July 30, 2008

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 PRELIMINARY SECOND QUARTER 2008 FINANCIAL RESULTS

·  
Consolidated revenue of $142.5 million
·  
EBITDAS of $43.4 million
·  
Net income of $3.6 million or $0.07 per diluted share

ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported preliminary second quarter 2008 revenues of $142.5 million, an increase of 9.7 percent over the second quarter of 2007. Second quarter 2008 earnings before interest, taxes, depreciation, amortization and share based compensation expense (EBITDAS) totaled $43.4 million. EBITDAS increased $1.8 million or 4.2 percent from the second quarter of 2007. The increase in EBITDAS was attributable to growth in all segments except network access.

GCI’s second quarter 2008 net income is expected to be $3.6 million, or earnings per diluted share of $0.07. The company’s second quarter net income compares to net income of $5.9 million, or earnings per diluted share of $0.11 in the same period of 2007.

Second quarter 2008 revenue increased along all products lines when compared to the prior year. Second quarter results include the acquisition of the United companies as of June 1, 2008.

Revenues for the company increased $7.8 million, or 5.8 percent, over first quarter 2008 revenues of $134.7 million. Second quarter EBITDAS of $43.4 million increased 13.6 percent from $38.2 million in the first quarter of 2008.

“We just concluded another excellent quarter,” said GCI president Ron Duncan. “GCI’s second quarter results set new records for both revenue and EBITDAS. Our strong financial results are being driven by solid and growing customer metrics across all categories. We are on target to achieve our goals for 2008 and 2009.”

“GCI achieved a number of important milestones since the end of the first quarter. We closed our acquisition of the United companies. We successfully transitioned all our rural telecommunications traffic to the Galaxy 18 satellite. Shortly after the end of the quarter we closed our acquisition of Alaska Wireless, LLC. This acquisition jump starts GCI’s rural wireless initiative and along with our own rural wireless build-out will allow GCI to provide wireless service in more than 40 rural communities before the end of the year and more than 200 rural communities within the next 24 months. The build-out plans for our urban wireless networks are proceeding and we hope to close our acquisition of the remaining interest in Alaska DigiTel prior to the end of the third quarter.”

“The third quarter marks the start of our wireless transition. Significant amounts of EBITDAS will be shifted from our network access business to our consumer and commercial business units as a result of the transition of AT&T Mobility traffic off of our carrier network and our transition of wireless customers from the AT&T network to our own,” said Duncan. This process will add significantly to EBITDAS when it is complete by this time next year. I anticipate continued improvement in customer counts and operating metrics during the third quarter. Financial results should be similar to the just completed quarter. Third quarter EBITDAS may be burdened some by the costs and pace of the wireless transition. I am confident, however, that we will hit our announced goals for both 2008 and 2009.”

GCI reaffirms 2008 guidance for revenues of $550 million to $560 million and EBITDAS of more than $165 million. Additionally GCI anticipates total cash receipts in excess of $45 million during 2008 as a result of fiber IRU agreements which are not otherwise reflected in current guidance. Second quarter 2008 results exceeded guidance for revenues of $133 million to $136 million and for EBITDAS in excess of the first quarter. Third quarter revenues are expected to total $138 million to $141 million, not including revenues from the amortization of fiber sales.
 
           Highlights
·  
Consumer revenues totaled $62.1 million, an increase of 12.7 percent over the prior year quarter and an increase of 1.2 percent over the first quarter of 2008. The increases were across all products and services.

·  
GCI local access lines increased by 14,800 over the first quarter of 2008. The increase includes access lines from the acquisition of the United companies. Consumer, network access, commercial and other local access lines totaled 137,700 at the end of the second quarter of 2008, representing an estimated 32 percent share of the total access line market in Alaska. GCI began providing local access services on its own facilities in the Nome market during the second quarter of 2008.

·  
GCI has provisioned 89,700 access lines on its own facilities at the end of the second quarter of 2008, an increase of 18,600 lines over the first quarter of 2008 and an increase of 35,000 lines when compared to the end of the second quarter of the prior year. The increase in provisioned lines includes 12,200 lines acquired from the United companies. The company had provisioned 54,700 access lines on its own facilities at the end of the second quarter of 2007. Plant upgrades were completed in the Fairbanks, Seward and Homer markets during the second quarter.

