Exhibit 99.1
November 9, 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 THIRD QUARTER 2005 FINANCIAL RESULTS
o Consolidated revenue of $113.8 million
o Net income of $2.3 million or $0.04 per diluted share
o EBITDA, as adjusted, of $38.2 million
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported net income of $2.3
million, or earnings per diluted share of $0.04, for the third quarter of 2005.
The company's third quarter net income compares to net income of $9.3 million,
or earnings per diluted share of $0.15 in the same period of 2004. Net income
for the quarter, as expected, was reduced by costs associated with refinancing
the company's senior debt and expenses associated with a reorganization plan
announced on August 22, 2005.
GCI's third quarter 2005 revenues totaled $113.8 million, an increase
of 6.8 percent over the third quarter of 2004. GCI's third quarter 2005 revenues
increased 2.8 percent from the second quarter 2005 revenues of $110.7 million.
Third quarter 2005 earnings before interest, taxes, depreciation,
amortization and accretion (EBITDA), as adjusted, totaled $38.2 million. EBITDA
increased $1.5 million or 4.1 percent over $36.7 million in the third quarter of
2004. Third quarter 2005 EBITDA of $38.2 million compares to EBITDA of $36.4
million in the second quarter of 2005, an increase of $1.8 million or 4.9
percent over the second quarter of 2005. EBITDA for the third quarter of 2005 is
adjusted for the loss associated with the early termination of a capital lease
in the amount of $2.8 million and the out of period costs associated with the
company's plan of reorganization in the amount of $1.3 million.
For the third quarter of 2005, GCI met its revenue and EBITDA guidance.
The company expected revenues and EBITDA to exceed the second quarter results,
excluding the effects of any receivable recovery from MCI. GCI recorded $1.4
million in EBITDA relating to the use of the MCI credit during the quarter.
GCI anticipates revenues of $430 million to $440 million and EBITDA of
$145 million, as adjusted, including the expected recovery of the remaining MCI
receivable, for the year 2005.
"The third quarter results show that we continue to operate on our
plan," said Ron Duncan, GCI President. "We met our financial goals as expected,
but more importantly we announced a plan of reorganization that we believe will
streamline our organization, significantly increase our ability to focus on our
customers and reduce our cost levels. The plan resulted in workforce reductions
that, while painful from a personal perspective, were logical and necessary to
position the company for continued growth."
Highlights
o Long-distance billable minutes increased 21.2 percent to 376.6 million
minutes for the third quarter as compared to the same quarter of 2004,
and increased 8.3 percent sequentially.
o Cable customers, as expected, decreased seasonally by 993 subscribers
during the period and average revenue per equivalent basic subscriber
grew to $82.01 per month. Revenue generating units (RGUs) for the
quarter increased by 14.0 percent over the prior year.
o GCI has provisioned approximately 16,800 lines on its Digital Local
Phone Service (DLPS) facilities at the end of the third quarter. The
company is behind in its deployment schedule but the rate of
installations increased during the quarter. GCI expects to have between
22,000 and 24,000 lines deployed on its own facilities by the end of
2005.
o During the third quarter and through October 2005, GCI repurchased
427,000 shares of its Class A Common shares at an average price of
$9.82 per share. The company has repurchased more than 2,067,000 shares
year to date and through October 2005 at an average price of $9.09 per
share. Since the plan inception in September 2004, GCI has repurchased
6,177,000 Class A Common shares at an average price of $8.67 per share
and retired $10 million face value of Series C Preferred Stock.
Long Distance Results
For the third quarter of 2005, long distance revenues totaled $67.6
million as compared to revenues of $63.2 million in the third quarter of 2004
and $64.2 million in the second quarter of 2005. The increase in revenues is
primarily attributable to an increase in minutes sold to other carriers.
