Document and Entity Information
Document and Entity Information - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document Information [Line Items] | ||
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, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 33,046 | |
Common Stock Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,052 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 19,203 | $ 19,297 |
Receivables | 183,785 | 184,296 |
Less allowance for doubtful receivables | 4,282 | 4,407 |
Net receivables | 179,503 | 179,889 |
Prepaid expenses | 23,162 | 18,599 |
Inventories | 9,394 | 11,945 |
Other current assets | 62 | 167 |
Total current assets | 231,324 | 229,897 |
Property and equipment | 2,714,782 | 2,614,875 |
Less accumulated depreciation | 1,561,039 | 1,452,957 |
Net property and equipment | 1,153,743 | 1,161,918 |
Goodwill | 242,264 | 239,263 |
Cable certificates | 191,635 | 191,635 |
Wireless licenses | 93,753 | 92,347 |
Other intangible assets, net of amortization | 74,371 | 74,444 |
Other assets | 76,200 | 76,435 |
Total other assets | 678,223 | 674,124 |
Total assets | 2,063,290 | 2,065,939 |
Current liabilities: | ||
Current maturities of obligations under long-term debt, capital leases, and tower obligation | 13,756 | 13,229 |
Accounts payable | 58,288 | 72,937 |
Deferred revenue | 41,348 | 37,618 |
Accrued payroll and payroll related obligations | 31,460 | 30,305 |
Accrued interest (including $3,714 and $5,132 to a related party at September 30, 2017 and December 31, 2016, respectively) | 25,968 | 13,926 |
Accrued liabilities | 13,988 | 14,729 |
Subscriber deposits | 1,239 | 917 |
Total current liabilities | 186,047 | 183,661 |
Long-term debt, net (including $58,177 and $56,640 to a related party at September 30, 2017 and December 31, 2016, respectively) | 1,333,485 | 1,333,446 |
Obligations under capital leases, excluding current maturities (including $1,721 and $1,769 due to a related party at September 30, 2017 and December 31, 2016, respectively) | 42,864 | 50,316 |
Deferred income taxes | 133,610 | 137,982 |
Long-term deferred revenue | 136,722 | 135,877 |
Tower obligation | 93,842 | 87,653 |
Derivative stock appreciation rights with related party | 83,670 | 29,700 |
Other liabilities | 55,741 | 54,056 |
Total liabilities | 2,065,981 | 2,012,691 |
Commitments and contingencies | ||
Stockholders’ equity (deficit): | ||
Paid-in capital | 16,512 | 3,237 |
Retained earnings (deficit) | (54,417) | 17,068 |
Total General Communication, Inc. stockholders' equity (deficit) | (35,576) | 22,719 |
Non-controlling interests | 32,885 | 30,529 |
Total stockholders’ equity (deficit) | (2,691) | 53,248 |
Total liabilities and stockholders’ equity (deficit) | 2,063,290 | 2,065,939 |
Common Stock Class A | ||
Stockholders’ equity (deficit): | ||
Common stock (no par) | 0 | 0 |
Less cost of 26 Class A common shares held in treasury at September 30, 2017 and December 31, 2016 | (249) | (249) |
Common Stock Class B | ||
Stockholders’ equity (deficit): | ||
Common stock (no par) | $ 2,578 | $ 2,663 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related party accrued interest | $ 3,714 | $ 5,132 |
Related party long-term debt | 58,177 | 56,640 |
Related party capital lease obligations, excluding current maturities | $ 1,721 | $ 1,769 |
Common Stock Class A | ||
Common stock, no par (dollars per share) | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,072,000 | 32,668,000 |
Common stock, shares outstanding | 33,046,000 | 32,642,000 |
Treasury stock, shares | 26,000 | 26,000 |
Common Stock Class B | ||
Common stock, no par (dollars per share) | ||
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,052,000 | 3,153,000 |
Common stock, shares outstanding | 3,052,000 | 3,153,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | $ 231,214 | $ 236,655 | $ 683,675 | $ 701,519 |
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 67,496 | 73,494 | 205,099 | 227,926 |
Selling, general and administrative expenses | 90,691 | 88,974 | 280,478 | 264,642 |
Depreciation and amortization expense | 48,853 | 47,819 | 147,547 | 143,033 |
Operating income | 24,174 | 26,368 | 50,551 | 65,918 |
Other income (expense): | ||||
Interest expense (including amortization of deferred loan fees) | (21,595) | (19,666) | (62,377) | (58,199) |
Interest expense with related party | (1,953) | (1,881) | (5,745) | (5,558) |
Derivative instrument unrealized income (loss) with related party | (12,270) | 4,800 | (53,970) | 15,840 |
Other | (69) | 613 | 1,203 | 1,702 |
Other expense, net | (35,887) | (16,134) | (120,889) | (46,215) |
Income (loss) before income taxes | (11,713) | 10,234 | (70,338) | 19,703 |
Income tax (expense) benefit | 2,864 | (2,407) | (2,757) | (7,596) |
Net income (loss) | (8,849) | 7,827 | (73,095) | 12,107 |
Net loss attributable to non-controlling interests | (118) | (116) | (353) | (350) |
Net income (loss) attributable to General Communication, Inc. | (8,731) | 7,943 | (72,742) | 12,457 |
Common Stock Class A | ||||
Other income (expense): | ||||
Net income (loss) attributable to General Communication, Inc. | $ (7,957) | $ 7,266 | $ (66,197) | $ 11,422 |
Net income (loss) per common share | ||||
Basic net income (loss) attributable to General Communication, Inc. common stockholders per common share (USD per share) | $ (0.25) | $ 0.21 | $ (2.12) | $ 0.33 |
Diluted net income (loss) attributable to General Communication, Inc. common stockholders per common share (USD per share) | $ (0.25) | $ 0.14 | $ (2.12) | $ 0.08 |
Common Stock Class B | ||||
Other income (expense): | ||||
Net income (loss) attributable to General Communication, Inc. | $ (774) | $ 677 | $ (6,545) | $ 1,035 |
Net income (loss) per common share | ||||
Basic net income (loss) attributable to General Communication, Inc. common stockholders per common share (USD per share) | $ (0.25) | $ 0.21 | $ (2.12) | $ 0.33 |
Diluted net income (loss) attributable to General Communication, Inc. common stockholders per common share (USD per share) | $ (0.25) | $ 0.14 | $ (2.12) | $ 0.08 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock Class A | Common Stock Class B | Shares of Class A and B Common Stock | Shares of Class A and B Common StockCommon Stock Class A | Shares of Class A and B Common StockCommon Stock Class B | Class A Shares Held in Treasury | Paid-in Capital | Retained Earnings (Deficit) | Non- controlling Interests |
Beginning balances, common stock, shares at Dec. 31, 2015 | 38,747 | |||||||||
Beginning balances, total stockholders' equity at Dec. 31, 2015 | $ 119,261 | $ 0 | $ 2,664 | $ (249) | $ 6,631 | $ 79,217 | $ 30,998 | |||
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) | (196) | (47,459) | |||||||
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 at Sep. 30, 2016 | 36,318 | |||||||||
Ending balances, total stockholders' equity at Sep. 30, 2016 | 91,887 | 0 | 2,664 | (249) | 14,609 | 44,215 | 30,648 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Cumulative effect of ASU 2016-09 adoption | 7,095 | 18 | 7,077 | |||||||
Beginning balances, common stock, shares at Dec. 31, 2016 | 32,668 | 3,153 | 35,821 | |||||||
Beginning balances, total stockholders' equity at Dec. 31, 2016 | 53,248 | 0 | 2,663 | (249) | 3,237 | 17,068 | 30,529 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | (73,095) | (72,742) | (353) | |||||||
Common stock repurchases and retirements, shares | (295) | |||||||||
Common stock repurchases and retirements | (5,912) | (7) | (5,905) | |||||||
Issuance of restricted stock awards, shares | 597 | |||||||||
Issuance of restricted stock awards | 0 | |||||||||
Share-based compensation expense | 13,180 | 13,180 | ||||||||
Conversion of Class B to Class A shares | 0 | (85) | 85 | |||||||
Investment by non-controlling interest | 2,709 | 2,709 | ||||||||
Other, shares | 1 | |||||||||
Other | 84 | 7 | 77 | |||||||
Ending balances, common stock, shares at Sep. 30, 2017 | 33,072 | 3,052 | 36,124 | |||||||
Ending balances, total stockholders' equity at Sep. 30, 2017 | $ (2,691) | $ 0 | $ 2,578 | $ (249) | $ 16,512 | $ (54,417) | $ 32,885 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (73,095) | $ 12,107 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization expense | 147,547 | 143,033 |
Unrealized (income) loss on derivative instrument with related party | 53,970 | (15,840) |
Share-based compensation expense | 13,741 | 7,820 |
Deferred income tax expense | 2,757 | 7,565 |
Other noncash income and expense items | 11,280 | 11,994 |
Change in operating assets and liabilities | 19,397 | 23,926 |
Net cash provided by operating activities | 175,597 | 190,605 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (152,768) | (149,842) |
