Exhibit 99.1
November 1, 2006
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 2006 FINANCIAL RESULTS
o Consolidated revenue of $125.8 million
o Net income of $7.1 million or $0.13 per diluted share
o EBITDA of $43.2 million
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported net income of $7.1
million, or earnings per diluted share of $0.13, for the third quarter of 2006.
The company's third quarter net income compares to income of $2.3 million, or
earnings per diluted share of $0.04 in the same period of 2005.
GCI's third quarter 2006 revenues totaled $125.8 million, an increase
of 10.6 percent over the third quarter of 2005. Revenues increased across all
GCI business segments on a year-over-year basis.
Third quarter 2006 earnings before interest, taxes, depreciation,
amortization and non-cash share based compensation expense (EBITDA) totaled
$43.2 million. EBITDA increased $5.0 million or 13.1 percent from the third
quarter of 2005. Third quarter 2005 EBITDA, as adjusted, totaled $38.2 million
including the MCI credit utilized of $1.4 million.
Sequentially, revenues for the company increased $7.6 million over
second quarter 2006 revenues of $118.2 million. Third quarter EBITDA of $43.2
million increased 9.4 percent over EBITDA of $39.5 million in the second quarter
of 2006.
For the third quarter of 2006 GCI significantly exceeded its revenue
and EBITDA guidance. The company expected revenues of approximately $116 million
to $118 million, and EBITDA of approximately $39.5 million, excluding non-cash
share based compensation expense. Prior guidance for the year 2006 was for $450
million to $460 million in revenues and EBITDA of $150 million to 154 million.
As a result of the third quarter growth GCI is increasing its 2006 full year
guidance for revenues and EBITDA. Revenues are now expected in the range of $470
million to $480 million and EBITDA is expected in the range of $154 million to
$158 million for the year 2006.
"Results for the year to date substantially exceeded expectations and
as a result we have raised EBITDA guidance for the year by $4 million," said GCI
president Ron Duncan. "All of our business lines are performing better than
expected and we are clearly on our way to another year of record performance."
"While delighted by the excellent results I am troubled by our failure
to turn up our own local phone lines at the expected rate. We missed our DLPS
conversion targets again in this quarter and have been forced to lower our
guidance for the second time. We now expect to have more than 30,000 lines on
our own facilities by year end."
"The failure lies primarily in our inability to complete plant
preparation for local consumer service. We are reviewing our internal processes
and making the changes necessary to increase the rate at which we are able to
turn up our own local lines. The bad news is that we are still paying more than
$25 million per year to ACS. The good news is that we can eliminate the majority
of that expense as we build out on our own facilities. Our challenge is to
deploy those facilities more rapidly."
Highlights
o Consumer revenues increased to $45.2 million, an improvement of 11.9
percent over the prior year and increased 2.3 percent from the second
quarter of 2006. The increases were from voice, video, data and
wireless sales.
o Network access revenues increased to $45.6 million, an increase of 14.0
percent over the prior year and increased 10.3 percent over the second
quarter of 2006. The increase in revenues is due primarily to a 23.8
percent increase in long distance minutes carried on GCI's network for
other common carriers for the third quarter of 2006 as compared to the
third quarter of 2005. Minutes for the third quarter increased 12.7
percent from the second quarter of 2006.
o Commercial revenues increased 5.4 percent from the prior year and 9.6
percent from the second quarter of 2006. Commercial experienced growth
in video, data and wireless revenues on both a year over year and
sequential basis.
o GCI has provisioned 28,300 consumer and commercial lines on its Digital
Local Phone Service (DLPS) facilities at the end of the third quarter
of 2006, an increase of 1,900 lines over the second quarter of 2006.
Third quarter conversions were approximately one-half of the planned
number due to further delays in upgrading plant for phone service.
