Document and Entity Information
Document and Entity Information - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Entity Registrant Name | GENERAL COMMUNICATION INC | |
Entity Central Index Key | 808,461 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock - Class A [Member] | ||
Entity Common Stock Shares Outstanding | 32,810 | |
Common Stock - Class B [Member] | ||
Entity Common Stock Shares Outstanding | 3,154 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 92,622 | $ 26,528 |
Receivables | 200,294 | 208,384 |
Less allowance for doubtful receivables | 4,436 | 3,630 |
Net receivables | 195,858 | 204,754 |
Prepaid expenses | 16,253 | 12,862 |
Inventories | 7,966 | 11,322 |
Other current assets | 173 | 3,129 |
Total current assets | 312,872 | 258,595 |
Property and equipment | 2,505,753 | 2,384,530 |
Less accumulated depreciation | 1,412,540 | 1,290,149 |
Net property and equipment | 1,093,213 | 1,094,381 |
Goodwill | 239,263 | 239,263 |
Cable certificates | 191,635 | 191,635 |
Wireless licenses | 92,347 | 86,347 |
Other intangible assets, net of amortization | 70,062 | 69,290 |
Other assets | 32,560 | 27,429 |
Total other assets | 625,867 | 613,964 |
Total assets | 2,031,952 | 1,966,940 |
Current liabilities: | ||
Current maturities of obligations under long-term debt, capital leases, and tower obligation | 13,046 | 12,050 |
Accounts payable | 51,551 | 63,014 |
Deferred revenue | 33,115 | 34,128 |
Accrued payroll and payroll related obligations | 29,251 | 31,337 |
Accrued interest (including $3,718 and $5,132 to a related party at September 30, 2016 and December 31, 2015, respectively) | 25,465 | 13,655 |
Accrued liabilities | 17,002 | 22,822 |
Subscriber deposits | 876 | 1,242 |
Total current liabilities | 170,306 | 178,248 |
Long-term debt, net (including $56,157 and $54,810 to a related party at September 30, 2016 and December 31, 2015, respectively) | 1,330,199 | 1,329,396 |
Obligations under capital leases, excluding current maturities (including $1,785 and $1,824 due to a related party at September 30, 2016 and December 31, 2015, respectively) | 52,713 | 59,651 |
Deferred income taxes | 113,710 | 106,145 |
Long-term deferred revenue | 120,875 | 93,427 |
Tower obligation | 88,060 | 0 |
Other liabilities (including $16,980 and $32,820 for derivative stock appreciation rights with a related party at September 30, 2016 and December 31, 2015, respectively) | 64,202 | 80,812 |
Total liabilities | 1,940,065 | 1,847,679 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Paid-in capital | 14,609 | 6,631 |
Retained earnings | 44,215 | 79,217 |
Total General Communication, Inc. stockholders' equity | 61,239 | 88,263 |
Non-controlling interests | 30,648 | 30,998 |
Total stockholders’ equity | 91,887 | 119,261 |
Total liabilities and stockholders’ equity | 2,031,952 | 1,966,940 |
Common Stock - Class A [Member] | ||
Stockholders' equity: | ||
Common stock | 0 | 0 |
Less cost of 26 Class A common shares held in treasury at September 30, 2016 and December 31, 2015 | (249) | (249) |
Total stockholders’ equity | 0 | 0 |
Common Stock - Class B [Member] | ||
Stockholders' equity: | ||
Common stock | 2,664 | 2,664 |
Total stockholders’ equity | $ 2,664 | $ 2,664 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Related party accrued interest | $ 3,718,000 | $ 5,132,000 |
Related party long-term debt | 56,157,000 | 54,810,000 |
Related party capital lease obligations, excluding current maturities | 1,785,000 | 1,824,000 |
Related party derivative stock appreciation rights | $ 16,980,000 | $ 32,820,000 |
Common Stock - Class A [Member] | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Common Stock, no par | ||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 33,164,000 | 35,593,000 |
Common Stock, Shares Outstanding | 33,138,000 | 35,567,000 |
Treasury Stock, Shares | 26,000 | 26,000 |
Common Stock - Class B [Member] | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Common Stock, no par | ||
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares Issued | 3,154,000 | 3,154,000 |
Common Stock, Shares Outstanding | 3,154,000 | 3,154,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Non-related party | $ 236,655 | $ 258,573 | $ 701,519 | $ 731,907 |
Related party | 0 | 0 | 0 | 5,283 |
Total revenues | 236,655 | 258,573 | 701,519 | 737,190 |
Cost of goods sold (exclusive of depreciation and amortization shown separately below): | ||||
Non-related party | 73,494 | 82,717 | 227,926 | 235,860 |
Related party | 0 | 0 | 0 | 881 |
Total cost of goods sold | 73,494 | 82,717 | 227,926 | 236,741 |
Selling, general and administrative expenses: | ||||
Non-related party | 88,974 | 82,655 | 264,642 | 249,090 |
Related party | 0 | 0 | 0 | 540 |
Total selling, general and administrative expenses | 88,974 | 82,655 | 264,642 | 249,630 |
Depreciation and amortization expense | 47,819 | 45,157 | 143,033 | 135,563 |
Software impairment charge | 0 | 2,571 | 0 | 29,839 |
Operating income | 26,368 | 45,473 | 65,918 | 85,417 |
Other income (expense): | ||||
Interest expense (including amortization of deferred loan fees) | (19,666) | (19,260) | (58,199) | (59,713) |
Related party interest expense | (1,881) | (1,828) | (5,558) | (4,760) |
Derivative instrument unrealized income (loss) with related party | 4,800 | 30 | 15,840 | (5,040) |
Loss on extinguishment of debt | 0 | 0 | 0 | (27,700) |
Impairment of equity method investment | 0 | 0 | 0 | (12,593) |
Other | 613 | 1,202 | 1,702 | 2,445 |
Other expense, net | (16,134) | (19,856) | (46,215) | (107,361) |
Income (loss) before income taxes | 10,234 | 25,617 | 19,703 | (21,944) |
Income tax (expense) benefit | (2,407) | (8,122) | (7,596) | 4,957 |
Net income (loss) | 7,827 | 17,495 | 12,107 | (16,987) |
Net income (loss) attributable to non-controlling interests | (116) | (136) | (350) | 278 |
Net income (loss) attributable to General Communication, Inc. | 7,943 | 17,631 | 12,457 | (17,265) |
Common Stock - Class A [Member] | ||||
Other income (expense): | ||||
Net income (loss) attributable to General Communication, Inc. | $ 7,266 | $ 16,213 | $ 11,422 | $ (15,838) |
Net income per common share | ||||
Basic net income (loss) attributable to General Communication, Inc. common stockholders (USD per share) | $ 0.21 | $ 0.45 | $ 0.33 | $ (0.45) |
Diluted net income (loss) attributable to General Communication, Inc. common stockholders (USD per share) | $ 0.14 | $ 0.44 | $ 0.08 | $ (0.45) |
Common Stock - Class B [Member] | ||||
Other income (expense): | ||||
Net income (loss) attributable to General Communication, Inc. | $ 677 | $ 1,418 | $ 1,035 | $ (1,427) |
Net income per common share | ||||
Basic net income (loss) attributable to General Communication, Inc. common stockholders (USD per share) | $ 0.21 | $ 0.45 | $ 0.33 | $ (0.45) |
Diluted net income (loss) attributable to General Communication, Inc. common stockholders (USD per share) | $ 0.14 | $ 0.44 | $ 0.08 | $ (0.45) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Shares of Class A and B Common Stock [Member] | Class A Shares held in Treasury [Member] | Paid-in Capital [Member] | Retained Earnings [Member] | Non-controlling Interests [Member] | Common Stock - Class A [Member] | Common Stock - Class B [Member] |
Beginning balances, Common Stock, Shares Issued at Dec. 31, 2014 | 41,157 | |||||||
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 (loss) | (16,987) | (17,265) | 278 | |||||
Common stock repurchases and retirements, shares | (2,404) | |||||||
Common stock repurchases and retirements | (44,324) | (25,262) | (19,062) | |||||
Shares issued under stock option plan, shares | 38 | |||||||
Shares issued under stock option plan | 295 | 295 | ||||||
Issuance of restricted stock awards, shares | 647 | |||||||
Issuance of restricted stock awards | 0 | (5,146) | 5,146 | |||||
Share-based compensation expense | 7,982 | 7,982 | ||||||
Distribution to non-controlling interest | (765) | (765) | ||||||
Investment by non-controlling interest | 3,209 | 3,209 | ||||||
Non-controlling interest acquisition | (305,831) | (34,310) | (271,521) | |||||
Other | (230) | (230) | 4 | (4) | ||||
Ending balances, Common Stock, Shares Issued at Sep. 30, 2015 | 39,438 | |||||||
Ending balances, total stockholders' equity at Sep. 30, 2015 | 110,571 | (249) | (4,931) | 82,020 | 31,067 | $ 0 | $ 2,664 | |
Beginning balances, Common Stock, Shares Issued at Dec. 31, 2015 | 38,747 | 35,593 | 3,154 | |||||
Beginning balances, total stockholders' equity at Dec. 31, 2015 | 119,261 | (249) | 6,631 | 79,217 | 30,998 | $ 0 | $ 2,664 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 12,107 | 12,457 | (350) | |||||
Common stock repurchases and retirements, shares | (3,027) | |||||||
Common stock repurchases and retirements | (47,655) | (47,459) | (196) | |||||
Issuance of restricted stock awards, shares | 580 | |||||||
Issuance of restricted stock awards | 0 | |||||||
Share-based compensation expense | 7,978 | 7,978 | ||||||
Other, shares | 18 | |||||||
Other | 196 | $ 196 | ||||||
Ending balances, Common Stock, Shares Issued at Sep. 30, 2016 | 36,318 | 33,164 | 3,154 | |||||
Ending balances, total stockholders' equity at Sep. 30, 2016 | $ 91,887 | $ (249) | $ 14,609 | $ 44,215 | $ 30,648 | $ 0 | $ 2,664 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ 7,827 | $ 17,495 | $ 12,107 | $ (16,987) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization expense | 47,819 | 45,157 | 143,033 | 135,563 |
Unrealized (income) loss on derivative instrument with related party | (4,800) | (30) | (15,840) | 5,040 |
Deferred income tax expense (benefit) | 7,565 | (5,006) | ||
Share-based compensation expense | 2,810 | 2,660 | 7,820 | 8,074 |
Loss on extinguishment of debt | 0 | 0 | 0 | 27,700 |
Software impairment charge | 0 | 2,571 | 0 | 29,839 |
Impairment of equity method investment | 0 | 0 | 0 | 12,593 |
Other noncash income and expense items | 11,994 | 9,106 | ||
Change in operating assets and liabilities | 23,926 | 20,588 | ||
Net cash provided by operating activities | 190,605 | 226,510 | ||
Cash flows from investing activities: | ||||
Purchases of property and equipment | (149,842) | (134,562) | ||
Purchases of other assets and intangible assets | (10,226) | (7,191) | ||
Note receivable payment from an equity method investee | 3,000 | 0 | ||
Proceeds from sale of investment | 1,377 | 7,551 | ||
Grant proceeds | 0 | 14,007 | ||
Note receivable issued to an equity method investee | 0 | (3,000) | ||
Purchase of business, net of cash received | 0 | (12,736) | ||
Other | (1,591) | (4,711) | ||
Net cash used for investing activities | (157,282) | (140,642) | ||
Cash flows from financing activities: | ||||
Proceeds from tower sale | 90,795 | 0 | ||
Borrowing on Amended Senior Credit Facility | 60,000 | 295,000 | ||
Repayment of debt and capital lease obligations | (69,013) | (492,068) | ||
Purchase of treasury stock to be retired | (47,655) | (44,324) | ||
Issuance of 2025 notes | 0 | 445,973 | ||
Purchase of non-controlling interests | 0 | (282,505) | ||
Issuance of Searchlight note payable and derivative stock appreciation rights with related party | 0 | 75,000 | ||
Payment of bond call premium | 0 | (20,244) | ||
Payment of debt issuance costs | 0 | (13,979) | ||
Distribution to non-controlling interest | 0 | (4,932) | ||
Other | (1,356) | 498 | ||
Net cash provided by (used for) financing activities | 32,771 | (41,581) | ||
Net increase in cash and cash equivalents | 66,094 | 44,287 | ||
Cash and cash equivalents at beginning of period | 26,528 | 15,402 | ||
Cash and cash equivalents at end of period | $ 92,622 | $ 59,689 | $ 92,622 | $ 59,689 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Principles | 9 Months Ended |
Sep. 30, 2016 | |
