Exhibit 99.1

 

May 9, 2007

 

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 2007 FINANCIAL RESULTS

 

Consolidated revenue of $124.6 million

Net income of $1.5 million or $0.02 per diluted share

EBITDAS of $34.0 million

 

ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported net income of $1.5 million, or earnings per diluted share of $0.02, for the first quarter of 2007. The company’s first quarter net income compares to income of $3.3 million, or earnings per diluted share of $0.06 in the same period of 2006.

 

GCI’s first quarter 2007 revenues totaled $124.6 million, an increase of 10.4 percent over the first quarter of 2006. Revenue increases in GCI’s consumer, network access, and managed boadband segments were partially offset by decreased revenue in the commercial segment. GCI’s first quarter results include the consolidation of $6.5 million in revenues from Alaska DigiTel, LLC (AKD.)

 

First quarter 2007 earnings before interest, taxes, depreciation, amortization and share based compensation expense (EBITDAS) totaled $34.0 million. EBITDAS decreased $3.1 million or 8.4 percent from the first quarter of 2006. EBITDAS growth in the consumer segment was offset by the decrease in EBITDAS from the commercial segment and by certain costs associated with repairing a fiber break, some of which may be reversed in a subsequent quarter. GCI’s first quarter results include the consolidation of slightly less than one million dollars in EBITDAS from AKD.

 

Sequentially, revenues for the company increased $3.2 million over fourth quarter 2006 revenues of $121.4 million. First quarter EBITDAS of $34.0 million decreased 8.4 percent from $37.1 million in the fourth quarter of 2006. Sequential increases in revenue and EBITDAS from the consumer segment were offset by a network change by a carrier customer that reduced minutes of use and by scheduled rate reductions that impacted the network access segment and from declining managed services revenues from a large customer in the commercial segment. Sequential EBITDAS for the first quarter was also affected by a $1.1 million bad debt recovery in the managed broadband business in the fourth quarter of 2006 and by the recognition of fiber repair costs occurring in the first quarter.

 

GCI’s revenue and EBITDAS were short of guidance as a result of the combined effects of declining revenue and weaker than expected performance in the commercial segment, fewer minutes of network access traffic than anticipated and fiber repair costs. The company expected revenues of approximately $119 million to $121 million, and EBITDAS in excess of $37 million, excluding AKD’s financial results.

 

“Unfortunately, a very strong performance in the consumer business and dramatic growth in our customer metrics were offset by poor financial results,” said GCI President Ron Duncan. “Uncertainty about the volume of network access minutes makes it difficult to project the second

uarter. We have implemented a plan to restore our financial progress and hope to be back on track by the end of this year.”

 

GCI is revising its 2007 annual guidance and now anticipates revenues of $514 million to $534 million and EBITDAS is expected to exceed $162 million, including revenues of $29 million and EBITDAS of $3 million from AKD.

 

Highlights

Consumer revenues totaled $53.3 million, an increase of 24.9 percent over the prior year and an increase of 13.8 percent from the fourth quarter of 2006. The increases were from video, data and wireless sales.

 

Network access revenues totaled $40.3 million, an increase of 6.6 percent over the prior year and a decrease of 4.8 percent when compared to the fourth quarter of 2006. The increase over the prior year is due primarily to an increase in data revenues. The decrease in sequential revenues is due to a decrease in the number of long distance minutes carried on GCI’s network and a decline in the average rate per minute for other common carriers.

 

Commercial revenues decreased 7.9 percent from the prior year and 4.8 percent from the fourth quarter of 2006.

 

GCI local access lines increased by 1,400 for the quarter. Consumer, network access and commercial local access lines totaled 112,600 at the end of the first quarter of 2007 representing an estimated 26 percent share of the total access lines market in Alaska. GCI began offering competitive local service in Eagle River during the first quarter and Chugiak in April, 2007. Prior to our entry both markets were served by the incumbent Matanuska Telephone Association (MTA.) MTA’s markets represent approximately 60,000 access lines.

 

GCI has provisioned 46,500 consumer and commercial lines on its own facilities at the end of the first quarter of 2007, an increase of 6,700 lines over the fourth quarter of 2006. GCI revised its facilities access lines totals to include lines served directly by its owned fiber facilities. Total line conversions to date account for almost $13.0 million in annualized avoided loop lease costs.

