Exhibit 99.1 May 7, 2003 (corrected May 9, 2003) John Lowber, (907) 868-5628; jlowber@gci.com Bruce Broquet, (907) 868-6660; bbroquet@gci.com David Morris, (907) 265-5396; dmorris@gci.com FOR IMMEDIATE RELEASE GCI REPORTS DETAILED FIRST QUARTER 2002 FINANCIAL RESULTS ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported its detailed first quarter 2003 results. For the first quarter of 2003, the company recorded net income of $2.6 million or $0.04 per share on a diluted basis, after the cumulative effect of a change in accounting principle of $0.5 million or $(0.01) per share on a diluted basis, net of income tax benefit. The first quarter 2003 net income compares to net income of $2.2 million or $0.03 per share for the first quarter of 2002. Revenues totaled $92.8 million for the first quarter of 2003, an increase of 5.2 percent as compared to $88.2 million in the first quarter of 2002. Earnings before interest, taxes, depreciation, amortization and accretion (EBITDA) increased to $28.9 million for the first quarter of 2003, an increase of $3.8 million or 15.1 percent when compared to first quarter 2002 EBITDA of $25.1 million. Revenues for the first quarter increased sequentially 0.5 percent to $92.8 million as compared to revenues of $92.3 million in the fourth quarter of 2002. GCI's first quarter EBITDA of $28.9 million compares to EBITDA of $28.1 million in the fourth quarter of 2002. The first quarter EBITDA of $28.9 million includes a net $1.9 million refund in 2003 from a local exchange carrier for access services rendered in previous years. GCI's first quarter 2003 EBITDA of $28.9 million exceeded guidance of $25.1 million to $28.1 million. The company's local services business added 3,000 access lines during the first quarter and now serves 99,000 access lines, an estimated 20 percent share of the total access line market in Alaska. GCI's statewide Internet platform remained steady at approximately 71,600 customers. More than 38,600 Internet customers are using GCI cable modem service, an increase of 2,400 over the fourth quarter of 2002. GCI cable television services now pass 198,380 homes and serve 136,283 basic subscribers. Basic subscribers increased sequentially by 228 subscribers from the fourth quarter of 2002. Digital revenues for the first quarter of 2003 are up 18.8% sequentially when compared to the fourth quarter of 2002. GCI serves 30,200 digital customers in Anchorage, Fairbanks, Juneau and Kenai. "The results of the first quarter contained no surprises and our expectations for the year remain unchanged," said Ron Duncan, GCI president. "In the most challenging environment ever faced by the telecommunications industry GCI continues to deliver steady growth. We have now completed a major amendment to our senior credit facility which extends the term of the facility and increases our flexibility." "On a percentage basis growth for 2003 will likely be less than previous years. However our continued focus on our customers and the careful investment of new capital should enable us to accelerate growth in 2004. Our internal goal is to grow run rate cash flow to $150 million before the end of 2005 and I believe we are on track to do so." Highlights: - Consolidated revenues increased 5.2 percent to $92.8 million for the first quarter of 2003 as compared to $88.2 million in 2002. First quarter 2003 revenues increased approximately 0.5 percent sequentially over revenues of $92.3 million in the fourth quarter of 2002. - Consolidated EBITDA increased 15.1 percent to $28.9 million in the first quarter 2003 as compared to $25.1 million in 2002. Consolidated first quarter EBITDA of $28.9 million increased $0.8 million sequentially, an increase of 2.8 percent, from $28.1 million for the fourth quarter of 2002. First quarter 2003 EBITDA of $28.9 million includes a net $1.9 million refund in 2003 from a local exchange carrier for access services rendered in previous years. - Broadband, private line and other data revenues increased 9.8 percent to $14.6 million during the first quarter of 2003 as compared to $13.3 million in the same period of 2002. - GCI had approximately 99,000 local service access lines in service at the end of the first quarter 2003 representing an increase of 