Continued delays are expected to materially reduce total conversions
for the year. GCI now expects to serve more than 30,000 lines on its
DLPS facilities by the end of 2006.
o GCI local access lines increased by 800 for the quarter. Consumer,
network access and commercial local access lines totaled 112,200 at the
end of the third quarter of 2006 representing an estimated 26 percent
share of the total access lines market in Alaska.
o GCI had 84,000 consumer and commercial cable modem access customers at
the end of the third quarter of 2006, an increase of 1,900 over the
82,100 cable modem customers at the end of the second quarter 2006. GCI
customers continue to migrate from dial up access service to cable
modem. Average monthly revenue per cable modem totaled $31.86 for the
third quarter of 2006 as compared to $31.54 for the second quarter of
2006.
o Beginning August 1, 2006 and ending October 11, 2006 GCI repurchased
533,500 shares of its Class A Common shares at a cost of approximately
$6.7 million or $12.52 per share. The company is authorized to purchase
an additional $8.5 million of Class A shares by the end of the fourth
quarter of 2006. GCI will repurchase shares depending on market
conditions and the availability of free cash flows.
Consumer
Total consumer revenues increased 11.9 percent to $45.2 million as
compared to $40.4 million in the third quarter of 2005 and increased 2.3 percent
from the second quarter of 2006. The increase in revenue is due primarily to an
increase in voice, video, data and wireless sales.
Consumer voice revenues increased slightly over the prior year and over
the second quarter of 2006. The increase in voice revenues was due to an
increase in support from the Universal Service Program offset by fewer long
distance minutes and local service customers. Consumer local access lines in
service were down 300 from the third quarter of 2005 and 300 from the second
quarter of 2006 GCI converted 1,900 consumer access lines to its own facilities
during the second quarter.
Consumer video revenue increased 7.2 percent over the prior year and
increased slightly over the second quarter of 2006. The increase in revenue is
due in part to increasing average revenue per customer in certain markets and
increases in video subscribers purchasing digital service and renting high
definition/digital video recorder converters.
Consumer data revenues increased 17.7 percent over the prior year and
2.6 percent over the second quarter of 2006. The increase in consumer data
revenues is due to an increase in cable modem customers. GCI added 8,700
consumer cable modem customers over the prior year and 1,800 customers during
the third quarter of 2006.
Consumer wireless revenues increased substantially during the third
quarter of 2006. The increase in wireless revenues is primarily due to the
increase in wireless customers.
Network Access
Network access revenues increased 14.0 percent to $45.6 million as
compared to $40.0 million in the third quarter of 2005 and increased 10.3
percent from the second quarter of 2006.
Voice revenues increased 22.0 percent over the prior year and increased
16.8 percent from the second quarter of 2006. The increase in voice revenues is
due to a strong increase in minutes partially offset by declining rates per
minute. Network access minutes increased 23.8 percent to 373.6 million minutes
for the third quarter of 2006 as compared to the third quarter of 2005. Minutes
for the third quarter of 2006 increased 12.7 percent from the second quarter of
2006.
Network access revenues and minutes for the third quarter of 2006 were
seasonally driven by a record influx of tourist during the quarter and by growth
from new wholesale customers. Wireless substitution for wire line long distance
service also contributed to third quarter growth.
Data revenues for the third quarter of 2006 were down 1.8 percent when
compared to third quarter 2005 and down 3.0 percent from the second quarter of
2006.
Commercial
Commercial revenues increased 5.4 percent to $28.5 million as compared
to $27.0 million in the third quarter of 2005 and increased 9.6 percent over
$26.0 million in the second quarter of 2006.
Increases in video, data and wireless revenues were offset by a slight
decrease in voice revenues when compared to the prior year. Video revenues
increased primarily from an increase in advertising. Increases in data services
revenues were offset in part, as expected, from declining managed services
revenues from a large customer. On a sequential basis all segments of commercial
revenues increased.
Basic commercial video customers, as expected, increased by 1,700
subscribers from the prior year and seasonally decreased by 900 subscribers when
compared to the second quarter of 2006. Commercial video customers are primarily
hotel video customers.