Long distance EBITDA, as adjusted, for the third quarter of 2005
totaled $24.4 million and was relatively unchanged from the third quarter of
2004. Long distance EBITDA for the third quarter of 2005 was up $2.4 million
sequentially, an increase of 10.9 percent, from $22.0 million in the second
quarter of 2005. Long distance EBITDA included MCI bad debt recoveries of $1.4
million in the third quarter of 2005, $1.1 million in the third quarter of 2004
and $1.0 million in the second quarter of 2005. The increase in EBITDA for the
third quarter of 2005 is primarily due to an increase in minutes carried on the
network.
Total minutes-of-use were up 21.2 percent in the third quarter of 2005
when compared to the third quarter of 2004. Minutes-of-use are up 8.3 percent
compared to the second quarter of 2005.
Prior to the billing system conversion on September 1, 2005, the number
of billed long distance customers totaled 91,500, an increase of 1.3 percent
from 90,300 at the end of the third quarter of 2004. Billed long distance
customers increased slightly from 91,300 at the end of the second quarter of
2005.
Cable Television Results
Cable television revenues for the third quarter increased 4.0 percent
to $26.2 million from $25.2 million in the third quarter of 2004, and were
relatively unchanged from $26.3 million in the second quarter of 2005. EBITDA,
as adjusted, of $10.6 million for the third quarter of 2005 was relatively
unchanged from the third quarter of 2004, and decreased $0.4 million when
compared to $11.0 million in the second quarter of 2005. The year-over-year
increase in revenues is primarily due to the sales of new video and cable modem
services. The steady EBITDA in the third quarter, when compared to the prior
year, is due to more subscribers and higher average revenue per subscriber
offset by increasing programming costs, an increase in direct operating costs
and costs associated with the reorganization. The decrease in EBITDA
sequentially is due in part to fewer subscribers and an increase in direct
operating costs and costs associated with the reorganization.
Gross margins in the third quarter of 2005, as a percentage of
revenues, decreased by 100 basis points from the third quarter of 2004 and
increased by 40 basis points sequentially. The decrease in gross margin from the
prior year is primarily due to increasing programming and copyright costs.
As of September 30, 2005, the company's cable television operations
passed 213,146 homes and served 136,435 subscribers (106,551 equivalent basic
subscribers). For the third quarter, average revenue per equivalent basic
subscriber was $82.01, an increase of 3.3 percent when compared to third quarter
2004 average revenue of $79.36. Average revenue is up slightly, from $81.75,
from the second quarter of 2005. The company, as expected, experienced a
seasonal decrease of 993 subscribers from the second quarter of 2005. The
decrease in subscribers for the third quarter of 2005 compares to a decrease of
915 subscribers in the third quarter of 2004.
Eighty percent of GCI's basic cable subscribers receive service through
a digital set-top box. More than 98 percent of the set top boxes deployed in
GCI's systems are digital and 51,265 customers purchase additional special
interest programming through a digital tier. GCI offers 14 channels of HDTV to
customers in the Anchorage area.
GCI cable modem service is available to more than 90 percent of the
homes in Alaska. Approximately 34.8 percent of homes passed and 62 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
nine-month periods ending September 30, 2005 and 2004 follow (amounts in
thousands):
2005 2004
-------------- -------------
Customer premise equipment $ 12,330 12,136
Upgrade/rebuild 10,291 6,516
Line extensions 2,620 517
Scalable infrastructure 2,315 3,782
Support capital 685 1,013
Commercial 270 348
-------------- -------------
Sub-total 28,511 24,312
Other capital expenditures 37,327 58,498
-------------- -------------
Total capital expenditures $ 65,838 82,810
============== =============
At September 30, 2005 and 2004, GCI's cable business had 124,300 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 service through the cable
television plant.
At September 30, 2005 and 2004, GCI's cable business had 227,400 and
199,400 revenue generating units, respectively. The increase in the revenue
generating units of 6,900 and 28,000 from June 30, 2005 and September 30, 2004,
respectively, is due to an increase in the number of cable modem and DLPS
customers. The 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 third quarter of 2005, local telephone service revenues totaled
$12.5 million, an increase of 8.7 percent, when compared to $11.5 million in the
third quarter of 2004. Revenue was down $0.2 million or 1.6 percent from $12.7
million in the second quarter of 2005. The sequential revenue decrease is
attributable to a USF revenue accrual recorded in the second quarter of 2005.
