Author Topic: GNCMA - General Communications  (Read 124609 times)

tombgrt

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Re: GNCMA - General Communications
« Reply #10 on: November 03, 2013, 02:28:09 AM »
With current total debt at almost $1b and equity value at $386m, GNCMA is trading at around 5.5 X EBITDA (not counting the effects of AWN) correct?

Wireless EBITDA was around $60m for GNCMA and almost $70m for ALSK in 2011. So if capex is $40m that leaves $120m in FCF. Year 1 and 2 GNCMA gets 4% management fee before distributions so say $4-5m, double that after the first 4 years. Then $50m for ALSK, less later and 1/3th after 4 years.

Does that really leave almost $70m for GNCMA? I understand synergies will take time and VZ coming in but still.


Packer, do you expect GNCMA to continue growing EBITDA at its current pace? Regardless the stock seems cheap.


Packer16

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Re: GNCMA - General Communications
« Reply #11 on: November 03, 2013, 03:45:18 AM »
I think EBITDA will be in the $290 to $300 range with $30m synergies.  This based upon the total run rate EBITDA ($62.1 m*4) less wireless EBITDA ($14.3m*$) plus 2/3rds the AWN EBITDA ($100m) plus $5 m management fee.  Total EBITDA this year is closer to $260m.  Analyst expect a $290m 2015 number before AWN. 

I believe your calculations are correct.  The upside for AWN is VZ backhaul and continued VZ roaming.  They also closed on their TV station buy.  This will make them a premier Alaska content provider.  This stock is still cheap as it has not advanced like many stocks have this year.  I think this is less than a 50 cent dollar (possibly a 30 cent dollar of you apply a cable co multiple - which I think is appropriate).

Packer   

tombgrt

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Re: GNCMA - General Communications
« Reply #12 on: November 03, 2013, 03:50:18 AM »
Thanks Packer, I had the same conclusions. We'll see when the market comes to its senses. In the meantime I'm quite happy to buy more.

gary17

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Re: GNCMA - General Communications
« Reply #13 on: November 03, 2013, 04:18:56 AM »
Is FCf after interest expense or just after cap ex.... Thx

Packer16

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Re: GNCMA - General Communications
« Reply #14 on: November 03, 2013, 04:44:31 AM »
At this point there is very little interest expense associated with AWN.  From GNCMA's perspective the interest is pass through as the interest is paid to GNCMA who then pays it to its debt holders.

Packer

gary17

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Re: GNCMA - General Communications
« Reply #15 on: November 03, 2013, 05:26:22 AM »
So based on Tom's number that's 70M or so available for dividend or share buy back.... An implied yield of 18%!'   Seems fairly good. 

Packer16

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Re: GNCMA - General Communications
« Reply #16 on: November 03, 2013, 05:50:32 AM »
That assumes no wireless roaming revenue decline of which there will be and no VZ backhaul of which there will be.  So how close this is based upon a tradeoff of declining roaming revenue versus increasing backhaul revenue. 

Packer

gary17

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Re: GNCMA - General Communications
« Reply #17 on: November 03, 2013, 05:59:43 AM »
Thanks Packer.
I trust by roaming we mean data roaming ... AlSk noted voice roaming is still through AWN , but that of course has less contribution to the ebitda

Quote
Anand Vadapalli - President and CEO
Yes. And so the question was, if I could speak to the Verizon Wireless rollout. Verizon acquired the 700 megahertz spectrum, 4G spectrum in the third quarter of 2010. They had an obligation under the spectrum acquisition to cover about 45% of Alaska by July 2013.

Based on the build out that they have done in the state, they have probably met that threshold. Itís a 4G data network only. Theyíve done that up couple of months ago. There is no voice on that network obviously. So voice network or voice services for Verizon customers coming into Alaska, they continue to roam on the AWN network

We -- we do not know when Verizon will be in the retail market. It appears to be delayed compared to what we thought -- where we thought they would be. But we -- thatís just our point of view. We have no visibility into when they plan to be in the -- in the retail market.

gary17

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Re: GNCMA - General Communications
« Reply #18 on: November 05, 2013, 05:00:06 PM »
Be interesting to see how the Internet will have an impact on the cable TV business over the long term - I wonder what people's thoughts are on this. 

http://www.bnn.ca/News/2013/11/5/Rogers-lays-off-94-in-media-division.aspx



no_free_lunch

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Re: GNCMA - General Communications
« Reply #19 on: November 05, 2013, 05:48:07 PM »
It will definitely be disruptive.  If you look at the charter board, I think that was the spot where there were some discussion on the topic.  At the end of the day, I don't know how it all shakes out but you need the telecom companies fibre lines to get the content to the user.  So as long as they don't overbuild these companies should adapt and do okay.    From my viewing of the malone interviews on charter that is sort of the impression that i got.  This is why Malone wants the industry to consolidate ahead of time.