 

GCI had 89,300 consumer and commercial cable modem access customers at the end of the first quarter of 2007, an increase of 3,000 over the 86,300 cable modem customers at the end of the fourth quarter 2006. GCI customers continue to migrate from dial up access service to cable modem. Average monthly revenue per cable modem totaled $32.94 for the first quarter of 2007 as compared to $32.29 for the fourth quarter of 2006.

 

GCI had 32,700 wireless subscribers, an increase of 3,800 subscribers from the fourth quarter of 2006. AKD had 33,400 wireless subscribers at the end of the first quarter of 2007.

 

During the first quarter of 2007 GCI purchased approximately 113,000 shares at an average cost of $15.50 per share. The company is authorized to purchase an additional $14.5 million of its shares through the end of the second quarter of 2007.

 

Consumer

Total consumer revenues increased 24.9 percent to $53.3 million as compared to $42.7 million in the first quarter of 2006 and increased 13.8 percent from the fourth quarter of 2006. The increase in revenue is due primarily to an increase in video, data and wireless sales and include consolidated revenues of $5.2 million from AKD.

 

Consumer voice revenues were relatively unchanged when compared to the prior year and the fourth quarter of 2006. Long distance minutes decreased from the prior year and sequentially. Consumer local access lines in service for the first quarter were down approximately 500 lines after a data base clean up in the fourth quarter of 2006 which removed 700 lines included in total access lines reported for the first quarter of 2006. Access lines in the first quarter increased by 1,200 over the fourth quarter of 2006. GCI converted 6,000 consumer access lines to its own facilities during the first quarter of 2007. An increase in USF support mitigated decreases in voice revenues as a result of fewer long distance minutes and local line losses when compared to the first quarter of 2006.

 

Consumer video revenue increased 7.4 percent over the prior year and increased slightly over the fourth 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 13.1 percent over the prior year and 1.8 percent over the fourth quarter of 2006. The increase in consumer data revenues is due to an increase in cable modem customers. GCI added 7,300 consumer cable modem customers over the prior year and 2,800 customers during the first quarter of 2007.

 

Consumer wireless revenues increased substantially during the first quarter of 2007. The increase in wireless revenues is primarily due to the consolidation of revenues from AKD and increases in GCI wireless customers.

 

Subsequent to the quarter’s end GCI received a waiver of the FCC’s requirement to use video set top boxes with segregated security after July 1, 2007. GCI will be allowed to continue to provision low end boxes with integrated security as it completes the conversion of all of its customers to a fully digital cable network by early 2009. This will reduce GCI’s required investment in customer premise equipment and facilitate the digital TV transition for GCI customers.

 

Network Access  

Network access revenues increased 6.6 percent to $40.3 million as compared to $37.8 million in the first quarter of 2006 and decreased 4.8 percent from the fourth quarter of 2007. The increase in revenue over the prior year is primarily due to an increase in data revenues. The decrease in sequential revenues was greater than expected and resulted from a scheduled rate reduction and a lower volume of carrier minutes on GCI’s network. A portion of the loss of traffic is a result of industry consolidation. Rate compression and traffic mix changes resulted in a lower average rate per minute as compared to the fourth quarter of 2006.

 

Voice revenues decreased 0.2 percent from the prior year and 8.6 percent from the fourth quarter of 2006. The sequential decrease in voice revenues is primarily due to a reduced number of minutes and declining rates per minute. Network access minutes increased 9.7 percent to 315.8 million minutes for the first quarter of 2007 as compared to the first quarter of 2006. The increase in minutes over the prior year mostly offset decreases in the average rate per minute. Minutes for the first quarter of 2007 decreased 2.4 percent from the fourth quarter of 2006.

 

Data revenues for the first quarter of 2007 were up 12.7 percent when compared to first quarter 2006 and down 3.9 percent from the fourth quarter of 2006. Data revenues decreased sequentially primarily due to a one time billing adjustment in the fourth quarter of 2006.

Commercial  

Commercial revenues decreased 7.9 percent to $24.1 million as compared to $26.1 million in the first quarter of 2006 and decreased 4.8 percent from $25.3 million in the fourth quarter of 2006. The decrease in commercial revenue when compared to the prior year is less than the decline in service revenues from a large customer. Rate compression in the first quarter was mostly offset by an increase in minutes as compared to the fourth quarter of 2006.

 

Growth in video and wireless revenues for the first quarter were offset by a seasonal decline in advertising and a revenue elimination effect resulting from the consolidation of AKD as compared to the fourth quarter of 2006.

 

Basic commercial video customers increased by 300 subscribers from the prior year and 500 subscribers when compared to the fourth quarter of 2006. Commercial video customers are primarily hotel video customers.