Managed Broadband
Managed broadband revenues totaled $6.4 million in the third quarter of
2006, an increase of 2.9 percent from $6.2 million in the third quarter of 2005
and a decrease of 2.7 percent from $6.6 million in the second quarter of 2006.
Other Items
Total selling, general and administrative expenses (SG&A) increased 8.0
percent to $41.7 million as compared to $38.6 million in the third quarter of
2005 and increased 2.6 percent from the second quarter of 2006. The increase in
SG&A from the prior year was due in part to share-based compensation expense
from the adoption of a new accounting rule on January 1, 2006 and approximately
$1.0 million in additional promotional expenses offset in part by a substantial
decrease in labor costs resulting from a decreased number of employees after the
company's restructuring. The sequential increase in SG&A is due primarily to the
increased promotional expenses. SG&A expenses are recorded by segment using a
combination of direct charges and an allocation based on prior year gross
margins by segment.
During the third quarter of 2006 GCI's capital expenditures totaled
$30.4 million as compared to $23.9 million in the second quarter of 2006.
GCI will hold a conference call to discuss the quarter's results on
Thursday, November 2, 2006 beginning at 2 p.m. (Eastern). To access the briefing
on November 2, dial 888-791-1856 (International callers should dial
210-234-0001) 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 800-879-6115, access code 7461
(International callers should dial 402-220-4742.)
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 2006 2005
- --------------------------------------------------------------------------------------- ------------------ -----------------
Current assets:
Cash and cash equivalents $ 36,864 44,362
------------------ -----------------
Receivables 89,463 78,279
Less allowance for doubtful receivables 5,070 5,317
------------------ -----------------
Net receivables 84,393 72,962
Deferred income taxes, net 19,205 19,596
Prepaid expenses 4,831 8,347
Notes receivable from related parties 2,729 922
Inventories 2,693 1,556
Property held for sale 2,315 2,312
Other current assets 4,815 2,572
------------------ -----------------
Total current assets 157,845 152,629
------------------ -----------------
Property and equipment in service, net of depreciation 432,752 453,008
Construction in progress 36,710 8,337
------------------ -----------------
Net property and equipment 469,462 461,345
------------------ -----------------
Cable certificates 191,565 191,565
Goodwill 42,181 42,181
Other intangible assets 7,672 6,201
Deferred loan and senior notes costs, net of amortization of $2,204
and $1,451 at September 30, 2006 and December 31, 2005, respectively 7,258 8,011
Notes receivable from related parties 85 2,544
Other assets 6,926 9,299
------------------ -----------------
Total other assets 255,687 259,801
------------------ -----------------
Total assets $ 882,994 873,775
================== =================
(Continued)
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
(Amounts in thousands) September 30, December 31,
Liabilities and Stockholders' Equity 2006 2005
- --------------------------------------------------------------------------------------- ------------------ -----------------
Current liabilities:
Current maturities of obligations under long-term debt and capital leases $ 1,901 1,769
Accounts payable 29,684 23,217
Deferred revenue 15,657 16,439
Accrued payroll and payroll related obligations 12,468 17,925
Accrued liabilities 7,863 6,814
Accrued interest 2,907 9,588
Subscriber deposits 454 361
------------------ -----------------
Total current liabilities 70,934 76,113
Long-term debt 473,048 474,115
Obligations under capital leases, excluding current maturities 2,215 ---
Obligation under capital lease due to related party, excluding current
maturity 580 628
Deferred income taxes, net of deferred income tax benefit 82,295 69,753
Other liabilities 12,313 9,546