Purchases of other assets and intangible assets | (8,311) | (10,226) |
Purchase of business, net of cash received | (6,802) | 0 |
Grant proceeds | 2,188 | 0 |
Note receivable payment from an equity method investee | 0 | 3,000 |
Proceeds from sale of investment | 0 | 1,377 |
Other | (1,233) | (1,591) |
Net cash used for investing activities | (166,926) | (157,282) |
Cash flows from financing activities: | ||
Repayment of debt, capital lease, and tower obligations | (91,761) | (69,013) |
Borrowing on Amended Senior Credit Facility | 82,000 | 60,000 |
Proceeds from tower sale | 6,755 | 90,795 |
Purchase of treasury stock to be retired | (5,912) | (47,655) |
Payment of debt modification costs | (2,563) | 0 |
Other | 2,716 | (1,356) |
Net cash provided by (used for) financing activities | (8,765) | 32,771 |
Net increase (decrease) in cash and cash equivalents | (94) | 66,094 |
Cash and cash equivalents at beginning of period | 19,297 | 26,528 |
Cash and cash equivalents at end of period | $ 19,203 | $ 92,622 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Principles | 9 Months Ended |
Sep. 30, 2017 | |
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, as well as five 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”), Terra GCI 3 Investment Fund, LLC (“TIF 3”), and Twain Investment Fund 210, LLC ("TIF 4"). 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) 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 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. In December 2016, the FASB issued ASU 2016-20 which makes minor corrections or improvements to ASU 2014-09 that are not expected to have a significant effect on accounting practices under ASU 2014-09. In September 2017, the FASB issued ASU 2017-13 which allows certain public business entities to use the non-public business entities effective dates to adopt ASU 2014-09. The standard permits the use of either the retrospective or cumulative effect transition method. We anticipate using the modified retrospective method to adopt this standard. Early adoption is permitted for annual periods beginning after December 15, 2016, however, we do not plan to early adopt this standard. We have assessed our material revenue streams and we do not anticipate significant changes to the timing and amount of our revenue recognition as a result of this new standard. We will have additional revenue recognition disclosures upon adoption of the new standard. 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 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. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The update eliminates step 2 of the goodwill impairment test. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the maximum impairment being the total value of goodwill allocated to the reporting unit. ASU 2017-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. 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 May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718) — Scope of Modification Accounting. ASU 2017-09 applies to entities that change the terms or conditions of a share-based payment award. The FASB adopted ASU 2017-09 to provide clarity and reduce diversity in practice as well as cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to the modification of the terms and conditions of a share-based payment award. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. Effective for all entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this guidance is not expected to have a material effect on our financial position or results of operations. (e) Recently Adopted Accounting Pronouncements 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 requires all excess tax benefits to be recorded in income even if they have not yet been realized. ASU 2016-09 also provides an election to account for forfeitures as they occur as opposed to estimating the amount of forfeitures. We adopted ASU 2016-09 as of January 1, 2017 on a modified retrospective basis. We have elected to account for forfeitures as they occur. As a result of adoption of this standard, we have recorded a $7.1 million adjustment to Retained Earnings (Deficit) as of January 1, 2017. (f) 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. (g) Earnings (Loss) per Common Share We compute net income (loss) attributable to GCI per share of Class A and Class B common stock using the “two class” method. Therefore, basic net income (loss) per share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the dilutive net income (loss) per share of Class A common stock assumes the conversion of Class B common stock to Class A common stock, while the dilutive net income (loss) per share of Class B common stock does not assume the conversion of those shares. 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. (h) 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 (Deficit) in our Consolidated Balance Sheets and is treated as constructively retired when purchased. (i) Accounts Receivable and Allowance for Doubtful Receivables Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful receivables is our best estimate of the amount of probable credit losses in our existing accounts receivable. We base our estimates on the aging of our accounts receivable balances, financial health of specific customers, regional economic data, changes in our collections process, regulatory requirements and our customers’ compliance with Universal Service Administrative Company ("USAC") 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. (j) 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. ( k ) 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. (l) Revenue Recognition The Universal Service Fund Rural Health Care ("RHC") Program subsidizes the rates for services provided to rural health providers. For the funding year that ran from July 1, 2016 through June 30, 2017, USAC received requests for funds that exceeded the funding available for the RHC Program. USAC allocated the funding on a pro-rata basis to rural health providers who submitted their funding requests during a certain period. We provide services to rural health providers who were impacted by the pro-rata allocation and as a result certain of our customers did not receive the full subsidy that was expected under the program. Under the program rules, we are forbidden from lowering our rates for services previously provided, however, the Federal Communications Commission ("FCC") published an order on June 30, 2017 to assist eligible remote Alaska rural health providers by allowing Alaska service providers, such as us, to retroactively lower their rates, or effectively giving a credit against amounts owed, for services provided. Based on these specific circumstances, we decided to retroactively lower our rates to these customers pursuant to the FCC waiver, and as a result we reduced revenue by $5.5 million during the nine months ended September 30, 2017, to aid our rural health customers who were impacted by the pro-rata allocation. ( m ) Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, observance of trends, and other factors, as appropriate. Additionally, changes in accounting estimates are reasonably likely to occur from period to period. These factors could have a material impact on our financial statements. Significant estimates include, but are not limited to, the following: revenue recognition, the valuation of the derivative stock appreciation rights, impairment and useful lives of intangible assets, and the valuation allowance for net operating loss deferred tax assets. (n) Classification of Taxes Collected from Customers We report sales, use, excise, and value added taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between us and a customer on a net basis in our Consolidated Statements of Operations. The following are certain surcharges reported on a gross basis in our Consolidated Statements of Operations (amounts in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Surcharges reported gross $ 758 951 2,408 2,973 (o) Reclassifications Reclassifications have been made to the 2016 financial statements to make them comparable with classifications used in the current year. |
Tower Sale and Leaseback
Tower Sale and Leaseback | 9 Months Ended |
Sep. 30, 2017 | |
Tower Sale and Leaseback [Abstract] | |
