition to dial-up access, GCI will make available net conferencing. To access the call via net conference, log on to gci.com and follow the instructions.
A replay of the call will be available for 72-hours by dialing 877-344-7529, access code 10069357 (International callers should dial +1-412-317-0088).
Forward-Looking Statement Disclosure
The foregoing contains forward-looking statements regarding GCI’s expected results that are based on management’s expectations as well as on a number of assumptions
concerning future events. Actual results might differ materially from those projected in the forward-looking statements due to uncertainties and other factors, many of which are outside GCI’s control. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in GCI’s cautionary statement sections of Forms 10-K and 10-Q filed with the Securities and Exchange Commission.
About GCI
GCI is the largest Alaska-based and -operated, integrated telecommunications provider, offering wireless, voice, data, and video services statewide. Learn more about GCI at www.gci.com.
# # #
Source: GCI
Contacts:
Peter Pounds, 907.868.6952; ppounds@gci.com
David Morris, 907.265.5396, dmorris@gci.com
|
| | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
| (Amounts in thousands) | | | |
| | June 30, | | December 31, |
| ASSETS | 2015 | | 2014 |
| Current assets: | | | |
| Cash and cash equivalents | $ | 34,184 |
| | 15,402 |
|
| | | | |
| Receivables (including $0 and $27,944 from a related party at June 30, 2015 and December 31, 2014, respectively) | 182,337 |
| | 212,441 |
|
| Less allowance for doubtful receivables | 5,860 |
| | 4,542 |
|
| Net receivables | 176,477 |
| | 207,899 |
|
| | | | |
| Deferred income taxes | 83,576 |
| | 56,120 |
|
| Prepaid expenses | 14,317 |
| | 12,179 |
|
| Inventories | 12,260 |
| | 17,032 |
|
| Other current assets | 3,141 |
| | 153 |
|
| Total current assets | 323,955 |
| | 308,785 |
|
| | | | |
| Property and equipment in service, net of depreciation | 999,516 |
| | 1,013,242 |
|
| Construction in progress | 85,578 |
| | 99,240 |
|
| Net property and equipment | 1,085,094 |
| | 1,112,482 |
|
| | | | |
| Goodwill | 237,817 |
| | 229,560 |
|
| Cable certificates | 191,635 |
| | 191,635 |
|
| Wireless licenses | 86,347 |
| | 86,347 |
|
| Other intangible assets, net of amortization | 64,908 |
| | 66,015 |
|
| Deferred loan and senior notes costs, net of amortization of $5,860 and $8,644 at June 30, 2015 and December 31, 2014, respectively | 17,141 |
| | 10,949 |
|
| Other assets | 26,970 |
| | 52,725 |
|
| Total other assets | 624,818 |
| | 637,231 |
|
| Total assets | $ | 2,033,867 |
| | 2,058,498 |
|
| | | | |
|
| | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
| (Continued) |
| (Amounts in thousands) | | | |
| | June 30, | | December 31, |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | 2015 | | 2014 |
| Current liabilities: | | | |
Current maturities of obligations under long-term debt and
capital leases | $ | 11,747 |
| | 8,722 |
|
