Attached files
| file | filename |
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| 8-K - 8-K - GCI, LLC | incform8k11022016.htm |
Exhibit 99.1
GCI REPORTS THIRD QUARTER 2016 FINANCIAL RESULTS
Net Income of $8 million
Consolidated Revenue of $237 million
Adjusted EBITDA up $7 million sequentially
November 2, 2016, Anchorage, Alaska - General Communication, Inc. (“GCI”) (NASDAQ: GNCMA) announces its results for the third quarter of 2016.
Operationally, this was one of our best quarters ever, and it showed up in our EBITDA growth of $7 million sequentially. We saw growth of data revenue, reductions in Cost of Goods Sold, significant risk reduction from the high cost reform, and our Senior Credit Facility refinance is imminent. Finally, we are close to eliminating our fourth billing system of the year which significantly simplifies our business and will lead to reductions of over $5 million per year in cost paid to those billing system providers.
Significant Updates
Change in Adjusted EBITDA Calculation: In March 2016 we noted, with our annual guidance, that we would be including in our Adjusted EBITDA, $30 million in cash payments under our roaming agreements in excess of GAAP revenues. GAAP requires revenues on long term contracts like our roaming agreements to be recognized on a straight line basis. We believe the contractual payment streams more accurately reflect the economics of the contracts. However, recent SEC interpretations and comments have made clear that these types of adjustments are generally inappropriate. Thus, we have elected, in the absence of any direct discussions with the SEC, to eliminate the adjustment both prospectively and retrospectively. This will not affect either our cash flow or the leverage on our new Senior Credit Facility which calculates leverage on the contractual payment streams.
High Cost Reform Update: On August 31st, the FCC released an Order adopting the Alaska Plan for high cost universal service funding, which is a huge step towards keeping existing and bringing new advanced broadband communications to rural Alaska. This Order largely completes the reform of the federal universal service high cost support in the State, providing the certainty and stability necessary to continue deployment of new telecommunications infrastructure in rural Alaska. We are pleased with this outcome.
The financial impact to GCI is twofold:
1. | Our rural high cost payments will remain unchanged at $55 million annually over the next ten years, subject to performance commitments and elimination of any duplicative support after five years. |
2. | Urban high cost support was phased down 20 percent per year in 2012 and 2013 and subsequently frozen. Under the Alaska plan, this revenue will continue to phase |
down from the frozen 60 percent level of $11 million to 40 percent in 2017, 20 percent in 2018 and then to zero.
Credit Facility Refinance: We expect to close on a refinancing of our Senior Credit Facility term loan and revolver this month. The terms will be substantially similar to the current facility, with the maturity extended to five years from the closing date. This will extend our earliest debt maturity out to 2021.
Operating and Financial Highlights
We achieved net income in the quarter of $8 million, up $5 million from the second quarter of 2016 and down $10 million year-over-year.
Our third quarter revenues and Adjusted EBITDA were $237 million and $78 million respectively, representing sequential growth of 1% and 9%, respectively. Growth was primarily driven by strength in data revenue and cost reductions including what we pay other carriers for circuit costs. On a year-over-year basis, revenues and Adjusted EBITDA declined $22 million and $18 million, respectively. As previously disclosed, we believe year-over-year comparisons are less relevant due to the change in roaming and backhaul agreements with our large wireless customers.
Wireless
Wireless segment revenues were $52 million for the quarter, down $28 million or 35 percent year-over-year and $2 million or three percent sequentially. The year-over-year decline is driven primarily by roaming and backhaul but also by lower plan fee revenue from declining wireless ARPU.
Wireless segment Adjusted EBITDA was $32 million for the quarter, declining $25 million or 44 percent over the third quarter of 2015 and was $1 million or two percent lower compared with the second quarter of 2016. The year-over-year decline in Adjusted EBITDA was a result of our roaming and backhaul agreements.
The wireless segment revenue detail is as follows:
($ millions) | 3Q16 | 3Q15 | 2Q16 |
Wholesale Wireless | 16 | 20 | 17 |
Roaming and Backhaul | 21 | 45 | 21 |
USF Support | 13 | 15 | 13 |
Other | 2 | 0 | 3 |
Total Wireless Revenue | 52 | 80 | 54 |
Wireline
Wireline segment revenues of $184 million during the quarter were up $6 million or three percent over the third quarter of 2015 and up $4 million or two percent over the prior quarter. Declines in voice and video were offset by strong gains in both Consumer and Business data revenues.