Tower Sale and Leaseback | Tower Sale and Leaseback In August 2016, March 2017, and July 2017, we sold to Vertical Bridge Towers II, LLC (“Vertical Bridge”) tower sites in exchange for net proceeds of $90.8 million , $3.7 million , and $3.1 million , respectively (“Tower Transactions”). 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 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 reduced our asset retirement obligation related to the tower sites by $3.4 million as of December 31, 2016. Per the master lease agreement, we have the right to cure land lease defaults on behalf of Vertical Bridge and have negotiated fixed rate lease renewals as described above. Due to this continuing involvement with the 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 Vertical Bridge. 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, 2017 December 31, 2016 Property and equipment (1) $ 19,528 18,792 Tower obligation (2) $ 93,842 87,653 (1) Property conveyed to Vertical Bridge 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 2017 $ 1,851 2018 7,465 2019 7,615 2020 7,767 2021 7,922 2022 and thereafter 157,381 Total minimum payments 190,001 Less amount representing interest 93,620 Tower obligation $ 96,381 |
Consolidated Statements of Cas9
Consolidated Statements of Cash Flows Supplemental Disclosures | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 2016 (Increase) decrease in accounts receivable, net $ (2,466 ) 3,129 Increase in prepaid expenses (4,527 ) (3,636 ) Decrease in inventories 2,551 3,356 (Increase) decrease in other current assets 132 (44 ) (Increase) decrease in other assets 1,112 (3,990 ) Increase in accounts payable 9,610 4,155 Increase (decrease) in deferred revenues 3,730 (1,013 ) Increase (decrease) in accrued payroll and payroll related obligations 819 (2,227 ) Decrease in accrued liabilities (742 ) (5,758 ) Increase in accrued interest 12,042 11,810 Increase (decrease) in subscriber deposits 322 (366 ) Increase (decrease) in long-term deferred revenue (2,143 ) 18,178 Increase (decrease) in components of other long-term liabilities (1,043 ) 332 Total change in operating assets and liabilities $ 19,397 23,926 The following item is for the nine months ended September 30, 2017 and 2016 (amounts in thousands): Net cash paid or received: 2017 2016 Interest paid including capitalized interest $ 56,250 50,789 The following items are non-cash investing and financing activities for the nine months ended September 30, 2017 and 2016 (amounts in thousands): 2017 2016 Non-cash additions for purchases of property and equipment $ 13,676 11,372 Net asset retirement obligation additions (deletions) to property and equipment $ 986 (2,279 ) |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2017 | |
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 Nine Months Ended 2017 2016 2017 2016 Amortization expense $ 3,291 3,147 9,848 9,183 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, 2017 $ 12,989 2018 $ 11,620 2019 $ 9,147 2020 $ 7,163 2021 $ 5,354 |
Fair Value Measurements and Der
Fair Value Measurements and Derivative Instrument | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Derivative Instrument | 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, 2017 and December 31, 2016 are as follows (amounts in thousands): September 30, 2017 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,294 — — 1,294 Liabilities: Derivative stock appreciation rights $ — — 83,670 83,670 December 31, 2016 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,477 — — 1,477 Liabilities: Derivative stock appreciation rights $ — — 29,700 29,700 (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, 2017 and December 31, 2016 are as follows (amounts in thousands): September 30, December 31, Carrying Amount Fair Value Carrying Amount Fair Value Current and long-term debt $ 1,336,489 1,421,873 1,336,772 1,393,865 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 Capital, L.P. ("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, holder behavior, and the impact of a change of control (please see Note 11 for additional information regarding a change of control contingency). 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, 2017 : September 30, 2017 Contractual term (in years) 1.3 to 5.3 Volatility 20% to 40% Risk-free interest rate 1.0% to 2.0% Stock price $ 40.79 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, 2017 and 2016 (amounts in thousands): Fair Value Measurement Using Level 3 Inputs Derivative Stock Appreciation Rights 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 Balance at January 1, 2017 $ 29,700 Fair value adjustment at end of period, included in Other Income (Expense) 53,970 Balance at September 30, 2017 $ 83,670 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Common Stock GCI’s Board of Directors had 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 have temporarily suspended the buyback program due to the Reorganization Agreement that we entered into with Liberty (see Note 11 ). During the three months ended September 30, 2016 , we repurchased 1.8 million shares of our Class A common stock under the stock buyback program at a cost of $27.1 million . During the nine months ended September 30, 2017 and 2016 , we repurchased 0.2 million and 3.0 million shares of our Class A common stock under the stock buyback program at a cost of $4.0 million and $46.5 million , respectively. 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 1.0 million shares available for grant under the Stock Option Plan at September 30, 2017 . A summary of nonvested restricted stock award activity under the Stock Option Plan as of September 30, 2017 and changes during the period then ended is presented below: Shares (in thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 1,465 $ 14.41 Granted 597 $ 22.94 Vested (388 ) $ 17.48 Forfeited (3 ) $ 17.84 Nonvested at September 30, 2017 1,671 $ 16.74 The weighted average grant date fair value of awards granted during the nine months ended September 30, 2017 and 2016 , were $22.94 and $17.68 , respectively. The total fair value of awards vesting during the nine months ended September 30, 2017 and 2016 were $9.7 million and $4.5 million , respectively. We have recorded share-based compensation expense of $13.7 million and $7.8 million for the nine months ended September 30, 2017 and 2016 , 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 $14.2 million as of September 30, 2017 . 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, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Common Share | 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, 2017 2016 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income (loss) available to common stockholders $ (7,957 ) (774 ) 7,266 677 Less: Undistributed net income allocable to participating securities — — (386 ) — Undistributed net income (loss) allocable to common stockholders (7,957 ) (774 ) 6,880 677 Denominator: Weighted average common shares outstanding 31,374 3,052 32,033 3,154 Basic net income (loss) attributable to GCI common stockholders per common share $ (0.25 ) (0.25 ) 0.21 0.21 Three Months Ended September 30, 2017 2016 Class A Class B Class A Class B Diluted net income (loss) per share: Numerator: Undistributed net income (loss) allocable to common stockholders for basic computation $ (7,957 ) (774 ) 6,880 677 Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares (774 ) — 677 — Reallocation of undistributed earnings as a result of conversion of dilutive securities — — 141 (247 ) Effect of derivative instrument that may be settled in cash or shares — — (2,827 ) — Effect of share based compensation that may be settled in cash or shares — — (32 ) — Undistributed net income (loss) adjusted for allocation of undistributed earnings (loss) and effect of contracts that may be settled in cash or shares $ (8,731 ) (774 ) 4,839 430 Denominator: Number of shares used in basic computation 31,374 3,052 32,033 3,154 Conversion of Class B to Class A common shares outstanding 3,052 — 3,154 — Effect of derivative instrument that may be settled in cash or shares — — 264 — Unexercised stock options — — 1 — Effect of share based compensation that may be settled in cash or shares — — 26 — Number of shares used in per share computation 34,426 3,052 35,478 3,154 Diluted net income (loss) attributable to GCI common stockholders per common share $ (0.25 ) (0.25 ) 0.14 0.14 Nine Months Ended September 30, 2017 2016 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income (loss) available to common stockholders $ (66,197 ) (6,545 ) 11,422 1,035 Less: Undistributed net income allocable to participating securities — — (588 ) — Undistributed net income (loss) allocable to common stockholders (66,197 ) (6,545 ) 10,834 1,035 Denominator: Weighted average common shares outstanding 31,291 3,094 33,008 3,154 Basic net income (loss) attributable to GCI common stockholders per common share $ (2.12 ) (2.12 ) 0.33 0.33 Nine Months Ended September 30, 2017 2016 Class A Class B Class A Class B Diluted net income (loss) per share: Numerator: Undistributed net income (loss) allocable to common stockholders for basic computation $ (66,197 ) (6,545 ) 10,834 1,035 Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares (6,545 ) — 1,035 — 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 $ (72,742 ) (6,545 ) 2,896 248 Denominator: Number of shares used in basic computation 31,291 3,094 33,008 3,154 Conversion of Class B to Class A common shares outstanding 3,094 — 3,154 — 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 34,385 3,094 36,793 3,154 Diluted net income (loss) attributable to GCI common stockholders per common share $ (2.12 ) (2.12 ) 0.08 0.08 Weighted average shares associated with outstanding securities for the three and nine months ended September 30, 2017 and 2016 , 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, 2017 2016 2017 2016 Derivative instrument that may be settled in cash or shares, the effect of which is anti-dilutive 2,045 — 1,797 — Share-based compensation that may be settled in cash or shares, the effect of which is anti-dilutive 26 — 26 — Shares associated with anti-dilutive unexercised stock options 1 — 1 — Total excluded 2,072 — 1,824 — |