------------------ -----------------
Total liabilities 641,385 630,155
------------------ -----------------
Stockholders' equity:
Common stock (no par):
Class A. Authorized 100,000 shares; issued 50,179 and 51,200
shares at September 30, 2006 and December 31, 2005, respectively 160,080 178,351
Class B. Authorized 10,000 shares; issued 3,380 and 3,843 shares
at September 30, 2006 and December 31, 2005, respectively; con-
vertible on a share-per-share basis into Class A common stock 2,855 3,247
Less cost of 290 and 291 Class A and Class B common shares held in
treasury at September 30, 2006 and December 31, 2005, respectively (1,724) (1,730)
Paid-in capital 18,816 16,425
Notes receivable with related parties issued upon stock option exercise (1,296) (1,722)
Retained earnings 62,878 49,049
------------------ -----------------
Total stockholders' equity 241,609 243,620
------------------ -----------------
Commitments and contingencies
Total liabilities and stockholders' equity $ 882,994 873,775
================== =================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(Amounts in thousands, except per share amounts) 2006 2005 2006 2005
---------------- ---------------- ---------------- ----------------
Revenues $ 125,821 113,761 356,863 330,936
Cost of goods sold (exclusive of depreciation and
amortization shown separately below) 41,283 36,345 116,065 107,590
Selling, general and administrative expenses 41,722 38,620 122,003 113,819
Restructuring charge --- 1,894 --- 1,894
Bad debt expense (recovery) 767 31 2,606 (128)
Depreciation and amortization expense 20,390 18,510 60,723 54,562
---------------- ---------------- ---------------- ----------------
Operating income 21,659 18,361 55,466 53,199
---------------- ---------------- ---------------- ----------------
Other income (expense):
Interest expense (8,995) (9,013) (26,245) (25,748)
Loss on termination of capital lease --- (2,797) --- (2,797)
Amortization and write-off of loan and senior notes fees (251) (2,224) (753) (3,155)
Interest income 759 266 1,398 557
Other 181 --- 350 ---
---------------- ---------------- ---------------- ----------------
Other expense, net (8,306) (13,768) (25,250) (31,143)
---------------- ---------------- ---------------- ----------------
Net income before income taxes and cumulative
effect of a change in accounting principle 13,353 4,593 30,216 22,056
Income tax expense 6,282 2,308 13,817 9,824
---------------- ---------------- ---------------- ----------------
Net income before cumulative effect of a change
in accounting principle 7,071 2,285 16,399 12,232
Cumulative effect of a change in accounting principle,
net of income tax benefit of $425 --- --- (608) ---
---------------- ---------------- ---------------- ----------------
Net income 7,071 2,285 15,791 12,232
Preferred stock dividends --- --- --- 148
---------------- ---------------- ---------------- ----------------
Net income available to common shareholders $ 7,071 2,285 15,791 12,084
================ ================ ================ ================
Basic net income per common share:
Net income before cumulative effect of a change in
accounting principle $ 0.13 0.04 0.30 0.22
Cumulative effect of a change in accounting principle --- --- (0.01) ---
---------------- ---------------- ---------------- ----------------
Net income $ 0.13 0.04 0.29 0.22
================ ================ ================ ================
Diluted net income per common share:
Net income before cumulative effect of a change in
accounting principle $ 0.13 0.04 0.29 0.22
Cumulative effect of a change in accounting principle --- --- (0.01) ---
---------------- ---------------- ---------------- ----------------
Net income $ 0.13 0.04 0.28 0.22
================ ================ ================ ================
Common shares used to calculate basic EPS 53,345 54,677 54,030 54,765
================ ================ ================ ================
Common shares used to calculate diluted EPS 54,874 55,981 55,615 55,955