In the third quarter, local services generated EBITDA, as adjusted, of
$0.0 million, an improvement of $0.8 million over the $(0.8) million of EBITDA
in the third quarter of 2004. The third quarter EBITDA of $0.0 million compares
to EBITDA of $0.4 million in the second quarter of 2005. The sequential decrease
in EBITDA is due in part to lower universal service fund revenues recorded for
the quarter and the restructuring charge.
The rates paid by GCI to lease loops and UNE access elements were
approximately 25 percent higher during the third quarter of 2005 as compared to
the third quarter of 2004. This resulted primarily from a rate increase granted
by state regulators that took effect at the beginning of 2005. GCI estimates
that conversion of customers from leased facilities to its own network has more
than offset all of the impact of this rate increase in the third quarter of 2005
and is now providing approximately $0.6 million in additional annualized savings
of leased loop costs.
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 16,800 customers completely on its
DLPS facilities at the end of the third quarter of 2005. The company is behind
in its deployment schedule but the rate of installations increased during the
quarter. GCI expects to have between 22,000 and 24,000 lines deployed on its own
facilities by the end of 2005.
At the end of the third quarter of 2005, GCI provided local service to
approximately 111,900 access lines statewide. This represents an increase of
approximately 1,500 access lines when compared to the third quarter of 2004.
Access lines for the third quarter are relatively unchanged from reported access
lines at the end of the second quarter of 2005. The company estimates it
maintains a 25 percent share of the total access line market in Alaska.
Approximately 86 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 third quarter of 2005 totaled $7.6
million. Revenues were up 13.4 percent as compared to third quarter 2004
revenues of $6.7 million and 1.3 percent as compared to the prior quarter
revenue of $7.5 million. EBITDA, as adjusted, for the third quarter of 2005
totaled $3.2 million, an improvement of $0.8 million year-over-year and an
improvement of $0.2 million from the second quarter of 2005. Third quarter 2004
EBITDA was $2.4 million and second quarter 2005 EBITDA was $3.0 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 third quarter of 2005, GCI had 74,200 cable modem
customers, an increase of 13,000 and 4,000 customers, or 21.2 percent from the
third quarter of 2004 and 5.7 percent from the second quarter of 2005,
respectively. GCI's Internet subscribers at the end of the third quarter of 2005
totaled 93,000. Dial-up access customers decreased by 8,900 as a result of
customers migrating to cable modems and due to a non-revenue affecting database
clean-up of "Free Net" customers.
Total cable modem revenues for the third quarter of 2005 increased 0.7
percent when compared to the second quarter of 2005 and increased 9.7 percent
year-over-year. At the end of the third quarter of 2005 GCI's average revenue
per cable modem (ARPM) was $30.48 as compared to $30.87 at the end of the second
quarter of 2005 and $33.51 at the end of the third 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 purchasing GCI's discounted cable modem products.
Other Items
During the third quarter of 2005 GCI's capital expenditures totaled
$18.1 million as compared to $23.3 million in the second quarter of 2005.
GCI will hold a conference call to discuss the quarter's results on
Thursday, November 10, 2005 beginning at 2 p.m. (Eastern.)To access the briefing
on November 10, dial 888-455-3612 (international callers should dial
210-234-0000) 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 800-239-4561, access code 7461
(international callers should dial 402-220-9697.)