Adjusted EBITDA for the quarter was $46 million, up $7 million or 18 percent year-over-year and up $7 million or 19 percent from the previous quarter. The sequential gain in Adjusted EBITDA was the result of growth in data revenues and cost reductions; particularly in our professional services business, which operates primarily in the economically challenged oil industry.
Wireline - Consumer
Consumer revenues of $88 million in the third quarter are flat year-over-year and up $4 million or four percent sequentially. Year-over-year growth in data ARPU driven by migration to higher plan tiers contributed to a nine percent, or $3 million, increase in data revenues. This gain was offset by declining voice and video subscribers. Sequentially, the growth was related to wireless handsets.
Total wireless subscribers were down 1,700 for the quarter as we continue transitioning the acquired wireless subscriber base. We ended the quarter with just 5,700 subscribers left to transition, down from 20,000 at the end of the second quarter. We currently have fewer than 1,000 remaining and we expect to complete the transition in the fourth quarter.
Our cable modem subscribers were up 2,700 year-over-year and flat sequentially. Towards the end of the quarter, we introduced new data plans which pick up where our competitor leaves off. Our new plans start at 50Mbps for $59.99 and additional plans are available up to our 1 Gig plans. These speeds are a compelling offer over what is available from our competitors.
Wireline - GCI Business
GCI Business revenues were $97 million for the quarter. This is up $6 million or seven percent compared with the same period in 2015 and up $1 million or one percent sequentially.
SG&A
SG&A expenses were $89 million during the quarter, up $6 million or eight percent over last year and up $1 million or one percent sequentially. Spending on our billing system conversion is reflected in the increase in SG&A. As part of our billing system conversion, we have eliminated three wireless billing platforms and with the completion of our acquired subscriber transition this year we will eliminate a fourth.
Capital Expenditures
Capital expenditures for the quarter totaled $58 million, bringing the total for the year to $142 million.
Stock Buybacks
GCI repurchased 1.8 million shares of its Class A common stock during the third quarter at a cost of $27 million, or $14.85 per share.
Leverage
We have guided to net leverage in the range of 4.0x to 4.5x, although we have noted that we would go outside of that for compelling reasons. The change in Adjusted EBITDA calculation means that we are slightly above 4.5x net leverage. However, when you add back the roaming adjustment, as our new Senior Credit Facility will allow, we are at 4.2x net leverage.
The following table may be helpful to understand our leverage:
($ millions) | 3Q16 | Leverage on EBITDA | Leverage on Cash Flow |
Total Debt | 1,484 | 5.0x | 4.5x |
Less Cash | (93) | (0.3x) | (0.3x) |
Net Debt | 1,391 | 4.6x | 4.2x |
Adjusted EBITDA (Last 2 quarters annualized) | 299 | ||
Add back of roaming cash flows allowed by new credit facility | 30 | ||
Annualized Cash Flow | 329 | ||
2016 Guidance
• | Revenue is expected to be between $930 million and $980 million in 2016. |
• | Previously our Adjusted EBITDA guidance was between $295 million and $325 million, including the $30 million adjustment. The change in the roaming adjustment would imply guidance of $265 to $295 million. We are increasing the guidance to $280 to $295 million. |
• | Capital expenditures are expected to be approximately $210 million. |
Use of Non-GAAP Measure
Adjusted EBITDA is presented herein and is a non-GAAP measure. See our attached financials for a reconciliation of this non-GAAP measure to the nearest GAAP measure.
Adjusted EBITDA guidance is a forward-looking non-GAAP financial measure presented herein. Reconciliation to the most directly comparable GAAP financial measure is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty regarding the occurrence, the financial impact and the periods with respect to recognition of future GAAP financial measures. We also believe that such a reconciliation would imply an inappropriate degree of precision. For the same reasons, we are unable to address the probable significance of the unavailable information.
Conference Call
The company will hold a conference call to discuss the financial results on Thursday, November 3rd, at 2:00 p.m. (Eastern). To access the call, call the conference operator between 1:45-2:00 p.m. (Eastern) at 844-850-0551 (International callers should dial +1-412-902-4197) and identify your call as “GCI”.
In addition to dial-up access, GCI will make available net conferencing. To access the call via net conference, log on to ir.gci.com and follow the instructions.
A replay of the call will be available, beginning at 4:00pm, for 72-hours by dialing 877-344-7529, access code 10094070 (International callers should dial +1-412-317-0088).