 

Managed Broadband

Managed broadband revenues totaled $6.9 million in the first quarter of 2007, an increase of 11.5 percent from $6.2 million in the first quarter of 2006. Revenue remained unchanged from the $6.9 million in the fourth quarter of 2006.

 

Other Items

Total selling, general and administrative expenses (SG&A) increased 17.6 percent to $48.5 million as compared to $41.3 million in the first quarter of 2006 and increased 5.4 percent from the fourth quarter of 2006. The increase in SG&A from the prior year was due primarily to the consolidation of AKD and a $1.1 million cost to repair a fiber break on the new Kodiak fiber. Excluding AKD, SG&A increased 9.5 percent as compared to the prior year and decreased 1.8 percent from the fourth quarter of 2006.

 

During the first quarter of 2007 GCI’s capital expenditures totaled $29.4 million as compared to $35.7 million in the fourth quarter of 2006.

 

GCI will hold a conference call to discuss the quarter’s results on Thursday, May 10, 2007 beginning at 2 p.m. (Eastern). To access the briefing on May 10, dial 210-234-0003 (International callers should dial 888-793-1765) 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 800-926-7631, access code 7461 (International callers should dial 402-530-8088.)

 

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

 

2007

 

2006

 

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

9,734

 

57,647

Restricted cash

 

-

 

4,612

 

 

 

 

 

Receivables

 

77,515

 

78,811

Less allowance for doubtful receivables

 

2,629

 

2,922

Net receivables

 

74,886

 

75,889

 

 

 

 

 

Deferred income taxes, net

 

17,675

 

20,685

Prepaid expenses

 

7,164

 

5,729

Inventories

 

4,933

 

3,362

Property held for sale

 

2,279

 

2,316

Notes receivable from related parties

 

69

 

1,080

Other current assets

 

1,018

 

1,988

Total current assets

 

117,758

 

173,308

 

 

 

 

 

Property and equipment in service, net of depreciation

 

466,266

 

454,879

Construction in progress

 

40,010

 

29,994

Net property and equipment

 

506,276

 

484,873

 

 

 

 

 

Cable certificates

 

191,565

 

191,565

Goodwill

 

42,181

 

42,181

Wireless certificates

 

26,914

 

1,497

Other intangible assets, net of amortization

 

11,210

 

7,011

Deferred loan and senior notes costs, net of amortization

 

6,917

 

7,091

Other assets

 

6,322

 

7,133

Total other assets

 

285,109

 

256,478

Total assets

$

909,143

 

914,659

 

 

 

 

 

 

 

 

 

(Continued)

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Continued)

 

 

 

 

 

 

 

(Unaudited)

 

 

(Amounts in thousands)

 

March 31,

 

December 31,

Liabilities and Stockholders' Equity

 

2007

 

2006

 

 

 

 

 

Current liabilities:

 

 

 

 

Current maturities of obligations under long-term debt and capital leases

$

1,832

 

1,792

Accounts payable

 

28,863

 

28,404

Deferred revenue

 

16,458

 

16,566

Accrued payroll and payroll related obligations

 

14,561

 

14,598

Accrued liabilities

 

9,727

 

8,377

Accrued interest

 

2,949

 

8,710

Subscriber deposits

 

721

 

489

Total current liabilities

 

75,111

 

78,936

 

 

 

 

 

Long-term debt

 

477,947

 

487,737

Obligations under capital leases, excluding current maturities

 

2,242

 

2,229

Obligation under capital lease due to related party, excluding current
maturity

 

541

 

561

Deferred income taxes, net of deferred income tax benefit

 

85,270

 

86,998

Minority interest

 

6,502

 

-

Other liabilities

 

12,845

 

12,725

Total liabilities

 

660,458

 

669,186

 

 

 

 

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock (no par):

 

 

 

 

Class A. Authorized 100,000 shares; issued 50,315 and 50,191
shares at March 31, 2007 and December 31, 2006, respectively;
outstanding 50,028 and 49,804 at March 31, 2007 and December 31,
2006, respectively

 

155,888

 

157,502

Class B. Authorized 10,000 shares; issued 3,258 and 3,370 shares at
March 31, 2007 and December 31, 2006, respectively; outstanding
3,256 and 3,368 at March 31, 2007 and December 31, 2006,
respectively; convertible on a share-per-share basis into Class A
common stock

 

2,752

 