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) September 30, December 31,
Assets 2005 2004
- --------------------------------------------------------------------------------------- ------------------ -----------------
Current assets:
Cash and cash equivalents $ 12,719 31,452
------------------ -----------------
Receivables 84,531 74,429
Less allowance for doubtful receivables 3,919 2,317
------------------ -----------------
Net receivables 80,612 72,112
Deferred income taxes, net 14,192 13,893
Prepaid expenses 7,758 7,907
Property held for sale 2,284 2,282
Inventories 1,054 1,215
Notes receivable from related parties 458 475
Other current assets 487 2,429
------------------ -----------------
Total current assets 119,564 131,765
------------------ -----------------
Property and equipment in service, net of depreciation 449,329 432,249
Construction in progress 16,000 22,505
------------------ -----------------
Net property and equipment 465,329 454,754
------------------ -----------------
Cable certificates 191,241 191,241
Goodwill 41,972 41,972
Other intangible assets, net of amortization of $2,537 and $1,625 6,305 6,265
at September 30, 2005 and December 31, 2004, respectively
Deferred loan and senior notes costs, net of amortization of $1,200 8,271 10,341
and $2,602 at September 30, 2005 and December 31, 2004, respectively
Notes receivable from related parties 3,413 3,345
Other assets 13,003 9,508
------------------ -----------------
Total other assets 264,205 262,672
------------------ -----------------
Total assets $ 849,098 849,191
================== =================
(Continued)
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
(Amounts in thousands) September 30, December 31,
Liabilities, Redeemable Preferred Stock, and Stockholders' Equity 2005 2004
- --------------------------------------------------------------------------------------- ------------------ -----------------
Current liabilities:
Current maturities of obligations under long-term debt and capital leases $ 1,763 6,407
Accounts payable 25,209 28,742
Accrued payroll and payroll related obligations 16,682 15,350
Deferred revenue 14,416 16,253
Accrued liabilities 5,965 6,849
Accrued interest 3,612 8,747
Subscriber deposits 377 437
------------------ -----------------
Total current liabilities 68,024 82,785
Long-term debt 474,433 436,969
Obligations under capital leases, excluding current maturities - 32,750
Obligation under capital lease due to related party, excluding current 642 672
maturity
Deferred income taxes, net of deferred income tax benefit 58,493 49,111
Other liabilities 10,408 8,385
------------------ -----------------
Total liabilities 612,000 610,672
------------------ -----------------
Redeemable preferred stock - 4,249
------------------ -----------------
Stockholders' equity : Common stock (no par):
Class A. Authorized 100,000 shares; issued 51,386 and 51,825 180,765 186,883
shares at September 30, 2005 and December 31, 2004, respectively
Class B. Authorized 10,000 shares; issued 3,845 and 3,862 shares 3,248 3,248
at September 30, 2005 and December 31, 2004, respectively; con-
vertible on a share-per-share basis into Class A common stock
Less cost of 292 and 288 Class A and Class B common shares held in (1,714) (1,702)
treasury at September 30, 2005 and December 31, 2004, respectively
Paid-in capital 15,845 14,957
Notes receivable with related parties issued upon stock option exercise (2,978) (3,016)
Retained earnings 41,932 33,900
------------------ -----------------
Total stockholders' equity 237,098 234,270
------------------ -----------------
Commitments and contingencies
Total liabilities, redeemable preferred stock, and stockholders' equity $ 849,098 849,191
================== =================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(Amounts in thousands, except per share amounts) 2005 2004 2005 2004
-------------- --------------- --------------- ---------------
Revenues $ 113,761 106,622 330,936 319,324
Cost of goods sold (exclusive of depreciation, amortization 36,345 32,876 107,590 104,878
and accretion shown separately below)
Selling, general and administrative expenses 38,620 37,324 113,819 108,830
Restructuring charge 1,894 - 1,894 -
Bad debt expense (recovery) 31 (281) (128) (1,165)
Depreciation, amortization and accretion expense 18,559 15,297 54,710 46,759
-------------- --------------- --------------- ---------------
Operating income 18,312 21,406 53,051 60,022
-------------- --------------- --------------- ---------------
Other income (expense):
Interest expense (8,964) (6,722) (25,600) (20,275)