Forward-Looking Statement Disclosure
The foregoing contains forward-looking statements regarding GCI’s expected results that are based on management’s expectations as well as on a number of assumptions concerning future events. Actual results might differ materially from those projected in the forward-looking statements due to uncertainties and other factors, many of which are outside GCI’s control. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in GCI’s cautionary statement sections of Forms 10-K and 10-Q filed with the Securities and Exchange Commission.
About GCI
GCI is the largest Alaska-based and operated, integrated telecommunications provider, offering wireless, voice, data, and video services statewide. Learn more about GCI at www.gci.com.
Contacts:
Investors: Kyle Jones, 907.868.7105, kjones@gci.com
Media: David Morris, 907.868.5396, dmorris@gci.com
# # #
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Amounts in thousands) | ||||||
September 30, | December 31, | |||||
ASSETS | 2016 | 2015 | ||||
Current assets: | ||||||
Cash and cash equivalents | $ | 92,622 | 26,528 | |||
Receivables | 200,294 | 208,384 | ||||
Less allowance for doubtful receivables | 4,436 | 3,630 | ||||
Net receivables | 195,858 | 204,754 | ||||
Prepaid expenses | 16,253 | 12,862 | ||||
Inventories | 7,966 | 11,322 | ||||
Other current assets | 173 | 3,129 | ||||
Total current assets | 312,872 | 258,595 | ||||
Property and equipment | 2,505,753 | 2,384,530 | ||||
Less accumulated depreciation | 1,412,540 | 1,290,149 | ||||
Net property and equipment | 1,093,213 | 1,094,381 | ||||
Goodwill | 239,263 | 239,263 | ||||
Cable certificates | 191,635 | 191,635 | ||||
Wireless licenses | 92,347 | 86,347 | ||||
Other intangible assets, net of amortization | 70,062 | 69,290 | ||||
Other assets | 32,560 | 27,429 | ||||
Total other assets | 625,867 | 613,964 | ||||
Total assets | $ | 2,031,952 | 1,966,940 | |||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Continued) | ||||||
(Amounts in thousands) | ||||||
September 30, | December 31, | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | 2016 | 2015 | ||||
Current liabilities: | ||||||
Current maturities of obligations under long-term debt, capital leases, and tower obligation | $ | 13,046 | 12,050 | |||
Accounts payable | 51,551 | 63,014 | ||||
Deferred revenue | 33,115 | 34,128 | ||||
Accrued payroll and payroll related obligations | 29,251 | 31,337 | ||||
Accrued interest (including $3,718 and $5,132 to a related party at September 30, 2016 and December 31, 2015, respectively) | 25,465 | 13,655 | ||||
Accrued liabilities | 17,002 | 22,822 | ||||
Subscriber deposits | 876 | 1,242 | ||||
Total current liabilities | 170,306 | 178,248 | ||||
Long-term debt, net (including $56,157 and $54,810 to a related party at September 30, 2016 and December 31, 2015, respectively) | 1,330,199 | 1,329,396 | ||||
Obligations under capital leases, excluding current maturities (including $1,785 and $1,824 due to a related party at September 30, 2016 and December 31, 2015, respectively) | 52,713 | 59,651 | ||||
Deferred income taxes | 113,710 | 106,145 | ||||
Long-term deferred revenue | 120,875 | 93,427 | ||||
Tower obligation | 88,060 | — | ||||
Other liabilities (including $16,980 and $32,820 for derivative stock appreciation rights with a related party at September 30, 2016 and December 31, 2015, respectively) | 64,202 | 80,812 | ||||
Total liabilities | 1,940,065 | 1,847,679 | ||||
Commitments and contingencies | ||||||
Stockholders’ equity: | ||||||
Common stock (no par): | ||||||
Class A. Authorized 100,000 shares; issued 33,164 and 35,593 shares at September 30, 2016 and December 31, 2015, respectively; outstanding 33,138 and 35,567 shares at September 30, 2016 and December 31, 2015, respectively | — | — | ||||