================ ================ ================ ================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
Third Quarter 2006
-------------------------------------------------------------------
Network
Access Managed
Consumer Services Commercial Broadband Totals
-------------------------------------------------------------------
Revenues
Voice $ 11,679 32,512 8,204 --- 52,395
Video 22,486 --- 2,122 --- 24,608
Data 7,450 13,127 17,523 6,428 44,528
Wireless 3,628 --- 662 --- 4,290
-------------------------------------------------------------------
Total 45,243 45,639 28,511 6,428 125,821
Cost of goods
sold 16,434 9,886 13,901 1,062 41,283
-------------------------------------------------------------------
Contribution 28,809 35,753 14,610 5,366 84,538
Less SG&A 19,878 9,411 9,070 3,363 41,722
Less / add bad
debt expense
(recovery) 760 --- 470 (463) 767
Add other
income --- --- --- 181 181
-------------------------------------------------------------------
EBITDA 8,171 26,342 5,070 2,647 42,230
Add share-based
compensation 341 354 231 81 1,007
-------------------------------------------------------------------
EBITDA, as
adjusted $ 8,512 26,696 5,301 2,728 43,237
===================================================================
(Amounts in thousands)
Third Quarter 2005
-------------------------------------------------------------------
Network
Access Managed
Consumer Services Commercial Broadband Totals
-------------------------------------------------------------------
Revenues
Voice $ 11,512 26,652 8,273 --- 46,437
Video 20,983 --- 1,857 --- 22,840
Data 6,328 13,372 16,599 6,248 42,547
Wireless 1,619 --- 318 --- 1,937
-------------------------------------------------------------------
Total 40,442 40,024 27,047 6,248 113,761
Cost of goods
sold 15,452 7,853 11,963 1,077 36,345
-------------------------------------------------------------------
Contribution 24,990 32,171 15,084 5,171 77,416
Less SG&A 18,981 8,273 7,969 3,397 38,620
Less / add bad
debt expense
(recovery) (429) --- (451) 911 31
Less loss on
termination of
capital lease 561 1,258 782 196 2,797
Less
restructuring
charge 623 736 381 154 1,894
-------------------------------------------------------------------
EBITDA 5,254 21,904 6,403 513 34,074
Add loss on
termination of
capital lease 561 1,258 782 196 2,797
Add restructuring
charge to be
paid in future
periods 424 501 259 105 1,289
-------------------------------------------------------------------
EBITDA, as
adjusted $ 6,239 23,663 7,444 814 38,160
===================================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
Second Quarter 2006
-------------------------------------------------------------------
Network
Access Managed
Consumer Services Commercial Broadband Totals
-------------------------------------------------------------------
Revenues
Voice $ 11,451 27,844 8,097 --- 47,392
Video 22,329 --- 1,933 --- 24,262
Data 7,258 13,533 15,400 6,607 42,798
Wireless 3,185 --- 583 --- 3,768
-------------------------------------------------------------------
Total 44,223 41,377 26,013 6,607 118,220
Cost of goods
sold 17,124 8,794 11,605 1,075 38,598
-------------------------------------------------------------------
Contribution 27,099 32,583 14,408 5,532 79,622
Less SG&A 18,544 9,771 8,857 3,495 40,667
Less / add bad
debt expense 677 --- 395 266 1,338
Add other
income --- --- --- 282 282
-------------------------------------------------------------------
EBITDA 7,878 22,812 5,156 2,053 37,899
Add share-based
compensation 508 605 348 121 1,582
-------------------------------------------------------------------
EBITDA, as
adjusted $ 8,386 23,417 5,504 2,174 39,481
===================================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
Nine Months Ended September 30, 2006
-------------------------------------------------------------------
Network
Access Managed
Consumer Services Commercial Broadband Totals
-------------------------------------------------------------------
