GCI grows total revenue 14 percent to $812M in 2013
General Communications Inc. reported total revenue growth of more than $100 million for 2013 compared to 2012.
On March 6, GCI reported total 2013 revenue was $812 million, compared to $710.2 million in 2012, a 14.3 percent increase. However, GCI’s net income decreased slightly, to $9 million for 2013 compared to $9.7 million in 2012.
Adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, for the year increased $40 million or 18 percent, to $267 million, compared to $226.8 million for 2012.
The 2013 fourth quarter was the first full quarter of operations for the new Alaska Wireless Network, which began operations in July 2013 when GCI and Alaska Communications received final approval on a deal that combined their infrastructure. The two companies are continuing to sell separate retail products.
Revenue for the fourth quarter increased 19 percent year-over-year, at $218 million, but flat sequentially. EBITDA for the fourth quarter increased 28 percent to $68 million compared to the prior year, but down sequentially from the third quarter.
GCI Chief Financial Officer Pete Pounds said the new network is off to a good start, although some integration work remains. By the end of the year, the company expects to roll out 4G LTE service in Fairbanks, and reach about 80 percent of the state’s population.
The new network had the biggest effect on GCI’s wireless segment. Wireless revenues were $62 million for the fourth quarter, down from $66 million in the third quarter, but nearly double the $33 million from the fourth quarter of 2012.
GCI’s wireline performance was stronger, with a slight increase in revenue compared to the prior year, at $156 million for the fourth quarter of 2013, although the adjusted EBITDA declined slightly to $40 million.
Pounds said that data increases offset video and voice decreases for the company. GCI had about 800 fewer voice subscribers for the fourth quarter, but added 500 cable subscribers.
For business services, data transport and storage charges were up $1 million year-over-year to $24 million for the fourth quarter, but professional services were down $3 million year over year to $12 million for the fourth quarter.
Managed broadband revenues also provided the growth, with a 6 percent increase in the fourth quarter of 2013 compared to the same quarter of 2012. That was the result of the expanded TERRA network, Pounds said. Multiple sectors increased their demand for the improved service, and the buildout to Kotzebue should be completed by the end of 2014.
Pounds said that while the 2013 results were solid, the company was particularly happy with how it is poised for 2014, both in terms of the AWN and other projects including the TERRA expansions, TV station purchases in Anchorage and Southeast Alaska and expected federal grants.
“We’re pleased with this year’s financial results, but strategically, we are even more pleased,” Pounds said.
For 2014, Pounds said the company expected to spend about $140 million to $150 million on capital expenditures, and about $30 million on wireless buildout that was previously planned for later years but is now being moved up.
GCI’s guidance for 2014 called for consolidated revenues of between $910 million and $930 million, and an adjusted EBITDA of $285 million to $305 million.
AWN to benefit from GCI’s Tribal Mobility Fund bids
AWN will also benefit from GCI’s winning bids in the FCC’s Tribal Mobility Fund auction.
GCI submitted 51 successful bids for a total of $41.4 million. According to auction information, more than 37,000 people will be affected throughout rural Alaska, including in Barrow, Nome, Hooper Bay, Kotzebue, Mountain Village, and Unalaska. GCI now must determine whether the company will upgrade connectivity in those places to 3G or 4G.
The 3G connections must be completed in two years. The 4G connections must be completed in three years.
The Alaska Wireless Network will receive the funds for GCI and do the work, and the resulting expansions will be available to both GCI and Alaska Communications. Long-form applications with more information on each project must be submitted before the funding is set.