·  
GCI had 100,000 consumer and commercial cable modem access customers at the end of the second quarter of 2008, an increase of 300 over the 99,700 cable modem customers at the end of the first quarter 2008. Average monthly revenue per cable modem totaled $37.77 for the second quarter of 2008 as compared to $36.71 for the first quarter of 2008, an increase of 2.9 percent. The increase in average monthly revenues arises primarily from customers upgrading to plans with increased levels of service.

·  
GCI has 84,100 wireless subscribers, an increase of 3,900 subscribers from the first quarter of 2008.

·  
GCI’s contractors began laying 750 miles of undersea fiber that will connect 50,000 residents in several communities in Southeast Alaska. The $33 million project is expected to be completed before the end of 2008.

·  
GCI is on track with its redundant fiber route to Fairbanks and with its diverse fiber route along Turnagain Arm near Anchorage. The Turnagain Arm project eliminates a current bottleneck where all of the fiber routes out of Alaska come unacceptably close together and when completed will allow GCI’s lower 48 fiber ring to fully meet the diversity requirements of the United States Department of Defense.

Consumer
Consumer revenues increased 12.7 percent to $62.1 million compared to $55.1 million in the second quarter of 2007 and increased 1.2 percent over the first quarter of 2008. The increased revenue is from all consumer product offerings.

Consumer voice revenues were up 4.4 percent over the prior year and 2.3 percent over the first quarter of 2008. Consumer local access lines in service for the second quarter were up approximately 9,700 lines compared to the second quarter of 2007. Access lines in the second quarter increased by 1,300 over the first quarter of 2008. Voice revenues continue to increase due to sales of voice services in existing and newly opened markets.

GCI serves 60,500 consumer access lines on its own facilities, an increase of 5,000 lines from the first quarter of 2008

Consumer video revenues increased 7.4 percent over the prior year and were up slightly from the first quarter of 2008. The increase in year-over-year revenue is due in part to an increase in video subscribers purchasing higher tier services including high definition or digital service and renting high definition/digital video recorders. Consumer video subscribers totaled 130,300, an increase of 5,600 subscribers over the second quarter of 2007 and a seasonal decrease of 400 subscribers from the first quarter of 2008.

Consumer data revenues increased 25.6 percent over the prior year and 2.9 percent over the first quarter of 2008. The increase in consumer data revenues is due to an increase in cable modem customers and an increase in average monthly revenue per modem subscriber. The increase in average monthly revenues arises in part from customers upgrading to plans with increased levels of service. GCI added 8,400 consumer cable modem customers over the prior year and 100 customers during the second quarter of 2008.

Consumer wireless revenues increased to $13.9 million, an increase of 22.9 percent over the second quarter of 2007. The increase in wireless revenues is primarily due to an increase in wireless subscribers, including those of the company’s wireless subsidiary, Alaska DigiTel.

Network Access
Network access revenues increased 0.7 percent to $41.9 million as compared to $41.6 million in the second quarter of 2007 and increased 6.9 percent over the first quarter of 2008.

Voice revenues, as expected, decreased 5.5 percent from the prior year and increased 5.8 percent over the first quarter of 2008. The decrease in voice revenues from the prior year is primarily due to the effects of rate reductions for other common carriers. Network access minutes increased 2.7 percent to 326.2 million minutes for the second quarter of 2008 as compared to the second quarter of 2007. Minutes for the second quarter of 2008 increased 3.7 percent from the first quarter of 2008.

Data revenues for the second quarter of 2008 were up 16.3 percent compared to second quarter 2007 and increased 6.8 percent over the first quarter of 2008. The increase in data revenues over the prior year is primarily due to an increase in circuits sold.

Commercial
Commercial revenues increased 4.8 percent to $27.4 million as compared to $26.2 million in the second quarter of 2007 and increased 3.2 percent from $26.6 million in the first quarter of 2008. Commercial revenues increased from the prior year primarily due to an increase in time and materials revenues. Revenues increased along all commercial product lines over the first quarter of 2008.

A second quarter decrease in voice revenues as compared to the prior year was primarily due to a decrease in average revenue per minute and a 3.5 percent decrease in long distance minutes. Sequentially, commercial minutes increased 0.3 percent over the first quarter of 2008. GCI increased commercial local access lines by 2,500 over the second quarter of 2007 and 1,900 when compared to the first quarter of 2008.