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 provide a full range of wireless, data, video, voice, and managed services to residential customers, businesses, governmental entities, and educational and medical institutions primarily in Alaska. (b) Basis of Presentation and 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 operations (“Acquired ACS Assets”) (collectively the "Wireless Acquisition"). Under the terms of the agreement, we paid ACS $293.2 million , excluding working capital 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 terminated 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 Other Income (Expense) in our Consolidated Statements of Operations for the nine months ended September 30, 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 excluding working capital adjustments (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 total of the additional deferred taxes incurred as a result of the transaction 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 Increase in deferred tax assets 24,028 Additional paid-in capital 11,439 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 Other Income (Expense) in our Consolidated Statements of Operations for the nine months ended September 30, 2015 . Other Acquisitions During the year ended December 31, 2015, we completed three business acquisitions for total cash consideration of $12.7 million , net of cash received. We accounted for the transactions using the acquisition method of accounting under ASC 805, Business Combinations. Accordingly, the assets received, liabilities assumed and any non-controlling interests were recorded at their estimated fair value as of the acquisition date. We determined the estimated fair values using a combination of the discounted cash flows method and estimates made by management. (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. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date to fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. In March 2016, the FASB issued ASU 2016-08, which amended the guidance in the new standard in order to clarify the principal versus agent assessment and is intended to make the guidance more operable and lead to more consistent application. In April 2016, the FASB issued ASU 2016-10, which clarifies the identification of performance obligations and the licensing implementation guidance in ASU 2014-09. In May 2016, the FASB issued ASU 2016-11, which rescinds SEC paragraphs pursuant to SEC staff announcements regarding ASU 2014-09. These rescissions include changes to topics pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May 2016, the FASB issued ASU 2016-12, which provides clarifying guidance in certain narrow areas and adds some practical expedients to ASU 2014-09. The standard permits the use of either the retrospective or cumulative effect transition method. Early adoption is permitted for annual periods beginning after December 15, 2016, however, we do not plan to early adopt this standard. We are currently evaluating the impact of the provisions of this new standard and we expect to have our assessment of the impact on our financial position and results of operations to be completed by December 31, 2016. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted only for certain portions of the ASU related to financial liabilities. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Lease accounting by the lessor remains largely unchanged by the new standard. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and is required to be adopted using the modified retrospective approach. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations, but we expect that adoption will have a material impact on our long-term assets and liabilities. In March 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting. The update eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. Instead, the equity method of accounting should be applied prospectively from the date significant influence is obtained and investors should add the cost of acquiring the additional interest to the current basis of their previously held interest. For available-for-sale securities that become eligible for the equity method of accounting, any unrealized gain or loss recorded within accumulated other comprehensive income should be recognized in earnings at the date the investment initially qualifies for the use of the equity method. ASU 2016-07 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and should be applied prospectively. The adoption of this guidance is not expected to have a material effect on our financial position or results of operations. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC 718, Compensation - Stock Compensation. The update includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted with any adjustments reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The update introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate consideration of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. ASU 2016-13 is effective for annual and interim reporting periods beginning after December 15, 2019, and is required to be adopted using the modified retrospective approach. Early adoption is permitted for annual and interim reporting periods beginning after December 15, 2018. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of reducing diversity in practice. The issues identified within the ASU include: debt prepayments or extinguishment costs; contingent consideration made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identified cash flows and application of the predominance principle. ASU 2016-15 is effective for annual and interim reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for annual and interim reporting periods. The adoption of this guidance is not expected to have a material effect on our statement of cash flows. (f) Recently Adopted Accounting Pronouncements 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. In August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements which clarifies that the guidance in ASU 2015-03 does not apply to line-of-credit arrangements. According to ASU 2015-15, line-of-credit arrangements will continue to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issue costs ratably over the term of the arrangement. We adopted ASU 2015-03 retrospectively as of January 1, 2016, and have reclassified $15.4 million of the December 31, 2015, Deferred Loan and Senior Note Costs, Net of Amortization balance included in Total Other Assets to Long-Term Debt, Net included in Total Liabilities. In April 2015, the FASB issued ASU 2015-05, Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The ASU provides guidance in evaluating whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it should be accounted for as a service contract. We adopted ASU 2015-05 prospectively as of January 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. In June 2015, the FASB issued ASU No. 2015-10, Technical Corrections and Updates. The amendments in this update cover a wide range of topics in the codification and are generally categorized as follows: Amendments Related to Differences between Original Guidance and the Codification; Guidance Clarification and Reference Corrections; Simplification; and, Minor Improvements. We adopted ASU 2015-10 as of January 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. Under ASU 2015-11, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. We adopted ASU 2015-11 prospectively as of April 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. The adjustments related to previous reporting periods since the acquisition date must be disclosed by income statement line item either on the face of the income statement or in the notes. We adopted ASU 2015-16 as of January 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. (g) Regulatory Accounting We account for the regulated operations of our incumbent local exchange carriers in accordance with the accounting principles for regulated enterprises. This accounting recognizes 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. (h) 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. The computation of the dilutive net income (loss) per share of Class A common stock also assumes the conversion of our derivative financial instrument that may be settled in cash or shares (as described in Note 5 of this Form 10-Q), shares associated with unexercised stock options and deferred compensation that may be settled in cash or shares if the effect of conversion is dilutive. 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. (i) Common Stock We have a common stock buyback program to repurchase GCI's Class A and Class B common stock. The cost of the repurchased common stock reduces Retained Earnings in our Consolidated Balance Sheets and is treated as constructively retired when purchased. (j) 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 for all accounts greater than 120 days past due, a pooled basis using a percentage of related accounts, 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. Wireless Equipment Installment Plan ("EIP") Receivables We offer new and existing wireless customers the option to participate in Upgrade Now, a program that provides eligible customers with the ability to purchase certain wireless devices in installments over a period of up to 24 months. Participating customers have the right to trade-in the original equipment for a new device after making the equivalent of 12 monthly installment payments, provided their handset is in good working condition. Upon upgrade, the outstanding balance of the EIP is exchanged for the used handset. At the time of sale, we impute interest on the receivables associated with Upgrade Now. We record the imputed interest as a reduction to the related accounts receivable. Interest income, which is included in Other Income and (Expense) in our Consolidated Statements of Operations, is recognized over the financed installment term. We assess the collectability of our EIP receivables based upon a variety of factors, including payment trends and other qualitative factors. The credit profiles of our customers with an Upgrade Now plan are similar to those of our customers with a traditional subsidized plan. Customers with a credit profile which carries a higher risk are required to make a down payment for equipment financed through Upgrade Now. (k) Derivative Financial Instrument We account for our derivative instrument 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 stock appreciation rights derivative instrument ("SAR") (as described in Note 5 of this Form 10-Q) is recorded as a liability at fair value and is included within Other Liabilities in our Consolidated Balance Sheets. The SAR is revalued at each reporting date, with changes in the fair value of the instrument included in our Consolidated Statements of Operations as Derivative Instrument Unrealized Income (Loss) with Related Party. ( l ) Guarantees 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 from us and have a qualifying monthly wireless service plan. 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 estimated value of the guarantees are 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. 