| Accounts payable (including $0 and $7,447 to a related party at June 30, 2015 and December 31, 2014, respectively) | 46,894 |
| | 76,918 |
|
| Deferred revenue | 29,698 |
| | 29,314 |
|
| Accrued payroll and payroll related obligations | 27,806 |
| | 32,803 |
|
| Accrued liabilities | 19,307 |
| | 14,457 |
|
| Accrued interest | 14,092 |
| | 6,654 |
|
| Subscriber deposits | 1,493 |
| | 1,212 |
|
| Total current liabilities | 151,037 |
| | 170,080 |
|
| | | | |
| Long-term debt, net | 1,345,454 |
| | 1,036,056 |
|
| Obligations under capital leases, excluding current maturities | 62,240 |
| | 66,499 |
|
Obligation under capital lease due to related party, excluding
current maturity | 1,840 |
| | 1,857 |
|
| Deferred income taxes | 202,386 |
| | 187,872 |
|
| Long-term deferred revenue | 98,635 |
| | 85,734 |
|
| Other liabilities | 72,467 |
| | 43,178 |
|
| Total liabilities | 1,934,059 |
| | 1,591,276 |
|
| | | | |
| Commitments and contingencies | | | |
| Stockholders’ equity: | |
| | |
|
| Common stock (no par): | |
| | |
|
| Class A. Authorized 100,000 shares; issued 36,280 and 37,998 shares at June 30, 2015 and December 31, 2014, respectively; outstanding 36,254 and 37,972 shares at June 30, 2015 and December 31, 2014, respectively | — |
| | 13,617 |
|
| Class B. Authorized 10,000 shares; issued and outstanding 3,158 and 3,159 at June 30, 2015 and December 31, 2014, respectively; convertible on a share-per-share basis into Class A common stock | 2,667 |
| | 2,668 |
|
| Less cost of 26 Class A common shares held in treasury at June 30, 2015 and December 31, 2014 | (249 | ) | | (249 | ) |
| Paid-in capital | (8,490 | ) | | 26,773 |
|
| Retained earnings | 71,520 |
| | 124,547 |
|
| Total General Communication, Inc. stockholders' equity | 65,448 |
| | 167,356 |
|
| Non-controlling interests | 34,360 |
| | 299,866 |
|
| Total stockholders’ equity | 99,808 |
| | 467,222 |
|
| Total liabilities and stockholders’ equity | $ | 2,033,867 |
| | 2,058,498 |
|
|
| | | | | | | | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
| (Amounts in thousands, except per share amounts) | 2015 | | 2014 | | 2015 | | 2014 |
| Revenues: | | | | | | | |
| Non-related party | $ | 247,528 |
| | 210,236 |
| | 473,334 |
| | 410,739 |
|
| Related party | — |
| | 14,163 |
| | 5,283 |
| | 29,943 |
|
| Total revenues | 247,528 |
| | 224,399 |
| | 478,617 |
| | 440,682 |
|
| | | | | | | | |
| Cost of goods sold (exclusive of depreciation and amortization shown separately below): | | | | | | | |
| Non-related party | 79,256 |
| | 69,707 |
| | 153,143 |
| | 138,850 |
|
| Related party | — |
| | 2,675 |
| | 881 |
| | 5,306 |
|
| Total cost of goods sold | 79,256 |
| | 72,382 |
| | 154,024 |
| | 144,156 |
|
| | | | | | | | |
| Selling, general and administrative expenses: | | | | | | | |
| Non-related party | 83,047 |
| | 68,685 |
| | 166,435 |
| | 139,427 |
|
| Related party | — |
| | 1,132 |
| | 540 |
| | 2,282 |
|
| Total selling, general and administrative expenses | 83,047 |
| | 69,817 |
| | 166,975 |
| | 141,709 |
|
| | | | | | | | |
