Exhibit 99.1
May 4, 2005
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 FIRST QUARTER 2005 FINANCIAL RESULTS
o Consolidated revenue of $106.5 million
o Net income of $4.7 million or $0.08 per diluted share
o EBITDA of $34.5 million
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported net income of $4.7
million, or earnings per diluted share of $0.08, for the first quarter of 2005.
The company's first quarter net income compares to income of $1.9 million, or
earnings per diluted share of $0.02 in the same period of 2004.
GCI's first quarter 2005 revenues totaled $106.5 million, an increase
of 3.1 percent over the first quarter of 2004, excluding $5.6 million of net
adjustments in the first quarter of 2004. The net adjustments include $6.1
million of project revenues reported in the first quarter of 2004 and
out-of-period Universal Service Fund (USF) true-ups released by the USF of $0.7
million in the first quarter of 2004 and $1.2 million in the first quarter of
2005. GCI's first quarter 2005 revenues decreased 2.2 percent from the first
quarter 2004 revenues of $108.9 million before reflecting the net adjustments.
First quarter 2005 earnings before interest, taxes, depreciation,
amortization and accretion (EBITDA) totaled $34.5 million. EBITDA decreased $0.7
million or 2.0 percent from the first quarter of 2004. First quarter 2004 EBITDA
totaled $35.2 million, as adjusted.
Sequentially, revenues for the company increased 0.9 percent over
fourth quarter 2004 revenues of $105.5 million. First quarter EBITDA of $34.5
million compares to EBITDA of $32.2 million in the fourth quarter of 2004.
For the first quarter of 2005, GCI met its revenue and EBITDA guidance.
The company expected revenues of approximately $105 million to $107 million, and
EBITDA of approximately $32 million to $33 million, excluding the effects of any
receivable recovery from MCI. GCI recorded $0.9 million in EBITDA relating to
the use of the MCI credit during the quarter.
GCI began a stock repurchase program during 2004. The company purchased
504,200 shares at an average price of $9.92 during the first quarter of 2005.
GCI has purchased a total of 4.6 million shares since the inception of the
program including Class A shares purchased from MCI last December. Shares
repurchased to date have been at an average cost of $8.62 per share. The company
received senior lender approval to repurchase stock of up to $10 million
annually in November 2004.
"First quarter results are in line with expectations and very
satisfying," said Ron Duncan, GCI president. "We continue to add new customers
and new products for existing customers. We increased our cable modem customers
by more than 30 percent from one year ago and total revenue generating
relationships for the cable business are up by over 16 percent from the prior
year."
"We added 2,400 new lines to our Digital Local Phone Service during the
quarter and customer satisfaction with that new service has decreased churn for
local phone customers by more than 20 percent. We expect to have 25,000
customers using DLPS technology by year end."
GCI expects second quarter revenue and EBITDA to exceed those achieved
in the first quarter and still anticipates revenues of $430 million to $440
million and EBITDA of $145 million for 2005, including the expected recovery of
the remaining MCI receivable.
Customer Highlights
o GCI cable modem customers grew by almost 6 percent sequentially and
34 percent year-over-year. GCI had 101,700 statewide Internet
customers at the end of the first quarter of 2005. More than 69,000
of these customers are using GCI cable modems, an increase of 3,800
over the fourth quarter of 2004. Approximately 58 percent of GCI
cable customers have a cable modem.
o GCI has provisioned approximately 10,400 customers on its Digital
Local Phone Service (DLPS) facilities at the end of the first
quarter and expects to have approximately 25,000 customers using
that technology by the end of 2005.
o The local services business added 1,600 consumer and business access
lines during the first quarter and turned down approximately 1,100
Internet Service Provider (ISP) dial-up lines. GCI now serves
112,600 local lines, an estimated 24 percent share of the total
access line market in Alaska.
o GCI's cable television business grew revenue generating units by
more than 16 percent year-over-year and 3.6 percent sequentially.
GCI cable television services pass 209,627 homes and serve 136,100
subscribers. Subscribers increased by 1,358 subscribers from the
fourth quarter of 2004.
o Long-distance billable minutes increased 0.4 percent to 302.5
million minutes for the first quarter as compared to the same
quarter of 2004, and increased 3.9 percent sequentially.