Segments
Segments | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segments | Segments We operate our business under a single reportable segment. Effective in the first quarter of 2017, we merged our former Wireless and Wireline segments into one operating segment in order to make our operations more efficient. We reassessed and reorganized our management and internal reporting structures and realigned our external financial reporting to support this change. Our chief operating decision maker assesses our financial performance as follows: • Capital expenditure decisions are based on the support they provide to all revenue streams • Revenues are managed on the basis of specific customers and customer groups • Costs are generally managed and assessed by function and generally support the organization across all customer groups or revenue streams • Profitability is assessed at the consolidated level Prior to 2017, we operated our business under two reportable segments - Wireline and Wireless. As a result of the reorganization of our reporting structure, assets, including goodwill, and liabilities were reassigned to a single reporting unit. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 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 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 is a related party because one of its principals is a member of our Board of Directors. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2017 | |
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. On March 21, 2017, we entered into the fourth arrangement ("NMTC #4"). In connection with the NMTC #4 transaction, we loaned $6.7 million to TIF 4, a special purpose entity created to effect the financing arrangement, at 1% interest due March 21, 2040. Simultaneously, US Bancorp invested $3.3 million in TIF 4. TIF 4 then contributed US Bancorp's contributions and the loan proceeds to a CDE. The CDE then paid a placement fee of $0.2 million and loaned the remaining $9.8 million , at an interest rate of 0.7337% , to Unicom, as partial financing for TERRA-NW. US Bancorp is the sole investor in TIF, TIF 2, TIF 2-USB, TIF 3, and TIF 4, 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 various phases of the TERRA-NW project. We plan to complete construction of the TERRA-NW phases for which these funds will be used during 2017. Restricted cash of $2.1 million was held by Unicom at September 30, 2017 , and is included in our Consolidated Balance Sheets. 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, TIF 3, and/or TIF 4. We believe that US Bancorp will exercise the put options in August 2018, October 2019, December 2019, and March 2024, at the end of the compliance periods for NMTC #1, NMTC #2, NMTC #3, and NMTC #4, 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, 2017 . The value attributed to the puts/calls is nominal. We have determined that TIF, TIF 2, TIF 2-USB, TIF 3, and TIF 4 are VIEs. The consolidated financial statement of TIF, TIF 2, TIF 2-USB, TIF 3, and TIF 4 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 $150.9 million and $110.9 million , respectively, as of September 30, 2017 , and $140.9 million and $104.2 million , respectively, as of December 31, 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies On April 4, 2017, Liberty Interactive Corporation, a Delaware corporation (“Liberty”) entered into an Agreement and Plan of Reorganization (the “Reorganization Agreement” and the transactions contemplated thereby, the “Transactions”) with GCI, an Alaska corporation, and Liberty Interactive LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Liberty (“LI LLC”), whereby Liberty will acquire GCI through a reorganization in which certain Liberty Ventures Group (“Liberty Ventures”) assets and liabilities will be contributed to GCI in exchange for a controlling interest in GCI. Liberty and LI LLC will contribute to the combined company (to be named GCI Liberty, Inc. (“GCI Liberty”) its entire equity interest in Liberty Broadband Corporation, Charter Communications, Inc. and LendingTree, Inc., together with the Evite, Inc. operating business and certain other assets and liabilities (including, subject to certain conditions, Liberty’s equity interest in FTD Companies, Inc.), in exchange for (a) the issuance to LI LLC of (i) a number of shares of reclassified GCI Class A Common Stock and a number of shares of reclassified GCI Class B Common Stock equal to the number of outstanding shares of Series A Liberty Ventures common stock and Series B Liberty Ventures common stock outstanding on the closing date of the Contribution, respectively, (ii) certain exchangeable debentures and (iii) cash, and (b) the assumption of certain liabilities by GCI Liberty (the "Contribution"). Liberty will then effect a tax-free separation of its controlling interest in GCI Liberty to the holders of Liberty Ventures common stock in full redemption of all outstanding shares of such stock. Holders of GCI Class A common stock and GCI Class B common stock each will receive (i) 0.63 of a share of reclassified GCI Liberty Class A common stock and (ii) 0.20 of a share of new GCI Liberty Series A preferred stock in exchange for each share of their existing GCI stock. The exchange ratios were determined based on total consideration of $32.50 per share for the existing GCI common stock, comprised of $27.50 per share in reclassified GCI Class A common stock and $5.00 per share in newly issued GCI Liberty Series A preferred stock, and a Liberty Ventures reference price of $43.65 (with no premium paid for shares of GCI Class B common stock). The GCI Liberty Series A preferred shares will accrue dividends at an initial rate of 5% per annum (which would increase to 7% in connection with a future reincorporation of GCI Liberty in Delaware) and will be redeemable upon the 21st anniversary of the closing. The Transactions are expected to be consummated during the first quarter of 2018, subject to the satisfaction of customary closing conditions, including receipt of regulatory approval and the requisite stockholder approvals. On April 12, 2017, we announced that our wholly owned subsidiary, GCI, Inc., was soliciting consents from the holders of its outstanding 6.75% Senior Notes due 2021 (“ 6.75% Senior Notes”) and 6.875% Senior Notes due 2025 (“ 6.875% Senior Notes” and together with the 6.75% Senior Notes, the “Notes”) to effect certain amendments to the indentures governing the Notes (the “Indentures”) to facilitate the Transactions, upon the terms and subject to the conditions set forth in the Consent Solicitation Statement, dated April 12, 2017, and the related Letter of Consent. The consent solicitation expired on April 24, 2017 and we received consents from holders of: (a) $312,418,000 in aggregate principal amount of the 6.75% Senior Notes, representing 96.13% of the total principal amount outstanding of the 6.75% Senior Notes, and (b) $443,538,000 in aggregate principal amount of the 6.875% Senior Notes, representing 98.56% of the total principal amount outstanding of the 6.875% Senior Notes. The consent of holders of at least a majority in aggregate principal amount of a series of Notes then outstanding was required to approve the proposed amendment with respect to that series of Notes. On April 26, 2017, we paid to the tabulation agent for the benefit of registered holders of Notes as of the record date for the Consent Solicitation that validly delivered (and did not validly revoke) a properly completed letter of consent (a “Consent”) on or prior to the expiration date (x) with respect to the proposed amendment relating to the 6.75% Senior Notes, an aggregate consent fee of $812,500 payable to the holders of 6.75% Senior Notes, on a pro rata basis, who validly delivered (and did not validly revoke) a properly completed Consent and (y) with respect to the proposed amendment relating to the 6.875% Senior Notes, an aggregate consent fee of $1,125,000 payable to the holders of 6.875% Senior Notes, on a pro rata basis, who validly delivered (and did not validly revoke) a properly completed Consent. The proposed amendments will be effected by supplemental indentures to the Indentures. We believe the Transactions will result in a change of control for the Searchlight stock appreciation rights that will result in us settling that instrument in cash. |