| Depreciation and amortization expense | 45,171 |
| | 43,786 |
| | 90,406 |
| | 86,138 |
|
| Software impairment charge | 851 |
| | — |
| | 27,268 |
| | — |
|
| Operating income | 39,203 |
| | 38,414 |
| | 39,944 |
| | 68,679 |
|
| | | | | | | | |
| Other income (expense): | | | | | | | |
| Loss on extinguishment of debt | (27,700 | ) | | — |
| | (27,700 | ) | | — |
|
| Interest expense (including amortization of deferred loan fees) | (22,400 | ) | | (18,170 | ) | | (43,385 | ) | | (36,381 | ) |
| Impairment of equity method investment | (12,593 | ) | | — |
| | (12,593 | ) | | — |
|
| Derivative instrument unrealized loss | (2,950 | ) | | — |
| | (5,070 | ) | | — |
|
| Other | 4,390 |
| | (1,049 | ) | | 1,243 |
| | (1,146 | ) |
| Other expense, net | (61,253 | ) | | (19,219 | ) | | (87,505 | ) | | (37,527 | ) |
| | | | | | | | |
| Income (loss) before income taxes | (22,050 | ) | | 19,195 |
| | (47,561 | ) | | 31,152 |
|
| Income tax (expense) benefit | 6,293 |
| | (2,355 | ) | | 13,079 |
| | (3,551 | ) |
| Net income (loss) | (15,757 | ) | | 16,840 |
| | (34,482 | ) | | 27,601 |
|
| | | | | | | | |
| Net income (loss) attributable to non-controlling interests | (130 | ) | | 10,913 |
| | 414 |
| | 20,534 |
|
| Net income (loss) attributable to General Communication, Inc. | $ | (15,627 | ) | | 5,927 |
| | (34,896 | ) | | 7,067 |
|
| | | | | | | | |
| Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share | $ | (0.41 | ) | | 0.14 |
| | (0.90 | ) | | 0.17 |
|
| Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share | $ | (0.41 | ) | | 0.14 |
| | (0.90 | ) | | 0.17 |
|
| Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share | $ | (0.41 | ) | | 0.14 |
| | (0.90 | ) | | 0.17 |
|
| Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share | $ | (0.41 | ) | | 0.14 |
| | (0.90 | ) | | 0.17 |
|
| Common shares used to calculate Class A basic EPS | 34,887 |
| | 36,143 |
| | 35,548 |
| | 36,112 |
|
| Common shares used to calculate Class A diluted EPS | 38,046 |
| | 39,453 |
| | 38,707 |
| | 39,422 |
|
|
| | | | | | | | | | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| SUPPLEMENTAL SCHEDULES |
| (Unaudited) |
| (Amounts in thousands) | | | | | | |
| | Second Quarter 2015 | | Second Quarter 2014 |
| | Wireless | Wireline | | | Wireless | Wireline | |
| | Segment | Segment | Total | | Segment | Segment | Total |
| Revenues | | | | | | | |
| Wireless | $ | 67,940 |
| 22,952 |
| 90,892 |
| | 69,397 |
| 7,149 |
| 76,546 |
|
| Data | — |
| 98,895 |
| 98,895 |
| | — |
| 88,475 |
| 88,475 |
|
| Video | — |
| 33,542 |
| 33,542 |
| | — |
| 34,478 |
| 34,478 |
|
| Voice | — |
| 24,199 |
| 24,199 |
| | — |
| 24,900 |
| 24,900 |
|
| Total | 67,940 |
| 179,588 |
| 247,528 |
| | 69,397 |
| 155,002 |
| 224,399 |
|
| | | | | | | | |
| Cost of goods sold | 18,335 |
| 60,921 |
| 79,256 |
| | 23,500 |
| 48,882 |
| 72,382 |
|
| | | | | | | | |
| Contribution | 49,605 |
| 118,667 |
| 168,272 |
| | 45,897 |
| 106,120 |
| 152,017 |
|
| | | | | | | | |
| Less SG&A | 4,032 |
| 79,015 |
| 83,047 |
| | 5,894 |
| 63,923 |
| 69,817 |
|
