Exhibit 99.1
 

 


August 3, 2011

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 SECOND QUARTER 2011 FINANCIAL RESULTS

·  
Consolidated revenue of $168.1 million
·  
Adjusted EBITDA of $54.9 million
·  
Net loss of $2.0 million or $(0.04) per diluted share

ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its second quarter 2011 results with revenues increasing to $168.1 million over revenues of $162.3 million in the second quarter of 2010. Adjusted EBITDA decreased $2.4 million or 4.2 percent from the second quarter of 2010 EBITDA of $57.4 million. Adjusted EBITDA for the second quarter of 2011 increased $0.6 million after excluding the benefit of $3 million in net adjustments to EBITDA reflected in the second quarter of 2010. The 2010 adjustments were related to a change in USF estimates and a contract reserve adjustment for a large customer.

GCI’s second quarter 2011 net loss totaled $2.0 million or loss per diluted share of $(0.04) and compares to net income of $1.9 million, or earnings per diluted share of $0.04 for the same period of 2010. GCI‘s second quarter net loss is primarily related to a $9.1 million loss on debt extinguishment related to the refinancing of the company’s $320 million Senior Notes due 2014 that were replaced with a new issue due 2021.

Second quarter of 2011 revenues increased 2.0 percent or $3.3 million over first quarter of 2011 revenues. Adjusted EBITDA increased 3.0 percent or $1.6 million over the first quarter of 2011 Adjusted EBITDA.

“GCI’s results for the second quarter were flat as a result of soft consumer metrics.” said GCI president Ron Duncan. “Consumer growth was adversely affected by a large troop deployment from Fort Wainwright in Fairbanks, a billing clean-up and delays in the implementation of new systems and products. Most of those issues are behind us now and we expect to return to more normal consumer growth patterns in the second half of the year. Presently we expect results for the full year to be within the range of our guidance.

“We are on track with our important TERRA project and anticipate that it will be completed this year. We also continued to make strong progress on our stock repurchase program by retiring more than $14 million worth of stock in the second quarter.

GCI previously provided guidance on revenues of $685 million to $700 million and adjusted EBITDA of $233 million to $238 million for the year 2011.

Highlights
·  
GCI repurchased 1,233,067 shares of its Class A common stock in the second quarter of 2011 at an average price per share of $11.44. GCI is authorized to repurchase $114.4 million of its common equity depending on company performance, market conditions, and liquidity, and subject to board oversight. At the end of the second quarter of 2011 GCI had approximately 45.7 million shares outstanding.
 
 
 

 
 

·  
GCI is the second largest wireless provider in Alaska with 141,000 wireless subscribers at the end of the quarter, an increase of 800 subscribers over the end of the first quarter of 2011.

·  
Consumer revenues for the second quarter of 2011 totaled $88.6 million, an increase of 1.6 percent over the second quarter of 2010. Consumer revenues for the second quarter of 2010 benefited from a $4.1 million USF estimate change. Excluding the estimate change for the prior year, consumer revenues increased $5.5 million or 6.6 percent over 2010. Revenue increases were in the video, data and wireless product lines during the second quarter of 2011.

·  
Commercial revenues increased $2.1 million to $34.2 million as compared to $32.1 million in the second quarter of 2010 and increased $2.4 million over $31.8 million in the first quarter of 2011. Commercial revenues for the second quarter of 2010 were favorably impacted by a $0.6 million USF estimate change. The increase in revenues was primarily due to an increase in data service revenues, mostly from the oil sector.

·  
Managed Broadband revenues increased $4.3 million or 40.9 percent over the second quarter of 2010 and increased $0.6 million or 4.6 percent over the first quarter of 2011. The second quarter of 2010 reflected a $1.7 million contract reserve adjustment. Excluding the contract reserve adjustment, managed broadband revenues increased $2.6 million or 21.1 percent over the prior year.

·  
GCI had 142,400 access lines at the end of the second quarter of 2011, representing an estimated 36 percent share of the total access line market in Alaska. Access lines decreased by 2,900 lines from the first quarter of 2011.

·  
GCI’s facilities-based access lines totaled 112,300, representing 78.9 percent of its total access lines at the end of the second quarter of 2011. Reported facilities based access lines decreased 2,000 lines from the first quarter of 2011. The decrease in lines is primarily due to a large troop deployment from Ft. Wainwright, located near Fairbanks.

·  
GCI had 116,400 consumer and commercial cable modem customers at the end of the second quarter of 2011, a decrease of 1,600 from the 118,000 cable modem customers at the end of the first quarter 2011. The decrease in customers is primarily due to the troop deployment in Fairbanks. Average monthly revenue per cable modem for the second quarter of 2011 was $53.85, an increase of 15.3 percent over the $46.69 figure posted for the prior year and 3.1 percent from the $52.21 figure posted for the first quarter of 2011.

Consumer
Consumer revenues increased 1.6 percent to $88.6 million as compared to $87.1 million in the second quarter of 2010 and were level with the first quarter of 2011. Consumer revenues for the second quarter of 2010 benefited from a $4.1 million in USF estimate change. Excluding the estimate change for the prior year, consumer revenues increased $5.5 million or 6.6 percent over 2010. Video, data and wireless revenue growth continue to drive financial results in the consumer business.

