($ millions) | 4Q16 | 4Q15 | 3Q16 |
Wholesale Wireless & Other | 19 | 21 | 18 |
Roaming and Backhaul | 18 | 26 | 21 |
USF Support | 13 | 13 | 13 |
Total Wireless Revenue | 50 | 60 | 52 |
($ millions) | 2016 | Leverage on EBITDA | Leverage on Cash Flow |
Total Debt | 1,485 | 5.2x | 4.7x |
Less Cash | (19) | (0.1x) | (0.1x) |
Net Debt | 1,466 | 5.1x | 4.6x |
Adjusted EBITDA | 288 | ||
Add back of roaming cash flows allowed by new credit facility | 30 | ||
Cash Flow | 318 |
• | Our 2016 revenue was $934 million, at the bottom end of our $930 million to $980 million range. |
• | Adjusted EBITDA in 2016 was $288 million which is within our upwardly revised guidance range $280 to $295 million. |
• | Capital expenditures were $209 million versus guidance of $210 million. |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Amounts in thousands) | December 31, | |||||
ASSETS | 2016 | 2015 | ||||
Current assets: | ||||||
Cash and cash equivalents | $ | 19,297 | 26,528 | |||
Receivables | 219,794 | 208,384 | ||||
Less allowance for doubtful receivables | 4,407 | 3,630 | ||||
Net receivables | 215,387 | 204,754 | ||||
Prepaid expenses | 18,599 | 12,862 | ||||
Inventories | 11,945 | 11,322 | ||||
Other current assets | 167 | 3,129 | ||||
Total current assets | 265,395 | 258,595 | ||||
Property and equipment | 2,614,875 | 2,384,530 | ||||
Less accumulated depreciation | 1,452,957 | 1,290,149 | ||||
Net property and equipment | 1,161,918 | 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 | 74,444 | 69,290 | ||||
Other assets | 40,937 | 27,429 | ||||
Total other assets | 638,626 | 613,964 | ||||
Total assets | $ | 2,065,939 | 1,966,940 | |||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Unaudited) | ||||||
(Continued) | ||||||
(Amounts in thousands) | December 31, | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | 2016 | 2015 | ||||
Current liabilities: | ||||||
Current maturities of obligations under long-term debt, capital leases, and tower obligations | $ | 13,229 | 12,050 | |||
Accounts payable | 72,937 | 63,014 | ||||
Deferred revenue | 37,618 | 34,128 | ||||
Accrued payroll and payroll related obligations | 30,305 | 31,337 | ||||
Accrued liabilities | 14,729 | 22,822 | ||||
Accrued interest (including $5,132 to a related party at December 31, 2016 and 2015) | 13,926 | 13,655 | ||||
Subscriber deposits | 917 | 1,242 | ||||
Total current liabilities | 183,661 | 178,248 | ||||
Long-term debt, net (including $56,640 and $54,810 due to a related party at December 31, 2016 and 2015, respectively) | 1,333,446 | 1,329,396 | ||||
Obligations under capital leases, excluding current maturities (including $1,769 and $1,824 due to a related party at December 31, 2016 and 2015, respectively) | 50,316 | 59,651 | ||||
Deferred income taxes | 137,982 | 106,145 | ||||
Long-term deferred revenue | 135,877 | 93,427 | ||||
Tower obligation | 87,653 | — | ||||
Other liabilities (including $29,700 and $32,820 for derivative stock appreciation rights with a related party at December 31, 2016 and 2015, respectively) | 83,756 | 80,812 | ||||
Total liabilities | 2,012,691 | 1,847,679 | ||||
Commitments and contingencies | ||||||
Stockholders’ equity: | ||||||
Common stock (no par): | ||||||
Class A. Authorized 100,000 shares; issued 32,668 and 35,593 shares at December 31, 2016 and 2015, respectively; outstanding 32,642 and 35,567 shares at December 31, 2016 and 2015, respectively | — | — | ||||