| Share-based compensation | — |
| 2,613 |
| 2,613 |
| | — |
| 2,193 |
| 2,193 |
|
| Accretion | 154 |
| 197 |
| 351 |
| | 171 |
| 130 |
| 301 |
|
| Other | — |
| (188 | ) | (188 | ) | | — |
| (223 | ) | (223 | ) |
| Adjusted EBITDA | $ | 45,727 |
| 42,274 |
| 88,001 |
| | 40,174 |
| 44,297 |
| 84,471 |
|
|
| | | | | | | | | | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| SUPPLEMENTAL SCHEDULES |
| (Unaudited) |
| (Amounts in thousands) | | | | | | |
| | Second Quarter 2015 | | First Quarter 2015 |
| | Wireless | Wireline | | | Wireless | Wireline | |
| | Segment | Segment | Total | | Segment | Segment | Total |
| Revenues | | | | | | | |
| Wireless | $ | 67,940 |
| 22,952 |
| 90,892 |
| | 59,204 |
| 18,204 |
| 77,408 |
|
| Data | — |
| 98,895 |
| 98,895 |
| | — |
| 96,446 |
| 96,446 |
|
| Video | — |
| 33,542 |
| 33,542 |
| | — |
| 33,639 |
| 33,639 |
|
| Voice | — |
| 24,199 |
| 24,199 |
| | — |
| 23,596 |
| 23,596 |
|
| Total | 67,940 |
| 179,588 |
| 247,528 |
| | 59,204 |
| 171,885 |
| 231,089 |
|
| | | | | | | | |
| Cost of goods sold | 18,335 |
| 60,921 |
| 79,256 |
| | 17,531 |
| 57,237 |
| 74,768 |
|
| | | | | | | | |
| Contribution | 49,605 |
| 118,667 |
| 168,272 |
| | 41,673 |
| 114,648 |
| 156,321 |
|
| | | | | | | | |
| Less SG&A | 4,032 |
| 79,015 |
| 83,047 |
| | 4,502 |
| 79,426 |
| 83,928 |
|
| Share-based compensation | — |
| 2,613 |
| 2,613 |
| | — |
| 2,801 |
| 2,801 |
|
| Accretion | 154 |
| 197 |
| 351 |
| | 216 |
| 234 |
| 450 |
|
| Other | — |
| (188 | ) | (188 | ) | | — |
| (341 | ) | (341 | ) |
| Adjusted EBITDA | $ | 45,727 |
| 42,274 |
| 88,001 |
| | 37,387 |
| 37,916 |
| 75,303 |
|
|
| | | | | | | | | | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| SUPPLEMENTAL SCHEDULES |
| (Unaudited) |
| (Amounts in thousands) | | | | | | |
| | Six Months Ended June 30, 2015 | | Six Months Ended June 30, 2014 |
| | Wireless | Wireline | | | Wireless | Wireline | |
| | Segment | Segment | Total | | Segment | Segment | Total |
| Revenues | | | | | | | |
| Wireless | $ | 127,144 |
| 41,156 |
| 168,300 |
| | 131,914 |
| 15,385 |
| 147,299 |
|
| Data | — |
| 195,341 |
| 195,341 |
| | — |
| 176,088 |
| 176,088 |
|
| Video | — |
| 67,181 |
| 67,181 |
| | — |
| 66,879 |
| 66,879 |
|
| Voice | — |
| 47,795 |
| 47,795 |
| | — |
| 50,416 |
| 50,416 |
|
| Total | 127,144 |
| 351,473 |
| 478,617 |
| | 131,914 |
| 308,768 |
| 440,682 |
|
| | | | | | | | |
| Cost of goods sold | 35,866 |
| 118,158 |
| 154,024 |
| | 42,213 |
| 101,943 |
| 144,156 |
|
| | | | | | | | |
| Contribution | 91,278 |
| 233,315 |
| 324,593 |
| | 89,701 |
| 206,825 |
| 296,526 |
|
| | | | | | | | |
| Less SG&A | 8,534 |
| 158,441 |
| 166,975 |
| | 11,852 |
| 129,857 |
| 141,709 |
|
| Share-based compensation | — |
| 5,414 |
| 5,414 |
| | — |
| 3,971 |
| 3,971 |
|
| Accretion | 370 |
| 431 |
| 801 |
| | 347 |
| 255 |
| 602 |
|
| Other | — |
| (529 | ) | (529 | ) | | — |
| (122 | ) | (122 | ) |
| Adjusted EBITDA | $ | 83,114 |
| 80,190 |
| 163,304 |
| | 78,196 |
| 81,072 |
| 159,268 |
|
|
| | | | | | | | | | | | | | | | |
