Industry Segments Data

12 Months Ended

Dec. 31, 2011

Industry Segments Data [Abstract]

Industry Segments Data [Text Block]

(10)       Industry Segments Data

Our reportable segments are business units that offer different products and are each managed separately.

A description of our reportable segments follows:

Consumer - We offer a full range of voice, video, data and wireless services to residential customers.

Network Access - We offer a full range of voice, data and wireless services to common carrier customers.

Commercial - We offer a full range of voice, video, data and wireless services to small businesses, local, national and global businesses, governmental entities and public and private educational institutions.

Managed Broadband - We offer data services to rural school districts, hospitals and health clinics through our SchoolAccess® and ConnectMD® initiatives and managed video conferencing.

Regulated Operations - We offer voice and data services to residential, business, and governmental customers in areas of rural Alaska.

Corporate related expenses including engineering, information technology, accounting, legal and regulatory, human resources, and other general and administrative expenses for the years ended December 31, 2011, 2010 and 2009, are allocated to our segments using segment margin for the years ended December 31, 2010, 2009 and 2008, respectively. Bad debt expense for the years ended December 31, 2011, 2010 and 2009, is allocated to our segments using a combination of specific identification and allocations based upon segment revenue for the years ended December 31, 2011, 2010 and 2009, respectively. Corporate related expenses and bad debt expense are specifically identified for our Regulated Operations segment and therefore, are not included in the allocations.

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, loss attributed to non-controlling interest, and non-cash contribution adjustment (“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 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-K. Intersegment sales are recorded at cost plus an agreed upon intercompany profit.

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 years ended December 31, 2011 2010 and 2009 follows (amounts in thousands):

				Consumer	Network Access	Commercial	Managed Broadband	Regulated Operations	Total Reportable Segments
2011
Revenues:
	Intersegment		$	-	-	5,710	-	607	6,317
	External			352,574	105,456	136,101	63,248	22,002	679,381
		Total revenues		352,574	105,456	141,811	63,248	22,609	685,698
Cost of Goods Sold:
	Intersegment			-	600	2,283	-	561	3,444
	External			110,693	28,744	65,170	17,021	5,771	227,399
		Total Cost of Goods Sold		110,693	29,344	67,453	17,021	6,332	230,843
Contribution:
	Intersegment			-	(600)	3,427	-	46	2,873
	External			241,881	76,712	70,931	46,227	16,231	451,982
		Total contribution		241,881	76,112	74,358	46,227	16,277	454,855
Less SG&A				134,951	27,837	41,085	18,246	13,402	235,521
Plus share-based compensation				3,457	1,214	1,276	657	16	6,620
Plus loss attributable to non-controlling interest				-	-	-	238	-	238
Less loss attributable to equity investment				-	-	-	(297)	-	(297)
Plus accretion				347	120	100	52	-	619
Adjusted EBITDA			$	110,734	50,209	31,222	28,631	2,845	223,641
2010
Revenues:
	Intersegment		$	-	-	5,442	-	176	5,618
	External			342,898	107,227	128,458	49,962	22,705	651,250
		Total revenues		342,898	107,227	133,900	49,962	22,881	656,868
Cost of Goods Sold:
	Intersegment			-	600	2,515	-	176	3,291
	External			104,481	25,030	59,885	14,012	4,409	207,817
		Total Cost of Goods Sold		104,481	25,630	62,400	14,012	4,585	211,108
Contribution:
	Intersegment			-	(600)	2,927	-	-	2,327
	External			238,417	82,197	68,573	35,950	18,296	443,433
		Total contribution		238,417	81,597	71,500	35,950	18,296	445,760
Less SG&A				127,130	33,566	38,838	17,338	11,936	228,808
Plus share-based compensation				3,361	1,598	1,117	651	6	6,733
Plus non-cash contribution expense				(81)	(41)	(24)	(14)	-	(160)
Plus accretion				149	71	43	26	-	289
Adjusted EBITDA			$	114,716	50,259	30,871	19,275	6,366	221,487
2009
Revenues:
	Intersegment		$	-	419	5,729	-	192	6,340
	External			294,925	122,072	110,135	44,875	23,804	595,811
		Total revenues		294,925	122,491	115,864	44,875	23,996	602,151
Cost of Goods Sold:
	Intersegment			419	600	2,694	-	192	3,905
	External			96,894	27,253	52,245	11,135	6,149	193,676
		Total Cost of Goods Sold		97,313	27,853	54,939	11,135	6,341	197,581
Contribution:
	Intersegment			(419)	(181)	3,035	-	-	2,435
	External			198,031	94,819	57,890	33,740	17,655	402,135
		Total contribution		197,612	94,638	60,925	33,740	17,655	404,570
Less SG&A				112,883	38,348	35,363	14,450	11,627	212,671
Plus share-based compensation				1,145	891	549	219	-	2,804
Plus non-cash contribution expense				294	201	98	47	-	640
Adjusted EBITDA			$	86,587	57,563	23,174	19,556	6,028	192,908

A reconciliation of reportable segment revenues to consolidated revenues follows (amounts in thousands):

Years Ended December 31,			2011	2010	2009
Reportable segment revenues		$	685,698	656,868	602,151
Less intersegment revenues eliminated in consolidation			6,317	5,618	6,340
	Consolidated revenues	$	679,381	651,250	595,811

A reconciliation of reportable segment Adjusted EBITDA to consolidated income before income taxes follows (amounts in thousands):

Years Ended December 31,			2011	2010	2009
Reportable segment Adjusted EBITDA		$	223,641	221,487	192,908
Less depreciation and amortization expense			(125,742)	(126,114)	(123,362)
Less share-based compensation expense			(6,620)	(6,733)	(2,804)
Plus (less) non-cash contribution expense			-	160	(640)
Less net loss attributable to non-controlling interest			(238)	-	-
Plus net loss attributable to equity investment			297	-	-
Less accretion expense			(619)	(289)	-
	Consolidated operating income		90,719	88,511	66,102
Less other expense, net			(77,633)	(70,068)	(58,650)
	Consolidated income before income tax expense	$	13,086	18,443	7,452

Assets at December 31, 2011, 2010 and 2009, and capital expenditures for the years ended December 31, 2011, 2010 and 2009 are not allocated to reportable segments as our Chief Operating Decision Maker does not review a balance sheet or capital expenditures by segment to make decisions about resource allocations or to evaluate segment performance.

We did not have any major customers for the years ended December 31, 2011 and 2010. We earned revenues included in the Network Access segment from a major customer for the year ended December 31, 2009, net of discounts, of $64.5 million. As a percentage of total revenues, our major customer's revenues totaled 11% for the year ended December 31, 2009.