Commercial video revenues increased 7.2 percent on a year-over-year basis and increased 18.1 percent sequentially over the first quarter of 2008. The increase in video revenues year-over-year is due primarily to a 15.4 percent increase in subscribers. The sequential increase in revenues is due mostly to an increase in advertising revenues.

Commercial data network revenues in the second quarter of 2008 totaled $16.6 million, an increase of 13.9 percent when compared to $14.6 million in the second quarter of 2007 and $0.4 million or 2.3 percent, when compared to $16.2 million in the first quarter of 2008.

Commercial data network revenues comprise $9.5 million in monthly recurring charges for data services and $7.1 million in charges billed on a time and materials basis largely for personnel providing on site customer support. This latter category can vary significantly based on project activity. For the second quarter of 2008 monthly recurring data revenues increased by approximately $0.9 million when compared to the second quarter 2007 and $0.3 million compared to the first quarter 2008. Time and material charges increased by $1.1 million as compared to the second quarter of 2007 and increased by $0.1 million as compared to the first quarter of 2008.
 
Managed Broadband                                                      
      Managed broadband revenues totaled $9.1 million in the second quarter of 2008, an increase of 31.4 percent from $7.0 million in the second quarter of 2007. Revenue for the second quarter was up 21.4 percent from the $7.5 million reported in the first quarter of 2008. The large increases in revenues were due primarily to one time equipment sales.

Regulated Operations
GCI acquired United Utilities, Inc. (UUI) and its wholly owned subsidiary United-KUC, Inc., as part of its acquisition of the United companies on June 1, 2008.  UUI and United-KUC are incumbent local exchange carriers that obtain their revenues from rates derived from the regulated revenue requirement for each service they provide.

UUI’s consolidated regulated revenues for one month of the second quarter totaled $1.9 million and its EBTIDAS totaled $0.4 million. UUI consolidated has 12,200 local access lines at the end of the second quarter of 2008.

Other Items
During the second quarter of 2008 GCI’s capital expenditures totaled $167.4 million as compared to $52.7 million in the first quarter of 2008. GCI’s capital expenditures include those of Alaska DigiTel and include capital lease assets totaling $98.6 million attributable to the Galaxy 18 Satellite.

While the company believes that the financial results included in this press release are materially correct, the company's auditors have not yet concluded all aspects of their review of our financial statements. Accordingly, the financial results included herein should be considered preliminary and may be subject to change following conclusion of the review.

GCI will hold a conference call to discuss the quarter’s results on Thursday, July 31, 2008 beginning at 2 p.m. (Eastern). To access the briefing on July 31, 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 866-413-9161, access code 7461 (International callers should dial 203-369-0666.)

GCI is the largest telecommunications company in Alaska. The company’s cable plant, which provides voice, video, and broadband data services, passes 90 percent of Alaska households. GCI operates Alaska’s most extensive terrestrial/subsea fiber optic network, which by the end of 2008, will connect not only Anchorage but also Fairbanks, and Juneau/Southeast to the lower 48 states with a diversely routed, protected fiber network. The company’s satellite network provides communications services to small towns and villages throughout rural Alaska. GCI is now in the process of constructing Alaska’s first truly statewide mobile wireless network, which will seamlessly link urban and rural Alaska for the first time in the state’s history.

      A pioneer in bundled services, GCI is the top provider of voice, data, and video services to Alaska consumers with a 70 percent share of the consumer broadband market. GCI is also the leading provider of communications services to enterprise customers, particularly large enterprise customers with complex data networking needs. 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 may 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)
 
(Preliminary)
       
   
June 30,
   
December 31,
 
Assets
 
2008
   
2007
 
             
Current assets:
           
  Cash and cash equivalents
  $ 95,703       13,074  
                 
  Receivables
    107,502       97,913  
  Less allowance for doubtful receivables
    1,864       1,657  
     Net receivables
    105,638       96,256  
                 
  Deferred income taxes
    10,423       5,734  
  Prepaid expenses
    6,246       5,356  
  Inventories
    5,390       2,541  
  Short-term investments
    5,230       -  
  Other current assets
    558       717  
       Total current assets
    229,188       123,678  
                 
Property and equipment in service, net of depreciation
    692,742       504,273  
Construction in progress
    115,809       69,409  
       Net property and equipment
    808,551       573,682  
                 
