Quarterly report pursuant to Section 13 or 15(d)

Segments

v2.4.1.9
Segments
 3 Months Ended
Mar. 31, 2015
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 customers, businesses, governmental entities and 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 net interest expense, income taxes, depreciation and amortization expense, software impairment charge, derivative instrument unrealized loss, share-based compensation expense, accretion expense, loss attributable to non-controlling interest resulting from New Markets Tax Credit ("NMTC") transactions, and other non-cash adjustments, plus imputed interest on financed devices (“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 months ended March 31, 2015 and 2014 follows (amounts in thousands):
 
Three Months Ended
 
Wireless
 
Wireline
 
Total Reportable Segments
March 31, 2015
 
 
 
 
 
Revenues
$
59,204

 
171,885

 
231,089

Adjusted EBITDA
$
37,387

 
37,916

 
75,303

 
 
 
 
 
 
March 31, 2014
 

 
 

 
 

Revenues
$
62,517

 
153,766

 
216,283

Adjusted EBITDA
$
38,022

 
36,775

 
74,797



A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands):
 
Three Months Ended March 31,
 
2015
 
2014
Reportable segment Adjusted EBITDA
$
75,303

 
74,797

Less depreciation and amortization
  expense
(45,235
)
 
(42,352
)
Less software impairment charge
(26,417
)
 
—

Less share-based compensation
  expense
(2,801
)
 
(1,778
)
Less accretion expense
(450
)
 
(301
)
Other
341

 
(101
)
Consolidated operating income
741

 
30,265

Less other expense, net
(26,252
)
 
(18,308
)
Consolidated income (loss) before
  income tax expense
$
(25,511
)
 
11,957