Industry Segments Data

12 Months Ended

Dec. 31, 2012

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 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, 2012, 2011 and 2010, are allocated to our segments using segment margin for the years ended December 31, 2011, 2010 and 2009, respectively. Bad debt expense for the years ended December 31, 2012, 2011 and 2010, is allocated to our segments using a combination of specific identification and allocations based upon segment revenue for the years ended December 31, 2012, 2011 and 2010, 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 attributable to non-controlling interests, 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 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-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, 2012,2011and 2010follows (amounts in thousands):

				Consumer	Network Access	Commercial	Managed Broadband	Regulated Operations	Total Reportable Segments
2012
Revenues:
	Intersegment		$	-	259	5,760	-	246	6,265
	External			352,972	105,447	143,575	86,562	21,625	710,181
		Total revenues		352,972	105,706	149,335	86,562	21,871	716,446
Cost of Goods Sold:
	Intersegment			146	114	2,253	-	265	2,778
	External			128,324	24,356	66,895	21,298	6,628	247,501
		Total Cost of Goods Sold		128,470	24,470	69,148	21,298	6,893	250,279
Contribution:
	Intersegment			(146)	145	3,507	-	(19)	3,487
	External			224,648	81,091	76,680	65,264	14,997	462,680
		Total contribution		224,502	81,236	80,187	65,264	14,978	466,167
Less SG&A				139,191	26,841	42,014	24,087	11,115	243,248
Plus share-based compensation				2,586	790	1,041	595	28	5,040
Plus non-cash contribution expense				533	169	156	102	-	960
Plus loss attributable to non-controlling interests				-	-	-	867	-	867
Plus net income attributable to equity investment				-	-	-	2	-	2
Plus accretion				282	89	83	54	-	508
Adjusted EBITDA			$	88,858	55,298	35,946	42,797	3,910	226,809
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

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

Years Ended December 31,			2012	2011	2010
Reportable segment revenues		$	716,446	685,698	656,868
Less intersegment revenues eliminated in consolidation			6,265	6,317	5,618
	Consolidated revenues	$	710,181	679,381	651,250

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

Years Ended December 31,			2012	2011	2010
Reportable segment Adjusted EBITDA		$	226,809	223,641	221,487
Less depreciation and amortization expense			(130,452)	(125,937)	(126,699)
Less share-based compensation expense			(5,040)	(6,620)	(6,733)
Plus (less) non-cash contribution expense			(960)	-	160
Less net loss attributable to non-controlling interests			(867)	(238)	-
Plus net loss (income) attributable to equity investment			(2)	297	-
Less accretion expense			(508)	(619)	(289)
	Consolidated operating income		88,980	90,524	87,926
Less other expense, net			(67,730)	(77,633)	(70,068)
	Consolidated income before income tax expense	$	21,250	12,891	17,858

Assets at December 31, 2012, 2011 and 2010, and capital expenditures for the years ended December 31, 2012, 2011 and 2010 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, 2012, 2011 and 2010.