3,000 access lines over the fourth quarter or an annualized sequential growth rate of 12.5 percent. The company estimates it has an approximate 20 percent share of the total access line market in Alaska. Approximately 87 percent of GCI's access lines are provisioned on its own facilities or on resold local loops. - GCI's statewide Internet platform remained steady at approximately 71,600 customers. - GCI provides cable modem Internet access in the Anchorage, Fairbanks, Juneau, Valdez, Sitka, Nome, Seward, Kenai, Soldotna, Wasilla, Cordova, Petersburg, Wrangell, Homer, Bethel and Kodiak. The company had more than 38,600 cable modem customers at the end of the first quarter 2003, as compared to 30,000 at the end of the first quarter of 2002. We believe GCI's cable modem penetration rate is one of the highest in the nation. More than 96 percent of GCI's cable customers are able to receive cable modem service. - During the three months ending March 31, 2003 we decreased our capital expenditures for all of our product lines as compared to the same period in 2002. The decrease was due to capital expenditure limitations required by our Senior Facility, which we closed on November 1, 2002. In April 2003 we amended our Senior Facility agreement which, among other items, increases the amount we may incur for capital expenditures. - GCI estimates that second quarter revenues will total approximately $92-95 million and EBITDA is expected to exceed $28.9 million. - GCI will discuss further first quarter highlights and provide additional non- material commentary during its Investor and Analyst Conference call on Thursday, May 8 at 2:00 pm EDT. More information about the call can be found at www.gci.com, click on "Investors". Long Distance Results Long distance and related revenues for the first quarter of 2003 increased 0.5 percent to $56.3 million as compared to $56.0 million for the first quarter of 2002. For the first quarter of 2003 long distance EBITDA totaled $18.6 million as compared to $17.0 million in the first quarter of 2002, an increase of 9.4 percent over the prior year. Revenue growth in broadband, private line and dedicated data services revenues, product sales, managed services and long haul fiber lease revenues offset a decrease in switched minutes revenues. EBITDA growth for the first quarter of 2003 is primarily attributable to a net $1.9 million refund in 2003 from a local exchange carrier for access services rendered in previous years. Long distance revenues of $56.3 million for the first quarter of 2003 are relatively unchanged from the fourth quarter of 2002. Long distance EBITDA of $18.6 million for the first quarter of 2003 increased 3.3 percent from $18.0 million in the fourth quarter of 2002. The sequential increase in EBITDA is primarily attributable to the previously mentioned net $1.9 million non-recurring refund in 2003. Total minutes-of-use was down 3.5 percent in the first quarter of 2003 as compared to the first quarter of 2002 and 1.8 percent sequentially from the fourth quarter of 2002. Revenues from broadband, private line and other data services increased 9.8 percent to $14.6 million during the first quarter of 2003 as compared to $13.3 million in the same period of 2002 and were up 2.1 percent from $14.3 million in the fourth quarter of 2002. The increase in revenue results from growing demand for data services by Internet service providers, commercial and governmental customers and others, and delivery of broadband services into rural Alaska. The total number of billed long distance customers decreased by 0.9 percent from the fourth quarter of 2002. Cable Television Results Cable television revenues for the first quarter increased 9.9 percent to $23.4 million from $21.3 million in the first quarter of 2002, and were up slightly from the fourth quarter of 2002. Sequential revenues were flat due primarily to strong political insertion ad sales for the fourth quarter of 2002. EBITDA increased 12.8 percent to $10.6 million from $9.4 million in the first quarter of 2002, and increased 1.9 percent from the fourth quarter of 2002. The increase in revenues and EBITDA year-over-year is due, in part, to the increase in basic subscribers and more sales of higher margin products