Loss on early extinguishment of debt and termination of (2,797) - (2,797) (6,136)
capital lease
Amortization and write-off of loan and senior notes fees (2,224) (400) (3,155) (3,414)
Interest income 266 86 557 273
-------------- --------------- --------------- ---------------
Other expense, net (13,719) (7,036) (30,995) (29,552)
-------------- --------------- --------------- ---------------
Net income before income taxes 4,593 14,370 22,056 30,470
Income tax expense 2,308 5,075 9,824 11,525
-------------- --------------- --------------- ---------------
Net income 2,285 9,295 12,232 18,945
Preferred stock dividends - 381 148 1,228
-------------- --------------- --------------- ---------------
Net income available to common shareholders $ 2,285 8,914 12,084 17,717
============== =============== =============== ===============
Basic net income per common share $ 0.04 0.15 0.22 0.31
============== =============== =============== ===============
Diluted net income per common share $ 0.04 0.15 0.22 0.30
============== =============== =============== ===============
Common shares used to calculate basic EPS 54,677 58,031 54,765 57,027
============== =============== =============== ===============
Common shares used to calculate diluted EPS 55,981 60,708 55,955 58,162
============== =============== =============== ===============
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Nine Months Ended September 30, 2005
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------------------
Revenues $ 191,764 78,422 38,463 22,287 330,936
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 58,358 22,025 21,580 5,627 107,590
---------------------------------------------------------------
Contribution 133,406 56,397 16,883 16,660 223,346
Selling, general and
administrative expenses 69,281 22,429 14,955 7,154 113,819
Restructuring charge 1,246 302 194 152 1,894
Bad debt expense (recovery) (1,428) 640 418 242 (128)
Add restructuring charge to be paid in future periods 848 206 132 103 1,289
---------------------------------------------------------------
EBITDA, as adjusted 65,155 33,232 1,448 9,215 109,050
Less loss on early extinguishment of debt and
termination of capital lease 2,797 - - - 2,797
Less restructuring charge to be paid in future periods 848 206 132 103 1,289
---------------------------------------------------------------
EBITDA 61,510 33,026 1,316 9,112 104,964
Add loss on early extinguishment of debt and
termination of capital lease 2,797 - - - 2,797
Less depreciation, amortization and
accretion expense 31,580 15,418 5,114 2,598 54,710
---------------------------------------------------------------
Operating income (loss) $ 32,727 17,608 (3,798) 6,514 53,051
===============================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Nine Months Ended September 30, 2005
Voice Data Video Combined
-------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 65,155 65,155
Cable 33,232 33,232
Local Services 1,448 1,448
Internet 9,215 9,215
-------------------------------------------------
66,603 9,215 33,232 109,050
EBITDA, as Adjusted, Reallocations:
Long Distance (37,923) 37,923 -
Cable 8,471 (8,471) -
Local Services (239) 239 -
-------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 28,441 55,848 24,761 109,050
=================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Nine Months Ended September 30, 2004
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------------------
Revenues $ 189,931 75,243 34,558 19,592 319,324
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 58,115 20,311 21,184 5,268 104,878
--------------------------------------------------------------
Contribution 131,816 54,932 13,374 14,324 214,446
Selling, general and
administrative expenses 66,528 21,099 13,415 7,788 108,830
Restructuring charge - - - - -
Bad debt expense (recovery) (1,808) 643 - - (1,165)
Add restructuring charge to be paid in future periods - - - - -
--------------------------------------------------------------
EBITDA, as adjusted 67,096 33,190 (41) 6,536 106,781
Less loss on early extinguishment of debt and
termination of capital lease 6,136 - - - 6,136
Less restructuring charge to be paid in future periods - - - - -
--------------------------------------------------------------
EBITDA 60,960 33,190 (41) 6,536 100,645
Add loss on early extinguishment of debt and
termination of capital lease 6,136 - - - 6,136
Less depreciation, amortization and
accretion expense 27,018 14,072 2,927 2,742 46,759
--------------------------------------------------------------