Class B. Authorized 10,000 shares; issued and outstanding 3,153 and 3,154 shares at December 31, 2016 and 2015, respectively; convertible on a share-per-share basis into Class A common stock | 2,663 | 2,664 | ||||
Less cost of 26 Class A common shares held in treasury at December 31, 2016 and 2015 | (249 | ) | (249 | ) | ||
Paid-in capital | 3,237 | 6,631 | ||||
Retained earnings | 17,068 | 79,217 | ||||
Total General Communication, Inc. stockholders' equity | 22,719 | 88,263 | ||||
Non-controlling interests | 30,529 | 30,998 | ||||
Total stockholders’ equity | 53,248 | 119,261 | ||||
Total liabilities and stockholders’ equity | $ | 2,065,939 | 1,966,940 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
YEARS ENDED DECEMBER 31, 2016, 2015, AND 2014 | |||||||||
(Unaudited) | |||||||||
(Amounts in thousands, except per share amounts) | 2016 | 2015 | 2014 | ||||||
Revenues: | |||||||||
Non-related party | $ | 933,812 | 973,251 | 850,656 | |||||
Related party | — | 5,283 | 59,542 | ||||||
Total revenues | 933,812 | 978,534 | 910,198 | ||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below): | |||||||||
Non-related party | 302,578 | 321,457 | 291,770 | ||||||
Related party | — | 881 | 10,934 | ||||||
Total cost of goods sold | 302,578 | 322,338 | 302,704 | ||||||
Selling, general and administrative expenses | |||||||||
Non-related party | 358,356 | 337,839 | 289,674 | ||||||
Related party | — | 540 | 3,973 | ||||||
Total selling, general and administrative expenses | 358,356 | 338,379 | 293,647 | ||||||
Depreciation and amortization expense | 193,775 | 181,767 | 170,285 | ||||||
Software impairment charge | — | 29,839 | — | ||||||
Operating income | 79,103 | 106,211 | 143,562 | ||||||
Other income (expense): | |||||||||
Interest expense (including amortization of deferred loan fees) | (78,628 | ) | (78,786 | ) | (72,496 | ) | |||
Related party interest expense | (7,455 | ) | (6,602 | ) | — | ||||
Derivative instrument unrealized income (loss) with related party | 3,120 | (11,160 | ) | — | |||||
Loss on extinguishment of debt | (640 | ) | (27,700 | ) | — | ||||
Impairment of equity method investment | — | (12,593 | ) | — | |||||
Other | 5,569 | 2,917 | (1,793 | ) | |||||
Other expense, net | (78,034 | ) | (133,924 | ) | (74,289 | ) | |||
Income (loss) before income taxes | 1,069 | (27,713 | ) | 69,273 | |||||
Income tax (expense) benefit | (5,205 | ) | 1,847 | (10,029 | ) | ||||
Net income (loss) | (4,136 | ) | (25,866 | ) | 59,244 | ||||
Net income attributable to non-controlling interests | (469 | ) | 159 | 51,687 | |||||
Net income (loss) attributable to General Communication, Inc. | $ | (3,667 | ) | (26,025 | ) | 7,557 | |||
Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share | $ | (0.10 | ) | (0.69 | ) | 0.18 | |||
Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share | $ | (0.10 | ) | (0.69 | ) | 0.18 | |||
Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share | $ | (0.15 | ) | (0.69 | ) | 0.18 | |||
Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share | $ | (0.15 | ) | (0.69 | ) | 0.18 | |||
Common shares used to calculate Class A basic EPS | 32,526 | 34,764 | 36,112 | ||||||
Common shares used to calculate Class A diluted EPS | 36,318 | 37,921 | 39,386 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Fourth Quarter 2016 | Fourth Quarter 2015 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 50,445 | 18,205 | 68,650 | 60,108 | 21,253 | 81,361 | |||||||