Long Distance Results
For the first quarter of 2005, long distance revenues totaled $60.0
million as compared to revenues of $59.8 million, adjusted for $6.1 million in
project revenues reported in the first quarter of 2004. Long distance revenues
of $60.0 million in the first quarter of 2005 were relatively unchanged from
$60.5 million in the fourth quarter of 2004. Increases in managed services and
data network services revenues, along with increased minutes, offset continued
decreases in rates.
Long distance EBITDA decreased 13.4 percent for the first quarter of
2005 to $18.8 million as compared to $21.7 million, as adjusted, in the first
quarter of the prior year. Long distance EBITDA for the first quarter of 2005
was up $1.5 million sequentially, an increase of 8.7 percent, from $17.3 million
in the fourth quarter of 2004. Long distance EBITDA included MCI bad debt
recoveries of $0.9 million in the first quarter of 2005, $1.2 million in the
first quarter of 2004 and $0.8 million in the fourth quarter of 2004. The
decrease in EBITDA from the first quarter of 2004 is a result of decreased rates
and increased costs.
Total minutes-of-use were up 0.4 percent in the first quarter of 2005
when compared to the first quarter of 2004. Minutes-of-use are up 3.9 percent
compared to the fourth quarter of 2004.
The number of billed long distance customers totaled 91,800 at the end
of the first quarter of 2005, an increase of 6.6 percent from 86,100 at the end
of the first quarter of 2004 and 0.5 percent sequentially.
Cable Television Results
Cable television revenues for the first quarter increased 4.0 percent
to $25.9 million from $24.9 million in the first quarter of 2004, and decreased
1.1 percent from $26.2 million in the fourth quarter of 2004. EBITDA of $11.6
million for the first quarter of 2005 increased 5.5 percent over $11.0 million
in the first quarter of 2004, and decreased 5.7 percent when compared to $12.3
million in the fourth quarter of 2004. The year-over-year increase in revenues
and EBITDA is due primarily to the sales of new video and cable modem services.
The sequential decrease in EBITDA is primarily attributable to advertising
revenues that were significantly higher in the previous quarter due to the
November elections.
Gross margins, as a percentage of revenues, increased by 135 basis
points year-over-year and decreased 169 basis points sequentially. The
sequential decrease in gross margins in the first quarter of 2005 is primarily
due to the election ad revenues. Increased sales of higher value products such
as the Ultimate Package, new programming tiers and cable modem services continue
to mitigate the effects of increasing programming and copyright costs.
As of December 31, 2004, the company's cable television operations
passed 209,627 homes and served 136,100 subscribers (108,900 equivalent basic
subscribers). For the first quarter, average revenue per equivalent basic
subscriber was $79.64, an increase of 4.0 percent when compared to first quarter
2004 average revenue of $76.58. Average revenue decreased 2.1 percent, from
$81.33, from the fourth quarter of 2004. The sequential decrease in average
revenue reflects the higher advertising revenues reported in the fourth quarter
of 2004. The company experienced an increase of 1,358 subscribers during the
first quarter of 2005. The increase in subscribers is partly due to the
acquisition of the Barrow Cable assets, including approximately 950 subscribers.
The increase in subscribers for the first quarter of 2005 compares to a decrease
of 369 subscribers in the first quarter of 2004. GCI's packaged offering of long
distance, local, Internet and cable television service is mitigating the impact
of DBS competition.
The company offers digital programming tiers in all of its major
markets. The Anchorage, Mat-Su Valley and Fairbanks systems have been fully
converted to digital. GCI has 80 percent of its basic cable subscribers
receiving service through a digital set-top box. More than 97 percent of the set
top boxes deployed in GCI's systems are digital and 47,970 customers purchase
additional programming through a digital tier. GCI offers 10 channels of HDTV to
customers in the Anchorage and Mat-Su Valley area.
GCI cable modem service is available to more than 90 percent of the
homes in Alaska. Thirty-five percent of homes passed and more than 57 percent of
GCI residential subscribers have cable modem service.
The operating statistics below include capital expenditures and
customer information from cable services and the components of our local
services and Internet services utilizing our cable services' facilities.
