Quarterly report pursuant to Section 13 or 15(d)

Segments

v2.4.0.8
Segments
 6 Months Ended
Jun. 30, 2014
Segment Reporting [Abstract]  
Segments
Segments
Our reportable segments are business units that offer different products and are each managed separately.

A description of our reportable segments follows:

Wireless - We offer wholesale wireless services.  

Wireline - We offer a full range of retail wireless, data, video and voice services to residential, local, national and global businesses, governmental entities and public and private educational institutions; wholesale data and voice services to common carrier customers; Internet, data network and managed services to rural schools and health organizations and regulated voice services to residential and commercial customers in rural communities primarily in Southwest Alaska.

We evaluate performance and allocate resources based on earnings before depreciation and amortization expense, net interest expense, income taxes, share-based compensation expense, accretion expense, income or loss attributable to non-controlling interest resulting from New Markets Tax Credit ("NMTC") transactions, non-cash contribution adjustment, and other non-cash adjustments (“Adjusted EBITDA”). Management believes that this measure is useful to investors and other users of our financial information in evaluating operating profitability as an analytical indicator of income generated to service debt and fund capital expenditures.  In addition, multiples of current or projected earnings before depreciation and amortization, net interest expense, and income taxes (“EBITDA”) are used to estimate current or prospective enterprise value.  The accounting policies of the reportable segments are the same as those described in Note 1, “Business and Summary of Significant Accounting Policies” of this Form 10-Q.  We have no intersegment sales.

We earn all revenues through sales of services and products within the United States. All of our long-lived assets are located within the United States of America, except approximately 82% of our undersea fiber optic cable systems which transit international waters and all of our satellite transponders.

Summarized financial information for our reportable segments for the three and six months ended June 30, 2014 and 2013 follows (amounts in thousands):
 
Three Months Ended
 
Six Months Ended
 
Wireless
 
Wireline
 
Total Reportable Segments
 
Wireless
 
Wireline
 
Total Reportable Segments
June 30, 2014
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
69,397

 
155,002

 
224,399

 
131,914

 
308,768

 
440,682

Adjusted EBITDA
$
40,174

 
44,297

 
84,471

 
78,196

 
81,072

 
159,268

 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2013
 

 
 

 
 

 
 
 
 
 
 

Revenues
$
35,559

 
154,102

 
189,661

 
69,396

 
306,481

 
375,877

Adjusted EBITDA
$
14,273

 
47,866

 
62,139

 
29,462

 
91,326

 
120,788



A reconciliation of reportable segment Adjusted EBITDA to consolidated income before income taxes follows (amounts in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Reportable segment Adjusted EBITDA
$
84,471

 
62,139

 
159,268

 
120,788

Less depreciation and amortization
  expense
(43,786
)
 
(34,396
)
 
(86,138
)
 
(68,395
)
Less share-based compensation
  expense
(2,193
)
 
(1,647
)
 
(3,971
)
 
(2,906
)
Less accretion expense
(301
)
 
(155
)
 
(602
)
 
(282
)
Other
223

 
(246
)
 
122

 
(450
)
Consolidated operating income
38,414

 
25,695

 
68,679

 
48,755

Less other expense
(19,219
)
 
(17,474
)
 
(37,527
)
 
(34,378
)
Consolidated income before
  income tax expense
$
19,195

 
8,221

 
31,152

 
14,377