Data | — | 111,388 | 111,388 | — | 104,099 | 104,099 | ||||||||
Video | — | 31,583 | 31,583 | — | 33,753 | 33,753 | ||||||||
Voice | — | 20,672 | 20,672 | — | 22,131 | 22,131 | ||||||||
Total | 50,445 | 181,848 | 232,293 | 60,108 | 181,236 | 241,344 | ||||||||
Cost of goods sold | 15,061 | 59,591 | 74,652 | 17,002 | 68,595 | 85,597 | ||||||||
Contribution | 35,384 | 122,257 | 157,641 | 43,106 | 112,641 | 155,747 | ||||||||
Less SG&A | (3,119 | ) | (90,595 | ) | (93,714 | ) | (4,488 | ) | (84,261 | ) | (88,749 | ) | ||
Plus share-based compensation expense | — | 3,223 | 3,223 | — | 2,828 | 2,828 | ||||||||
Plus imputed interest on financed devices | — | 672 | 672 | — | 313 | 313 | ||||||||
Plus accretion | (246 | ) | 235 | (11 | ) | 63 | 66 | 129 | ||||||
Other | — | (98 | ) | (98 | ) | — | 253 | 253 | ||||||
Adjusted EBITDA | $ | 32,019 | 35,694 | 67,713 | 38,681 | 31,840 | 70,521 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Fourth Quarter 2016 | Third Quarter 2016 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 50,445 | 18,205 | 68,650 | 52,327 | 22,071 | 74,398 | |||||||
Data | — | 111,388 | 111,388 | — | 110,032 | 110,032 | ||||||||
Video | — | 31,583 | 31,583 | — | 30,770 | 30,770 | ||||||||
Voice | — | 20,672 | 20,672 | — | 21,455 | 21,455 | ||||||||
Total | 50,445 | 181,848 | 232,293 | 52,327 | 184,328 | 236,655 | ||||||||
Cost of goods sold | 15,061 | 59,591 | 74,652 | 15,313 | 58,181 | 73,494 | ||||||||
Contribution | 35,384 | 122,257 | 157,641 | 37,014 | 126,147 | 163,161 | ||||||||
Less SG&A | (3,119 | ) | (90,595 | ) | (93,714 | ) | (5,138 | ) | (83,836 | ) | (88,974 | ) | ||
Plus share-based compensation expense | — | 3,223 | 3,223 | — | 2,810 | 2,810 | ||||||||
Plus imputed interest on financed devices | — | 672 | 672 | — | 651 | 651 | ||||||||
Plus accretion | (246 | ) | 235 | (11 | ) | 142 | 264 | 406 | ||||||
Other | — | (98 | ) | (98 | ) | — | 131 | 131 | ||||||
Adjusted EBITDA | $ | 32,019 | 35,694 | 67,713 | 32,018 | 46,167 | 78,185 |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
SUPPLEMENTAL SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Twelve Months Ended December 31, 2016 | Twelve Months Ended December 31, 2015 | |||||||||||||
Wireless | Wireline | Wireless | Wireline | |||||||||||
Segment | Segment | Total | Segment | Segment | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 208,109 | 75,047 | 283,156 | 267,676 | 83,896 | 351,572 | |||||||
Data | — | 436,398 | 436,398 | — | 399,685 | 399,685 | ||||||||
Video | — | 127,407 | 127,407 | — | 133,893 | 133,893 | ||||||||
Voice | — | 86,851 | 86,851 | — | 93,384 | 93,384 | ||||||||
Total | 208,109 | 725,703 | 933,812 | 267,676 | 710,858 | 978,534 | ||||||||
Cost of goods sold | 62,487 | 240,091 | 302,578 | 70,899 | 251,439 | 322,338 | ||||||||
Contribution | 145,622 | 485,612 | 631,234 | 196,777 | 459,419 | 656,196 | ||||||||
Less SG&A | (16,439 | ) | (341,917 | ) | (358,356 | ) | (18,137 | ) | (320,242 | ) | (338,379 | ) | ||
Plus share-based compensation expense | — | 11,043 | 11,043 | — | 10,902 | 10,902 | ||||||||
Plus imputed interest on financed devices | — | 2,557 | 2,557 | — | 751 | 751 | ||||||||
Plus accretion | 252 | 977 | 1,229 | 559 | 562 | 1,121 | ||||||||
Other | — | 337 | 337 | — | (240 | ) | (240 | ) | ||||||
Adjusted EBITDA | $ | 129,435 | 158,609 | 288,044 | 179,199 | 151,152 | 330,351 |
General Communication, Inc. | ||||||||||||||||