GCI's capital expenditures by standard reporting category for the
three-month periods ending March 31, 2005 and 2004 follow (amounts in
thousands):
2005 2004
-------------- -------------
Customer premise equipment $ 3,558 3,438
Commercial 97 47
Scalable infrastructure 552 1,755
Line extensions 45 44
Upgrade/rebuild 4,057 1,770
Support capital 69 181
-------------- -------------
Sub-total 8,378 7,235
Remaining capital expenditures 16,036 17,966
-------------- -------------
$ 24,414 25,201
============== =============
At March 31, 2005 and 2004, GCI's cable business had 124,200 and
122,100 customer relationships, respectively. The standard definition of a
customer relationship is the number of customers who receive at least one level
of service, encompassing voice, video, and data services, without regard to
which services customers purchase. These relationships do not include local
telephone customers except those receiving phone services through the cable
television plant.
At March 31, 2005 and 2004, GCI's cable business had 215,800 and
185,800 revenue generating units, respectively. The increase in the revenue
generating units of 7,500 and 30,000 from December 31, 2004 and March 31, 2004,
respectively, is due to an increase in the number of cable modem and DLPS
customers. The standard 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.
Local Telephone Results
For the first quarter of 2005, local telephone service revenues totaled
$13.3 million, an increase of 12.7 percent, when compared to $11.8 million in
the first quarter of 2004. Revenue was up $0.9 million or 7.3 percent from $12.4
million in the fourth quarter of 2004. The increase in year-over-year and
sequential revenues is primarily attributable to a true-up adjustment released
by USF during the quarter. Approximately $1.2 million of a total $1.6 million
adjustment is out-of-period.
In the first quarter, local services generated EBITDA of $1.1 million,
an improvement of $0.5 million over the $0.6 million of EBITDA in the first
quarter of 2004. The first quarter EBITDA of $1.1 million compares to an EBITDA
loss of $0.4 million in the fourth quarter of 2004. The sequential increase in
EBITDA is due primarily to an increase in revenues from the Universal Service
Fund and lower direct costs of good sold.
The rates paid by GCI to lease loops and UNE access elements from ACS
were approximately 20 percent higher during the first quarter of 2005 as
compared to 2004. This resulted primarily from a rate increase granted to ACS by
state regulators in the second half of 2004. GCI estimates that conversion of
customers from leased ACS facilities to its own network offset more than half of
the impact of this rate increase in the first quarter of 2005.
GCI began converting customers to its own network using its DLPS
technology in 2004. The roll out of DLPS enables GCI to avoid wholesale and loop
rental costs from local phone lines leased from the incumbent local exchange
carrier. GCI has provisioned approximately 10,400 customers completely on its
DLPS facilities at the end of the first quarter of 2005 and expects to have
approximately 25,000 customers similarly provisioned by the end of 2005. Churn
for customers receiving service through DLPS is materially lower than for
customers served using facilities leased from ACS.
At the end of the first quarter of 2005, GCI provided local service to
approximately 112,600 access lines statewide. GCI added 1,600 voice access lines
during the quarter and turned down approximately 1,100 Internet Service Provider
dial-up lines. This represents a net increase of 500 access lines when compared
to the 112,100 access lines reported at the end of the fourth quarter of 2004.
The company estimates it has attained a 24 percent share of the total access
line market in Alaska. Approximately 85 percent of GCI's access lines are
provisioned on its own facilities or on resold local loops.
Internet Access Results
Internet access revenues for the first quarter of 2005 totaled $7.3
million, an increase of 14.1 percent year-over-year and sequentially. Revenues
for both the first and fourth quarter of 2004 were $6.4 million. EBITDA for the
first quarter of 2005 totaled $3.0 million, an improvement of $1.1 million
year-over-year and relatively unchanged from the fourth quarter of 2004. First
quarter 2004 EBITDA was $1.9 million and fourth quarter 2004 EBITDA was $3.1
million. The increase in Internet access revenues and EBITDA results from the
migration of existing customers to cable modem access, customers adding more
features and services and increasing economies of scale.
At the end of the first quarter of 2005, GCI had 101,700 statewide
Internet customers, an increase of 100 customers sequentially and an increase of
1,100 year-over-year. GCI's statewide Internet customers included 69,300
subscribers using cable modem access, an increase of 3,800 subscribers, or 5.8
percent, over the prior quarter's subscriber count of 65,500. On a
year-over-year basis, GCI experienced a 34.0 percent increase in cable modem
subscribers, from 51,700 at the end of the first quarter of 2004.