such as digital television and cable modem services. Gross margins as a percentage of revenues are relatively unchanged year-over-year and down 226 basis points sequentially. The decline in gross margin sequentially was due primarily to strong political insertion ad sales in the fourth quarter and first quarter programming cost increases. The growth rate in higher value products such as digital cable service and cable modems is expected to help mitigate the margin effects of increasing programming and copyright costs. As of March 31, 2003, the company's cable television operations passed 198,380 homes and served 136,283 basic subscribers (112,251 equivalent basic subscribers). Average revenue per equivalent basic subscriber increased 8.8 percent to $69.49 for the first quarter of 2003 as compared to $63.88 for the first quarter of 2002, and was up slightly from $69.38 from the fourth quarter of 2002. The company added 228 basic subscribers to its system during the first quarter. The company offers digital cable television service in Anchorage, Fairbanks, Juneau, Kenai and Soldotna. GCI served 30,200 digital customers at the end of the first quarter of 2003. In October 2002 we, along with the other largest publicly traded multiple system operators signed a pledge to support and adhere to new voluntary reporting guidelines on common operating statistics to provide investors and others with a better understanding of our operations. The operating statistics below include capital expenditures and customer information from our cable television, cable telephony and cable modem services. These statistics do not include capital expenditures or customer relationships for our long distance, local access services and Internet services. Our capital expenditures by standard reporting category for the three months ending March 31, 2003 and 2002 follows (amounts in thousands): 2003 2002 ------- ------- Customer premise equipment("CPE") $ 1,276 $ 1,333 Commercial 68 176 Scalable infrastructure 135 1,131 Line extensions 88 124 Upgrade/rebuild 72 1,286 Support capital 77 2,358 ------- ------- $ 1,716 $ 6,408 ------- ------- The standardized definition of a customer relationship is the number of customers that receive at least one level of service, encompassing voice, video, and data services, without regard to which services customers purchase. At March 31, 2003 and 2002 our cable business had 124,007 and 122,273 customer relationships, respectively. The standardized definition of a revenue generating unit is the sum of all primary analog video, digital video, high-speed data, and telephony customers, not counting additional outlets. At March 31, 2003 and 2002 our cable business had 173,281 and 162,580 revenue generating units, respectively. Local Telephone Results Local telephone service revenues for the first quarter increased 15.1 percent to $8.4 million as compared to $7.3 million in the first quarter of 2002, and decreased 2.3 percent sequentially from $8.6 million in the fourth quarter of 2002. The decrease in sequential local service revenues is attributable to a reallocation of pooled access revenues from intrastate long distance carriers, including GCI. Local services generated a $1.2 million EBITDA loss for the first quarter, an improvement of $0.1 million over the first quarter of 2002. The first quarter EBITDA loss of $1.2 million compares to $1.1 million of reported EBITDA loss in the fourth quarter of 2002. If the local telephone business was given credit for approximately $1.8 million in access cost savings on calls placed by GCI long distance customers who are also GCI local customers, the company's local telephone business would have reported positive EBITDA. GCI's local telephone business has been generating positive cash flow on a stand-alone basis for several quarters. GCI provided local service for approximately 99,000 access lines at the end of the first quarter of 2003, an increase of 3,000 access lines or 3.1 percent from the 96,000 access lines in service at the end of the fourth quarter of 2002. The company estimates it has attained a 20 percent share of the total access line market in Alaska. Internet Access Results As of March 31, 2003 GCI's statewide Internet platform customer count