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. (m) Revenue Recognition As an Eligible Telecommunications Carrier ("ETC"), we receive support from the Universal Service Fund ("USF") to support the provision of wireline local access and wireless service in high cost areas. On August 31, 2016, the Federal Communications Commission ("FCC") published a Report and Order to reform the methodology for distributing USF high cost support for both wireline and wireless voice and broadband service (“Alaska High Cost Order”). The Alaska High Cost Order was a significant program change that required a reassessment of our high cost support revenue recognition. Remote High Cost Support Prior to the Alaska High Cost Order, we accrued estimated program revenue based on current line counts and the frozen per-line rates, reduced as needed by our estimate of the impact of the Statewide Support Cap. Additionally, we also considered our assessment of the impact of current FCC regulations and of the potential outcome of FCC proceedings. As of January 1, 2017, Remote high cost support payments to Alaska High Cost participants will be frozen on a per-company basis at adjusted December 2014 levels for a ten-year term in exchange for meeting individualized performance obligations to offer voice and broadband services meeting the service obligations at specified minimum speeds by five-year and ten-year service milestones to a specified number of locations. Remote high cost support is no longer dependent upon line counts and line count filings are no longer required. As a result of the Alaska High Cost Order, we apply the proportional performance revenue recognition method to account for the transition from accruals based on line counts to a fixed payment stream while our level of service provided and associated costs remain constant. Included in the calculation are the scheduled Remote high cost support payments from September 2016 through January 2027 net of our Remote accounts receivable balance at August 31, 2016. In 2022, the FCC may redistribute support in areas with duplicative LTE service. We will account for any changes made by the FCC to redistribute support prospectively. Urban High Cost Support Prior to the Alaska High Cost Order, Urban high cost support payments were frozen and had phased down to 60% of the monthly average of the 2011 annual support. The Alaska High Cost Order mandates that as of January 1, 2017, Urban high cost support for 2017 and 2018 will be two-thirds and one-third of the December 2014 level of support received, respectively. We apply the proportional performance revenue recognition method to account for the impact of the declining payments while our level of service provided and associated costs remain constant. Included in the calculation are the scheduled Urban high cost support payments from September 2016 through January 2018 net of our Urban accounts receivable balance at August 31, 2016. An equal amount of this result is recognized as Urban support revenue each period. For both Remote and Urban high cost support revenue, our ability to collect our accrued USF support is contingent upon continuation of the USF program and upon our eligibility to participate in that program, which are subject to change by future regulatory, legislative or judicial actions. We adjust revenue and the account receivable in the period the FCC makes a program change or we assess the likelihood that such a change has increased or decreased revenue. We do not recognize revenue related to a particular service area until our ETC status has been approved by the RCA. We recorded high cost support revenue under the Universal Service Fund (“USF”) program of $15.9 million and $16.5 million for the three months ended September 30, 2016 and 2015 , respectively, and $48.4 million and $50.6 million for the nine months ended September 30, 2016 and 2015 , respectively. At September 30, 2016 , we have $44.7 million in high cost support accounts receivable. ( n ) 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 program support, share-based compensation, inventory at lower of cost and net realizable value, 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, the fair value of equity method investments evaluated for impairment, 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, guarantees, and the accrual of contingencies and litigation. Actual results could differ from those estimates. (o) 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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Surcharges reported gross $ 951 1,426 2,973 3,960 (p) |
Tower Sale and Leaseback
Tower Sale and Leaseback | 9 Months Ended |
Sep. 30, 2016 | |
Tower Sale and Leaseback [Abstract] | |
Tower Sale and Leaseback | Tower Sale and Leaseback In August 2016, we sold to Vertical Bridge Towers II, LLC (“VBT”) 276 cell sites (“VBT Tower Sites”) in exchange for net proceeds of $90.8 million (“Tower Transaction”). The sale included, where applicable, the towers, the land on which the towers were situated if owned by us, the obligation to pay land leases, and other executory costs. We entered into a master lease agreement in which we lease back space at the VBT Tower Sites for an initial term of ten years, followed by the option to renew for eight additional five year periods, for a total possible lease term of 50 years. Each lease is subject to a 2% annual increase in lease payments throughout the life of the initial lease and all subsequent lease renewals. Prior to the Tower Transaction, we had the legal obligation to remove the towers upon termination of the land lease agreements. The obligation is now reduced to the removal of our equipment from the towers. Therefore, we have reduced our asset retirement obligation related to the VBT Tower Sites by $ 3.4 million . Per the master lease agreement, we have the right to cure land lease defaults on behalf of VBT and have negotiated fixed rate lease renewals as described above. Due to this continuing involvement with the VBT Tower Sites, we determined we were precluded from applying sale-leaseback accounting. We recorded a long-term financial obligation (“Tower Obligation”) in the amount of the net proceeds received and recognize interest on the tower obligation at a rate of 7.1% using the effective interest method. The Tower Obligation is increased by interest expense and amortized through contractual leaseback payments made by us to VBT. Our historical tower site asset costs continue to be depreciated and reported in Net Property and Equipment. The following table summarizes the impacts to the Consolidated Balance Sheets (amounts in thousands): September 30, 2016 Property and equipment (1) $ 19,159 Tower obligation (2) $ 88,060 (1) Property conveyed to VBT as part of the Tower Transaction, but remains on our Consolidated Balance Sheets. (2) Excluding current portion and net of deferred transaction costs. Future minimum payments related to the Tower Obligation, including expected renewals and excluding deferred transaction costs, are summarized below (amounts in thousands): Years ending December 31, Total 2016 $ 1,735 2017 6,996 2018 7,136 2019 7,279 2020 7,425 2021 and thereafter 157,690 Total minimum payments 188,261 Less amount representing interest 98,118 Tower obligation $ 90,143 |
Consolidated Statements of Cas9
Consolidated Statements of Cash Flows Supplemental Disclosures | 9 Months Ended |
Sep. 30, 2016 | |
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): Nine Months Ended September 30, 2016 2015 Decrease in accounts receivable, net $ 3,129 16,916 Increase in prepaid expenses (3,636 ) (813 ) Decrease in inventories 3,356 6,957 (Increase) decrease in other current assets (44 ) 17 Increase in other assets (3,990 ) (7,886 ) Increase (decrease) in accounts payable 4,155 (8,095 ) Increase (decrease) in deferred revenues (1,013 ) 1,532 Decrease in accrued payroll and payroll related obligations (2,227 ) (3,783 ) Increase (decrease) in accrued liabilities (5,758 ) 2,505 Increase in accrued interest 11,810 20,035 Decrease in subscriber deposits (366 ) (590 ) Increase (decrease) in long-term deferred revenue 18,178 (6,437 ) Increase in components of other long-term liabilities 332 230 Total change in operating assets and liabilities $ 23,926 20,588 The following item is for the nine months ended September 30, 2016 and 2015 (amounts in thousands): Net cash paid or received: 2016 2015 Interest paid including capitalized interest $ 50,789 43,195 The following items are non-cash investing and financing activities for the nine months ended September 30, 2016 and 2015 (amounts in thousands): 2016 2015 Non-cash additions for purchases of property and equipment $ 11,372 17,683 Net asset retirement obligation additions (deletions) to property and equipment $ (2,279 ) 1,730 Non-cash consideration for Wireless Acquisition $ — 23,326 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Amortization expense for amortizable intangible assets was as follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended 2016 2015 2016 2015 Amortization expense $ 3,147 2,701 9,183 7,919 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, 2016 $ 12,141 2017 $ 10,352 2018 $ 8,388 2019 $ 5,872 2020 $ 4,474 |
Fair Value Measurements and Der
Fair Value Measurements and Derivative Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Derivative Instruments | Fair Value Measurements and Derivative Instrument Recurring Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 are as follows (amounts in thousands): September 30, 2016 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,462 — — 1,462 Liabilities: Derivative stock appreciation rights $ — — 16,980 16,980 December 31, 2015 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,728 — — 1,728 Liabilities: Derivative stock appreciation rights $ — — 32,820 32,820 (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 Instrument" 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 September 30, 2016 and December 31, 2015 are as follows (amounts in thousands): September 30, December 31, Carrying Amount Fair Value Carrying Amount Fair Value Current and long-term debt $ 1,333,535 1,392,626 1,348,106 1,390,743 The following methods and assumptions were used to estimate fair values: • The fair values of the 6.75% Senior Notes due 2021 and the 6.875% Senior Notes due 2025 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 plus an additional premium to reflect its subordination to our 2021 and 2025 Notes (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 Instrument 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 instrument is 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 a derivative instrument 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. The following table shows our significant assumptions and inputs used in the lattice-based valuation model to value the stock appreciation right liability at September 30, 2016 : September 30, 2016 Contractual term (in years) 2.3 - 6.3 Volatility 40 % Risk-free interest rate 1.3 % The following table summarizes the changes in fair value of our financial instrument measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2016 and 2015 (amounts in thousands): Fair Value Measurement Using Level 3 Inputs Derivative Stock Appreciation Rights Balance at January 1, 2015 $ — Issuance 21,660 Fair value adjustment at end of period, included in Other Income (Expense) 5,040 Balance at September 30, 2015 26,700 Balance at January 1, 2016 32,820 Fair value adjustment at end of period, included in Other Income (Expense) (15,840 ) Balance at September 30, 2016 $ 16,980 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Common Stock 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. During the three months ended September 30, 2016 and 2015 , we repurchased 1.8 million and 0.4 million shares, respectively, of our Class A common stock under the stock buyback program at a cost of $27.1 million and $7.3 million , respectively. During the nine months ended September 30, 2016 and 2015 , we repurchased 3.0 million and 2.8 million shares of our Class A common stock under the stock buyback program at a cost of $46.5 million and $43.2 million , respectively. Under this program we are currently authorized to make up to $64.0 million of repurchases as of September 30, 2016 . 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. 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. We have issued only restricted stock awards since 2010. 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. The requisite service period of our awards is generally the same as the vesting period. New shares are issued when restricted stock awards are granted. We have 1.6 million shares available for grant under the Stock Option Plan at September 30, 2016 . A summary of nonvested restricted stock award activity under the Stock Option Plan as of September 30, 2016 and changes during the period then ended is presented below: Shares (in thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2015 1,495 $ 11.08 Granted 580 $ 17.68 Vested (284 ) $ 10.41 Forfeited (3 ) $ 15.93 Nonvested at September 30, 2016 1,788 $ 13.32 The weighted average grant date fair value of awards granted during the nine months ended September 30, 2016 and 2015 , were $17.68 and $14.70 , respectively. The total fair value of awards vesting during the nine months ended September 30, 2016 and 2015 were $4.5 million and $5.1 million , respectively. We have recorded share-based compensation expense of $7.8 million and $8.0 million for the nine months ended September 30, 2016 and 2015 , 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 $11.2 million as of September 30, 2016 . We expect to recognize share-based compensation expense over a weighted average period of 1.4 years for restricted stock awards. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Earnings (Loss) per Common 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 September 30, 2016 2015 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income available to common stockholders $ 7,266 677 $ 16,213 1,418 Less: Undistributed net income allocable to participating securities (386 ) — (920 ) — Undistributed net income allocable to common stockholders 6,880 677 15,293 1,418 Denominator: Weighted average common shares outstanding 32,033 3,154 34,031 3,155 Basic net income attributable to GCI common stockholders per common share $ 0.21 0.21 $ 0.45 0.45 Three Months Ended September 30, 2016 2015 Class A Class B Class A Class B Diluted net loss per share: Numerator: Undistributed net income allocable to common stockholders for basic computation $ 6,880 677 $ 15,293 1,418 Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 677 — 1,418 — Reallocation of undistributed earnings as a result of conversion of dilutive securities 141 (247 ) 22 (34 ) Effect of derivative instrument that may be settled in cash or shares (2,827 ) — (18 ) — Effect of share based compensation that may be settled in cash or shares (32 ) — 4 — Undistributed net income adjusted for allocation of undistributed earnings and effect of contracts that may be settled in cash or shares $ 4,839 430 $ 16,719 1,384 Denominator: Number of shares used in basic computation 32,033 3,154 34,031 3,155 Conversion of Class B to Class A common shares outstanding 3,154 — 3,155 — Effect of derivative instrument that may be settled in cash or shares 264 — 781 — Unexercised stock options 1 — 122 — Effect of share based compensation that may be settled in cash or shares 26 — 26 — Number of shares used in per share computation 35,478 3,154 38,115 3,155 Diluted net income attributable to GCI common stockholders per common share $ 0.14 0.14 $ 0.44 0.44 Nine Months Ended September 30, 2016 2015 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income (loss) available to common stockholders $ 11,422 1,035 $ (15,838 ) (1,427 ) Less: Undistributed net income allocable to participating securities (588 ) — — — Undistributed net income (loss) allocable to common stockholders 10,834 1,035 (15,838 ) (1,427 ) Denominator: Weighted average common shares outstanding 33,008 3,154 35,037 3,158 Basic net income (loss) attributable to GCI common stockholders per common share $ 0.33 0.33 $ (0.45 ) (0.45 ) Nine Months Ended September 30, 2016 2015 Class A Class B Class A Class B Diluted net loss per share: Numerator: Undistributed net income (loss) allocable to common stockholders for basic computation $ 10,834 1,035 $ (15,838 ) (1,427 ) Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares 1,035 — (1,427 ) — Reallocation of undistributed earnings as a result of conversion of dilutive securities 447 (787 ) — — Effect of derivative instrument that may be settled in cash or shares (9,327 ) — — — Effect of share based compensation that may be settled in cash or shares (93 ) — — — Undistributed net income (loss) adjusted for allocation of undistributed earnings (loss) and effect of contracts that may be settled in cash or shares $ 2,896 248 $ (17,265 ) (1,427 ) Denominator: Number of shares used in basic computation 33,008 3,154 35,037 3,158 Conversion of Class B to Class A common shares outstanding 3,154 — 3,158 — Effect of derivative instrument that may be settled in cash or shares 602 — — — Unexercised stock options 3 — — — Effect of share based compensation that may be settled in cash or shares 26 — — — Number of shares used in per share computation 36,793 3,154 38,195 3,158 Diluted net income (loss) attributable to GCI common stockholders per common share $ 0.08 0.08 $ (0.45 ) (0.45 ) Weighted average shares associated with outstanding securities for the three and nine months ended September 30, 2016 and 2015 , 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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Derivative instrument that may be settled in cash or shares, the effect of which is anti-dilutive — — — 595 Shares associated with anti-dilutive unexercised stock options — — — 120 Share-based compensation that may be settled in cash or shares, the effect of which is anti-dilutive — — — 26 Total excluded — — — 741 |
Segments
Segments | 9 Months Ended |
Sep. 30, 2016 | |
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 provide a full range of wireless, data, video, voice, and managed services to residential customers, businesses, governmental entities, and educational and medical institutions primarily in Alaska. We evaluate performance and allocate resources based on Adjusted EBITDA, which is defined as earnings plus imputed interest on financed devices before: • Net interest expense, • Income taxes, • Depreciation and amortization expense, • Loss on extinguishment of debt, • Software impairment charge, • Derivative instrument unrealized income (loss), • Share-based compensation expense, • Accretion expense, • Loss attributable to non-controlling interest resulting from NMTC transactions, • Gains and impairment losses on equity and cost method investments, and • Other non-cash adjustments. Management believes that this measure is useful to investors and other users of our financial information in understanding and evaluating operating performance 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. In the first quarter of 2016, we added an adjustment to Adjusted EBITDA, our measure of segment profitability, for cash received in excess of revenue recognized for long-term roaming arrangements ("Roaming Adjustment"). In the third quarter of 2016, we reevaluated our measure of segment profitability and decided to eliminate this adjustment due to the fact that this adjustment is not appropriate to include in non-GAAP metrics, which resulted in differences between our measure of segment profitability and disclosures of non-GAAP metrics. The effect of removing the Roaming Adjustment from Adjusted EBITDA for the three months ended March 31, 2016 and the three and six months ended June 30, 2016 follows (amounts in thousands): Wireless Segment Adjusted EBITDA Adjusted EBITDA as Previously Defined Removal of Roaming Adjustment Adjusted EBITDA First Quarter 2016 $ 40,064 (7,500 ) 32,564 Second Quarter 2016 $ 40,334 (7,500 ) 32,834 Six Months Ended June 30, 2016 $ 80,398 (15,000 ) 65,398 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 the majority 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 and nine months ended September 30, 2016 and 2015 follows (amounts in thousands): Three Months Ended Nine Months Ended Wireless Wireline Total Reportable Segments Wireless Wireline Total Reportable Segments September 30, 2016 Revenues $ 52,327 184,328 236,655 $ 157,664 543,855 701,519 Adjusted EBITDA $ 32,018 46,167 78,185 $ 97,416 122,915 220,331 September 30, 2015 Revenues $ 80,424 178,149 258,573 $ 207,568 529,622 737,190 Adjusted EBITDA $ 57,404 39,122 96,526 $ 140,518 119,312 259,830 A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Reportable segment Adjusted EBITDA $ 78,185 96,526 220,331 259,830 Less depreciation and amortization expense (47,819 ) (45,157 ) (143,033 ) (135,563 ) Less share-based compensation expense (2,810 ) (2,660 ) (7,820 ) (8,074 ) Less imputed interest on financed devices (651 ) (268 ) (1,885 ) (438 ) Less accretion expense (406 ) (191 ) (1,240 ) (992 ) Less software impairment charge — (2,571 ) — (29,839 ) Other (131 ) (206 ) (435 ) 493 Consolidated operating income 26,368 45,473 65,918 85,417 Less other expense, net (16,134 ) (19,856 ) (46,215 ) (107,361 ) Consolidated income (loss) before income taxes $ 10,234 25,617 19,703 (21,944 ) |
Related Party Transaction
Related Party Transaction | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party Transactions On July 11, 2016, we repurchased 1,000,000 shares of our Class A common stock for $16.1 million from John W. Stanton and Theresa E Gillespie, husband and wife, who continue to be significant shareholders of our Class B common stock. We entered into a long-term capital lease agreement in 1991 with the wife of GCI’s President and CEO for property occupied by us. The leased asset was capitalized in 1991 at the owner’s cost of $0.9 million and the related obligation was recorded. The lease agreement was amended in April 2008 and our existing capital lease asset and liability increased by $1.3 million to record the extension of this capital lease. The amended lease terminates on September 30, 2026. In January 2001 we entered into an aircraft operating lease agreement with a company owned by GCI’s President and CEO. The lease was amended several times, most recently in May 2011. The lease term of the aircraft may be terminated at any time by us upon 12 months written notice. The monthly lease rate of the aircraft is $132,000 . In 2001, we paid a deposit of $1.5 million in connection with the lease. The deposit will be repaid to us no later than six months after the agreement terminates. As disclosed in Note 5 of this Form 10-Q, we have an unsecured promissory note and stock appreciation rights with Searchlight. Searchlight received the right to nominate one person for appointment or election as a member of our Board of Directors pursuant to a Securityholder Agreement dated as of December 4, 2014. Searchlight became a related party on February 2, 2015 when we closed the Wireless Acquisition. Searchlight's nominee was appointed as a member of our Board of Directors on March 4, 2015. 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. We also have long-term capacity exchange agreements with ACS for which no money is exchanged. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2016 | |
Variable Interest Entity Disclosures [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 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 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 September 30, 2016 . 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 September 30, 2016 and December 31, 2015 . Equity Method Investment We own a 40.8% interest in a next generation carrier-class communications services firm. We account for our investment using the equity method. Due to declining economic conditions in the sector in which it operates, 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 was $3.0 million . We determined that the additional financing provided to the company was a reconsideration event under ASC 810 and subsequently determined that the entity is a VIE due to insufficient equity to finance its operations as a result of the decline in economic conditions. 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. During the second quarter of 2015, it became apparent that we would not recover the carrying value of our investment and we subsequently wrote-off the entire value of our investment. We received full payment on the $3.0 million note receivable in January 2016 and we do not have a contractual obligation to provide additional financing. We currently have no exposure to loss related to our involvement with the VIE. |
Software Impairment
Software Impairment | 9 Months Ended |
Sep. 30, 2016 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [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 first quarter of 2015, we completed a detailed assessment of our progress to date and determined it was no longer probable that the computer software being developed would be completed and placed in service. Our assessment concluded that the cost of continuing the development would be much higher than originally estimated, and the timing and scope risks were substantial. We identified development work, hardware, and software recorded as Construction in Progress through September 30, 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 considered the remaining capital expenditures for this billing system to have a fair value of $0 and recorded an impairment charge of $20.7 million during the nine months ended September 30, 2015 by recording an expense which is included in Software Impairment Charge in our Consolidated Statements of Operations. During the first quarter of 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 charge of $0.5 million and $7.1 million during the three and nine months ended September 30, 2015 by recording an expense which is included in Software Impairment Charge in our Consolidated Statements of Operations. During the third quarter of 2015, we evaluated user management software we purchased in 2014 and determined that we would not be able to use the software. Accordingly we recognized an impairment of $1.0 million during the three and nine months ended September 30, 2015 by recording an expense which is included in Software Impairment Charge in our Consolidated Statement of Operations. |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies On July 29, 2016, we executed a Membership Interest Purchase Agreement to acquire Kodiak Kenai Cable Company, the owner of the Kodiak Kenai Fiber Link ("KKFL") for consideration of $20.0 million . KKFL is the only low latency redundant fiber link between Anchorage, the Kenai Peninsula and Kodiak and it will ensure we have diverse, protected network capacity to these markets to support our current and future broadband requirements. Closing is subject to the consent of the Federal Communications Commission. |