| General Communication, Inc. | | | | | | | | |
| Non-GAAP Financial Reconciliation Schedule | | | | | | | | |
| (Unaudited, Amounts in Thousands) | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30, | | June 30, | | March 31 | | June 30, | | June 30, |
| | | 2015 | | 2014 | | 2015 | | 2015 | | 2014 |
| Net income (loss) | | $ | (15,757 | ) | | 16,840 |
| | (18,725 | ) | | (34,482 | ) | | 27,601 |
|
| Income tax expense (benefit) | | (6,293 | ) | | 2,355 |
| | (6,786 | ) | | (13,079 | ) | | 3,551 |
|
| Income (loss) before income taxes | | (22,050 | ) | | 19,195 |
| | (25,511 | ) | | (47,561 | ) | | 31,152 |
|
| | | | | | | | | | | |
| Other (income) expense: | | | | | | | | | | |
| Interest expense (including amortization of deferred loan fees) | | 22,400 |
| | 18,170 |
| | 20,985 |
| | 43,385 |
| | 36,381 |
|
| Loss on extinguishment of debt | | 27,700 |
| | — |
| | — |
| | 27,700 |
| | — |
|
| Investments, net | | 12,593 |
| | — |
| | — |
| | 12,593 |
| | — |
|
| Derivative instrument unrealized loss | | 2,950 |
| | — |
| | 2,120 |
| | 5,070 |
| | — |
|
| Other | | (4,390 | ) | | 1,049 |
| | 3,147 |
| | (1,243 | ) | | 1,146 |
|
| Other expense, net | | 61,253 |
| | 19,219 |
| | 26,252 |
| | 87,505 |
| | 37,527 |
|
| | | | | | | | | | | |
| Operating income | | 39,203 |
| | 38,414 |
| | 741 |
| | 39,944 |
| | 68,679 |
|
| Depreciation and amortization expense | | 45,171 |
| | 43,786 |
| | 45,235 |
| | 90,406 |
| | 86,138 |
|
| Software impairment charge | | 851 |
| | — |
| | 26,417 |
| | 27,268 |
| | — |
|
| Share-based compensation | | 2,613 |
| | 2,193 |
| | 2,801 |
| | 5,414 |
| | 3,971 |
|
| Accretion | | 351 |
| | 301 |
| | 450 |
| | 801 |
| | 602 |
|
| Other | | (188 | ) | | (223 | ) | | (341 | ) | | (529 | ) | | (122 | ) |
| Adjusted EBITDA (Note 1) | | $ | 88,001 |
| | 84,471 |
| | 75,303 |
| | 163,304 |
| | 159,268 |
|
| | | | | | | | | | | |
| Notes: | | | | | | | | | | |
| (1) The sum of net income (loss), interest expense (including amortization of deferred loan fees), interest income, income tax (expense) benefit, depreciation and amortization expense, loss on extinguishment of debt, software impairment charge, derivative instrument unrealized loss, share-based compensation, accretion expense, loss attributable to non-controlling interests resulting from New Markets Tax Credit transactions, gains and impairment losses on equity and cost method investments, and other non-cash adjustments plus imputed interest on financed devices. Adjusted EBITDA is not presented as an alternative measure of net income, operating income or cash flow from operations, as determined in accordance with accounting principles generally accepted in the United States of America. GCI's management uses Adjusted EBITDA to evaluate the operating performance of its business, and as a measure of performance for incentive compensation purposes. GCI believes Adjusted EBITDA is a measure used as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected Adjusted EBITDA are used to estimate current or prospective enterprise value. Adjusted EBITDA does not give effect to cash used for debt service requirements, and thus does not reflect funds available for investment or other discretionary uses. Adjusted EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies. |