remained relatively unchanged at approximately 71,600 customers. Internet access revenues for the first quarter of 2003 totaled $4.6 million, an increase of 27.8 percent year-over-year and 9.5 percent sequentially when compared to first quarter 2002 revenues of $3.6 million and fourth quarter 2002 revenues of $4.2 million. The increase in Internet access revenues is attributed to existing subscribers adding additional features and services including cable modem service. The first quarter EBITDA of $1.0 million is an improvement of $1.0 million over the EBITDA of $0.0 million in the first quarter of 2002 and an improvement of $0.2 million over the EBITDA of $0.8 million in the fourth quarter of 2002. Internet access results continue to improve, reflecting increasing economies of scale and operating cost controls. During the first quarter of 2003 GCI began offering a new cable modem service called LiteSpeed as an alternative product to our dial-up Internet service and our HyperNet 360/64 K cable modem service priced at $39.99 per month to GCI long distance customers. LiteSpeed is a 64/32 K transfer rate Internet service offered at $24.99 per month to GCI long distance customers. HyperNet and LiteSpeed are priced at $54.99 and $39.99 per month, respectively, to customers who do not take our long distance service. GCI began offering Internet access services during 1998 and its dial-up Internet service is offered in most major Alaska markets. Due to the completion of major cable plant upgrades, GCI can now offer cable modem service to 96 percent of its cable entertainment subscribers. GCI is now providing cable modem Internet access in the Anchorage, Fairbanks, Juneau, Valdez, Sitka, Nome, Seward, Kenai, Soldotna, Wasilla, Cordova, Petersburg, Wrangell, Homer, Bethel and Kodiak. The company had 38,600 cable modem customers at the end of the first quarter of 2003, an increase of 8,600 customers when compared to the first quarter of 2002. We believe GCI's cable modem penetration rate is one of the highest in the nation. When expansion plans are completed almost all GCI cable television customers will be able to receive cable modem service. GCI plans to offer high speed Internet service to substantially all communities it serves by 2004. The foregoing contains forward-looking statements regarding the company's expected results which are based on management's expectations as well as on a number of assumptions concerning future events. Actual results might differ materially from those projected in the forward looking statements due to uncertainties and other factors, many of which are outside GCI's control. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in GCI's cautionary statements sections of Form 10K and 10-Q filed with the Securities and Exchange Commission. Based on revenues GCI is the largest Alaska-based and operated integrated telecommunications provider and provides local, wireless, and long distance telephone, cable television, Internet and data communication services throughout Alaska. More information about the company can be found at www.gci.com. # # # A CONFERENCE CALL TO DISCUSS OPERATING RESULTS WILL TAKE PLACE ON THURSDAY, MAY 8, 2003 FROM 2 P.M. TO 3 P.M. (EASTERN TIME). SENIOR MANAGEMENT WILL CONDUCT THE BRIEFING. TO ACCESS THE BRIEFING ON MAY 8, CALL THE WORLDCOM CONFERENCE OPERATOR BETWEEN 1:50 P.M. AND 2 P.M. (EASTERN) AT 800-779-0488. (INTERNATIONAL CALLERS SHOULD DIAL 630 395-0017). IDENTIFY YOUR CALL AS "GCI." CALLERS WILL BE PLACED ON MUSIC HOLD UNTIL THE BRIEFING COMMENCES. AFTER THE DIRECT BY GCI, CALLERS MAY ASK QUESTIONS VIA THE CONFERENCE OPERATOR. TO ACCESS THE CALL ONLINE VIA NET CONFERENCE, LOG ON TO WWW.GCI.COM AND FOLLOW THE INSTRUCTIONS. THE CALL WILL BE ARCHIVED FOR TWO WEEKS. BEGINNING AT 4:00 P.M. (EASTERN) ON MAY 8, A REBROADCAST OF THE BRIEFING WILL BE AVAILABLE FOR 72-HOURS BY DIALING 800-234-2079, ACCESS CODE 7461 (INTERNATIONAL CALLERS SHOULD DIAL 402-220-9687). CALLERS MAY UTILIZE THE FOLLOWING OPTIONS DURING THE REBROADCAST. - - - PRESS "7" TO REWIND THE CALL 30 SECONDS. - - - PRESS "8" TO PAUSE THE CALL. - - - PRESS "9" TO FAST-FORWARD THE CALL 30 SECONDS. THIS PRESS RELEASE WILL APPEAR IN THE INVESTOR SECTION OF THE COMPANY'S WEBSITE AT WWW.GCI.COM.