Business and Summary of Signi19
Business and Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Basis of Presentation and 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. |
Acquisition | 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. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date to fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. In March 2016, the FASB issued ASU 2016-08, which amended the guidance in the new standard in order to clarify the principal versus agent assessment and is intended to make the guidance more operable and lead to more consistent application. In April 2016, the FASB issued ASU 2016-10, which clarifies the identification of performance obligations and the licensing implementation guidance in ASU 2014-09. In May 2016, the FASB issued ASU 2016-11, which rescinds SEC paragraphs pursuant to SEC staff announcements regarding ASU 2014-09. These rescissions include changes to topics pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May 2016, the FASB issued ASU 2016-12, which provides clarifying guidance in certain narrow areas and adds some practical expedients to ASU 2014-09. The standard permits the use of either the retrospective or cumulative effect transition method. Early adoption is permitted for annual periods beginning after December 15, 2016, however, we do not plan to early adopt this standard. We are currently evaluating the impact of the provisions of this new standard and we expect to have our assessment of the impact on our financial position and results of operations to be completed by December 31, 2016. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted only for certain portions of the ASU related to financial liabilities. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Lease accounting by the lessor remains largely unchanged by the new standard. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and is required to be adopted using the modified retrospective approach. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations, but we expect that adoption will have a material impact on our long-term assets and liabilities. In March 2016, the FASB issued ASU No. 2016-07, Simplifying the Transition to the Equity Method of Accounting. The update eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. Instead, the equity method of accounting should be applied prospectively from the date significant influence is obtained and investors should add the cost of acquiring the additional interest to the current basis of their previously held interest. For available-for-sale securities that become eligible for the equity method of accounting, any unrealized gain or loss recorded within accumulated other comprehensive income should be recognized in earnings at the date the investment initially qualifies for the use of the equity method. ASU 2016-07 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted and should be applied prospectively. The adoption of this guidance is not expected to have a material effect on our financial position or results of operations. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC 718, Compensation - Stock Compensation. The update includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted with any adjustments reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The update introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate consideration of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. ASU 2016-13 is effective for annual and interim reporting periods beginning after December 15, 2019, and is required to be adopted using the modified retrospective approach. Early adoption is permitted for annual and interim reporting periods beginning after December 15, 2018. We are currently evaluating the impact of the provisions of this new standard on our financial position and results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of reducing diversity in practice. The issues identified within the ASU include: debt prepayments or extinguishment costs; contingent consideration made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identified cash flows and application of the predominance principle. ASU 2016-15 is effective for annual and interim reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for annual and interim reporting periods. The adoption of this guidance is not expected to have a material effect on our statement of cash flows. (f) Recently Adopted Accounting Pronouncements 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. In August 2015, the FASB issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements which clarifies that the guidance in ASU 2015-03 does not apply to line-of-credit arrangements. According to ASU 2015-15, line-of-credit arrangements will continue to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issue costs ratably over the term of the arrangement. We adopted ASU 2015-03 retrospectively as of January 1, 2016, and have reclassified $15.4 million of the December 31, 2015, Deferred Loan and Senior Note Costs, Net of Amortization balance included in Total Other Assets to Long-Term Debt, Net included in Total Liabilities. In April 2015, the FASB issued ASU 2015-05, Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. The ASU provides guidance in evaluating whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement should be accounted for as an acquisition of a software license. If the arrangement does not contain a software license, it should be accounted for as a service contract. We adopted ASU 2015-05 prospectively as of January 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. In June 2015, the FASB issued ASU No. 2015-10, Technical Corrections and Updates. The amendments in this update cover a wide range of topics in the codification and are generally categorized as follows: Amendments Related to Differences between Original Guidance and the Codification; Guidance Clarification and Reference Corrections; Simplification; and, Minor Improvements. We adopted ASU 2015-10 as of January 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. Under ASU 2015-11, inventory will be measured at the “lower of cost and net realizable value” and options that currently exist for “market value” will be eliminated. The ASU defines net realizable value as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” No other changes were made to the current guidance on inventory measurement. We adopted ASU 2015-11 prospectively as of April 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount as if the accounting had been completed at the acquisition date. The adjustments related to previous reporting periods since the acquisition date must be disclosed by income statement line item either on the face of the income statement or in the notes. We adopted ASU 2015-16 as of January 1, 2016. The adoption of this standard did not have a significant effect on our financial position or results of operations. |
Regulatory Accounting | Regulatory Accounting We account for the regulated operations of our incumbent local exchange carriers in accordance with the accounting principles for regulated enterprises. This accounting recognizes 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 (Loss) 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. The computation of the dilutive net income (loss) per share of Class A common stock also assumes the conversion of our derivative financial instrument that may be settled in cash or shares (as described in Note 5 of this Form 10-Q), shares associated with unexercised stock options and deferred compensation that may be settled in cash or shares if the effect of conversion is dilutive. 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. |
Common Stock | Common Stock We have a common stock buyback program to repurchase GCI's Class A and Class B common stock. The cost of the repurchased common stock reduces Retained Earnings in our Consolidated Balance Sheets and is treated as constructively retired when purchased. |
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 for all accounts greater than 120 days past due, a pooled basis using a percentage of related accounts, 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. Wireless Equipment Installment Plan ("EIP") Receivables We offer new and existing wireless customers the option to participate in Upgrade Now, a program that provides eligible customers with the ability to purchase certain wireless devices in installments over a period of up to 24 months. Participating customers have the right to trade-in the original equipment for a new device after making the equivalent of 12 monthly installment payments, provided their handset is in good working condition. Upon upgrade, the outstanding balance of the EIP is exchanged for the used handset. At the time of sale, we impute interest on the receivables associated with Upgrade Now. We record the imputed interest as a reduction to the related accounts receivable. Interest income, which is included in Other Income and (Expense) in our Consolidated Statements of Operations, is recognized over the financed installment term. We assess the collectability of our EIP receivables based upon a variety of factors, including payment trends and other qualitative factors. The credit profiles of our customers with an Upgrade Now plan are similar to those of our customers with a traditional subsidized plan. Customers with a credit profile which carries a higher risk are required to make a down payment for equipment financed through Upgrade Now. |
Derivative Financial Instruments | Derivative Financial Instrument We account for our derivative instrument 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 stock appreciation rights derivative instrument ("SAR") (as described in Note 5 of this Form 10-Q) is recorded as a liability at fair value and is included within Other Liabilities in our Consolidated Balance Sheets. The SAR is revalued at each reporting date, with changes in the fair value of the instrument included in our Consolidated Statements of Operations as Derivative Instrument Unrealized Income (Loss) with Related Party. |
Revenue Recognition | The Alaska High Cost Order was a significant program change that required a reassessment of our high cost support revenue recognition. Remote High Cost Support Prior to the Alaska High Cost Order, we accrued estimated program revenue based on current line counts and the frozen per-line rates, reduced as needed by our estimate of the impact of the Statewide Support Cap. Additionally, we also considered our assessment of the impact of current FCC regulations and of the potential outcome of FCC proceedings. As of January 1, 2017, Remote high cost support payments to Alaska High Cost participants will be frozen on a per-company basis at adjusted December 2014 levels for a ten-year term in exchange for meeting individualized performance obligations to offer voice and broadband services meeting the service obligations at specified minimum speeds by five-year and ten-year service milestones to a specified number of locations. Remote high cost support is no longer dependent upon line counts and line count filings are no longer required. As a result of the Alaska High Cost Order, we apply the proportional performance revenue recognition method to account for the transition from accruals based on line counts to a fixed payment stream while our level of service provided and associated costs remain constant. Included in the calculation are the scheduled Remote high cost support payments from September 2016 through January 2027 net of our Remote accounts receivable balance at August 31, 2016. In 2022, the FCC may redistribute support in areas with duplicative LTE service. We will account for any changes made by the FCC to redistribute support prospectively. Urban High Cost Support Prior to the Alaska High Cost Order, Urban high cost support payments were frozen and had phased down to 60% of the monthly average of the 2011 annual support. The Alaska High Cost Order mandates that as of January 1, 2017, Urban high cost support for 2017 and 2018 will be two-thirds and one-third of the December 2014 level of support received, respectively. We apply the proportional performance revenue recognition method to account for the impact of the declining payments while our level of service provided and associated costs remain constant. Included in the calculation are the scheduled Urban high cost support payments from September 2016 through January 2018 net of our Urban accounts receivable balance at August 31, 2016. An equal amount of this result is recognized as Urban support revenue each period. For both Remote and Urban high cost support revenue, our ability to collect our accrued USF support is contingent upon continuation of the USF program and upon our eligibility to participate in that program, which are subject to change by future regulatory, legislative or judicial actions. We adjust revenue and the account receivable in the period the FCC makes a program change or we assess the likelihood that such a change has increased or decreased revenue. We do not recognize revenue related to a particular service area until our ETC status has been approved by the RCA. |