|
| | | | | | | | | | | | | | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| WIRELINE SEGMENT SUPPLEMENTAL REVENUE SCHEDULES |
| (Unaudited) |
| (Amounts in thousands) | | | | | | | | | |
| | Second Quarter 2015 | | Second Quarter 2014 |
| | | Business | Managed | | | | Business | Managed | |
| | Consumer | Services | Broadband | Total | | Consumer | Services | Broadband | Total |
| Revenues | | | | | | | | | |
| Wireless | $ | 20,705 |
| 2,247 |
| — |
| 22,952 |
| | 6,360 |
| 789 |
| — |
| 7,149 |
|
| Data | 32,034 |
| 35,485 |
| 31,376 |
| 98,895 |
| | 27,313 |
| 35,554 |
| 25,608 |
| 88,475 |
|
| Video | 28,921 |
| 4,621 |
| — |
| 33,542 |
| | 26,871 |
| 7,607 |
| — |
| 34,478 |
|
| Voice | 7,729 |
| 10,480 |
| 5,990 |
| 24,199 |
| | 8,279 |
| 11,359 |
| 5,262 |
| 24,900 |
|
| Total | $ | 89,389 |
| 52,833 |
| 37,366 |
| 179,588 |
| | 68,823 |
| 55,309 |
| 30,870 |
| 155,002 |
|
| | | | | | | | | | |
| (Amounts in thousands) | | | | | | | | | |
| | Second Quarter 2015 | | First Quarter 2015 |
| | | Business | Managed | | | | Business | Managed | |
| | Consumer | Services | Broadband | Total | | Consumer | Services | Broadband | Total |
| Revenues | | | | | | | | | |
| Wireless | $ | 20,705 |
| 2,247 |
| — |
| 22,952 |
| | 16,410 |
| 1,794 |
| — |
| 18,204 |
|
| Data | 32,034 |
| 35,485 |
| 31,376 |
| 98,895 |
| | 31,272 |
| 36,298 |
| 28,876 |
| 96,446 |
|
| Video | 28,921 |
| 4,621 |
| — |
| 33,542 |
| | 29,225 |
| 4,414 |
| — |
| 33,639 |
|
| Voice | 7,729 |
| 10,480 |
| 5,990 |
| 24,199 |
| | 7,801 |
| 10,706 |
| 5,089 |
| 23,596 |
|
| Total | $ | 89,389 |
| 52,833 |
| 37,366 |
| 179,588 |
| | 84,708 |
| 53,212 |
| 33,965 |
| 171,885 |
|
| | | | | | | | | | |
| (Amounts in thousands) | | | | | | | | | |
| | Six Months Ended June 30, 2015 | | Six Months Ended June 30, 2014 |
| | | Business | Managed | | | | Business | Managed | |
| | Consumer | Services | Broadband | Total | | Consumer | Services | Broadband | Total |
| Revenues | | | | | | | | | |
| Wireless | $ | 37,115 |
| 4,041 |
| — |
| 41,156 |
| | 13,851 |
| 1,534 |
| — |
| 15,385 |
|
| Data | 63,306 |
| 71,783 |
| 60,252 |
| 195,341 |
| | 54,257 |
| 70,394 |
| 51,437 |
| 176,088 |
|
| Video | 58,146 |
| 9,035 |
| — |
| 67,181 |
| | 54,120 |
| 12,759 |
| — |
| 66,879 |
|
| Voice | 15,530 |
| 21,186 |
| 11,079 |
| 47,795 |
| | 16,724 |
| 23,100 |
| 10,592 |
| 50,416 |
|
| Total | $ | 174,097 |
| 106,045 |
| 71,331 |
| 351,473 |
| | 138,952 |
| 107,787 |
| 62,029 |
| 308,768 |
|
| | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| KEY PERFORMANCE INDICATORS |
| (Unaudited) |
| | | | | | | | | | | |
| | | | | | | June 30, 2015 | | June 30, 2015 |
| | |
| | as compared to | | as compared to |
| | | June 30, | June 30, | March 31, | | June 30, | March 31, | | June 30, | March 31, |
