Industry Segments Data

3 Months Ended

Mar. 31, 2012

Industry Segments Data [Abstract]

Industry Segments Data [Text Block]

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

				Consumer	Network Access	Commercial	Managed Broadband	Regulated Operations	Total Reportable Segments
2012
Revenues:
	Intersegment		$	524	83	1,385	-	39	2,031
	External			87,812	25,188	34,341	19,029	5,537	171,907
		Total revenues		88,336	25,271	35,726	19,029	5,576	173,938
Adjusted EBITDA			$	24,794	12,410	8,441	8,249	935	54,829
2011
Revenues:
	Intersegment		$	-	-	1,409	-	69	1,478
	External			88,417	25,097	31,829	13,995	5,439	164,777
		Total revenues		88,417	25,097	33,238	13,995	5,508	166,255
Adjusted EBITDA			$	28,393	11,880	6,662	5,711	700	53,346

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

Three Months Ended March 31,			2012	2011
Reportable segment revenues		$	173,938	166,255
Less intersegment revenues eliminated in consolidation			2,031	1,478
	Consolidated revenues	$	171,907	164,777

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

Three Months Ended March 31,			2012	2011
Reportable segment Adjusted EBITDA		$	54,829	53,346
Less depreciation and amortization expense			(32,380)	(31,866)
Less share-based compensation expense			(1,730)	(1,170)
Less non-cash contribution expense			(800)	-
Less net loss attributable to non-controlling interest			(177)	-
Plus net loss attributable to equity investment			131	-
Less accretion expense			(188)	(72)
Plus other expense			-	24
	Consolidated operating income		19,685	20,262
Less other expense, net			(17,284)	(17,472)
	Consolidated income before income tax expense	$	2,401	2,790