2,846

Less cost of 250 and 258 Class A and Class B common shares held in
treasury at March 31, 2007 and December 31, 2006, respectively

 

(1,391)

 

(1,436)

Paid-in capital

 

21,801

 

20,641

Notes receivable with related parties issued upon stock option exercise

 

-

 

(738)

Retained earnings

 

69,635

 

66,658

Total stockholders' equity

 

248,685

 

245,473

 

 

 

 

 

Total liabilities and stockholders' equity

$

909,143

 

914,659

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

 

 

(Unaudited)

 

 

Three Months Ended

 

 

March 31,

 

(Amounts in thousands, except per share amounts)

2007

 

2006 (as amended)

 

 

 

 

 

 

Revenues

$ 124,579

 

112,822

 

 

 

 

 

 

Cost of goods sold (exclusive of depreciation and amortization shown
separately below)

43,113

 

36,184

 

Selling, general and administrative expenses

48,524

 

41,256

 

Depreciation and amortization expense

21,454

 

20,161

 

Operating income

11,488

 

15,221

 

 

 

 

 

 

Other income (expense):

 

 

 

 

Interest expense

(8,700)

 

(8,554)

 

Interest income

184

 

157

 

Amortization of loan and senior notes fees

(180)

 

(251)

 

Other

13

 

(113)

 

Other expense, net

(8,683)

 

(8,761)

 

 

 

 

 

 

Income before income taxes and cumulative effect of a change in
accounting principle

2,805

 

6,460

 

 

 

 

 

 

Income tax expense

1,275

 

3,210

 

 

 

 

 

 

Income before cumulative effect of a change in accounting principle

1,530

 

3,250

 

 

 

 

 

 

Cumulative effect of a change in accounting principle, net of income tax
expense of $44

-

 

64

 

 

 

 

 

 

Net income available to common shareholders

$      1,530

 

3,314

 

 

 

 

 

 

Basic net income available to common shareholders per common share:

 

 

 

 

Income available to common shareholders before cumulative effect
of a change in accounting principle

$  0.03

 

0.06

 

Cumulative effect of a change in accounting principle

-

 

-

 

Net income available to common shareholders

$  0.03

 

0.06

 

 

 

 

 

 

Diluted net income available to common shareholders per common share:

 

 

 

 

Income available to common shareholders before cumulative effect
of a change in accounting principle

$  0.02

 

0.06

 

Cumulative effect of a change in accounting principle

-

 

-

 

Net income available to common shareholders

$  0.02

 

0.06

 

 

 

 

 

 

Common shares used to calculate basic EPS

53,260

 

54,561

 

 

 

 

 

 

Common shares used to calculate diluted EPS

54,940

 

56,217

 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES

SUPPLEMENTAL SCHEDULES

(Unaudited)

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

First Quarter 2007

 

First Quarter 2006 (as amended)

 

 

Network

 

Managed

 

 

 

Network

 

Managed

 

 

Consumer

Access

Commercial

Broadband

Totals

 

Consumer

Access

Commercial

Broadband

Totals

Revenues

 

 

 

 

 

 

 

 

 

 

 

Voice

$ 11,271

24,437

7,778

-

43,486

 

11,311

24,485

8,023

-

43,819

Video

23,631

-

1,766

-

25,397

 

22,003

-

1,726

-

23,729

Data

7,874

15,034

13,926

6,920

43,754

 

6,961

13,338

15,910

6,208

42,417

Wireless

10,494

856

592

-

11,942

 

2,388

-

469

-

2,857

Total

53,270

40,327

24,062

6,920

124,579

 

42,663

37,823

26,128

6,208

112,822

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods
sold

20,421

9,498

11,609

1,585

43,113

 

15,923

8,776

10,424

1,061

36,184

 

 

 

 

 

 

 

 

 

 

 

 

Contribution

32,849

30,829

12,453

5,335

81,466

 

26,740

29,047

15,704

5,147

76,638

 

 

 

 

 

 

 

 

 

 

 

 

Less SG&A

23,405

11,866

9,645

3,608

48,524

 

19,042

9,632

9,277

3,305

41,256

Add other
income
(expense)

6

5

2

-

13

 

-

-

-

(113)

(113)

EBITDA

9,450

18,968

2,810

1,727

32,955

 

7,698

19,415

6,427

1,729

35,269

 

 

 

 

 

 

 

 

 

 

 

 

Add share-based
compensation

356

349

237

85

1,027

 

623

667

393

130

1,813

EBITDA, as
adjusted

$ 9,806

19,317

3,047

1,812

33,982

 

