Segment Reporting

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

With the acquisition of Amcom on March 3, 2011, we currently have two reportable operating segments: a Wireless segment and a Software segment. These segments are operated and managed as strategic business units and are organized by products and services. We measure and evaluate our segments based on segment operating income, consistent with the chief operating decision maker's assessment of segment performance.

Our segments and their principal activities consist of the following:

Wireless	Provides local, regional and nationwide one-way paging and advanced two-way messaging services and mobile voice and data services through third party providers.
Software	Provides mission critical unified communications solutions for contact centers, emergency management, mobile event notification and messaging.

Effective January 1, 2014 Amcom Software, Inc was merged into USA Mobility Wireless, Inc. The Company has and is undertaking the consolidation of wireless and software operation activities and functions.

We use a non-GAAP financial measure as a key element in determining performance for purposes of incentive compensation under our annual STIP. That non-GAAP financial measure is operating cash flow (“OCF”) defined as earnings before interest, taxes, depreciation, amortization, accretion and impairment (“EBITDA”) less purchases of property and equipment (EBITDA is defined as operating income plus depreciation, amortization, accretion and impairment, each determined in accordance with GAAP). Purchases of property and equipment are also determined in accordance with GAAP.

The following table presents the key financial metrics of our segments for the periods stated:

	For the Year Ended December 31,
	2013			2012			2011
	(Dollars in thousands)
Revenues:
Wireless	$	149,448		$	168,405		$	199,701
Software	60,304			51,291			33,992
Total revenues	209,752			219,696			233,693
Operating expenses:
Wireless	104,319			115,056			139,319
Software	59,939			58,912			42,545
Total operating expenses	164,258			173,968			181,864
Operating income (loss):
Wireless	45,129			53,349			60,382
Software	365			(7,621		)	(8,553		)
Total operating income	$	45,494		$	45,728		$	51,829
	For the Year Ended December 31,
	2013			2012			2011
	(Dollars in thousands)
EBITDA (as defined by the Company):
Wireless	$	54,663		$	64,516		$	74,355
Software	5,998			2,826			(3,192		)
Total EBITDA	60,661			67,342			71,163
% of revenue	28.9		%	30.7		%	30.5		%
Capital expenditures:
Wireless	10,073			9,746			7,788
Software	335			243			164
Total capital expenditures	10,408			9,989			7,952
% of revenue	5.0		%	4.5		%	3.4		%
OCF (as defined by the Company):
Wireless	44,590			54,770			66,567
Software	5,663			2,583			(3,356		)
Total OCF	$	50,253		$	57,353		$	63,211
% of revenue	24.0		%	26.1		%	27.0		%

Segment information for total assets is as follows for the periods stated:

	December 31,
	2013		2012		2011
	(Dollars in thousands)
Wireless(1)	$	166,553	$	158,261	$	193,658
Software	160,345		164,366		160,763
Total assets	$	326,898	$	322,627	$	354,421

⁽¹⁾ Includes elimination of $141.6 million in investment in software operations recorded upon the acquisition of Amcom.

Below is a reconciliation of our non-GAAP measure for the periods stated:

	For the Year Ended December 31,
	2013			2012			2011
	(Dollars in thousands)
Operating income	$	45,494		$	45,728		$	51,829
Plus: Depreciation, amortization, accretion and impairment	15,167			21,614			19,334
EBITDA (as defined by the Company)	60,661			67,342			71,163
Less: Purchases of property and equipment	(10,408		)	(9,989		)	(7,952		)
OCF (as defined by the Company)	$	50,253		$	57,353		$	63,211