Cable certificates
    191,565       191,565  
Goodwill
    48,211       42,181  
Wireless licenses
    25,907       25,757  
Other intangible assets, net of amortization
    18,080       11,769  
Deferred loan and senior notes costs, net of amortization
    6,726       6,202  
Other assets
    11,197       9,399  
    Total other assets
    301,686       286,873  
       Total assets
  $ 1,339,425       984,233  
                 
           
(Continued)
 

 
 

 


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
           
CONSOLIDATED BALANCE SHEETS
           
(Unaudited)
           
(Continued)
           
             
             
(Amounts in thousands)
 
(Preliminary)
       
   
June 30,
   
December 31,
 
Liabilities, Minority Interest, and Stockholders' Equity
 
2008
   
2007
 
             
Current liabilities:
           
  Current maturities of obligations under long-term debt and capital leases
  $ 9,242       2,375  
  Accounts payable
    46,094       35,747  
  Deferred revenue
    20,886       16,600  
  Accrued payroll and payroll related obligations
    17,401       16,329  
  Accrued liabilities
    9,439       7,536  
  Accrued interest
    9,322       8,927  
  Subscriber deposits
    1,020       877  
     Total current liabilities
    113,404       88,391  
                 
Long-term debt
    707,540       536,115  
Obligations under capital leases, excluding current maturities
    96,254       2,290  
Obligation under capital lease due to related party, excluding current
  maturity
    1,864       469  
Deferred income taxes
    93,671       84,294  
Long-term deferred revenue
    37,738       624  
Other liabilities
    19,768       12,617  
       Total liabilities
    1,070,239       724,800  
                 
Minority interest
    6,502       6,478  
                 
Commitments and contingencies
               
Stockholders’ equity:
               
  Common stock (no par):
               
    Class A.  Authorized 100,000 shares; issued 49,930 and 50,437
     shares at June 30, 2008 and December 31, 2007, respectively;
     outstanding 49,461 and 49,425 shares at June30, 2008 and
     December 31, 2007, respectively
    150,706       155,980  
                 
    Class B.  Authorized 10,000 shares; issued 3,256 and 3,257 shares at
     June 30, 2008 and December 31, 2007, respectively; outstanding
     3,254 and 3,255 shares at June 30, 2008 and December 31, 2007,
     respectively; convertible on a share-per-share basis into Class A
     common stock
    2,750       2,751  
                 
    Less cost of 471 and 473 Class A and Class B common shares held in
      treasury at June 30, 2008 and December 31, 2007, respectively
    (3,422 )     (3,448 )
                 
  Paid-in capital
    23,522       20,132  
  Retained earnings
    89,128       77,540  
       Total stockholders' equity
    262,684       252,955  
                 
       Total liabilities, minority interest, and stockholders' equity
  $ 1,339,425       984,233  
                 

 
 

 


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
                       
CONSOLIDATED INCOME STATEMENTS
                       
(Unaudited)
                       
                         
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
         
June 30,
       
(Amounts in thousands, except per share amounts)
 
2008
(preliminary)
   
2007
(as restated)
   
2008
(preliminary)
   
2007
(as restated)
 
                         
Revenues
  $ 142,461       129,890       277,135       254,921  
                                 
Cost of goods sold (exclusive of depreciation and amortization shown
  separately below)
    52,448       45,579       103,759       93,569  
Selling, general and administrative expenses
    48,260       43,430       94,666       87,035  
Depreciation and amortization expense
    23,527       21,437       46,309       42,303  
   Operating income
    18,226       19,444       32,401       32,014  
                                 
Other income (expense):
                               
  Interest expense
    (10,899 )     (8,557 )     (19,584 )     (16,875 )
  Loan and senior notes fees
    (879 )     (216 )     (1,102 )     (396 )
  Interest income
    402       161       483       345  
  Minority interest
    26       (24 )     (24 )     (11 )
   Other expense, net
    (11,350 )     (8,636 )     (20,227 )     (16,937 )
                                 
   Income before income tax expense
    6,876       10,808       12,174       15,077  
                                 
Income tax expense
    3,281       4,890       6,050       6,853  
                                 
   Net income available to common shareholders
  $ 3,595       5,918       6,124       8,224  
                                 
Basic net income available to common shareholders per common share
  $ 0.07       0.11       0.12       0.15  
                                 
Diluted net income available to common shareholders per common share
  $ 0.07       0.11       0.11       0.14  
                                 
Common shares used to calculate basic EPS
    52,320       53,201       52,289       53,230  
                                 
Common shares used to calculate diluted EPS
    52,745       54,698       52,950       54,815  
                                 
Note:
                               
We reclassified $3.3 million and $8.2 million of network maintenance and operations expense from selling, general and administrative expense to Cost of Goods Sold for the three and six months ended June 30, 2007, respectively, to make our income statement classification more consistent with that of our peers.
 

