Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.2.0.727
Segments
 6 Months Ended
Jun. 30, 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, loss on extinguishment of debt, 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, gains and impairment losses on equity and cost method investments, 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 and six months ended June 30, 2015 and 2014 follows (amounts in thousands):
 
Three Months Ended
 
Six Months Ended
 
Wireless
 
Wireline
 
Total Reportable Segments
 
Wireless
 
Wireline
 
Total Reportable Segments
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
67,940

 
179,588

 
247,528

 
$
127,144

 
351,473

 
478,617

Adjusted EBITDA
$
45,727

 
42,274

 
88,001

 
$
83,114

 
80,190

 
163,304

 
 
 
 
 
 
 
 
 
 
 
 
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



A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands):
 
Three Months Ended June 30,
 
Six Months Ended 
 June 30, 2015
 
2015
 
2014
 
2015
 
2014
Reportable segment Adjusted EBITDA
$
88,001

 
84,471

 
$
163,304

 
159,268

Less depreciation and amortization
  expense
(45,171
)
 
(43,786
)
 
(90,406
)
 
(86,138
)
Less software impairment charge
(851
)
 
—

 
(27,268
)
 
—

Less share-based compensation
  expense
(2,613
)
 
(2,193
)
 
(5,414
)
 
(3,971
)
Less accretion expense
(351
)
 
(301
)
 
(801
)
 
(602
)
Other
188

 
223

 
529

 
122

Consolidated operating income
39,203

 
38,414

 
39,944

 
68,679

Less other expense, net
(61,253
)
 
(19,219
)
 
(87,505
)
 
(37,527
)
Consolidated income (loss) before
  income tax expense
$
(22,050
)
 
19,195

 
(47,561
)
 
31,152