Business and Summary of Signi18
Business and Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and 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, as well as five 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”), Terra GCI 3 Investment Fund, LLC (“TIF 3”), and Twain Investment Fund 210, LLC ("TIF 4"). 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. |
Recently Issued Accounting Pronouncements and Recently Adopted 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 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. In December 2016, the FASB issued ASU 2016-20 which makes minor corrections or improvements to ASU 2014-09 that are not expected to have a significant effect on accounting practices under ASU 2014-09. In September 2017, the FASB issued ASU 2017-13 which allows certain public business entities to use the non-public business entities effective dates to adopt ASU 2014-09. The standard permits the use of either the retrospective or cumulative effect transition method. We anticipate using the modified retrospective method to adopt this standard. Early adoption is permitted for annual periods beginning after December 15, 2016, however, we do not plan to early adopt this standard. We have assessed our material revenue streams and we do not anticipate significant changes to the timing and amount of our revenue recognition as a result of this new standard. We will have additional revenue recognition disclosures upon adoption of the new standard. 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 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. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The update eliminates step 2 of the goodwill impairment test. Instead, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the maximum impairment being the total value of goodwill allocated to the reporting unit. ASU 2017-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. 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 May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718) — Scope of Modification Accounting. ASU 2017-09 applies to entities that change the terms or conditions of a share-based payment award. The FASB adopted ASU 2017-09 to provide clarity and reduce diversity in practice as well as cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to the modification of the terms and conditions of a share-based payment award. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. Effective for all entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The adoption of this guidance is not expected to have a material effect on our financial position or results of operations. (e) Recently Adopted Accounting Pronouncements 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 requires all excess tax benefits to be recorded in income even if they have not yet been realized. ASU 2016-09 also provides an election to account for forfeitures as they occur as opposed to estimating the amount of forfeitures. We adopted ASU 2016-09 as of January 1, 2017 on a modified retrospective basis. We have elected to account for forfeitures as they occur. |
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 (Deficit) in our Consolidated Balance Sheets and is treated as constructively retired when purchased. |
Accounts Receivable and Allowance for Doubtful Receivables and Wireless Equipment Installment Plan (EIP) 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 ("USAC") 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 Instrument | 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. |
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. |
Revenue Recognition | Revenue Recognition The Universal Service Fund Rural Health Care ("RHC") Program subsidizes the rates for services provided to rural health providers. For the funding year that ran from July 1, 2016 through June 30, 2017, USAC received requests for funds that exceeded the funding available for the RHC Program. USAC allocated the funding on a pro-rata basis to rural health providers who submitted their funding requests during a certain period. We provide services to rural health providers who were impacted by the pro-rata allocation and as a result certain of our customers did not receive the full subsidy that was expected under the program. Under the program rules, we are forbidden from lowering our rates for services previously provided, however, the Federal Communications Commission ("FCC") published an order on June 30, 2017 to assist eligible remote Alaska rural health providers by allowing Alaska service providers, such as us, to retroactively lower their rates, or effectively giving a credit against amounts owed, for services provided. |
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. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, observance of trends, and other factors, as appropriate. Additionally, changes in accounting estimates are reasonably likely to occur from period to period. These factors could have a material impact on our financial statements. Significant estimates include, but are not limited to, the following: revenue recognition, the valuation of the derivative stock appreciation rights, impairment and useful lives of intangible assets, and the valuation allowance for net operating loss deferred tax assets. |
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 2016 financial statements to make them comparable with classifications used in the current year. |
Business and Summary of Signi19
Business and Summary of Significant Accounting Principles (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Surcharges on Gross Basis | 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, 2017 2016 2017 2016 Surcharges reported gross $ 758 951 2,408 2,973 |
Tower Sale and Leaseback (Table
Tower Sale and Leaseback (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tower Sale and Leaseback [Abstract] | |
Schedule of Sale Leaseback Transactions | The following table summarizes the impacts to the Consolidated Balance Sheets (amounts in thousands): September 30, 2017 December 31, 2016 Property and equipment (1) $ 19,528 18,792 Tower obligation (2) $ 93,842 87,653 (1) Property conveyed to Vertical Bridge as part of the Tower Transaction, but remains on our Consolidated Balance Sheets. (2) Excluding current portion and net of deferred transaction costs. |
Schedule of Future Minimum Lease Payments for 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 2017 $ 1,851 2018 7,465 2019 7,615 2020 7,767 2021 7,922 2022 and thereafter 157,381 Total minimum payments 190,001 Less amount representing interest 93,620 Tower obligation $ 96,381 |
Consolidated Statements of Ca21
Consolidated Statements of Cash Flows Supplemental Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 2016 (Increase) decrease in accounts receivable, net $ (2,466 ) 3,129 Increase in prepaid expenses (4,527 ) (3,636 ) Decrease in inventories 2,551 3,356 (Increase) decrease in other current assets 132 (44 ) (Increase) decrease in other assets 1,112 (3,990 ) Increase in accounts payable 9,610 4,155 Increase (decrease) in deferred revenues 3,730 (1,013 ) Increase (decrease) in accrued payroll and payroll related obligations 819 (2,227 ) Decrease in accrued liabilities (742 ) (5,758 ) Increase in accrued interest 12,042 11,810 Increase (decrease) in subscriber deposits 322 (366 ) Increase (decrease) in long-term deferred revenue (2,143 ) 18,178 Increase (decrease) in components of other long-term liabilities (1,043 ) 332 Total change in operating assets and liabilities $ 19,397 23,926 |
Cash Payments for Interest | The following item is for the nine months ended September 30, 2017 and 2016 (amounts in thousands): Net cash paid or received: 2017 2016 Interest paid including capitalized interest $ 56,250 50,789 |