Total cable modem revenues for the first quarter of 2005 increased 3.1
percent when compared to the fourth quarter of 2004 and increased 6.1 percent
year-over-year. At the end of the first quarter of 2005 GCI's average revenue
per cable modem (ARPM) was $30.97 as compared to $31.94 at the end of the fourth
quarter of 2004 and $40.20 at the end of the first quarter of 2004. The increase
in sequential and year-over-year revenues is due to the increase in the number
of modem customers. The decline in ARPM is due to an increase in the percentage
of total customers taking GCI's discounted cable modem products. More than 57
percent of GCI's 120,000 residential cable subscribers were using a cable modem
for their Internet service at the end of the first quarter of 2005.
Other Items
During the first quarter of 2005 GCI's capital expenditures totaled
$24.4 million as compared to $29.8 million in the fourth quarter of 2004.
GCI will hold a conference call to discuss the quarter's results on
Thursday, May 5, 2005 beginning at 2 p.m. (Eastern). To access the briefing on
May 5, dial 888-843-6162 (international callers should dial 630-395-0017) and
identify your call as "GCI." In addition to the conference call, GCI will make
available net conferencing. To access the call via net conference, log on to
www.gci.com and follow the instructions. A replay of the call will be available
for 72-hours by dialing 888-473-0137, access code 7461 (international callers
should dial 402-998-1358.)
GCI is the largest telecommunications company in Alaska. A pioneer in
bundled services, GCI 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.
The foregoing contains forward-looking statements regarding the
company's expected results that 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 statement sections of Form 10-K and 10-Q filed with the
Securities and Exchange Commission.
# # #
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands) March 31, December 31,
Assets 2005 2004
- --------------------------------------------------------------------------------------- ----------------- -----------------
Current assets:
Cash and cash equivalents $ 21,766 31,452
----------------- -----------------
Receivables 70,690 74,429
Less allowance for doubtful receivables 2,060 2,317
----------------- -----------------
Net receivables 68,630 72,112
Deferred income taxes, net 13,031 13,893
Prepaid expenses 7,763 7,907
Property held for sale 2,282 2,282
Inventories 1,024 1,215
Notes receivable from related parties 385 475
Other current assets 1,736 2,429
----------------- -----------------
Total current assets 116,617 131,765
----------------- -----------------
Property and equipment in service, net of depreciation 430,799 432,249
Construction in progress 30,952 22,505
----------------- -----------------
Net property and equipment 461,751 454,754
----------------- -----------------
Cable certificates 191,241 191,241
Goodwill 41,972 41,972
Other intangible assets, net of amortization of $1,917 and $1,625
at March 31, 2005 and December 31, 2004, respectively 6,566 6,265
Deferred loan and senior notes costs, net of amortization of $3,085
and $2,602 at March 31, 2005 and December 31, 2004, respectively 9,901 10,341
Notes receivable from related parties 3,527 3,345
Other assets 12,283 9,508
----------------- -----------------
Total other assets 265,490 262,672
----------------- -----------------
Total assets $ 843,858 849,191
================= =================
(Continued)
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
(Amounts in thousands) March 31, December 31,
Liabilities, Redeemable Preferred Stock, and Stockholders' Equity 2005 2004
- --------------------------------------------------------------------------------------- ----------------- -----------------
Current liabilities:
Current maturities of obligations under long-term debt and capital leases $ 14,450 6,407
Accounts payable 28,472 28,742
Deferred revenue 15,880 16,253
Accrued payroll and payroll related obligations 15,175 15,350
Accrued liabilities 6,543 6,849
Accrued interest 2,900 8,747
Subscriber deposits 409 437
----------------- -----------------
Total current liabilities 83,829 82,785
Long-term debt 429,047 436,969
Obligations under capital leases, excluding current maturities 31,134 32,750
Obligation under capital lease due to related party, excluding current
maturity 662 672
Deferred income taxes, net of deferred income tax benefit 51,667 49,111
Other liabilities 9,401 8,385
----------------- -----------------
Total liabilities 605,740 610,672
----------------- -----------------
Redeemable preferred stock 4,249 4,249
----------------- -----------------
Stockholders' equity :
Common stock (no par):
Class A. Authorized 100,000 shares; issued 51,566 and 51,825