Guarantees | Guarantees 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 from us and have a qualifying monthly wireless service plan. 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 estimated value of the guarantees are 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. 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. |
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 program support, share-based compensation, inventory at lower of cost and net realizable value, 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, the fair value of equity method investments evaluated for impairment, 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, guarantees, 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 2015 financial statements to make them comparable with classifications used in the current year. |
Business and Summary of Signi20
Business and Summary of Significant Accounting Principles (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 excluding working capital adjustments (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 |
Changes in Noncontrolling Interest | The impact of the AWN NCI Acquisition is summarized in the following table (amounts in thousands): Reduction of non-controlling interest $ 268,364 Increase in deferred tax assets 24,028 Additional paid-in capital 11,439 Fair value of consideration paid for acquisition of equity interest $ 303,831 |
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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Surcharges reported gross $ 951 1,426 2,973 3,960 |
Tower Sale and Leaseback (Table
Tower Sale and Leaseback (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Tower Sale and Leaseback [Abstract] | |
Tower Sale and Leaseback Balance Sheet Impacts | The following table summarizes the impacts to the Consolidated Balance Sheets (amounts in thousands): September 30, 2016 Property and equipment (1) $ 19,159 Tower obligation (2) $ 88,060 (1) Property conveyed to VBT as part of the Tower Transaction, but remains on our Consolidated Balance Sheets. (2) Excluding current portion and net of deferred transaction costs. |
Furture minimum payments under Tower Obligation | Future minimum payments related to the Tower Obligation, including expected renewals and excluding deferred transaction costs, are summarized below (amounts in thousands): Years ending December 31, Total 2016 $ 1,735 2017 6,996 2018 7,136 2019 7,279 2020 7,425 2021 and thereafter 157,690 Total minimum payments 188,261 Less amount representing interest 98,118 Tower obligation $ 90,143 |
Consolidated Statements of Ca22
Consolidated Statements of Cash Flows Supplemental Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow Operating Capital | Changes in operating assets and liabilities consist of (amounts in thousands): Nine Months Ended September 30, 2016 2015 Decrease in accounts receivable, net $ 3,129 16,916 Increase in prepaid expenses (3,636 ) (813 ) Decrease in inventories 3,356 6,957 (Increase) decrease in other current assets (44 ) 17 Increase in other assets (3,990 ) (7,886 ) Increase (decrease) in accounts payable 4,155 (8,095 ) Increase (decrease) in deferred revenues (1,013 ) 1,532 Decrease in accrued payroll and payroll related obligations (2,227 ) (3,783 ) Increase (decrease) in accrued liabilities (5,758 ) 2,505 Increase in accrued interest 11,810 20,035 Decrease in subscriber deposits (366 ) (590 ) Increase (decrease) in long-term deferred revenue 18,178 (6,437 ) Increase in components of other long-term liabilities 332 230 Total change in operating assets and liabilities $ 23,926 20,588 |
Cash Payments for Interest | The following item is for the nine months ended September 30, 2016 and 2015 (amounts in thousands): Net cash paid or received: 2016 2015 Interest paid including capitalized interest $ 50,789 43,195 |
Schedule of Other Significant Noncash Transactions | The following items are non-cash investing and financing activities for the nine months ended September 30, 2016 and 2015 (amounts in thousands): 2016 2015 Non-cash additions for purchases of property and equipment $ 11,372 17,683 Net asset retirement obligation additions (deletions) to property and equipment $ (2,279 ) 1,730 Non-cash consideration for Wireless Acquisition $ — 23,326 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, Nine Months Ended 2016 2015 2016 2015 Amortization expense $ 3,147 2,701 9,183 7,919 |
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, 2016 $ 12,141 2017 $ 10,352 2018 $ 8,388 2019 $ 5,872 2020 $ 4,474 |
Fair Value Measurements and D24
Fair Value Measurements and Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
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 September 30, 2016 and December 31, 2015 are as follows (amounts in thousands): September 30, 2016 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,462 — — 1,462 Liabilities: Derivative stock appreciation rights $ — — 16,980 16,980 December 31, 2015 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,728 — — 1,728 Liabilities: Derivative stock appreciation rights $ — — 32,820 32,820 (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 September 30, 2016 and December 31, 2015 are as follows (amounts in thousands): September 30, December 31, Carrying Amount Fair Value Carrying Amount Fair Value Current and long-term debt $ 1,333,535 1,392,626 1,348,106 1,390,743 |
Fair Value Inputs, Liabilities, Quantitative Information | The following table shows our significant assumptions and inputs used in the lattice-based valuation model to value the stock appreciation right liability at September 30, 2016 : September 30, 2016 Contractual term (in years) 2.3 - 6.3 Volatility 40 % Risk-free interest rate 1.3 % |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the changes in fair value of our financial instrument measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the nine months ended September 30, 2016 and 2015 (amounts in thousands): Fair Value Measurement Using Level 3 Inputs Derivative Stock Appreciation Rights Balance at January 1, 2015 $ — Issuance 21,660 Fair value adjustment at end of period, included in Other Income (Expense) 5,040 Balance at September 30, 2015 26,700 Balance at January 1, 2016 32,820 Fair value adjustment at end of period, included in Other Income (Expense) (15,840 ) Balance at September 30, 2016 $ 16,980 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
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 September 30, 2016 and changes during the period then ended is presented below: Shares (in thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2015 1,495 $ 11.08 Granted 580 $ 17.68 Vested (284 ) $ 10.41 Forfeited (3 ) $ 15.93 Nonvested at September 30, 2016 1,788 $ 13.32 |
Earnings (Loss) Per Common Sh26
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 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 September 30, 2016 2015 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income available to common stockholders $ 7,266 677 $ 16,213 1,418 Less: Undistributed net income allocable to participating securities (386 ) — (920 ) — Undistributed net income allocable to common stockholders 6,880 677 15,293 1,418 Denominator: Weighted average common shares outstanding 32,033 3,154 34,031 3,155 Basic net income attributable to GCI common stockholders per common share $ 0.21 0.21 $ 0.45 0.45 Three Months Ended September 30, 2016 2015 Class A Class B Class A Class B Diluted net loss per share: Numerator: Undistributed net income allocable to common stockholders for basic computation $ 6,880 677 $ 15,293 1,418 Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 677 — 1,418 — Reallocation of undistributed earnings as a result of conversion of dilutive securities 141 (247 ) 22 (34 ) Effect of derivative instrument that may be settled in cash or shares (2,827 ) — (18 ) — Effect of share based compensation that may be settled in cash or shares (32 ) — 4 — Undistributed net income adjusted for allocation of undistributed earnings and effect of contracts that may be settled in cash or shares $ 4,839 430 $ 16,719 1,384 Denominator: Number of shares used in basic computation 32,033 3,154 34,031 3,155 Conversion of Class B to Class A common shares outstanding 3,154 — 3,155 — Effect of derivative instrument that may be settled in cash or shares 264 — 781 — Unexercised stock options 1 — 122 — Effect of share based compensation that may be settled in cash or shares 26 — 26 — Number of shares used in per share computation 35,478 3,154 38,115 3,155 Diluted net income attributable to GCI common stockholders per common share $ 0.14 0.14 $ 0.44 0.44 Nine Months Ended September 30, 2016 2015 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income (loss) available to common stockholders $ 11,422 1,035 $ (15,838 ) (1,427 ) Less: Undistributed net income allocable to participating securities (588 ) — — — Undistributed net income (loss) allocable to common stockholders 10,834 1,035 (15,838 ) (1,427 ) Denominator: Weighted average common shares outstanding 33,008 3,154 35,037 3,158 Basic net income (loss) attributable to GCI common stockholders per common share $ 0.33 0.33 $ (0.45 ) (0.45 ) Nine Months Ended September 30, 2016 2015 Class A Class B Class A Class B Diluted net loss per share: Numerator: Undistributed net income (loss) allocable to common stockholders for basic computation $ 10,834 1,035 $ (15,838 ) (1,427 ) Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares 1,035 — (1,427 ) — Reallocation of undistributed earnings as a result of conversion of dilutive securities 447 (787 ) — — Effect of derivative instrument that may be settled in cash or shares (9,327 ) — — — Effect of share based compensation that may be settled in cash or shares (93 ) — — — Undistributed net income (loss) adjusted for allocation of undistributed earnings (loss) and effect of contracts that may be settled in cash or shares $ 2,896 248 $ (17,265 ) (1,427 ) Denominator: Number of shares used in basic computation 33,008 3,154 35,037 3,158 Conversion of Class B to Class A common shares outstanding 3,154 — 3,158 — Effect of derivative instrument that may be settled in cash or shares 602 — — — Unexercised stock options 3 — — — Effect of share based compensation that may be settled in cash or shares 26 — — — Number of shares used in per share computation 36,793 3,154 38,195 3,158 Diluted net income (loss) attributable to GCI common stockholders per common share $ 0.08 0.08 $ (0.45 ) (0.45 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Weighted average shares associated with outstanding securities for the three and nine months ended September 30, 2016 and 2015 , 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 September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Derivative instrument that may be settled in cash or shares, the effect of which is anti-dilutive — — — 595 Shares associated with anti-dilutive unexercised stock options — — — 120 Share-based compensation that may be settled in cash or shares, the effect of which is anti-dilutive — — — 26 Total excluded — — — 741 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Profitability Definition Adjustments [Table Text Block] | The effect of removing the Roaming Adjustment from Adjusted EBITDA for the three months ended March 31, 2016 and the three and six months ended June 30, 2016 follows (amounts in thousands): Wireless Segment Adjusted EBITDA Adjusted EBITDA as Previously Defined Removal of Roaming Adjustment Adjusted EBITDA First Quarter 2016 $ 40,064 (7,500 ) 32,564 Second Quarter 2016 $ 40,334 (7,500 ) 32,834 Six Months Ended June 30, 2016 $ 80,398 (15,000 ) 65,398 |