Class B. Authorized 10,000 shares; issued and outstanding 3,154 at September 30, 2016 and December 31, 2015; convertible on a share-per-share basis into Class A common stock | 2,664 | 2,664 | ||||
Less cost of 26 Class A common shares held in treasury at September 30, 2016 and December 31, 2015 | (249 | ) | (249 | ) | ||
Paid-in capital | 14,609 | 6,631 | ||||
Retained earnings | 44,215 | 79,217 | ||||
Total General Communication, Inc. stockholders' equity | 61,239 | 88,263 | ||||
Non-controlling interests | 30,648 | 30,998 | ||||
Total stockholders’ equity | 91,887 | 119,261 | ||||
Total liabilities and stockholders’ equity | $ | 2,031,952 | 1,966,940 | |||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(Amounts in thousands, except per share amounts) | 2016 | 2015 | 2016 | 2015 | ||||||||
Revenues: | ||||||||||||
Non-related party | $ | 236,655 | 258,573 | 701,519 | 731,907 | |||||||
Related party | — | — | — | 5,283 | ||||||||
Total revenues | 236,655 | 258,573 | 701,519 | 737,190 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below): | ||||||||||||
Non-related party | 73,494 | 82,717 | 227,926 | 235,860 | ||||||||
Related party | — | — | — | 881 | ||||||||
Total cost of goods sold | 73,494 | 82,717 | 227,926 | 236,741 | ||||||||
Selling, general and administrative expenses: | ||||||||||||
Non-related party | 88,974 | 82,655 | 264,642 | 249,090 | ||||||||
Related party | — | — | — | 540 | ||||||||
Total selling, general and administrative expenses | 88,974 | 82,655 | 264,642 | 249,630 | ||||||||
Depreciation and amortization expense | 47,819 | 45,157 | 143,033 | 135,563 | ||||||||
Software impairment charge | — | 2,571 | — | 29,839 | ||||||||
Operating income | 26,368 | 45,473 | 65,918 | 85,417 | ||||||||
Other income (expense): | ||||||||||||
Interest expense (including amortization of deferred loan fees) | (19,666 | ) | (19,260 | ) | (58,199 | ) | (59,713 | ) | ||||
Related party interest expense | (1,881 | ) | (1,828 | ) | (5,558 | ) | (4,760 | ) | ||||
Derivative instrument unrealized income (loss) with related party | 4,800 | 30 | 15,840 | (5,040 | ) | |||||||
Loss on extinguishment of debt | — | — | — | (27,700 | ) | |||||||
Impairment of equity method investment | — | — | — | (12,593 | ) | |||||||
Other | 613 | 1,202 | 1,702 | 2,445 | ||||||||
Other expense, net | (16,134 | ) | (19,856 | ) | (46,215 | ) | (107,361 | ) | ||||
Income (loss) before income taxes | 10,234 | 25,617 | 19,703 | (21,944 | ) | |||||||
Income tax (expense) benefit | (2,407 | ) | (8,122 | ) | (7,596 | ) | 4,957 | |||||
Net income (loss) | 7,827 | 17,495 | 12,107 | (16,987 | ) | |||||||
Net income (loss) attributable to non-controlling interests | (116 | ) | (136 | ) | (350 | ) | 278 | |||||
Net income (loss) attributable to General Communication, Inc. | $ | 7,943 | 17,631 | 12,457 | (17,265 | ) | ||||||
Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share | $ | 0.21 | 0.45 | 0.33 | (0.45 | ) | ||||||
Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share | $ | 0.21 | 0.45 | 0.33 | (0.45 | ) | ||||||
Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share | $ | 0.14 | 0.44 | 0.08 | (0.45 | ) | ||||||
Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share | $ | 0.14 | 0.44 | 0.08 | (0.45 | ) | ||||||
Common shares used to calculate Class A basic EPS | 32,033 | 34,031 | 33,008 | 35,037 | ||||||||
Common shares used to calculate Class A diluted EPS | 35,478 | 38,115 | 36,793 | 38,195 | ||||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Third Quarter 2016 | Third Quarter 2015 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 52,327 | 22,071 | 74,398 | 80,424 | 21,487 | 101,911 | |||||||
Data | — | 110,032 | 110,032 | — | 100,245 | 100,245 | ||||||||