Revenues
Voice $ 34,443 84,840 24,324 --- 143,607
Video 66,816 --- 5,781 --- 72,597
Data 21,669 39,999 48,833 19,243 129,744
Wireless 9,201 --- 1,714 --- 10,915
-------------------------------------------------------------------
Total 132,129 124,839 80,652 19,243 356,863
Cost of goods
sold 49,480 27,456 35,931 3,198 116,065
-------------------------------------------------------------------
Contribution 82,649 97,383 44,721 16,045 240,798
Less SG&A 56,829 28,360 26,836 9,978 122,003
Less / add bad
debt expense
(recovery) 1,695 --- 1,003 (92) 2,606
Add other
income --- --- --- 350 350
-------------------------------------------------------------------
EBITDA 24,125 69,023 16,882 6,509 116,539
Add share-based
compensation 1,112 1,165 740 250 3,267
-------------------------------------------------------------------
EBITDA, as
adjusted $ 25,237 70,188 17,622 6,759 119,806
===================================================================
(Amounts in thousands)
Nine Months Ended September 30, 2005
-------------------------------------------------------------------
Network
Access Managed
Consumer Services Commercial Broadband Totals
-------------------------------------------------------------------
Revenues
Voice $ 35,101 71,560 25,851 --- 132,512
Video 63,119 --- 5,390 --- 68,509
Data 18,894 39,514 46,813 20,065 125,286
Wireless 3,869 --- 760 --- 4,629
-------------------------------------------------------------------
Total 120,983 111,074 78,814 20,065 330,936
Cost of goods
sold 46,116 23,432 34,498 3,544 107,590
-------------------------------------------------------------------
Contribution 74,867 87,642 44,316 16,521 223,346
Less SG&A 54,142 24,894 24,684 10,099 113,819
Less / add bad
debt expense
(recovery) (893) --- (659) 1,424 (128)
Less loss on
termination of
capital lease 561 1,258 782 196 2,797
Less
restructuring
charge 623 736 381 154 1,894
-------------------------------------------------------------------
EBITDA 20,434 60,754 19,128 4,648 104,964
Add loss on
termination of
capital lease 561 1,258 782 196 2,797
Add restructuring
charge to be
paid in future
periods 424 501 259 105 1,289
-------------------------------------------------------------------
EBITDA, as
adjusted $ 21,419 62,513 20,169 4,949 109,050
===================================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(Unaudited)
September 30, 2006 September 30, 2006
as compared to as compared to
September 30, September 30, June 30, September 30, June 30, September 30, June 30,
2006 2005 2006 2005 2006 2005 2006
------------- ------------- -------- ------------- -------- ------------- --------
Consumer
Voice
Long-distance subscribers 91,200 NA 92,800 NA (1,600) NA -1.7%
Total local access lines in service 67,400 67,700 67,700 (300) (300) -0.4% -0.4%
DLPS local access lines in service 27,200 16,100 25,300 11,100 1,900 68.9% 7.5%
Video
Basic subscribers 121,800 121,000 121,900 800 (100) 0.7% -0.1%
Digital programming tier subscribers 56,500 51,300 55,100 5,200 1,400 10.1% 2.5%
HD/DVR converter boxes 22,800 9,100 18,800 13,700 4,000 150.6% 21.3%
Homes passed 218,100 213,100 217,100 5,000 1,000 2.3% 0.5%
Data
Cable modem subscribers 76,800 68,100 75,000 8,700 1,800 12.8% 2.4%
Network Access Services
Voice:
Total ISP access lines in service 3,100 3,500 3,300 (400) (200) -11.4% -6.1%
Commercial
Voice:
Long-distance subscribers 11,500 NA 11,700 NA (200) NA -1.7%
Total local access lines in service 41,700 40,700 40,400 1,000 1,300 2.5% 3.2%
DLPS access lines in service 1,100 500 1,100 600 --- 120.0% 0.0%
Video
Hotels and mini-headend
subscribers 15,600 13,900 16,500 1,700 (900) 12.2% -5.5%
Basic subscribers 1,500 1,500 1,500 --- --- 0.0% 0.0%
-------------------------------------- ----------------------- -----------------------
Total basic subscribers 17,100 15,400 18,000 1,700 (900) 11.0% -5.0%
====================================== ======================= =======================
Data
Cable modem subscribers 7,200 6,200 7,100 1,000 100 16.1% 1.4%