8,321

20,082

6,820

1,859

37,082

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES

SUPPLEMENTAL SCHEDULES

(Unaudited)

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

First Quarter 2007

 

Fourth Quarter 2006

 

 

Network

 

Managed

 

 

 

Network

 

Managed

 

 

Consumer

Access

Commercial

Broadband

Totals

 

Consumer

Access

Commercial

Broadband

Totals

Revenues

 

 

 

 

 

 

 

 

 

 

 

Voice

$ 11,271

24,437

7,778

-

43,486

 

11,182

26,734

7,838

-

45,754

Video

23,631

-

1,766

-

25,397

 

23,410

-

2,212

-

25,622

Data

7,874

15,034

13,926

6,920

43,754

 

7,737

15,638

14,443

6,888

44,706

Wireless

10,494

856

592

-

11,942

 

4,493

-

784

-

5,277

Total

53,270

40,327

24,062

6,920

124,579

 

46,822

42,372

25,277

6,888

121,359

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods
sold

20,421

9,498

11,609

1,585

43,113

 

17,409

9,824

11,938

1,169

40,340

 

 

 

 

 

 

 

 

 

 

 

 

Contribution

32,849

30,829

12,453

5,335

81,466

 

29,413

32,548

13,339

5,719

81,019

 

 

 

 

 

 

 

 

 

 

 

 

Less SG&A

23,405

11,866

9,645

3,608

48,524

 

21,885

11,499

10,122

2,508

46,014

Add other
income

6

5

2

-

13

 

-

-

-

114

114

EBITDA

9,450

18,968

2,810

1,727

32,955

 

7,528

21,049

3,217

3,325

35,119

 

 

 

 

 

 

 

 

 

 

 

 

Add share-based
compensation

356

349

237

85

1,027

 

591

858

368

139

1,956

EBITDA, as
adjusted

$ 9,806

19,317

3,047

1,812

33,982

 

8,119

21,907

3,585

3,464

37,075

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES

KEY PERFORMANCE INDICATORS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2007

 

March 31, 2007

 

 

 

 

 

 

as compared to

 

as compared to

 

 

March 31,

March 31,

December 31,

 

March 31,

December 31,

 

March 31,

December 31,

 

 

2007

2006

2006

 

2006

2006

 

2006

2006

Consumer

 

 

 

 

 

 

 

 

 

Voice

 

 

 

 

 

 

 

 

 

 

Long-distance subscribers

89,600

93,800

89,800

 

(4,200)

(200)

 

-4.5%

-0.2%

 

Total local access lines in service

67,400

68,600

66,200

 

(1,200)

1,200

 

-1.7%

1.8%

 

Local access lines in service on GCI facilities

37,400

24,500

31,400

 

12,900

6,000

 

52.7%

19.1%

 

 

 

 

 

 

 

 

 

 

 

Video

 

 

 

 

 

 

 

 

 

 

Basic subscribers

124,500

122,100

124,000

 

2,400

500

 

2.0%

0.4%

 

Digital programming tier subscribers

60,600

54,900

58,700

 

5,700

1,900

 

10.4%

3.2%

 

HD/DVR converter boxes

34,600

16,200

29,200

 

18,400

5,400

 

113.7%

18.5%

 

Homes passed

220,100

216,000

219,900

 

4,100

200

 

1.9%

0.1%

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

Cable modem subscribers

81,300

74,000

78,500

 

7,300

2,800

 

9.9%

3.6%

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

 

 

 

 

 

 

 

 

 

Wireless lines in service

60,000

17,000

24,400

 

43,000

35,600

 

252.9%

145.9%

 

 

 

 

 

 

 

 

 

 

 

Network Access Services

 

 

 

 

 

 

 

 

 

Voice:

 

 

 

 

 

 

 

 

 

 

Total ISP access lines in service

3,100

3,300

3,100

 

(200)

-

 

-6.1%

0.0%

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

Voice:

 

 

 

 

 

 

 

 

 

 

Long-distance subscribers

11,100

10,400

11,100

 

700

-

 

6.7%

0.0%

 

Total local access lines in service

42,100

40,600

41,900

 

1,500

200

 

3.7%

0.5%

 

Local access lines in service on GCI facilities

9,100

7,200

8,400

 

1,900

700

 

26.4%

8.3%

 

 

 

 

 

 

 

 

 

 

 

Video

 

 

 

 

 

 

 

 

 

 

Hotels and mini-headend
subscribers

13,600

13,900

13,300

 