shares at March 31, 2005 and December 31, 2004, respectively 183,943 186,883
Class B. Authorized 10,000 shares; issued 3,861 and 3,862 shares
at March 31, 2005 and December 31, 2004, respectively; convertible
on a share-per-share basis into Class A common stock 3,248 3,248
Less cost of 288 Class A common shares held in treasury at
March 31, 2005 and December 31, 2004 (1,734) (1,702)
Paid-in capital 15,067 14,957
Notes receivable with related parties issued upon stock option exercise (3,016) (3,016)
Retained earnings 36,361 33,900
----------------- -----------------
Total stockholders' equity 233,869 234,270
----------------- -----------------
Commitments and contingencies
Total liabilities, redeemable preferred stock, and stockholders' equity $ 843,858 849,191
================= =================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
(Amounts in thousands, except per share amounts) 2005 2004
----------------- -----------------
Revenues $ 106,510 108,916
Cost of goods sold (exclusive of depreciation, amortization
and accretion shown separately below) 35,200 38,745
Selling, general and administrative expenses 37,180 35,404
Bad debt recovery (353) (397)
Depreciation, amortization and accretion expense 17,754 15,758
----------------- -----------------
Operating income 16,729 19,406
----------------- -----------------
Other income (expense):
Interest expense (8,282) (7,517)
Loss on early extinguishment of debt - (6,136)
Amortization and write-off of loan and senior notes fees (483) (2,627)
Interest income 179 108
----------------- -----------------
Other expense, net (8,586) (16,172)
----------------- -----------------
Net income before income taxes 8,143 3,234
Income tax expense 3,480 1,309
----------------- -----------------
Net income 4,663 1,925
Preferred stock dividends 93 484
----------------- -----------------
Net income available to common shareholders $ 4,570 1,441
================= =================
Basic net income per common share $ 0.08 0.03
================= =================
Diluted net income per common share $ 0.08 0.02
================= =================
Common shares used to calculate basic EPS 55,108 56,752
================= =================
Common shares used to calculate diluted EPS 56,341 58,037
================= =================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended March 31, 2005
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 60,007 25,899 13,295 7,309 106,510
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 19,033 7,010 7,276 1,881 35,200
------------------------------------------------------------------
Contribution 40,974 18,889 6,019 5,428 71,310
Selling, general and administrative expenses 22,778 7,117 4,857 2,428 37,180
Bad debt expense (recovery) (623) 172 62 36 (353)
------------------------------------------------------------------
EBITDA, as adjusted 18,819 11,600 1,100 2,964 34,483
Less loss on early extinguishment of debt - - - - -
------------------------------------------------------------------
EBITDA 18,819 11,600 1,100 2,964 34,483
Add loss on early extinguishment of debt - - - - -
Less depreciation, amortization and
accretion expense 9,954 5,098 1,607 1,095 17,754
------------------------------------------------------------------
Operating income (loss) $ 8,865 6,502 (507) 1,869 16,729
==================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Three Months Ended March 31, 2005
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 18,819 18,819
Cable 11,600 11,600
Local Services 1,100 1,100
Internet 2,964 2,964
-------------------------------------------------------
19,919 2,964 11,600 34,483
EBITDA, as Adjusted, Reallocations:
Long Distance (11,953) 11,953 -
Cable 2,799 (2,799) -
Local Services (68) 68 -
-------------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 7,898 17,784 8,801 34,483
=======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended March 31, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 65,866 24,852 11,792 6,406 108,916
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 23,378 7,062 6,546 1,759 38,745
------------------------------------------------------------------
Contribution 42,488 17,790 5,246 4,647 70,171
Selling, general and administrative expenses 21,390 6,551 4,682 2,781 35,404
Bad debt expense (recovery) (608) 211 - - (397)
------------------------------------------------------------------
EBITDA, as adjusted 21,706 11,028 564 1,866 35,164
Less loss on early extinguishment of debt 6,136 - - - 6,136
------------------------------------------------------------------
EBITDA 15,570 11,028 564 1,866 29,028
Add loss on early extinguishment of debt 6,136 - - - 6,136
Less depreciation, amortization and