Broadband
SchoolAccess(R) customers 48 45 45 3 3 6.7% 6.7%
Rural health customers 22 20 21 2 1 10.0% 4.8%
Combined Consumer & Commercial
Wireless
Total lines in service 25,900 14,300 22,900 11,600 3,000 81.1% 13.1%
September 30, 2006 September 30, 2006
Three Months Ended as Compared to as Compared to
September 30, September 30, June 30, September 30, June 30, September 30, June 30,
2006 2005 2006 2005 2006 2005 2006
------------- ------------- -------- ------------- -------- ------------- --------
Consumer
Voice
Long-distance minutes carried
(in millions) 34.3 39.6 35.9 (5.3) (1.7) -13.4% -4.6%
Video
Average monthly gross revenue per
subscriber $ 61.66 $ 59.34 $ 60.92 $ 2.32 $ 0.74 3.9% 1.2%
Network Access Services
Voice
Long-distance minutes carried
(in millions) 373.6 301.8 331.5 71.8 42.1 23.8% 12.7%
Commercial
Voice:
Long-distance minutes carried
(in millions) 33.8 35.2 34.4 (1.4) (0.6) -4.0% -1.8%
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Three Months Ended
September 30, September 30, June 30,
2006 2005 2006
-------------------- ------------------- ---------------------
EBITDA, as adjusted (Note 1) $ 43.2 38.2 39.5
Share-based compensation expense (1.0) --- (1.6)
Loss on termination of capital lease --- (2.8) ---
Restructuring charge to be paid in future
periods --- (1.3) ---
------------------- ------------------- ---------------------
EBITDA (Note 2) 42.2 34.1 37.9
Depreciation and amortization expense (20.4) (18.6) (20.2)
Loss on termination of capital lease --- 2.8 ---
Other (0.1) --- (0.3)
-------------------- ------------------- ---------------------
Operating income 21.7 18.3 17.4
-------------------- ------------------- ---------------------
Other income (expense):
Interest expense (9.0) (9.0) (8.7)
Loss on termination of capital lease --- (2.8) ---
Amortization and write-off of loan and
senior notes fee expense (0.2) (2.2) (0.2)
Interest income 0.8 0.3 0.5
Other 0.1 --- 0.3
-------------------- ------------------- ---------------------
Other expense, net (8.3) (13.7) (8.1)
-------------------- ------------------- ---------------------
Net income before income taxes
13.4 4.6 9.3
Income tax expense (6.3) (2.3) (3.9)
-------------------- ------------------- ---------------------
Net income $ 7.1 2.3 5.4
==================== =================== =====================
Nine Months Ended
September 30, September 30,
2006 2005
-------------------- -------------------
EBITDA, as adjusted (Note 1) $ 119.8 109.0
Share-based compensation expense (3.3) ---
Loss on termination of capital lease --- (2.8)
Restructuring charge to be paid in future
periods --- (1.3)
-------------------- -------------------
EBITDA (Note 2) 116.5 104.9
Depreciation and amortization expense (60.7) (54.7)
Loss on termination of capital lease --- 2.8
Other (0.3) ---
-------------------- -------------------
Operating income 55.5 53.0
-------------------- -------------------
Other income (expense):
Interest expense (26.2) (25.6)
Loss on termination of capital lease --- (2.8)
Amortization and write-off of loan and
senior notes fee expense (0.8) (3.2)
Interest income 1.4 0.6
Other 0.3 ---
-------------------- -------------------
Other expense, net (25.3) (31.0)
-------------------- -------------------
Net income before income taxes and
cumulative effect of a change in
accounting principle 30.2 22.0
Income tax expense (13.8) (9.8)
-------------------- -------------------
Net income before cumulative effect
of a change in accounting principle 16.4 12.2
Cumulative effect of change in accounting
principle, net of income tax benefit of
$0.4 (0.6) ---
-------------------- -------------------
Net income $ 15.8 12.2
==================== ===================
Notes:
(1) EBITDA (as defined in Note 2 below) before deducting share-based
compensation expense, loss on termination of capital lease, and
restructuring charge to be paid in future periods.
(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
and Amortization 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.