Operating income (loss) $ 40,078 19,118 (2,968) 3,794 60,022
==============================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Nine Months Ended September 30, 2004
Voice Data Video Combined
-------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 67,096 67,096
Cable 33,190 33,190
Local Services (41) (41)
Internet 6,536 6,536
-------------------------------------------------
67,055 6,536 33,190 106,781
EBITDA, as Adjusted, Reallocations:
Long Distance (36,523) 36,523 -
Cable 8,080 (8,080) -
Local Services (142) 142 -
-------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 30,390 51,281 25,110 106,781
=================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended September 30, 2005
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------------------
Revenues $ 67,548 26,179 12,467 7,567 113,761
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 19,939 7,437 7,101 1,868 36,345
---------------------------------------------------------------
Contribution 47,609 18,742 5,366 5,699 77,416
Selling, general and
administrative expenses 23,402 7,722 5,154 2,342 38,620
Restructuring charge 1,246 302 194 152 1,894
Bad debt expense (recovery) (572) 289 197 117 31
Add restructuring charge to be paid in future periods 848 206 132 103 1,289
---------------------------------------------------------------
EBITDA, as adjusted 24,381 10,635 (47) 3,191 38,160
Less loss on early extinguishment of debt and
termination of capital lease 2,797 - - - 2,797
Less restructuring charge to be paid in future periods 848 206 132 103 1,289
---------------------------------------------------------------
EBITDA 20,736 10,429 (179) 3,088 34,074
Add loss on early extinguishment of debt and
termination of capital lease 2,797 - - - 2,797
Less depreciation, amortization and
accretion expense 10,751 5,196 1,833 779 18,559
---------------------------------------------------------------
Operating income (loss) $ 12,782 5,233 (2,012) 2,309 18,312
===============================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Three Months Ended September 30, 2005
Voice Data Video Combined
-------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 24,381 24,381
Cable 10,635 10,635
Local Services (47) (47)
Internet 3,191 3,191
-------------------------------------------------
24,334 3,191 10,635 38,160
EBITDA, Reallocations:
Long Distance (13,413) 13,413 -
Cable 2,846 (2,846) -
Local Services (87) 87 -
-------------------------------------------------
Integrated Summary EBITDA $ 10,834 19,537 7,789 38,160
=================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended September 30, 2004
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------------------
Revenues $ 63,195 25,210 11,548 6,669 106,622
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 16,463 6,897 7,816 1,700 32,876
--------------------------------------------------------------
Contribution 46,732 18,313 3,732 4,969 73,746
Selling, general and
administrative expenses 22,863 7,433 4,486 2,542 37,324
Restructuring charge - - - - -
Bad debt expense (recovery) (522) 241 - - (281)
Add restructuring charge to be paid in future periods - - - - -
--------------------------------------------------------------
EBITDA, as adjusted 24,391 10,639 (754) 2,427 36,703
Less loss on early extinguishment of debt and
termination of capital lease - - - - -
Less restructuring charge to be paid in future periods - - - - -
--------------------------------------------------------------
EBITDA 24,391 10,639 (754) 2,427 36,703
Add loss on early extinguishment of debt and
termination of capital lease - - - - -
Less depreciation, amortization and
accretion expense 8,752 4,702 964 879 15,297
--------------------------------------------------------------
Operating income (loss) $ 15,639 5,937 (1,718) 1,548 21,406
==============================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Three Months Ended September 30, 2004
Voice Data Video Combined
-------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 24,391 24,391
Cable 10,639 10,639
Local Services (754) (754)
Internet 2,427 2,427
-------------------------------------------------
23,637 2,427 10,639 36,703
EBITDA, Reallocations:
Long Distance (13,000) 13,000 -
Cable 2,578 (2,578) -
Local Services (53) 53 -
-------------------------------------------------
Integrated Summary EBITDA $ 10,584 18,058 8,061 36,703
=================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended June 30, 2005
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------------------
Revenues $ 63,195 25,210 11,548 6,669 106,622