Schedule of Other Significant Noncash Transactions | The following items are non-cash investing and financing activities for the nine months ended September 30, 2017 and 2016 (amounts in thousands): 2017 2016 Non-cash additions for purchases of property and equipment $ 13,676 11,372 Net asset retirement obligation additions (deletions) to property and equipment $ 986 (2,279 ) |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 Nine Months Ended 2017 2016 2017 2016 Amortization expense $ 3,291 3,147 9,848 9,183 |
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, 2017 $ 12,989 2018 $ 11,620 2019 $ 9,147 2020 $ 7,163 2021 $ 5,354 |
Fair Value Measurements and D23
Fair Value Measurements and Derivative Instrument (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 and December 31, 2016 are as follows (amounts in thousands): September 30, 2017 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,294 — — 1,294 Liabilities: Derivative stock appreciation rights $ — — 83,670 83,670 December 31, 2016 Level 1 (1) Level 2 (2) Level 3 (3) Total Assets: Deferred compensation plan assets (mutual funds) $ 1,477 — — 1,477 Liabilities: Derivative stock appreciation rights $ — — 29,700 29,700 (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, 2017 and December 31, 2016 are as follows (amounts in thousands): September 30, December 31, Carrying Amount Fair Value Carrying Amount Fair Value Current and long-term debt $ 1,336,489 1,421,873 1,336,772 1,393,865 |
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, 2017 : September 30, 2017 Contractual term (in years) 1.3 to 5.3 Volatility 20% to 40% Risk-free interest rate 1.0% to 2.0% Stock price $ 40.79 |
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, 2017 and 2016 (amounts in thousands): Fair Value Measurement Using Level 3 Inputs Derivative Stock Appreciation Rights 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 Balance at January 1, 2017 $ 29,700 Fair value adjustment at end of period, included in Other Income (Expense) 53,970 Balance at September 30, 2017 $ 83,670 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 and changes during the period then ended is presented below: Shares (in thousands) Weighted Average Grant Date Fair Value Nonvested at December 31, 2016 1,465 $ 14.41 Granted 597 $ 22.94 Vested (388 ) $ 17.48 Forfeited (3 ) $ 17.84 Nonvested at September 30, 2017 1,671 $ 16.74 |
Earnings (Loss) per Common Sh25
Earnings (Loss) per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | 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, 2017 2016 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income (loss) available to common stockholders $ (7,957 ) (774 ) 7,266 677 Less: Undistributed net income allocable to participating securities — — (386 ) — Undistributed net income (loss) allocable to common stockholders (7,957 ) (774 ) 6,880 677 Denominator: Weighted average common shares outstanding 31,374 3,052 32,033 3,154 Basic net income (loss) attributable to GCI common stockholders per common share $ (0.25 ) (0.25 ) 0.21 0.21 Three Months Ended September 30, 2017 2016 Class A Class B Class A Class B Diluted net income (loss) per share: Numerator: Undistributed net income (loss) allocable to common stockholders for basic computation $ (7,957 ) (774 ) 6,880 677 Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares (774 ) — 677 — Reallocation of undistributed earnings as a result of conversion of dilutive securities — — 141 (247 ) Effect of derivative instrument that may be settled in cash or shares — — (2,827 ) — Effect of share based compensation that may be settled in cash or shares — — (32 ) — Undistributed net income (loss) adjusted for allocation of undistributed earnings (loss) and effect of contracts that may be settled in cash or shares $ (8,731 ) (774 ) 4,839 430 Denominator: Number of shares used in basic computation 31,374 3,052 32,033 3,154 Conversion of Class B to Class A common shares outstanding 3,052 — 3,154 — Effect of derivative instrument that may be settled in cash or shares — — 264 — Unexercised stock options — — 1 — Effect of share based compensation that may be settled in cash or shares — — 26 — Number of shares used in per share computation 34,426 3,052 35,478 3,154 Diluted net income (loss) attributable to GCI common stockholders per common share $ (0.25 ) (0.25 ) 0.14 0.14 Nine Months Ended September 30, 2017 2016 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net income (loss) available to common stockholders $ (66,197 ) (6,545 ) 11,422 1,035 Less: Undistributed net income allocable to participating securities — — (588 ) — Undistributed net income (loss) allocable to common stockholders (66,197 ) (6,545 ) 10,834 1,035 Denominator: Weighted average common shares outstanding 31,291 3,094 33,008 3,154 Basic net income (loss) attributable to GCI common stockholders per common share $ (2.12 ) (2.12 ) 0.33 0.33 Nine Months Ended September 30, 2017 2016 Class A Class B Class A Class B Diluted net income (loss) per share: Numerator: Undistributed net income (loss) allocable to common stockholders for basic computation $ (66,197 ) (6,545 ) 10,834 1,035 Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares (6,545 ) — 1,035 — 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 $ (72,742 ) (6,545 ) 2,896 248 Denominator: Number of shares used in basic computation 31,291 3,094 33,008 3,154 Conversion of Class B to Class A common shares outstanding 3,094 — 3,154 — 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 34,385 3,094 36,793 3,154 Diluted net income (loss) attributable to GCI common stockholders per common share $ (2.12 ) (2.12 ) 0.08 0.08 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Weighted average shares associated with outstanding securities for the three and nine months ended September 30, 2017 and 2016 , 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, 2017 2016 2017 2016 Derivative instrument that may be settled in cash or shares, the effect of which is anti-dilutive 2,045 — 1,797 — Share-based compensation that may be settled in cash or shares, the effect of which is anti-dilutive 26 — 26 — Shares associated with anti-dilutive unexercised stock options 1 — 1 — Total excluded 2,072 — 1,824 — |
Business and Summary of Signi26
Business and Summary of Significant Accounting Principles (Narratives) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017paymententity | Dec. 31, 2016USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Period past due for write-off of trade accounts receivable | 120 days | |
Principles of Consolidation | ||
Number of VIEs | entity | 5 | |
Recently Adopted Accounting Pronouncements | ||
Cumulative effect of ASU 2016-09 adoption | $ 7,095 | |
Accounts Receivable and Allowance for Doubtful Receivables | ||
Number of installment plan payments | payment | 12 | |
Maximum | ||
Accounts Receivable and Allowance for Doubtful Receivables | ||
Equipment installment plan payment term | 24 months | |
Retained Earnings (Deficit) | ||
Recently Adopted Accounting Pronouncements | ||
Cumulative effect of ASU 2016-09 adoption | $ 7,077 |
Business and Summary of Signi27
Business and Summary of Significant Accounting Principles (Revenue Recognition) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Universal Service Fund | |
Public Utilities, General Disclosures [Line Items] | |
Revenue adjustment | $ 5.5 |
Business and Summary of Signi28
Business and Summary of Significant Accounting Principles (Surcharges Reported Gross) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Surcharges reported gross | $ 758 | $ 951 | $ 2,408 | $ 2,973 |
Tower Sale and Leaseback (Narra
Tower Sale and Leaseback (Narratives) (Details) - Tower Sale $ in Millions | 1 Months Ended | 8 Months Ended | 12 Months Ended | ||
Jul. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Mar. 31, 2017renewal_option | Dec. 31, 2016USD ($) | |
Sale Leaseback Transaction [Line Items] | |||||
Net proceeds from sale of cell sites | $ 3.1 | $ 3.7 | $ 90.8 | ||
Number of renewal options | renewal_option | 8 | ||||
Renewal period, term | 5 years | ||||
Annual increase in lease payments, percentage | 2.00% | ||||
Decrease in asset retirement obligation | $ 3.4 | ||||
Interest rate on the Tower Obligation | 7.10% | ||||
Minimum | |||||
Sale Leaseback Transaction [Line Items] | |||||
Lease term (in years) | 10 years | ||||
Maximum | |||||
Sale Leaseback Transaction [Line Items] | |||||
Lease term (in years) | 50 years |
Tower Sale and Leaseback (Balan
Tower Sale and Leaseback (Balance Sheet Impact) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Tower Sale and Leaseback [Abstract] | ||