 
 

 


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
   
Second Quarter 2008 (preliminary)
   
Second Quarter 2007 (as restated)
 
         
Network
         
Managed
   
Regulated
               
Network
         
Managed
       
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Totals
 
Revenues
                                                                 
  Voice
  $ 12,117       23,213       7,280       -       1,879       44,489       11,608       24,577       8,045       -       44,230  
  Video
    25,668       -       2,149       -       -       27,817       23,907       -       2,004       -       25,911  
  Data
    10,386       17,988       16,584       9,134       -       54,092       8,269       15,469       14,561       6,953       45,252  
  Wireless
    13,942       690       1,431       -       -       16,063       11,344       1,570       1,583       -       14,497  
    Total
    62,113       41,891       27,444       9,134       1,879       142,461       55,128       41,616       26,193       6,953       129,890  
                                                                                         
Cost of goods
  sold (exclusive
  of depreciation
  and amortization)
    23,689       11,529       13,912       3,020       298       52,448       22,375       8,722       12,257       2,225       45,579  
                                                                                         
    Contribution
    38,424       30,362       13,532       6,114       1,581       90,013       32,753       32,894       13,936       4,728       84,311  
                                                                                         
Less SG&A
    26,054       9,579       8,312       3,093       1,222       48,260       22,034       9,597       9,118       2,681       43,430  
Add other
  income
  (expense)
    (12 )     (10 )     (4 )     -       -       (26 )     10       10       4       -       24  
    EBITDA
    12,382       20,793       5,224       3,021       359       41,779       10,709       23,287       4,814       2,047       40,857  
                                                                                         
Add share-based
  compensation
    637       522       317       117       -       1,593       256       256       182       69       763  
    EBITDAS
  $ 13,019       21,315       5,541       3,138       359       43,372       10,965       23,543       4,996       2,116       41,620  
                                                                                         
Note:
                                                                                       
We reclassified $3.3 million of network maintenance and operations expense from selling, general and administrative expense to Cost of Goods Sold for the three months ended June 30, 2007 to make our income statement classification more consistent with that of our peers.
 

 
 

 


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
 
SUPPLEMENTAL SCHEDULES
 
(Unaudited)
 
(Amounts in thousands)
                                                             
   
Second Quarter 2008 (preliminary)
   
First Quarter 2008
 
         
Network
         
Managed
   
Regulated
               
Network
         
Managed
       
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Totals
 
Revenues
                                                                 
  Voice
  $ 12,117       23,213       7,280       -       1,879       44,489       11,844       21,942       7,214       -       41,000  
  Video
    25,668       -       2,149       -       -       27,817       25,647       -       1,820       -       27,467  
  Data
    10,386       17,988       16,584       9,134       -       54,092       10,096       16,839       16,209       7,526       50,670  
  Wireless
    13,942       690       1,431       -       -       16,063       13,796       393       1,348       -       15,537  
    Total
    62,113       41,891       27,444       9,134       1,879       142,461       61,383       39,174       26,591       7,526       134,674  
                                                                                         
Cost of goods
  sold (exclusive
  of depreciation
  and amortization)
    23,689       11,529       13,912       3,020       298       52,448       24,701       10,255       14,071       2,284       51,311  
                                                                                         
    Contribution
    38,424       30,362       13,532       6,114       1,581       90,013       36,682       28,919       12,520       5,242       83,363  
                                                                                         
Less SG&A
    26,054       9,579       8,312       3,093       1,222       48,260       25,353       9,586       8,612       2,855       46,406  
Add other
  income
  (expense)
    (12 )     (10 )     (4 )     -       -       (26 )     22       19       9       -       50  
    EBITDA
    12,382       20,793       5,224       3,021       359       41,779       11,307       19,314       3,899       2,387       36,907  
                                                                                         