Non-GAAP Financial Reconciliation Schedule | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Amounts in Thousands) | Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | September 30, | December 31, | December 31, | ||||||||||||
2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | (16,243 | ) | (8,879 | ) | 7,827 | (4,136 | ) | (25,866 | ) | ||||||
Income tax expense (benefit) | (2,391 | ) | 3,110 | 2,407 | 5,205 | (1,847 | ) | |||||||||
Income (loss) before income taxes | (18,634 | ) | (5,769 | ) | 10,234 | 1,069 | (27,713 | ) | ||||||||
Other (income) expense: | ||||||||||||||||
Interest expense (including amortization of deferred loan fees) | 20,429 | 19,073 | 19,666 | 78,628 | 78,786 | |||||||||||
Related party interest expense | 1,897 | 1,842 | 1,881 | 7,455 | 6,602 | |||||||||||
Derivative instrument unrealized income (loss) with related party | 12,720 | 6,120 | (4,800 | ) | (3,120 | ) | 11,160 | |||||||||
Loss on extinguishment of debt | 640 | — | — | 640 | 27,700 | |||||||||||
Impairment of equity method investment | — | — | — | — | 12,593 | |||||||||||
Other | (3,867 | ) | (472 | ) | (613 | ) | (5,569 | ) | (2,917 | ) | ||||||
Other expense, net | 31,819 | 26,563 | 16,134 | 78,034 | 133,924 | |||||||||||
Operating income | 13,185 | 20,794 | 26,368 | 79,103 | 106,211 | |||||||||||
Plus depreciation and amortization expense | 50,742 | 46,204 | 47,819 | 193,775 | 181,767 | |||||||||||
Plus software impairment charge | — | — | — | — | 29,839 | |||||||||||
Plus share-based compensation expense | 3,223 | 2,828 | 2,810 | 11,043 | 10,902 | |||||||||||
Plus imputed interest on financed devices | 672 | 313 | 651 | 2,557 | 751 | |||||||||||
Plus (less) accretion expense | (11 | ) | 129 | 406 | 1,229 | 1,121 | ||||||||||
Other | (98 | ) | 253 | 131 | 337 | (240 | ) | |||||||||
Adjusted EBITDA (Note 1) | $ | 67,713 | 70,521 | 78,185 | 288,044 | 330,351 | ||||||||||
Note: |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||
WIRELINE SEGMENT SUPPLEMENTAL REVENUE SCHEDULES | ||||||||||||||
(Unaudited) | ||||||||||||||
(Amounts in thousands) | ||||||||||||||
Fourth Quarter 2016 | Fourth Quarter 2015 | |||||||||||||
Business | Business | |||||||||||||
Consumer | Services | Total | Consumer | Services | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 16,170 | 2,035 | 18,205 | 19,233 | 2,020 | 21,253 | |||||||
Data | 35,163 | 76,225 | 111,388 | 34,442 | 69,657 | 104,099 | ||||||||
Video | 26,011 | 5,572 | 31,583 | 28,445 | 5,308 | 33,753 | ||||||||
Voice | 6,377 | 14,295 | 20,672 | 7,160 | 14,971 | 22,131 | ||||||||
Total | $ | 83,721 | 98,127 | 181,848 | 89,280 | 91,956 | 181,236 | |||||||
(Amounts in thousands) | ||||||||||||||
Fourth Quarter 2016 | Third Quarter 2016 | |||||||||||||
Business | Business | |||||||||||||
Consumer | Services | Total | Consumer | Services | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 16,170 | 2,035 | 18,205 | 19,866 | 2,205 | 22,071 | |||||||
Data | 35,163 | 76,225 | 111,388 | 35,255 | 74,777 | 110,032 | ||||||||
Video | 26,011 | 5,572 | 31,583 | 26,134 | 4,636 | 30,770 | ||||||||
Voice | 6,377 | 14,295 | 20,672 | 6,551 | 14,904 | 21,455 | ||||||||
Total | $ | 83,721 | 98,127 | 181,848 | 87,806 | 96,522 | 184,328 | |||||||
(Amounts in thousands) | ||||||||||||||
Twelve Months Ended December 31, 2016 | Twelve Months Ended December 31, 2015 | |||||||||||||
Business | Business | |||||||||||||
Consumer | Services | Total | Consumer | Services | Total | |||||||||
Revenues | ||||||||||||||