Schedule of Segment Reporting Information, by Segment | Summarized financial information for our reportable segments for the three and nine months ended September 30, 2016 and 2015 follows (amounts in thousands): Three Months Ended Nine Months Ended Wireless Wireline Total Reportable Segments Wireless Wireline Total Reportable Segments September 30, 2016 Revenues $ 52,327 184,328 236,655 $ 157,664 543,855 701,519 Adjusted EBITDA $ 32,018 46,167 78,185 $ 97,416 122,915 220,331 September 30, 2015 Revenues $ 80,424 178,149 258,573 $ 207,568 529,622 737,190 Adjusted EBITDA $ 57,404 39,122 96,526 $ 140,518 119,312 259,830 |
Reconciliation of Total EBITDA to Operating Profit (Loss) | A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Reportable segment Adjusted EBITDA $ 78,185 96,526 220,331 259,830 Less depreciation and amortization expense (47,819 ) (45,157 ) (143,033 ) (135,563 ) Less share-based compensation expense (2,810 ) (2,660 ) (7,820 ) (8,074 ) Less imputed interest on financed devices (651 ) (268 ) (1,885 ) (438 ) Less accretion expense (406 ) (191 ) (1,240 ) (992 ) Less software impairment charge — (2,571 ) — (29,839 ) Other (131 ) (206 ) (435 ) 493 Consolidated operating income 26,368 45,473 65,918 85,417 Less other expense, net (16,134 ) (19,856 ) (46,215 ) (107,361 ) Consolidated income (loss) before income taxes $ 10,234 25,617 19,703 (21,944 ) |
Business and Summary of Signi28
Business and Summary of Significant Accounting Principles (Narratives) (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2016entity | Jan. 01, 2016USD ($) | Feb. 02, 2015 | |
Business | |||
Year founded | 1,979 | ||
Principles of Consolidation | |||
Voting interests acquired | 66.67% | ||
Interests acquired from noncontrolling interest | 33.33% | ||
Number of VIEs | entity | 4 | ||
Accounts Receivable and Allowance for Doubtful Receivables | |||
Period past due for write-off of trade accounts receivable | 120 days | ||
Number of Installment Plan Payments | 12 | ||
Accounting Standards Update 2015-03 [Member] | |||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||
Deferred debt issuance costs | $ | $ 15.4 | ||
Maximum [Member] | |||
Accounts Receivable and Allowance for Doubtful Receivables | |||
Equipment Installment Plan Payment Term | 24 months |
Business and Summary of Signi29
Business and Summary of Significant Accounting Principles (Business Acquisition) (Details) - USD ($) | Feb. 02, 2015 | Sep. 30, 2015 | Dec. 31, 2015 |
Noncontrolling Interest [Line Items] | |||
Consideration paid | $ 293,200,000 | ||
Schedule of Consideration Transferred [Abstract] | |||
Total consideration transfered to ACS | 304,838,000 | ||
Non-controlling interest acquisition | 303,831,000 | ||
Property and equipment | 746,000 | ||
Other intangible assets | 261,000 | ||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 303,831,000 | $ 305,831,000 | |
Increase in Deferred Tax Assets | 24,028,000 | ||
Series of Individually Immaterial Business Acquisitions [Member] | |||
Other Acquisitions | |||
Number of Businesses Acquired | 3 | ||
Business Combination, Consideration Transferred | $ 12,700,000 | ||
Non-controlling Interests [Member] | |||
Schedule of Consideration Transferred [Abstract] | |||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | 268,364,000 | 271,521,000 | |
Additional Paid-in Capital [Member] | |||
Schedule of Consideration Transferred [Abstract] | |||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | $ 11,439,000 | 34,310,000 | |
Other Nonoperating Income (Expense) [Member] | Rights to Receive Future Capacity [Member] | |||
Noncontrolling Interest [Line Items] | |||
Fair value adjustment to assets | 1,200,000 | ||
Other Nonoperating Income (Expense) [Member] | Rights to Use Capacity [Member] | |||
Noncontrolling Interest [Line Items] | |||
Impairment of intangible assets | $ 3,800,000 |
Business and Summary of Signi30
Business and Summary of Significant Accounting Principles (Revenue Recognition) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Public Utilities, General Disclosures [Line Items] | |||||
Revenues | $ 236,655 | $ 258,573 | $ 701,519 | $ 737,190 | |
Document Period End Date | Sep. 30, 2016 | ||||
Receivables | 200,294 | $ 200,294 | $ 208,384 | ||
High Cost Support Program [Member] | |||||
Public Utilities, General Disclosures [Line Items] | |||||
High cost support payment percent | 60.00% | ||||
Revenues | 15,900 | $ 16,500 | $ 48,400 | $ 50,600 | |
Receivables | $ 44,700 | $ 44,700 |
Business and Summary of Signi31
Business and Summary of Significant Accounting Principles (Surcharges reported gross) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Surcharges reported gross | $ 951 | $ 1,426 | $ 2,973 | $ 3,960 |
Tower Sale and Leaseback (Narra
Tower Sale and Leaseback (Narrative) (Details) - Vertical Bridge Tower Sale [Member] $ in Millions | 1 Months Ended |
Aug. 31, 2016USD ($) | |
Sale Leaseback Transaction [Line Items] | |
Towers conveyed to VBT | 276 |
Sale Leaseback Transaction, Net Proceeds | $ 90.8 |
Renewal Options | 8 |
Lessee Leasing Arrangements, Renewal Term | 5 years |
Annual rent increase | 2.00% |
Reduction of asset retirement obligation | $ 3.4 |
Imputed Interest Rate | 7.10% |
Minimum [Member] | |
Sale Leaseback Transaction [Line Items] | |
Lessee Leasing Arrangements, Term of Contract | 10 years |
Maximum [Member] | |
Sale Leaseback Transaction [Line Items] | |
Lessee Leasing Arrangements, Term of Contract | 50 years |
Tower Sale and Leaseback (Balan
Tower Sale and Leaseback (Balance Sheet Impacts) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Tower Sale and Leaseback [Abstract] | ||
Property and equipment | $ 19,159 | |
Tower obligation | $ 88,060 | $ 0 |
Tower Sale and Leaseback (Futur
Tower Sale and Leaseback (Future Minimum Payments) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Tower Sale and Leaseback [Abstract] | |
2,016 | $ 1,735 |
2,017 | 6,996 |
2,018 | 7,136 |
2,019 | 7,279 |
2,020 | 7,425 |
2021 and thereafter | 157,690 |
Total minimum payments | 188,261 |
Less amount representing interest | 98,118 |
Tower obligation | $ 90,143 |
Consolidated Statements of Ca35
Consolidated Statements of Cash Flows Supplemental Disclosures (Changes in operating assets and liabilities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Decrease in accounts receivable, net | $ 3,129 | $ 16,916 |
Increase in prepaid expenses | (3,636) | (813) |
Decrease in inventories | 3,356 | 6,957 |
(Increase) decrease in other current assets | (44) | 17 |
Increase in other assets | (3,990) | (7,886) |
Increase (decrease) in accounts payable | 4,155 | (8,095) |
Increase (decrease) in deferred revenues | (1,013) | 1,532 |
Decrease in accrued payroll and payroll related obligations | (2,227) | (3,783) |
Increase (decrease) in accrued liabilities | (5,758) | 2,505 |
Increase in accrued interest | 11,810 | 20,035 |
Decrease in subscriber deposits | (366) | (590) |
Increase (decrease) in long-term deferred revenue | 18,178 | (6,437) |
Increase in components of other long-term liabilities | 332 | 230 |
Total change in operating assets and liabilities | $ 23,926 | $ 20,588 |
Consolidated Statements of Ca36
Consolidated Statements of Cash Flows Supplemental Disclosures (Net cash paid or received) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid including capitalized interest | $ 50,789 | $ 43,195 |
Consolidated Statements of Ca37
Consolidated Statements of Cash Flows Supplemental Disclosures (Non-cash investing and financing activities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Non-cash additions for purchases of property and equipment | $ 11,372 | $ 17,683 |
Net asset retirement obligation additions (deletions) to property and equipment | (2,279) | 1,730 |
Non-cash consideration for Wireless Acquisition | $ 0 | $ 23,326 |
Intangible Assets (Amortization
Intangible Assets (Amortization expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 3,147 | $ 2,701 | $ 9,183 | $ 7,919 |
Intangible Assets (5 year Futur
Intangible Assets (5 year Future Amortization ) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | |
2,016 | $ 12,141 |
2,017 | 10,352 |
2,018 | 8,388 |
2,019 | 5,872 |
2,020 | $ 4,474 |
Fair Value Measurements and D40
Fair Value Measurements and Derivative Instruments (Assets and liabilities measured at fair value on a recurring basis) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (mutual funds) | $ 1,462 | $ 1,728 |
Derivative stock appreciation rights | 16,980 | 32,820 |
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) | 1,462 | 1,728 |
Derivative stock appreciation rights | 0 | 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 | 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 | $ 16,980 | $ 32,820 |
Fair Value Measurements and D41
Fair Value Measurements and Derivative Instruments (Carrying amounts and fair value of the financial instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Senior Notes Due 2021 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt stated percentage | 6.75% | |
Senior Notes Due 2025 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt stated percentage | 6.875% | |
Carrying Value [Member] | ||
Debt Instrument [Line Items] | ||
Current and long-term debt | $ 1,333,535 | $ 1,348,106 |
Fair Value [Member] | ||
Debt Instrument [Line Items] | ||
Current and long-term debt | $ 1,392,626 | $ 1,390,743 |
Fair Value Measurements and D42
Fair Value Measurements and Derivative Instruments (Derivative Financial Instruments) (Details) - USD ($) | Feb. 02, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Stock Appreciation Rights (SARs) [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Stock appreciation rights, expiration period | 8 years | ||
Volatility | 40.00% | ||
Risk-free interest rate | 1.30% | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value of stock appreciation rights, beginning balance | $ 32,820,000 | $ 0 | |
Issuance | 21,660,000 | ||
Fair value of stock appreciation rights, ending balance | 16,980,000 | 26,700,000 | |
Stock Appreciation Rights (SARs) [Member] | Other Income (Expense) [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value adjustment at end of period, included in Other Income (Expense) | $ (15,840,000) | $ 5,040,000 | |
Stock Appreciation Rights (SARs) [Member] | Minimum [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Contractual term (in years) | 2 years 4 months | ||
Stock Appreciation Rights (SARs) [Member] | Maximum [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Contractual term (in years) | 6 years 3 months | ||
Stock Appreciation Rights (SARs) [Member] | Common Stock - Class A [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Stock appreciation rights (in rights) | 3,000,000 | ||
Exercise price of stock appreciation rights (per share) | $ 13 | ||
Searchlight ALX, LP Promissory Note [Member] | Unsecured Debt [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Debt face amount | $ 75,000,000 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narratives) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Common Stock [Abstract] | ||||
Stock Repurchased and Retired During Period, Value | $ 47,655 | $ 44,324 | ||
Restricted Stock [Member] | ||||
Share-based Compensation [Abstract] | ||||
Unrecognized share-based compensation expense | $ 11,200 | $ 11,200 | ||
Weighted average period for recognition of unvested shares | 1 year 4 months 7 days | |||
Common Stock - Class A [Member] | ||||
Common Stock [Abstract] | ||||
Stock Repurchased and Retired During Period, Value | $ 196 | $ 19,062 | ||