Property and equipment | $ 19,528 | $ 18,792 |
Tower obligation | $ 93,842 | $ 87,653 |
Tower Sale and Leaseback (Futur
Tower Sale and Leaseback (Future Minimum Payments) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Years ending December 31, | |
2,017 | $ 1,851 |
2,018 | 7,465 |
2,019 | 7,615 |
2,020 | 7,767 |
2,021 | 7,922 |
2022 and thereafter | 157,381 |
Total minimum payments | 190,001 |
Less amount representing interest | 93,620 |
Tower obligation | $ 96,381 |
Consolidated Statements of Ca32
Consolidated Statements of Cash Flows Supplemental Disclosures (Changes in Operating Assets and Liabilities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||
(Increase) decrease in accounts receivable, net | $ (2,466) | $ 3,129 |
Increase in prepaid expenses | (4,527) | (3,636) |
Decrease in inventories | 2,551 | 3,356 |
(Increase) decrease in other current assets | 132 | (44) |
(Increase) decrease in other assets | 1,112 | (3,990) |
Increase in accounts payable | 9,610 | 4,155 |
Increase (decrease) in deferred revenues | 3,730 | (1,013) |
Increase (decrease) in accrued payroll and payroll related obligations | 819 | (2,227) |
Decrease in accrued liabilities | (742) | (5,758) |
Increase in accrued interest | 12,042 | 11,810 |
Increase (decrease) in subscriber deposits | 322 | (366) |
Increase (decrease) in long-term deferred revenue | (2,143) | 18,178 |
Increase (decrease) in components of other long-term liabilities | (1,043) | 332 |
Total change in operating assets and liabilities | $ 19,397 | $ 23,926 |
Consolidated Statements of Ca33
Consolidated Statements of Cash Flows Supplemental Disclosures (Net Cash Paid or Received) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net cash paid or received: | ||
Interest paid including capitalized interest | $ 56,250 | $ 50,789 |
Consolidated Statements of Ca34
Consolidated Statements of Cash Flows Supplemental Disclosures (Non-cash Investing and Financing Activities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||
Non-cash additions for purchases of property and equipment | $ 13,676 | $ 11,372 |
Net asset retirement obligation additions (deletions) to property and equipment | $ 986 | $ (2,279) |
Intangible Assets and Goodwil35
Intangible Assets and Goodwill (Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 3,291 | $ 3,147 | $ 9,848 | $ 9,183 |
Intangible Assets and Goodwil36
Intangible Assets and Goodwill (5 Year Future Amortization) (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Years Ending December 31, | |
2,017 | $ 12,989 |
2,018 | 11,620 |
2,019 | 9,147 |
2,020 | 7,163 |
2,021 | $ 5,354 |
Fair Value Measurements and D37
Fair Value Measurements and Derivative Instrument (Recurring Fair Value Measurements) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (mutual funds) | $ 1,294 | $ 1,477 |
Derivative stock appreciation rights | 83,670 | 29,700 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (mutual funds) | 1,294 | 1,477 |
Derivative stock appreciation rights | 0 | 0 |
Level 2 | ||
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 |
Level 3 | ||
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 | $ 83,670 | $ 29,700 |
Fair Value Measurements and D38
Fair Value Measurements and Derivative Instrument (Current and Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Apr. 26, 2017 | Apr. 12, 2017 | Dec. 31, 2016 |
Senior Notes | Senior Notes Due 2021 | ||||
Debt Instrument [Line Items] | ||||
Debt stated percentage | 6.75% | 6.75% | 6.75% | |
Senior Notes | Senior Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt stated percentage | 6.875% | 6.875% | 6.875% | |
Carrying Amount | ||||
Debt Instrument [Line Items] | ||||
Current and long-term debt | $ 1,336,489 | $ 1,336,772 | ||
Fair Value | ||||
Debt Instrument [Line Items] | ||||
Current and long-term debt | $ 1,421,873 | $ 1,393,865 |
Fair Value Measurements and D39
Fair Value Measurements and Derivative Instrument (Derivative Financial Instrument, Narrative) (Details) | Feb. 02, 2015USD ($)$ / sharesshares |
Stock Appreciation Rights (SARs) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Stock appreciation rights, expiration period | 8 years |
Common Stock Class A | Stock Appreciation Rights (SARs) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Stock appreciation rights (in shares) | shares | 3,000,000 |
Exercise price of stock appreciation rights (USD per share) | $ / shares | $ 13 |
Unsecured Debt | Searchlight ALX, LP Promissory Note | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Debt face amount | $ | $ 75,000,000 |
Fair Value Measurements and D40
Fair Value Measurements and Derivative Instrument (Significant Assumptions) (Details) - Stock Appreciation Rights (SARs) | 9 Months Ended |
Sep. 30, 2017$ / shares | |
Derivative [Line Items] | |
Stock price (USD per share) | $ 40.79 |
Minimum | |
Derivative [Line Items] | |
Contractual term (in years) | 1 year 4 months 4 days |
Volatility (percent) | 20.00% |
Risk-free interest rate | 1.00% |
Maximum | |
Derivative [Line Items] | |
Contractual term (in years) | 5 years 4 months 1 day |
Volatility (percent) | 40.00% |
Risk-free interest rate | 2.00% |
Fair Value Measurements and D41
Fair Value Measurements and Derivative Instrument (Fair Value Measurement Using Level 3 Inputs) (Details) - Derivative Stock Appreciation Rights - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value of stock appreciation rights, beginning balance | $ 29,700 | $ 32,820 |
Fair value of stock appreciation rights, ending balance | 83,670 | 16,980 |
Other Income (Expense) | ||
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) | $ 53,970 | $ (15,840) |
Stockholders' Equity (Narrative
Stockholders' Equity (Narratives) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Common Stock | |||
Shares repurchased value | $ 5,912 | $ 47,655 | |
Other Nonoperating Income (Expense) | |||
Share-based Compensation | |||
Share-based compensation expense | 13,700 | $ 7,800 | |
Restricted Stock | |||
Share-based Compensation | |||
Unrecognized share-based compensation expense | $ 14,200 | ||
Weighted average period for recognition of unvested shares | 1 year 5 months 5 days | ||
Restricted Stock | Stock Option Plan | |||
Share-based Compensation | |||
Granted (USD per share) | $ 22.94 | $ 17.68 | |
Fair value of awards vesting during period | $ 9,700 | $ 4,500 | |
Restricted Stock | Maximum | |||
Share-based Compensation | |||
Vesting period | 3 years | ||
Common Stock Class A | |||
Share-based Compensation | |||
Number of shares authorized | 15,700,000 | ||
Common Stock Class A | Stock Option Plan | |||
Share-based Compensation | |||
Number of shares available for grant | 1,000,000 | ||
Stock Buyback Program | Common Stock Class A | |||
Common Stock | |||
Shares repurchased | 1,800,000 | 200,000 | 3,000,000 |
Shares repurchased value | $ 27,100 | $ 4,000 | $ 46,500 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Nonvested Restricted Stock Award Activity) (Details) - Stock Option Plan - Restricted Stock - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Shares | ||
Nonvested beginning balance (shares) | 1,465 | |
Granted (shares) | 597 | |
Vested (shares) | (388) | |
Forfeited (shares) | (3) | |
Nonvested ending balance (shares) | 1,671 | |
Weighted Average Grant Date Fair Value | ||
Nonvested beginning balance (USD per share) | $ 14.41 | |
Granted (USD per share) | 22.94 | $ 17.68 |
Vested (USD per share) | 17.48 | |
Forfeited (USD per share) | 17.84 | |
Nonvested ending balance (USD per share) | $ 16.74 |
Earnings (Loss) per Common Sh44
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income (loss) available to common stockholders | $ (8,731) | $ 7,943 | $ (72,742) | $ 12,457 |
Class A | ||||
Numerator: | ||||
Net income (loss) available to common stockholders | (7,957) | 7,266 | (66,197) | 11,422 |
Less: Undistributed net income allocable to participating securities | 0 | (386) | 0 | (588) |
Undistributed net income (loss) allocable to common stockholders | $ (7,957) | $ 6,880 | $ (66,197) | $ 10,834 |
Denominator: | ||||
Weighted average common shares outstanding | 31,374 | 32,033 | 31,291 | 33,008 |
Basic net income (loss) attributable to GCI common stockholders per common share (USD per share) | $ (0.25) | $ 0.21 | $ (2.12) | $ 0.33 |
Class B | ||||
Numerator: | ||||
Net income (loss) available to common stockholders | $ (774) | $ 677 | $ (6,545) | $ 1,035 |
Less: Undistributed net income allocable to participating securities | 0 | 0 | 0 | 0 |
Undistributed net income (loss) allocable to common stockholders | $ (774) | $ 677 | $ (6,545) | $ 1,035 |
Denominator: | ||||
Weighted average common shares outstanding | 3,052 | 3,154 | 3,094 | 3,154 |