accretion expense 9,263 4,679 892 924 15,758
------------------------------------------------------------------
Operating income (loss) $ 12,443 6,349 (328) 942 19,406
==================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Three Months Ended March 31, 2004
Voice Data Video Combined
------------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 21,706 21,706
Cable 11,028 11,028
Local Services 564 564
Internet 1,866 1,866
------------------------------------------------------
22,270 1,866 11,028 35,164
EBITDA, as Adjusted, Reallocations:
Long Distance (11,875) 11,875 -
Cable 2,738 (2,738) -
Local Services (31) 31 -
------------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 10,364 16,510 8,290 35,164
======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended December 31, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 60,532 26,194 12,399 6,377 105,502
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 18,410 6,648 7,904 1,723 34,685
------------------------------------------------------------------
Contribution 42,122 19,546 4,495 4,654 70,817
Selling, general and administrative expenses 25,069 7,120 4,870 1,589 38,648
Bad debt expense (recovery) (197) 169 - - (28)
------------------------------------------------------------------
EBITDA 17,250 12,257 (375) 3,065 32,197
Less depreciation, amortization and
accretion expense 8,132 4,966 2,014 1,242 16,354
------------------------------------------------------------------
Operating income (loss) $ 9,118 7,291 (2,389) 1,823 15,843
==================================================================
Integrated Summary EBITDA
(Unaudited)
Three Months Ended December 31, 2004
Voice Data Video Combined
------------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 17,250 17,250
Cable 12,257 12,257
Local Services (375) (375)
Internet 3,065 3,065
------------------------------------------------------
16,875 3,065 12,257 32,197
EBITDA Reallocations:
Long Distance (11,435) 11,435 -
Cable 2,679 (2,679) -
Local Services (98) 98 -
------------------------------------------------------
Integrated Summary EBITDA $ 5,342 17,277 9,578 32,197
======================================================
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Three Months Ended
March 31, 2005 March 31, 2004 December 31, 2004
-------------------- ------------------- ---------------------
EBITDA, as adjusted (Note 1) $ 34.5 35.2 32.2
Loss on early extinguishment of debt --- (6.1) ---
-------------------- ------------------- ---------------------
EBITDA (Note 2) 34.5 29.1 32.2
Depreciation, amortization and accretion
expense (17.8) (15.8) (16.4)
Loss on early extinguishment of debt --- 6.1 ---
-------------------- ------------------- ---------------------
Operating income 16.7 19.4 15.8
-------------------- ------------------- ---------------------
Other income (expense):
Interest expense (8.3) (7.5) (7.3)
Loss on early extinguishment of debt --- (6.1) ---
Amortization and write-off of loan and
senior notes fee expense (0.5) (2.7) (0.4)
Interest income 0.2 0.1 0.1
-------------------- ------------------- ---------------------
Other expense, net (8.6) (16.2) (7.6)
-------------------- ------------------- ---------------------
Net income before income taxes 8.1 3.2 8.2
Income tax expense (3.5) (1.3) (5.9)
-------------------- ------------------- ---------------------
Net income $ 4.6 1.9 2.3
==================== =================== =====================
Notes:
(1) EBITDA (as defined in Note 2 below) before deducting Loss on Early
Extinguishment of Debt during the three months ended March 31, 2004.
(2) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is
the sum of Net Income, Interest Expense, Amortization and Write-off of
Loan and Senior Notes Fees, Interest Income, Income Tax Expense, and
Depreciation, Amortization and Accretion Expense. EBITDA is not presented
as an alternative measure of net income, operating income or cash flow
from operations, as determined in accordance with accounting principles
generally accepted in the United States of America. GCI's management uses
EBITDA to evaluate the operating performance of its business, and as a
measure of performance for incentive compensation purposes. GCI believes
EBITDA is a measure used as an analytical indicator of income generated to
service debt and fund capital expenditures. In addition, multiples of
current or projected EBITDA are used to estimate current or prospective
enterprise value. EBITDA does not give effect to cash used for debt
service requirements, and thus does not reflect funds available for
investment or other discretionary uses. EBITDA as presented herein may not
be comparable to similarly titled measures reported by other companies.