Video | — | 30,770 | 30,770 | — | 32,959 | 32,959 | ||||||||
Voice | — | 21,455 | 21,455 | — | 23,458 | 23,458 | ||||||||
Total | 52,327 | 184,328 | 236,655 | 80,424 | 178,149 | 258,573 | ||||||||
Cost of goods sold | 15,313 | 58,181 | 73,494 | 18,031 | 64,686 | 82,717 | ||||||||
Contribution | 37,014 | 126,147 | 163,161 | 62,393 | 113,463 | 175,856 | ||||||||
Less SG&A | (5,138 | ) | (83,836 | ) | (88,974 | ) | (5,115 | ) | (77,540 | ) | (82,655 | ) | ||
Plus share-based compensation | — | 2,810 | 2,810 | — | 2,660 | 2,660 | ||||||||
Plus imputed interest on financed devices | — | 651 | 651 | — | 268 | 268 | ||||||||
Plus accretion | 142 | 264 | 406 | 126 | 65 | 191 | ||||||||
Other | — | 131 | 131 | — | 206 | 206 | ||||||||
Adjusted EBITDA | $ | 32,018 | 46,167 | 78,185 | 57,404 | 39,122 | 96,526 | |||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Third Quarter 2016 | Second Quarter 2016 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 52,327 | 22,071 | 74,398 | 53,875 | 17,973 | 71,848 | |||||||
Data | — | 110,032 | 110,032 | — | 108,007 | 108,007 | ||||||||
Video | — | 30,770 | 30,770 | — | 31,645 | 31,645 | ||||||||
Voice | — | 21,455 | 21,455 | — | 22,266 | 22,266 | ||||||||
Total | 52,327 | 184,328 | 236,655 | 53,875 | 179,891 | 233,766 | ||||||||
Cost of goods sold | 15,313 | 58,181 | 73,494 | 17,081 | 61,060 | 78,141 | ||||||||
Contribution | 37,014 | 126,147 | 163,161 | 36,794 | 118,831 | 155,625 | ||||||||
Less SG&A | (5,138 | ) | (83,836 | ) | (88,974 | ) | (4,171 | ) | (83,851 | ) | (88,022 | ) | ||
Plus share-based compensation | — | 2,810 | 2,810 | — | 2,683 | 2,683 | ||||||||
Plus imputed interest on financed devices | — | 651 | 651 | — | 633 | 633 | ||||||||
Plus accretion | 142 | 264 | 406 | 211 | 231 | 442 | ||||||||
Other | — | 131 | 131 | — | 179 | 179 | ||||||||
Adjusted EBITDA | $ | 32,018 | 46,167 | 78,185 | 32,834 | 38,706 | 71,540 | |||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Nine Months Ended September 30, 2016 | Nine Months Ended September 30, 2015 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 157,664 | 56,842 | 214,506 | 207,568 | 62,643 | 270,211 | |||||||
Data | — | 325,010 | 325,010 | — | 295,586 | 295,586 | ||||||||
Video | — | 95,824 | 95,824 | — | 100,140 | 100,140 | ||||||||
Voice | — | 66,179 | 66,179 | — | 71,253 | 71,253 | ||||||||
Total | 157,664 | 543,855 | 701,519 | 207,568 | 529,622 | 737,190 | ||||||||
Cost of goods sold | 47,426 | 180,500 | 227,926 | 53,897 | 182,844 | 236,741 | ||||||||
Contribution | 110,238 | 363,355 | 473,593 | 153,671 | 346,778 | 500,449 | ||||||||
Less SG&A | (13,320 | ) | (251,322 | ) | (264,642 | ) | (13,649 | ) | (235,981 | ) | (249,630 | ) | ||
Plus share-based compensation | — | 7,820 | 7,820 | — | 8,074 | 8,074 | ||||||||
Plus imputed interest on financed devices | — | 1,885 | 1,885 | — | 438 | 438 | ||||||||
Plus accretion | 498 | 742 | 1,240 | 496 | 496 | 992 | ||||||||
Other | — | 435 | 435 | — | (493 | ) | (493 | ) | ||||||
Adjusted EBITDA | $ | 97,416 | 122,915 | 220,331 | 140,518 | 119,312 | 259,830 | |||||||
General Communication, Inc. | ||||||||||||||||
Non-GAAP Financial Reconciliation Schedule | ||||||||||||||||
(Unaudited, Amounts in Thousands) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | June 30, | September 30, | September 30, | ||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | 7,827 | 17,495 | 3,298 | 12,107 | (16,987 | ) | |||||||||
Income tax expense (benefit) | 2,407 | 8,122 | 2,122 | 7,596 | (4,957 | ) | ||||||||||
Income (loss) before income taxes | 10,234 | 25,617 | 5,420 | 19,703 | (21,944 | ) | ||||||||||
Other (income) expense: | ||||||||||||||||
Interest expense (including amortization of deferred loan fees) | 19,666 | 19,260 | 19,362 | 58,199 | 59,713 | |||||||||||