Wireless | $ | 66,225 | 8,822 | 75,047 | 75,799 | 8,097 | 83,896 | |||||||
Data | 140,196 | 296,202 | 436,398 | 130,213 | 269,472 | 399,685 | ||||||||
Video | 107,305 | 20,102 | 127,407 | 115,074 | 18,819 | 133,893 | ||||||||
Voice | 26,734 | 60,117 | 86,851 | 30,110 | 63,274 | 93,384 | ||||||||
Total | $ | 340,460 | 385,243 | 725,703 | 351,196 | 359,662 | 710,858 | |||||||
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |||||||||||||||||
KEY PERFORMANCE INDICATORS | |||||||||||||||||
(Unaudited) | |||||||||||||||||
December 31, 2016 | December 31, 2016 | ||||||||||||||||
as compared to | as compared to | ||||||||||||||||
December 31, | December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | |||||||||||
Wireline Segment | |||||||||||||||||
Consumer | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 127,600 | 127,300 | 127,000 | 300 | 600 | 0.2 | % | 0.5 | % | ||||||||
Video | |||||||||||||||||
Basic subscribers | 107,700 | 114,000 | 108,900 | (6,300 | ) | (1,200 | ) | (5.5 | )% | (1.1 | )% | ||||||
Digital programming tier subscribers | 52,000 | 59,500 | 54,400 | (7,500 | ) | (2,400 | ) | (12.6 | )% | (4.4 | )% | ||||||
HD/DVR converter boxes | 115,900 | 114,000 | 117,300 | 1,900 | (1,400 | ) | 1.7 | % | (1.2 | )% | |||||||
Homes passed | 250,800 | 251,900 | 250,200 | (1,100 | ) | 600 | (0.4 | )% | 0.2 | % | |||||||
Voice | |||||||||||||||||
Local access lines in service | 48,600 | 50,400 | 49,000 | (1,800 | ) | (400 | ) | (3.6 | )% | (0.8 | )% | ||||||
Business Services | |||||||||||||||||
Data | |||||||||||||||||
Cable modem subscribers | 13,200 | 12,700 | 13,200 | 500 | — | 3.9 | % | — | % | ||||||||
Voice | |||||||||||||||||
Local access lines in service | 45,900 | 46,600 | 46,100 | (700 | ) | (200 | ) | (1.5 | )% | (0.4 | )% | ||||||
Consumer and Business Services Combined | |||||||||||||||||
Wireless | |||||||||||||||||
Consumer Lifeline lines in service | 27,200 | 28,100 | 28,700 | (900 | ) | (1,500 | ) | (3.2 | )% | (5.2 | )% | ||||||
Consumer prepaid lines in service | 28,500 | 23,800 | 29,600 | 4,700 | (1,100 | ) | 19.7 | % | (3.7 | )% | |||||||
Consumer postpaid lines in service | 139,200 | 146,300 | 141,000 | (7,100 | ) | (1,800 | ) | (4.9 | )% | (1.3 | )% | ||||||
Business Services postpaid lines in service | 27,600 | 29,600 | 27,100 | (2,000 | ) | 500 | (6.8 | )% | 1.8 | % | |||||||
Total wireless lines in service | 222,500 | 227,800 | 226,400 | (5,300 | ) | (3,900 | ) | -2.3 | % | -1.7 | % |
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
KEY PERFORMANCE INDICATORS | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
December 31, 2016 | December 31, 2016 | |||||||||||||||||||||
Three Months Ended | as compared to | as compared to | ||||||||||||||||||||
December 31, | December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | ||||||||||||||||
Wireline segment | ||||||||||||||||||||||
Consumer | ||||||||||||||||||||||
Video | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 79.94 | $ | 83.10 | $ | 79.63 | $ | (3.16 | ) | $ | 0.31 | (3.8 | )% | 0.4 | % | |||||||
Combined Consumer and Business Services | ||||||||||||||||||||||
Data | ||||||||||||||||||||||
Average monthly revenue per cable modem subscriber | $ | 88.85 | $ | 87.31 | $ | 88.54 | $ | 1.54 | $ | 0.31 | 1.8 | % | 0.4 | % | ||||||||
Wireless | ||||||||||||||||||||||
Average monthly revenue per subscriber | $ | 37.10 | $ | 43.37 | $ | 37.21 | $ | (6.27 | ) | $ | (0.11 | ) | (14.5 | )% | (0.3 | )% |