(300)

300

 

-2.2%

2.3%

 

Basic subscribers

2,100

1,500

1,900

 

600

200

 

40.0%

10.5%

 

Total basic subscribers

15,700

15,400

15,200

 

300

500

 

1.9%

3.3%

 

 

 

 

 

 

 

 

 

 

 

Data

 

 

 

 

 

 

 

 

 

 

Cable modem subscribers

8,000

6,900

7,800

 

1,100

200

 

15.9%

2.6%

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

 

 

 

 

 

 

 

 

 

Wireless lines in service

6,200

3,100

4,600

 

3,100

1,600

 

100.0%

34.8%

 

 

 

 

 

 

 

 

 

 

 

Broadband

 

 

 

 

 

 

 

 

 

 

SchoolAccess® customers

48

47

48

 

1

-

 

2.1%

0.0%

 

Rural health customers

21

21

21

 

-

-

 

0.0%

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2007

 

March 31, 2007

 

 

Three Months Ended

 

as Compared to

 

as Compared to

 

 

March 31,

March 31,

December 31,

 

March 31,

December 31,

 

March 31,

December 31,

 

 

2007

2006

2006

 

2006

2006

 

2006

2006

Consumer

 

 

 

 

 

 

 

 

 

Voice

 

 

 

 

 

 

 

 

 

 

Long-distance minutes carried
(in millions)

34.2

36.9

35.0

 

(2.7)

(0.8)

 

-7.3%

-2.3%

 

 

 

 

 

 

 

 

 

 

 

Video

 

 

 

 

 

 

 

 

 

 

Average monthly gross revenue per
subscriber

$ 63.38

$ 60.64

$ 63.44

 

$ 2.74

$ (0.06)

 

4.5%

-0.1%

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

 

 

 

 

 

 

 

 

 

Average monthly gross revenue per
subscriber

$ 53.59

$ 44.72

$ 64.58

 

$ 8.87

$ (10.99)

 

19.8%

-17.0%

 

 

 

 

 

 

 

 

 

 

 

Network Access Services

 

 

 

 

 

 

 

 

 

Voice

 

 

 

 

 

 

 

 

 

 

Long-distance minutes carried
(in millions)

315.8

288.0

323.4

 

27.8

(7.6)

 

9.7%

-2.4%

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

Voice:

 

 

 

 

 

 

 

 

 

 

Long-distance minutes carried
(in millions)

32.9

35.1

30.8

 

(2.2)

2.1

 

-6.2%

6.8%

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

Long-distance minutes carried
(in millions)

382.9

360.0

389.2

 

22.9

(6.3)

 

6.5%

-1.6%

 

General Communication, Inc.

Non-GAAP Financial Reconciliation Schedule

(Unaudited, Amounts in Millions)

 

 

 

Three Months Ended

 

 

 

 

March 31,
2007

 

March 31,
2006 (as amended)

 

 

December 31,

2006

Net income available to common shareholders

 

$

1.5

 

3.3

 

3.1

Income tax expense

 

1.3

 

3.2

 

2.6

Income before income tax expense

 

2.8

 

6.5

 

5.7

Cumulative effect of a change in accounting principle, net of income tax benefit of $0.0

 

---

 

(0.1)

 

---

Income before income tax expense and cumulative effect of a change in accounting principle

 

2.8

 

6.4

 

5.7

 

 

 

 

 

 

 

Other (income) expense:

 

 

 

 

 

 

Interest expense

 

8.7

 

8.6

 

8.2

Amortization of loan and senior notes fee expense

 

0.2

 

0.3

 

0.2

Interest income

 

(0.2)

 

(0.1)

 

(0.4)

Other

 

---

 

---

 

(0.1)

Other expense, net

 

8.7

 

8.8

 

7.9

 

 

 

 

 

 

 

Operating income

 

11.5 

 

15.2 

 

13.6 

Depreciation and amortization expense

 

21.5 

 

20.1 

 

21.4 

Other

 

---

 

---

 

0.1

 

 

 

 

 

 

 

EBITDA (Note 2)

 

33.0 

 

35.3 

 

35.1 

Share-based compensation expense

 

1.0

 

1.8

 

2.0

EBITDA, as adjusted (Note 1)

$

34.0 

 

37.1 

 

37.1 

 

 

Notes:

(1) EBITDA (as defined in Note 2 below) before deducting share-based compensation expense.

 

(2) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the sum of Net Income, Interest Expense, Amortization 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.