Related party interest expense | 1,881 | 1,828 | 1,846 | 5,558 | 4,760 | |||||||||||
Derivative instrument unrealized (income) loss with related party | (4,800 | ) | (30 | ) | (6,510 | ) | (15,840 | ) | 5,040 | |||||||
Loss on extinguishment of debt | — | — | — | — | 27,700 | |||||||||||
Impairment on equity method investment | — | — | — | — | 12,593 | |||||||||||
Other | (613 | ) | (1,202 | ) | (587 | ) | (1,702 | ) | (2,445 | ) | ||||||
Other expense, net | 16,134 | 19,856 | 14,111 | 46,215 | 107,361 | |||||||||||
Operating income | 26,368 | 45,473 | 19,531 | 65,918 | 85,417 | |||||||||||
Plus depreciation and amortization expense | 47,819 | 45,157 | 48,072 | 143,033 | 135,563 | |||||||||||
Plus software impairment charge | — | 2,571 | — | — | 29,839 | |||||||||||
Plus share-based compensation expense | 2,810 | 2,660 | 2,683 | 7,820 | 8,074 | |||||||||||
Plus imputed interest on financed devices | 651 | 268 | 633 | 1,885 | 438 | |||||||||||
Plus accretion expense | 406 | 191 | 442 | 1,240 | 992 | |||||||||||
Other | 131 | 206 | 179 | 435 | (493 | ) | ||||||||||
Adjusted EBITDA (Note 1) | $ | 78,185 | 96,526 | 71,540 | 220,331 | 259,830 | ||||||||||
Note: | ||||||||||||||||
(1) Earnings plus imputed interest on financed devices before:
•Net interest expense,
•Income taxes,
•Depreciation and amortization expense,
•Loss on extinguishment of debt,
•Software impairment charge,
•Derivative instrument unrealized income (loss),
•Share-based compensation expense,
•Accretion expense,
•Loss attributable to non-controlling interest resulting from NMTC transactions,
•Gains and impairment losses on equity and cost method investments, and
•Other non-cash adjustments.
Adjusted EBITDA is not presented as an alternative measure of net income, operating income or cash flow from operations, as determined in accordance with accounting principles generally accepted in the United States of America. GCI's management uses Adjusted EBITDA to evaluate the operating performance of its business, and as a measure of performance for incentive compensation purposes. GCI believes Adjusted EBITDA is useful to investors and other users of our financial information in understanding and evaluating operating performance as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected
Adjusted EBITDA are used to estimate current or prospective enterprise value. Adjusted EBITDA does not give effect to cash used for debt service requirements, and thus does not reflect funds available for investment or other discretionary uses. Adjusted EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies.
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
WIRELINE SEGMENT SUPPLEMENTAL REVENUE SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Third Quarter 2016 | Third Quarter 2015 | |||||||||||||
Consumer | Business | Total | Consumer | Business | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 19,866 | 2,205 | 22,071 | 19,451 | 2,036 | 21,487 | |||||||
Data | 35,255 | 74,777 | 110,032 | 32,465 | 67,780 | 100,245 | ||||||||
Video | 26,134 | 4,636 | 30,770 | 28,483 | 4,476 | 32,959 | ||||||||
Voice | 6,551 | 14,904 | 21,455 | 7,420 | 16,038 | 23,458 | ||||||||
Total | $ | 87,806 | 96,522 | 184,328 | 87,819 | 90,330 | 178,149 | |||||||
(Amounts in thousands) | ||||||||||||||
Third Quarter 2016 | Second Quarter 2016 | |||||||||||||
Consumer | Business | Total | Consumer | Business | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 19,866 | 2,205 | 22,071 | 15,651 | 2,322 | 17,973 | |||||||
Data | 35,255 | 74,777 | 110,032 | 34,818 | 73,189 | 108,007 | ||||||||
Video | 26,134 | 4,636 | 30,770 | 26,813 | 4,832 | 31,645 | ||||||||
Voice | 6,551 | 14,904 | 21,455 | 6,764 | 15,502 | 22,266 | ||||||||
Total | $ | 87,806 | 96,522 | 184,328 | 84,046 | 95,845 | 179,891 | |||||||