| | | 2015 | 2014 | 2015 | | 2014 | 2015 | | 2014 | 2015 |
| Wireline Segment | | | | | | | | | |
| Consumer | | | | | | | | | |
| Data | | | | | | | | | |
| | Cable modem subscribers | 122,300 |
| 115,600 |
| 121,700 |
| | 6,700 |
| 600 |
| | 5.8 | % | 0.5 | % |
| Video | | | | | | | | | |
| | Basic subscribers | 112,900 |
| 116,300 |
| 114,700 |
| | (3,400 | ) | (1,800 | ) | | (2.9 | )% | (1.6 | )% |
| | Digital programming tier subscribers | 60,000 |
| 65,200 |
| 62,300 |
| | (5,200 | ) | (2,300 | ) | | (8.0 | )% | (3.7 | )% |
| | HD/DVR converter boxes | 108,300 |
| 103,400 |
| 109,900 |
| | 4,900 |
| (1,600 | ) | | 4.7 | % | (1.5 | )% |
| | Homes passed | 249,600 |
| 248,000 |
| 248,700 |
| | 1,600 |
| 900 |
| | 0.6 | % | 0.4 | % |
| Voice | | | | | | | | | |
| | Local access lines in service | 52,000 |
| 57,700 |
| 53,400 |
| | (5,700 | ) | (1,400 | ) | | (9.9 | )% | (2.6 | )% |
| Business Services | | | | | | | | | |
| Data | | | | | | | | | |
| | Cable modem subscribers | 14,400 |
| 14,200 |
| 14,100 |
| | 200 |
| 300 |
| | 1.4 | % | 2.1 | % |
| Voice | | | | | | | | | |
| | Local access lines in service | 47,200 |
| 48,200 |
| 47,500 |
| | (1,000 | ) | (300 | ) | | (2.1 | )% | (0.6 | )% |
| Consumer and Business Services Combined |
| Wireless | | | | | | | | | |
| | Consumer Lifeline lines in service | 28,400 |
| 28,200 |
| 32,900 |
| | 200 |
| (4,500 | ) | | 0.7 | % | (13.7 | )% |
| | Consumer prepaid lines in service | 26,700 |
| 10,000 |
| 24,500 |
| | 16,700 |
| 2,200 |
| | 167.0 | % | 9.0 | % |
| | Consumer postpaid lines in service | 151,800 |
| 89,100 |
| 152,600 |
| | 62,700 |
| (800 | ) | | 70.4 | % | (0.5 | )% |
| | Business Services postpaid lines in service | 29,200 |
| 18,500 |
| 28,600 |
| | 10,700 |
| 600 |
| | 57.8 | % | 2.1 | % |
| | Total wireless lines in service | 236,100 |
| 145,800 |
| 238,600 |
| | 90,300 |
| (2,500 | ) | | 61.9 | % | -1.0 | % |
|
| | | | | | | | | | | | | | | | | | | | | | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| KEY PERFORMANCE INDICATORS |
| (Unaudited) |
| | | | | | | | | | | |
| | | | | | June 30, 2015 | | June 30, 2015 |
| | | Three Months Ended | | as compared to | | as compared to |
| | | June 30, | June 30, | March 31, | | June 30, | March 31, | | June 30, | March 31, |
| | | 2015 | 2014 | 2015 | | 2014 | 2015 | | 2014 | 2015 |
| Wireline segment | | | | | | | | | |
| Consumer | | | | | | | | | |
| Video | | | | | | | | | |
| | Average monthly revenue per subscriber | $ | 84.60 |
| $ | 76.49 |
| $ | 84.37 |
| | $ | 8.11 |
| $ | 0.23 |
| | 10.6 | % | 0.3 | % |
| | | | | | | | | | | |
| Combined Consumer and Business Services | | | | | | |
| Data | | | | | | | | | |
| | Average monthly revenue per cable modem subscriber | $ | 83.93 |
| $ | 76.69 |
| $ | 83.93 |
| | $ | 7.24 |
| $ | — |
| | 9.4 | % | — | % |
| | | | | | | | | | | |
| Wireless | | | | | | | | | |
| | Average monthly revenue per subscriber | $ | 47.26 |
| $ | 48.89 |
| $ | 48.23 |
| | $ | (1.63 | ) | $ | (0.97 | ) | | (3.3 | )% | (2.0 | )% |