Share-based Compensation [Abstract] | ||||
Number of shares authorized | 15,700,000 | 15,700,000 | ||
Maximum [Member] | Restricted Stock [Member] | ||||
Share-based Compensation [Abstract] | ||||
Vesting period | 3 years | |||
Stock Option Plan Member [Member] | Restricted Stock [Member] | ||||
Share-based Compensation [Abstract] | ||||
Granted (USD per share) | $ 17.68 | $ 14.70 | ||
Fair value of awards vesting during period | $ 4,500 | $ 5,100 | ||
Stock Option Plan Member [Member] | Common Stock - Class A [Member] | ||||
Share-based Compensation [Abstract] | ||||
Number of shares available for grant | 1,600,000 | 1,600,000 | ||
Stock Buyback Program [Member] | ||||
Common Stock [Abstract] | ||||
Amount authorized per quarter by Board for share repurchases | $ 5,000 | |||
Stock Repurchased and Retired During Period, Shares | 1,800,000 | 400,000 | 3,000,000 | 2,800,000 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 64,000 | $ 64,000 | ||
Stock Buyback Program [Member] | Common Stock - Class A [Member] | ||||
Common Stock [Abstract] | ||||
Stock Repurchased and Retired During Period, Value | $ 27,100 | $ 7,300 | 46,500 | $ 43,200 |
Other Nonoperating Income (Expense) [Member] | ||||
Share-based Compensation [Abstract] | ||||
Share-based compensation expense | $ 7,800 | $ 8,000 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of nonvested restricted stock award activity) (Details) - Restricted Stock [Member] - Stock Option Plan Member [Member] - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Shares (in thousands) | ||
Nonvested beginning balance (shares) | 1,495 | |
Granted (shares) | 580 | |
Vested (shares) | (284) | |
Forfeited (shares) | (3) | |
Nonvested ending balance (shares) | 1,788 | |
Weighted Average Grant Date Fair Value | ||
Nonvested, Beginning (USD per share) | $ 11.08 | |
Granted (USD per share) | 17.68 | $ 14.70 |
Vested (USD per share) | 10.41 | |
Forfeited (USD per share) | 15.93 | |
Nonvested, Ending (USD per share) | $ 13.32 |
Earnings (Loss) Per Common Sh45
Earnings (Loss) Per Common Share (Basic Net Income (Loss) per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator [Abstract] | ||||
Net income (loss) available to common stockholders | $ 7,943 | $ 17,631 | $ 12,457 | $ (17,265) |
Common Stock - Class A [Member] | ||||
Numerator [Abstract] | ||||
Net income (loss) available to common stockholders | 7,266 | 16,213 | 11,422 | (15,838) |
Less: Undistributed net income allocable to participating securities | (386) | (920) | (588) | 0 |
Undistributed net income (loss) allocable to common stockholders | $ 6,880 | $ 15,293 | $ 10,834 | $ (15,838) |
Denominator [Abstract] | ||||
Weighted average common shares outstanding | 32,033 | 34,031 | 33,008 | 35,037 |
Basic net income (loss) attributable to GCI common stockholders per common share | $ 0.21 | $ 0.45 | $ 0.33 | $ (0.45) |
Common Stock - Class B [Member] | ||||
Numerator [Abstract] | ||||
Net income (loss) available to common stockholders | $ 677 | $ 1,418 | $ 1,035 | $ (1,427) |
Less: Undistributed net income allocable to participating securities | 0 | 0 | 0 | 0 |
Undistributed net income (loss) allocable to common stockholders | $ 677 | $ 1,418 | $ 1,035 | $ (1,427) |
Denominator [Abstract] | ||||
Weighted average common shares outstanding | 3,154 | 3,155 | 3,154 | 3,158 |
Basic net income (loss) attributable to GCI common stockholders per common share | $ 0.21 | $ 0.45 | $ 0.33 | $ (0.45) |
Earnings (Loss) Per Common Sh46
Earnings (Loss) Per Common Share (Diluted Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Common Stock - Class A [Member] | ||||
Numerator [Abstract] | ||||
Undistributed income (loss) allocable to common stockholders for basic computation | $ 6,880 | $ 15,293 | $ 10,834 | $ (15,838) |
Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares | 677 | 1,418 | 1,035 | (1,427) |
Reallocation of undistributed earnings as a result of conversion of dilutive securities | 141 | 22 | 447 | 0 |
Effect of derivative instrument that may be settled in cash or shares | (2,827) | (18) | (9,327) | 0 |
Effect of share based compensation that may be settled in cash or shares | (32) | 4 | (93) | 0 |
Undistributed net income (loss) adjusted for allocation of undistributed earnings (loss) and effect of contracts that may be settled in cash or shares | $ 4,839 | $ 16,719 | $ 2,896 | $ (17,265) |
Denominator [Abstract] | ||||
Number of shares used in basic computation | 32,033 | 34,031 | 33,008 | 35,037 |
Conversion of Class B to Class A common shares outstanding | 3,154 | 3,155 | 3,154 | 3,158 |
Effect of derivative instrument that may be settled in cash or shares | 264 | 781 | 602 | 0 |
Unexercised stock options | 1 | 122 | 3 | 0 |
Effect of share based compensation that may be settled in cash or shares | 26 | 26 | 26 | 0 |
Number of shares used in per share computation | 35,478 | 38,115 | 36,793 | 38,195 |
Diluted net income (loss) attributable to GCI common stockholders per common share | $ 0.14 | $ 0.44 | $ 0.08 | $ (0.45) |
Common Stock - Class B [Member] | ||||
Numerator [Abstract] | ||||
Undistributed income (loss) allocable to common stockholders for basic computation | $ 677 | $ 1,418 | $ 1,035 | $ (1,427) |
Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares | 0 | 0 | 0 | 0 |
Reallocation of undistributed earnings as a result of conversion of dilutive securities | (247) | (34) | (787) | 0 |
Effect of derivative instrument that may be settled in cash or shares | 0 | 0 | 0 | 0 |
Effect of share based compensation that may be settled in cash or shares | 0 | 0 | 0 | 0 |
Undistributed net income (loss) adjusted for allocation of undistributed earnings (loss) and effect of contracts that may be settled in cash or shares | $ 430 | $ 1,384 | $ 248 | $ (1,427) |
Denominator [Abstract] | ||||
Number of shares used in basic computation | 3,154 | 3,155 | 3,154 | 3,158 |
Conversion of Class B to Class A common shares outstanding | 0 | 0 | 0 | 0 |
Effect of derivative instrument that may be settled in cash or shares | 0 | 0 | 0 | 0 |
Unexercised stock options | 0 | 0 | 0 | 0 |
Effect of share based compensation that may be settled in cash or shares | 0 | 0 | 0 | 0 |
Number of shares used in per share computation | 3,154 | 3,155 | 3,154 | 3,158 |
Diluted net income (loss) attributable to GCI common stockholders per common share | $ 0.14 | $ 0.44 | $ 0.08 | $ (0.45) |
Earnings (Loss) Per Common Sh47
Earnings (Loss) Per Common Share (Weighted Average Shares outstanding which are anti-dilutive) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 741 |
Stock Appreciation Rights (SARs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 595 |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 120 |
Share-based compensation that may be settled in cash or shares, the effect of which is anti-dilutive | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 26 |
Segments (Segment Profitability
Segments (Segment Profitability Definition Adjustments) (Details) - Wireless [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA as Previously Defined | $ 40,334 | $ 40,064 | $ 80,398 |
Roaming Adjustment | (7,500) | (7,500) | (15,000) |
Adjusted EBITDA | $ 32,834 | $ 32,564 | $ 65,398 |
Segments (Reportable segment re
Segments (Reportable segment revenues) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 236,655 | $ 258,573 | $ 701,519 | $ 737,190 |
Adjusted EBITDA | 78,185 | 96,526 | 220,331 | 259,830 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 236,655 | 258,573 | 701,519 | 737,190 |
Adjusted EBITDA | 78,185 | 96,526 | 220,331 | 259,830 |
Operating Segments [Member] | Wireless [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 52,327 | 80,424 | 157,664 | 207,568 |
Adjusted EBITDA | 32,018 | 57,404 | 97,416 | 140,518 |
Operating Segments [Member] | Wireline [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 184,328 | 178,149 | 543,855 | 529,622 |
Adjusted EBITDA | $ 46,167 | $ 39,122 | $ 122,915 | $ 119,312 |
Segments (Reconciliation of rep
Segments (Reconciliation of reportable segment adjusted EBITDA) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting [Abstract] | ||||
Reportable segment Adjusted EBITDA | $ 78,185 | $ 96,526 | $ 220,331 | $ 259,830 |
Less depreciation and amortization expense | (47,819) | (45,157) | (143,033) | (135,563) |
Less share-based compensation expense | (2,810) | (2,660) | (7,820) | (8,074) |
Less imputed interest on financed devices | (651) | (268) | (1,885) | (438) |
Less accretion expense | (406) | (191) | (1,240) | (992) |
Less software impairment charge | 0 | (2,571) | 0 | (29,839) |
Other | (131) | (206) | (435) | 493 |
Operating income | 26,368 | 45,473 | 65,918 | 85,417 |
Less other expense, net | (16,134) | (19,856) | (46,215) | (107,361) |
Income (loss) before income taxes | $ 10,234 | $ 25,617 | $ 19,703 | $ (21,944) |
Related Party Transaction (Deta
Related Party Transaction (Details) - USD ($) shares in Thousands | Jul. 11, 2016 | Feb. 02, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Apr. 30, 2008 | Dec. 31, 2001 | Dec. 31, 1991 |
Related Party Transaction [Line Items] | |||||||
Stock Repurchased and Retired During Period, Value | $ 47,655,000 | $ 44,324,000 | |||||
Chief Executive Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Termination period on lease | 12 months | ||||||
Monthly Lease Payment | $ 132,000 | ||||||
Security Deposit | $ 1,500,000 | ||||||
Security Deposit Termination Period | 6 months | ||||||
ACS [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Payments to related party | $ 6,200,000 | ||||||
Receipts from Related Parties | $ 8,100,000 | ||||||
Property | Immediate Family Member of Management or Principal Owner [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Capital Lease Obligations | $ 1,300,000 | $ 900,000 | |||||
Common Stock - Class A [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Repurchased and Retired During Period, Value | $ 196,000 | $ 19,062,000 | |||||
Common Stock - Class A [Member] | Investor [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Repurchased and Retired During Period, Shares | 1,000 | ||||||
Stock Repurchased and Retired During Period, Value | $ 16,100,000 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Dec. 11, 2012 | Oct. 03, 2012 | Aug. 30, 2011 | Jan. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Tax credit percentage | 39.00% | |||||
Percentage of recapture | 100.00% | |||||
Recapture period | 7 years | |||||
Assets | $ 140.9 | $ 140.9 | ||||
Liabilities | $ 104.2 | $ 104.2 | ||||
NMTC 1 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Financial or Other Support, Amount | $ 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] | ||||||
Variable Interest Entity, Financial or Other Support, Amount | $ 37.7 | |||||
Interest rate percentage | 1.00% | |||||
NMTC 2 [Member] | Minimum [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 0.7099% | |||||
NMTC 2 [Member] | Maximum [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 0.7693% | |||||
NMTC 3 [Member] | Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Financial or Other Support, Amount | $ 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% | |||||
Next Generation Carrier-Class Communications Services Firm [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Ownership percentage | 40.80% | |||||
Next Generation Carrier-Class Communications Services Firm [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Financial or Other Support, Amount | $ 3 | |||||
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 |
Software Impairment (Details)
Software Impairment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Software impairment charge | $ 0 | $ 2,571,000 | $ 0 | $ 29,839,000 |
Wireless, Internet, Video, Local Service, and Long Distance Customer Billing Systems [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Fair Value of Capital Expenditures | 0 | 0 | ||
Software impairment charge | 20,700,000 | |||
Internally Developed Machine-To-Machine Billing System [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Software impairment charge | 500,000 | 7,100,000 | ||
User Management Software [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Software impairment charge | $ 1,000,000 | $ 1,000,000 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Details) $ in Millions | Jul. 29, 2016USD ($) |
Kodiak Kenai Fiber Link [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Consideration | $ 20 |