Revenues 64,209 26,344 12,701 7,411 110,665
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 19,386 7,578 7,203 1,878 36,045
--------------------------------------------------------------
Contribution 44,823 18,766 5,498 5,533 74,620
Selling, general and
administrative expenses 23,103 7,590 4,943 2,383 38,019
Restructuring charge - - - - -
Bad debt expense (recovery) (233) 179 159 89 194
Add restructuring charge to be paid in future periods - - - - -
--------------------------------------------------------------
EBITDA, as adjusted 21,953 10,997 396 3,061 36,407
Less loss on early extinguishment of debt and
termination of capital lease - - - - -
Less restructuring charge to be paid in future periods - - - - -
--------------------------------------------------------------
EBITDA 21,953 10,997 396 3,061 36,407
Add loss on early extinguishment of debt and
termination of capital lease - - - - -
Less depreciation, amortization and
accretion expense 10,875 5,124 1,674 724 18,397
--------------------------------------------------------------
Operating income (loss) $ 11,078 5,873 (1,278) 2,337 18,010
==============================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Three Months Ended June 30, 2005
Voice Data Video Combined
-------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 21,953 21,953
Cable 10,997 10,997
Local Services 396 396
Internet 3,061 3,061
-------------------------------------------------
22,349 3,061 10,997 36,407
EBITDA Reallocations:
Long Distance (12,557) 12,557 -
Cable 2,826 (2,826) -
Local Services (84) 84 -
-------------------------------------------------
Integrated Summary EBITDA $ 9,708 18,528 8,171 36,407
=================================================
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Three Months Ended
September 30, 2005 September 30, 2004 June 30, 2005
-------------------- ------------------- --------------------
EBITDA, as adjusted (Note 2) $ 38.2 36.7 36.4
Loss on early extinguishment of debt and
termination of capital lease (2.8) --- ---
Restructuring charge to be paid in future
periods (1.3) --- ---
-------------------- ------------------- --------------------
EBITDA (Note 1) 34.1 36.7 36.4
Depreciation, amortization and accretion
expense (18.6) (15.3) (18.4)
Loss on early extinguishment of debt and
termination of capital lease 2.8 --- ---
-------------------- ------------------- --------------------
Operating income 18.3 21.4 18.0
-------------------- ------------------- --------------------
Other income (expense):
Interest expense (9.0) (6.7) (8.4)
Loss on early extinguishment of debt
and termination of capital lease (2.8) --- ---
Amortization and write-off of loan and
senior notes fee expense (2.2) (0.4) (0.4)
Interest income 0.3 0.1 0.1
-------------------- ------------------- --------------------
Other expense, net (13.7) (7.0) (8.7)
-------------------- ------------------- --------------------
Net income before income taxes 4.6 14.4 9.3
Income tax expense (2.3) (5.1) (4.0)
-------------------- ------------------- --------------------
Net income $ 2.3 9.3 5.3
==================== =================== ====================
Nine Months Ended
September 30, 2005 September 30, 2004
-------------------- -------------------
EBITDA, as adjusted (Note 2) $ 109.0 106.8
Loss on early extinguishment of debt and
termination of capital lease (2.8) (6.1)
Restructuring charge to be paid in future
periods (1.3) ---
-------------------- -------------------
EBITDA (Note 1) 104.9 100.7
Depreciation, amortization and accretion
expense (54.7) (46.8)
Loss on early extinguishment of debt and
termination of capital lease 2.8 6.1
-------------------- -------------------
Operating income 53.0 60.0
-------------------- -------------------
Other income (expense):
Interest expense (25.6) (20.3)
Loss on early extinguishment of debt
and termination of capital lease (2.8) (6.1)
Amortization and write-off of loan and
senior notes fee expense (3.2) (3.4)
Interest income 0.6 0.2
-------------------- -------------------
Other expense, net (31.0) (29.6)
-------------------- -------------------
Net income before income taxes 22.0 30.4
Income tax expense (9.8) (11.5)
-------------------- -------------------
Net income $ 12.2 18.9
==================== ===================
Notes:
(1) 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.
(2) EBITDA (as defined in Note 1 above) before deducting Loss on Early
Extinguishment of Debt and Termination of Capital Lease and Restructuring
Charge to be paid in future periods during the three and nine months ended
September 30, 2005 and 2004.