Add share-based
  compensation
    637       522       317       117       -       1,593       496       421       253       90       1,260  
    EBITDAS
  $ 13,019       21,315       5,541       3,138       359       43,372       11,803       19,735       4,152       2,477       38,167  
                                                                                         

 
 

 


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
 
SUPPLEMENTAL SCHEDULES
 
(Unaudited)
 
(Amounts in thousands)
                                                             
   
Six Months Ended June 30, 2008 (preliminary)
   
Six Months Ended June 30, 2007 (as restated)
 
         
Network
         
Managed
   
Regulated
               
Network
         
Managed
       
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Totals
 
Revenues
                                                                 
  Voice
  $ 23,978       45,155       14,494       -       1,879       85,506       22,961       48,848       15,902       -       87,711  
  Video
    51,315       -       3,969       -       -       55,284       47,538       -       3,770       -       51,308  
  Data
    20,482       34,827       32,793       16,660       -       104,762       16,216       30,397       28,515       13,874       89,002  
  Wireless
    27,721       1,083       2,779       -       -       31,583       22,016       2,697       2,187       -       26,900  
    Total
    123,496       81,065       54,035       16,660       1,879       277,135       108,731       81,942       50,374       13,874       254,921  
                                                                                         
Cost of goods
  sold (exclusive
  of depreciation
  and amortization)
    48,391       21,783       27,983       5,304       298       103,759       44,332       19,961       24,525       4,751       93,569  
                                                                                         
    Contribution
    75,105       59,282       26,052       11,356       1,581       173,376       64,399       61,981       25,849       9,123       161,352  
                                                                                         
Less SG&A
    51,406       19,166       16,924       5,948       1,222       94,666       44,068       19,262       18,183       5,522       87,035  
Add other
  income
  (expense)
    11       9       4       -       -       24       4       5       2       -       11  
    EBITDA
    23,688       40,107       9,124       5,408       359       78,686       20,327       42,714       7,664       3,601       74,306  
                                                                                         
Add share-based
  compensation
    1,134       943       569       207       -       2,853       596       594       411       147       1,748  
    EBITDAS
  $ 24,822       41,050       9,693       5,615       359       81,539       20,923       43,308       8,075       3,748       76,054  
                                                                                         
Note:
                                                                                       
We reclassified $8.2 million of network maintenance and operations expense from selling, general and administrative expense to Cost of Goods Sold for the six months ended June 30, 2007 to make our income statement classification more consistent with that of our peers.
 

 
 

 


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
 
KEY PERFORMANCE INDICATORS
 
(Unaudited)
 
                                           
                     
June 30, 2008
   
June 30, 2008
 
                     
as compared to
   
as compared to
 
   
June 30,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
 
   
2008
   
2007
   
2008
   
2007
   
2008
   
2007
   
2008
 
Consumer
                                         
Voice
                                         
Long-distance subscribers
    89,800       90,500       90,400       (700 )     (600 )     -0.8 %     -0.7 %
Total local access lines in service
    78,100       68,400       76,800       9,700       1,300       14.2 %     1.7 %
Local access lines in service on GCI facilities
    60,500       41,800       55,500       18,700       5,000       44.7 %     9.0 %
                                                         
Video
                                                       
Basic subscribers
    130,300       124,700       130,700       5,600       (400 )     4.5 %     -0.3 %
Digital programming tier subscribers
    68,200       61,000       68,100       7,200       100       11.8 %     0.1 %
HD/DVR converter boxes
    56,900       40,200       55,400       16,700       1,500       41.5 %     2.7 %
Homes passed
    226,900       221,100       225,700       5,800       1,200       2.6 %     0.5 %
                                                         
Data
                                                       
Cable modem subscribers
    91,000       82,600       90,900       8,400       100       10.2 %     0.1 %
                                                         
Wireless
                                                       
Wireless lines in service
    77,000       62,900       73,000       14,100       4,000       22.4 %     5.5 %
                                                         
Network Access Services
                                                       
Data:
                                                       
Total ISP access lines in service
    2,000       2,600       2,600       (600 )     (600 )     -23.1 %     -23.1 %
                                                         
Commercial
                                                       
Voice:
                                                       