(Amounts in thousands) | ||||||||||||||
Nine Months Ended September 30, 2016 | Nine Months Ended September 30, 2015 | |||||||||||||
Consumer | Business | Total | Consumer | Business | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 50,055 | 6,787 | 56,842 | 56,566 | 6,077 | 62,643 | |||||||
Data | 105,033 | 219,977 | 325,010 | 95,771 | 199,815 | 295,586 | ||||||||
Video | 81,294 | 14,530 | 95,824 | 86,629 | 13,511 | 100,140 | ||||||||
Voice | 20,357 | 45,822 | 66,179 | 22,950 | 48,303 | 71,253 | ||||||||
Total | $ | 256,739 | 287,116 | 543,855 | 261,916 | 267,706 | 529,622 | |||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |||||||||||||||||
KEY PERFORMANCE INDICATORS | |||||||||||||||||
(Unaudited) | |||||||||||||||||
September 30, 2016 | September 30, 2016 | ||||||||||||||||
as compared to | as compared to | ||||||||||||||||
September 30, | September 30, | June 30, | September 30, | June 30, | September 30, | June 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | |||||||||||
Wireline Segment | |||||||||||||||||
Consumer | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 127,000 | 124,300 | 127,000 | 2,700 | — | 2.2 | % | — | % | ||||||||
Video | |||||||||||||||||
Basic subscribers | 108,900 | 113,600 | 110,000 | (4,700 | ) | (1,100 | ) | (4.1 | )% | (1.0 | )% | ||||||
Digital programming tier subscribers | 54,400 | 59,500 | 55,600 | (5,100 | ) | (1,200 | ) | (8.6 | )% | (2.2 | )% | ||||||
HD/DVR converter boxes | 117,300 | 110,700 | 117,800 | 6,600 | (500 | ) | 6.0 | % | (0.4 | )% | |||||||
Homes passed | 250,200 | 251,200 | 249,500 | (1,000 | ) | 700 | (0.4 | )% | 0.3 | % | |||||||
Voice | |||||||||||||||||
Local access lines in service | 49,000 | 51,000 | 49,500 | (2,000 | ) | (500 | ) | (3.9 | )% | (1.0 | )% | ||||||
Business | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 13,200 | 14,200 | 13,000 | (1,000 | ) | 200 | (7.0 | )% | 1.5 | % | |||||||
Voice | |||||||||||||||||
Local access lines in service | 46,100 | 47,100 | 46,200 | (1,000 | ) | (100 | ) | (2.1 | )% | (0.2 | )% | ||||||
Consumer and Business Combined | |||||||||||||||||
Wireless | |||||||||||||||||
Consumer Lifeline lines in service | 28,700 | 28,100 | 28,400 | 600 | 300 | 2.1 | % | 1.1 | % | ||||||||
Consumer prepaid lines in service | 29,600 | 27,100 | 27,900 | 2,500 | 1,700 | 9.2 | % | 6.1 | % | ||||||||
Consumer postpaid lines in service | 141,000 | 146,700 | 143,900 | (5,700 | ) | (2,900 | ) | (3.9 | )% | (2.0 | )% | ||||||
Business postpaid lines in service | 27,100 | 30,000 | 27,900 | (2,900 | ) | (800 | ) | (9.7 | )% | (2.9 | )% | ||||||
Total wireless lines in service | 226,400 | 231,900 | 228,100 | (5,500 | ) | (1,700 | ) | (2.4 | )% | -0.7 | % | ||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
KEY PERFORMANCE INDICATORS | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
September 30, 2016 | September 30, 2016 | |||||||||||||||||||||
Three Months Ended | as compared to | as compared to | ||||||||||||||||||||
September 30, | September 30, | June 30, | September 30, | June 30, | September 30, | June 30, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | ||||||||||||||||
Wireline segment | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||
Video | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 79.63 | $ | 80.85 | $ | 80.38 | $ | (1.22 | ) | $ | (0.75 | ) | (1.5 | )% | (0.9 | )% | ||||||
Combined Consumer and Business | ||||||||||||||||||||||
Data | ||||||||||||||||||||||
Average monthly revenue per cable modem subscriber | $ | 88.54 | $ | 84.87 | $ | 88.32 | $ | 3.67 | $ | 0.22 | 4.3 | % | 0.2 | % | ||||||||
Wireless | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 37.21 | $ | 44.24 | $ | 39.22 | $ | (7.03 | ) | $ | (2.01 | ) | (15.9 | )% | (5.1 | )% | ||||||