Consumer customer metrics for the quarter were directly impacted by the deployment of more than 4,000 troops from Fort Wainwright in Fairbanks. GCI estimates the deployment resulted in a reduction of approximately 1,100 wired access lines, 1,000 basic video subscribers, 1,200 cable modems and more than 300 wireless subscribers.
 
 
 
 

 
Consumer voice revenues of $13.6 million, as expected, were lower when compared to the second quarter of 2010 and were steady with the first quarter of 2011. Consumer voice revenues for the second quarter of 2010 were favorably impacted by $1.2 million of the total $4.1 million USF estimate change. Consumer local access lines in service at the end of the second quarter of 2011 totaled 82,300, a decrease of 2,800 lines from the second quarter of 2010 and the first quarter of 2011.  The decrease in access lines, in part, is a result of customers discontinuing wire line service and relying solely on wireless devices. While GCI has consistently grown share in the wire line market, that share growth is no longer sufficient to offset the decreasing overall size of the wire line access market. The troop deployment also contributed to the decrease in local access lines as local service is often bundled with video and internet service.

GCI serves 75,900 consumer access lines on its own facilities, a decrease of 1,200 and 2,100 lines from the second quarter of 2010 and the first quarter of 2011, respectively. More than 92 percent of consumer access lines are provisioned exclusively on GCI facilities.

Consumer video revenues of $29.5 million increased 0.7 percent over the second quarter of 2010 and decreased 2.6 percent from the first quarter of 2011. The increase over the prior year is largely due to increases in video subscribers renting high definition/digital video recorder converters. Consumer basic video subscribers totaled 126,900 at the end of the second quarter of 2011, a decrease of 4,300 subscribers from the second quarter of 2010 and 3,300 subscribers from the first quarter of 2011. The decrease in subscribers from the prior year is primarily due to the troop deployment. The sequential decrease in subscribers is primarily due to the troop deployment and seasonality.

Consumer data revenues of $17.3 million increased 18.1 percent over the second quarter of 2010 and were steady with the first quarter of 2011. The increase in consumer data revenues over the prior year is due to an increase in cable modem customers and increasing average monthly usage per cable modem. GCI added 1,900 consumer cable modem customers over the second quarter of 2010 and cable modem customer counts decreased by 1,800 on a sequential basis. The sequential decrease in cable modems is primarily due to the troop deployment.
 
Consumer wireless revenues of $28.1 million for the second quarter of 2011 were steady with the second quarter of 2010 and increased 1.8 percent over the first quarter of 2011. Consumer wireless revenues for the second quarter of 2010 were favorably impacted by a $2.9 million USF estimate change. Excluding the USF estimate change, consumer wireless revenue increased $3.1 million or 12.4 percent over the prior year. Consumer has added 7,400 wireless customers over the end of the second quarter a year ago, an increase of 6.2 percent. Consumer wireless customers decreased by 100 lines as compared to the end of the first quarter of 2011. Sequential wireless net additions were unfavorably impacted by the troop deployment and the implementation of a new policy for wireless lifeline customers.

Network Access
Network access revenues decreased 7.2 percent to $25.2 million as compared to $27.1 million in the second quarter of 2010 and were steady with the first quarter of 2011.

Voice revenues, as expected, decreased 24.2 percent to $5.4 million from the prior year and 15.9 percent from the first quarter of 2011. The decrease in voice revenues is primarily due to the continued decrease in the wired voice market as a result of wireless and data substitution. Long distance minutes decreased 6.9 percent from the prior year and decreased 1.7 percent from the first quarter of 2011.
 
 
 

 
Data revenues were down 5.1 percent compared to the second quarter of 2010 and were steady with the first quarter of 2011. The decrease in data revenues is primarily attributable to lower rates resulting from the extension of national pricing schedules into the Alaska market and the continuing shift to IP-based transport.

Wireless revenues, primarily related to roaming traffic, increased 14.0 percent to $4.7 million over the prior year and 28.2 percent sequentially. The increase in revenues is primarily due to seasonality.

Commercial
Commercial revenues increased $2.1 million to $34.2 million as compared to $32.1 million in the second quarter of 2010 and increased $2.4 million over $31.8 million in the first quarter of 2011. Commercial revenues for the second quarter of 2010 were favorably impacted by a $0.6 million USF estimate change. The increase in revenues for the quarter was primarily due to an increase in data service revenues, mostly from the oil sector.

Voice revenues for the second quarter of 2011 decreased 13.1 percent or $1.1 million when compared to the second quarter of 2010 and were relatively steady when compared with the first quarter of 2011. Voice revenues for the second quarter decreased 8.8 percent or $0.7 million, excluding an $0.4 million USF estimate change in the second quarter of 2010. Long distance minutes decreased 4.7 percent from the prior year and decreased 1.0 percent from the first quarter of 2011. Local access lines at the end of the second quarter of 2011 increased by 400 lines sequentially. Local access lines served entirely on GCI’s facilities increased by 5,000 lines when compared to the prior year and increased by 400 over the first quarter of 2011. The increase in lines over the prior year is primarily due to the correction of a classification error in calculating the number of lines on our facilities.