Long-distance subscribers
    10,400       11,100       10,400       (700 )     -       -6.3 %     0.0 %
Total local access lines in service
    45,400       42,900       43,500       2,500       1,900       5.8 %     4.4 %
Local access lines in service on GCI facilities
    15,400       10,700       13,400       4,700       2,000       43.9 %     14.9 %
                                                         
Video
                                                       
Hotels and mini-headend
  subscribers
    15,700       13,600       14,000       2,100       1,700       15.4 %     12.1 %
Basic subscribers
    2,000       2,100       2,000       (100 )     -       -4.8 %     0.0 %
   Total basic subscribers
    17,700       15,700       16,000       2,000       1,700       12.7 %     10.6 %
                                                         
Data
                                                       
Cable modem subscribers
    9,000       8,100       8,800       900       200       11.1 %     2.3 %
                                                         
Wireless
                                                       
Wireless lines in service
    7,100       6,700       7,200       400       (100 )     6.0 %     -1.4 %
                                                         
Regulated Operations
                                                       
Voice:
                                                       
Total local access lines in service
    12,200    
NA
   
NA
   
NA
   
NA
   
NA
   
NA
 
                                                         
                           
June 30, 2008
   
June 30, 2008
 
   
Three Months Ended
           
as Compared to
   
as Compared to
 
   
June 30,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
 
   
2008
   
2007
   
2008
   
2007
   
2008
   
2007
   
2008
 
Consumer
                                                       
Voice
                                                       
Long-distance minutes carried
  (in millions)
    32.0       33.6       33.7       (1.6 )     (1.7 )     -4.8 %     -5.0 %
                                                         
Video
                                                       
Average monthly gross revenue per subscriber
  $ 65.86     $ 63.79     $ 66.09     $ 2.07     $ (0.23 )     3.2 %     -0.3 %
                                                         
Wireless
                                                       
Average monthly gross revenue per subscriber
  $ 57.39     $ 55.25     $ 56.76     $ 2.14     $ 0.63       3.9 %     1.1 %
                                                         
Network Access Services
                                                       
Voice
                                                       
Long-distance minutes carried
  (in millions)
    326.2       317.7       314.6       8.5       11.6       2.7 %     3.7 %
                                                         
Commercial
                                                       
Voice:
                                                       
Long-distance minutes carried
  (in millions)
    32.9       34.1       32.8       (1.2 )     0.1       -3.5 %     0.3 %
                                                         
Total
                                                       
Long-distance minutes carried
  (in millions)
    391.1       385.4       381.1       5.7       10.0       1.5 %     2.6 %

 
 

 


 
 

 
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)



   
Three Months Ended
 
   
June 30,
2008 (preliminary)
   
June 30,
2007 (as restated)
   
March 31,
2008
 
Net income
  $ 3.6       5.9       2.5  
Income tax expense
    3.3       4.9       2.8  
Income before income tax expense
    6.9       10.8       5.3  
                         
Other (income) expense:
                       
Interest expense
    10.9       8.6       8.7  
Loan and senior notes fees
    0.8       0.2       0.2  
Interest income
    (0.4 )     (0.2 )     (0.1 )
Minority interest
    ---       ---       0.1  
Other expense, net
    11.3       8.6       8.9  
                         
Operating income
    18.2       19.4       14.2  
Depreciation and amortization expense
    23.5       21.4       22.8  
Minority interest
    ---       ---       (0.1 )
                         
EBITDA (Note 2)
    41.7       40.8       36.9  
Share-based compensation expense
    1.7       0.8       1.3  
EBITDAS (Note 1)
  $ 43.4       41.6       38.2  

   
Six Months Ended
 
   
June 30, 2008 (preliminary)
   
June 30, 2007 (as restated)
 
Net income
  $ 6.1       8.2  
Income tax expense
    6.1       6.9  
Income before income tax expense
    12.2       15.1  
                 
Other (income) expense:
               
Interest expense
    19.6       16.9  
Loan and senior notes fees
    1.1       0.4  
Interest income
    (0.5 )     (0.4 )
Minority interest
    ---       ---  
Other expense, net
    20.2       16.9  
                 
Operating income
    32.4       32.0  
Depreciation and amortization expense
    46.3       42.3  
Minority interest
    ---       ---  
                 
EBITDA (Note 2)
    78.7       74.3  
Share-based compensation expense
    2.8       1.7  
EBITDAS (Note 1)
  $ 81.5       76.1  


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, 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.