Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.3.0.814
Segments
 9 Months Ended
Sep. 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; data 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 income (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 nine months ended September 30, 2015 and 2014 follows (amounts in thousands):
 
Three Months Ended
 
Nine Months Ended
 
Wireless
 
Wireline
 
Total Reportable Segments
 
Wireless
 
Wireline
 
Total Reportable Segments
September 30, 2015
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
80,424

 
178,149

 
258,573

 
$
207,568

 
529,622

 
737,190

Adjusted EBITDA
$
57,404

 
39,122

 
96,526

 
$
140,518

 
119,312

 
259,830

 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2014
 

 
 

 
 

 
 
 
 
 
 

Revenues
$
76,398

 
164,327

 
240,725

 
$
208,312

 
473,095

 
681,407

Adjusted EBITDA
$
47,279

 
45,915

 
93,194

 
$
125,475

 
126,987

 
252,462



A reconciliation of reportable segment Adjusted EBITDA to consolidated income (loss) before income taxes follows (amounts in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended 
 September 30, 2015
 
2015
 
2014
 
2015
 
2014
Reportable segment Adjusted EBITDA
$
96,526

 
93,194

 
$
259,830

 
252,462

Less depreciation and amortization
  expense
(45,157
)
 
(41,705
)
 
(135,563
)
 
(127,843
)
Less software impairment charge
(2,571
)
 
—

 
(29,839
)
 
—

Less share-based compensation
  expense
(2,660
)
 
(2,153
)
 
(8,074
)
 
(6,124
)
Less accretion expense
(191
)
 
(359
)
 
(992
)
 
(961
)
Other
(474
)
 
359

 
55

 
481

Consolidated operating income
45,473

 
49,336

 
85,417

 
118,015

Less other expense, net
(19,856
)
 
(18,411
)
 
(107,361
)
 
(55,938
)
Consolidated income (loss) before
  income taxes
$
25,617

 
30,925

 
$
(21,944
)
 
62,077