Basic net income (loss) attributable to GCI common stockholders per common share (USD per share) | $ (0.25) | $ 0.21 | $ (2.12) | $ 0.33 |
Earnings (Loss) per Common Sh45
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Class A | ||||
Numerator: | ||||
Undistributed net income (loss) allocable to common stockholders for basic computation | $ (7,957) | $ 6,880 | $ (66,197) | $ 10,834 |
Reallocation of undistributed earnings (loss) as a result of conversion of Class B to Class A shares | (774) | 677 | (6,545) | 1,035 |
Reallocation of undistributed earnings as a result of conversion of dilutive securities | 0 | 141 | 0 | 447 |
Effect of derivative instrument that may be settled in cash or shares | 0 | (2,827) | 0 | (9,327) |
Effect of share based compensation that may be settled in cash or shares | 0 | (32) | 0 | (93) |
Undistributed net income (loss) adjusted for allocation of undistributed earnings (loss) and effect of contracts that may be settled in cash or shares | $ (8,731) | $ 4,839 | $ (72,742) | $ 2,896 |
Denominator: | ||||
Number of shares used in basic computation (shares) | 31,374 | 32,033 | 31,291 | 33,008 |
Conversion of Class B to Class A common shares outstanding (shares) | 3,052 | 3,154 | 3,094 | 3,154 |
Effect of derivative instrument that may be settled in cash or shares (shares) | 0 | 264 | 0 | 602 |
Unexercised stock options (shares) | 0 | 1 | 0 | 3 |
Effect of share based compensation that may be settled in cash or shares (shares) | 0 | 26 | 0 | 26 |
Number of shares used in per share computation | 34,426 | 35,478 | 34,385 | 36,793 |
Diluted net income (loss) attributable to GCI common stockholders per common share (USD per share) | $ (0.25) | $ 0.14 | $ (2.12) | $ 0.08 |
Class B | ||||
Numerator: | ||||
Undistributed net income (loss) allocable to common stockholders for basic computation | $ (774) | $ 677 | $ (6,545) | $ 1,035 |
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 | 0 | (247) | 0 | (787) |
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 | $ (774) | $ 430 | $ (6,545) | $ 248 |
Denominator: | ||||
Number of shares used in basic computation (shares) | 3,052 | 3,154 | 3,094 | 3,154 |
Conversion of Class B to Class A common shares outstanding (shares) | 0 | 0 | 0 | 0 |
Effect of derivative instrument that may be settled in cash or shares (shares) | 0 | 0 | 0 | 0 |
Unexercised stock options (shares) | 0 | 0 | 0 | 0 |
Effect of share based compensation that may be settled in cash or shares (shares) | 0 | 0 | 0 | 0 |
Number of shares used in per share computation | 3,052 | 3,154 | 3,094 | 3,154 |
Diluted net income (loss) attributable to GCI common stockholders per common share (USD per share) | $ (0.25) | $ 0.14 | $ (2.12) | $ 0.08 |
Earnings (Loss) per Common Sh46
Earnings (Loss) per Common Share (Weighted Average Shares Outstanding, Anti-dilutive) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total excluded (shares) | 2,072 | 0 | 1,824 | 0 |
Derivative instrument 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] | ||||
Total excluded (shares) | 2,045 | 0 | 1,797 | 0 |
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] | ||||
Total excluded (shares) | 26 | 0 | 26 | 0 |
Shares associated with anti-dilutive unexercised stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total excluded (shares) | 1 | 0 | 1 | 0 |
Segments (Details)
Segments (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 1 | 2 |
Number of operating segments | 1 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jul. 11, 2016 | Jan. 31, 2001 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2001 | Apr. 30, 2008 | Dec. 31, 1991 |
Related Party Transaction [Line Items] | |||||||
Shares repurchased value | $ 5,912,000 | $ 47,655,000 | |||||
Investor | Common Stock Class A | |||||||
Related Party Transaction [Line Items] | |||||||
Shares repurchased | 1,000,000 | ||||||
Shares repurchased value | $ 16,100,000 | ||||||
Immediate Family Member of Management or Principal Owner | Property | |||||||
Related Party Transaction [Line Items] | |||||||
Capital lease obligations | $ 1,300,000 | $ 900,000 | |||||
CEO | Air Transportation Equipment | |||||||
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 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Mar. 21, 2017 | Dec. 11, 2012 | Oct. 03, 2012 | Aug. 30, 2011 | Sep. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||||||
Restricted cash | $ 2.1 | |||||
Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Tax credit percentage | 39.00% | |||||
Percentage of recapture | 100.00% | |||||
Recapture period | 7 years | |||||
Assets | $ 150.9 | $ 140.9 | ||||
Liabilities | $ 110.9 | $ 104.2 | ||||
Primary Beneficiary | NMTC 1 | ||||||
Variable Interest Entity [Line Items] | ||||||
Loans to VIE | $ 58.3 | |||||
Interest rate percentage | 1.00% | |||||
Primary Beneficiary | NMTC 1 | Minimum | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 1.00% | |||||
Primary Beneficiary | NMTC 1 | Maximum | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 3.96% | |||||
Primary Beneficiary | NMTC 1 | US Bancorp | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | $ 22.4 | |||||
Primary Beneficiary | NMTC 1 | Community Development Entities | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | $ 76.8 | |||||
Primary Beneficiary | NMTC 2 | ||||||
Variable Interest Entity [Line Items] | ||||||
Loans to VIE | $ 37.7 | |||||
Interest rate percentage | 1.00% | |||||
Primary Beneficiary | NMTC 2 | Minimum | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 0.7099% | |||||
Primary Beneficiary | NMTC 2 | Maximum | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 0.7693% | |||||
Primary Beneficiary | NMTC 2 | US Bancorp | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | $ 17.5 | |||||
Primary Beneficiary | NMTC 2 | Community Development Entities | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | $ 55.2 | |||||
Primary Beneficiary | NMTC 3 | ||||||
Variable Interest Entity [Line Items] | ||||||
Loans to VIE | $ 8.2 | |||||
Interest rate percentage | 1.00% | |||||
Primary Beneficiary | NMTC 3 | Maximum | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 1.35% | |||||
Primary Beneficiary | NMTC 3 | US Bancorp | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | $ 3.8 | |||||
Primary Beneficiary | NMTC 3 | Community Development Entities | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | $ 12 | |||||
Primary Beneficiary | NMTC 4 | ||||||
Variable Interest Entity [Line Items] | ||||||
Loans to VIE | $ 6.7 | |||||
Interest rate percentage | 1.00% | |||||
Primary Beneficiary | NMTC 4 | Maximum | ||||||
Variable Interest Entity [Line Items] | ||||||
Interest rate percentage | 0.7337% | |||||
Primary Beneficiary | NMTC 4 | US Bancorp | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | $ 3.3 | |||||
Primary Beneficiary | NMTC 4 | Community Development Entities | ||||||
Variable Interest Entity [Line Items] | ||||||
Amount to other entity | 9.8 | |||||
Placement fees | $ 0.2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Apr. 26, 2017USD ($) | Apr. 04, 2017year$ / shares | Sep. 30, 2017 | Apr. 12, 2017USD ($) |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Consideration per share | $ / shares | $ 32.50 | |||
Liberty Ventures reference price (USD per share) | $ / shares | $ 43.65 | |||
Years to redemption date | year | 21 | |||
Senior Notes Due 2021 | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Aggregate principal amount of consent received | $ | $ 312,418,000 | |||
Percent of total consent received | 96.13% | |||
Aggregate consent fee | $ | $ 812,500 | |||
Senior Notes Due 2025 | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Aggregate principal amount of consent received | $ | $ 443,538,000 | |||
Percent of total consent received | 98.56% | |||
Aggregate consent fee | $ | $ 1,125,000 | |||
Senior Notes | Senior Notes Due 2021 | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Debt stated percentage | 6.75% | 6.75% | 6.75% | |
Senior Notes | Senior Notes Due 2025 | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Debt stated percentage | 6.875% | 6.875% | 6.875% | |
Minimum | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Series A preferred shares dividend rate | 5.00% | |||
Maximum | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Series A preferred shares dividend rate | 7.00% | |||
Common Stock | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Ratio of new stock received | 0.63 | |||
Consideration per share | $ / shares | $ 27.50 | |||
Preferred Stock | ||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||||
Ratio of new stock received | 0.20 | |||
Consideration per share | $ / shares | $ 5 |