Commercial video revenues increased $0.3 million over the prior year and $0.1 million sequentially. Commercial video subscribers total 20,300 at the end of the second quarter of 2011 and were unchanged when compared to the end of the prior year. Commercial video subscribers at the end of the second quarter increased by 3,100 subscribers over the first quarter of 2011. The sequential increase in basic subscribers is primarily attributed to the seasonal increase in hotel subscribers.
 
Commercial data service revenues include both transmission charges for data circuits and time and materials charges for GCI on-site support of customer operations. Data transport charges of $10.0 million increased by $1.1 million as compared to the second quarter of 2010 and time and material charges for support activities increased by $1.6 million to $11.5 million for the second quarter of 2011 as a result of increased activity primarily in the oil sector. Commercial data service revenues were $21.5 million in the second quarter of 2011, an increase of $2.7 million from the second quarter of 2010 and $2.4 million from the first quarter of 2011.

Commercial wireless revenues totaled $2.4 million for the second quarter of 2011 and increased 12.5 percent or $0.3 million from the second quarter of 2010 and were steady with the first quarter of 2011. Wireless revenues for the second quarter increased 24.0 percent or $0.5 million excluding a $0.2 million USF estimate change in the second quarter of 2010. GCI had 14,600 Commercial wireless subscribers at the end of the second quarter of 2011, an increase of 2,400 subscribers over the prior year and 900 subscribers sequentially.

Managed Broadband
Managed broadband revenues increased $4.3 million or 40.9 percent over the second quarter of 2010 and increased $0.6 million or 4.6 percent over the first quarter of 2011. The second quarter of 2010 reflected a $1.7 million contract reserve adjustment. Excluding the contract reserve adjustment, managed broadband revenues increased $2.6 million or 21.1 percent over the prior year.

 
 

 
Regulated Operations
Regulated operations revenues totaled $5.5 million in the second quarter of 2011 and were steady when compared to the second quarter of 2010 and the first quarter of 2011. Regulated operations had 9,400 local access lines at the end of the second quarter of 2011, a decrease of 1,200 lines from the second quarter of 2010 and a decrease of 400 lines from the first quarter of 2011.

Other Items
SG&A expenses for the second quarter of 2011 totaled $57.7 million, an increase of 5.5 percent as compared to $54.7 million for the second quarter of 2010. The increase is due to increases in health care, labor and related benefits and contract services offset in part by a decrease in success sharing costs. As a percentage of revenues, SG&A expenses are steady at 34 percent in the second quarter of 2011 as compared to the prior year. SG&A expenses for the second quarter decreased $1.2 million from the first quarter of 2011. The decrease is primarily related to a reduction in success sharing costs.

GCI’s second quarter 2011 capital expenditures totaled $45.6 million as compared to $27.1 million in the second quarter of 2010 and $28.3 million in the first quarter of 2011. The second quarter 2011 capital expenditures include $19.3 million related to the TERRA-SW project and compares to $16.0 million spent in the first quarter of 2011. GCI has received RUS loan and grant funds totaling $5.7 million for the year.

GCI refinanced the company’s $320 million face value, 7.25 percent 2014 senior notes replacing them with a new issue due 2021 with a $325 million face value, 6.75 percent. In addition, GCI added two $25 million term loans to its senior credit facilities, one of which closed prior to the end of second quarter, the second add-on term loan closed July 22, 2011. The bond refinancing added no net new cash to the company and the add-on term loan proceeds were used to repay a portion of the outstandings on the company’s $75 million revolving credit facility and for other general corporate purposes, including the funding of GCI’s core capital expenditures.

GCI will hold a conference call to discuss the quarter’s results on Thursday, August 4, 2011 beginning at 2 p.m. (Eastern). To access the briefing on August 4, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 800-779-1626 (International callers should dial 1-517-623-4003) 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 800-677-6119, access code 7461 (International callers should dial 203-369-3700.)

GCI is the largest telecommunications company in Alaska. GCI’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 connects not only Anchorage but also Fairbanks and Juneau/Southeast Alaska to the lower 48 states with a diversely routed, protected fiber network. GCI’s satellite network provides communications services to small towns and communities throughout rural Alaska. GCI’s newly constructed statewide mobile wireless network seamlessly links 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 GCI can be found at www.gci.com.

The foregoing contains forward-looking statements regarding GCI’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)
           
   
June 30,
   
December 31,
 
Assets
 
2011
   
2010
 
             
Current assets:
           
  Cash and cash equivalents
  $ 25,869       33,070  
 
               
  Receivables
    155,632       132,856  
  Less allowance for doubtful receivables
    7,530       9,189  
     Net receivables
    148,102       123,667  
 
               
  Deferred income taxes
    10,145       10,145  
  Prepaid expenses
    9,141       5,950  
  Inventories
    6,523       5,804  
  Other current assets
    3,734       3,940  
       Total current assets
    203,514       182,576  
 
               
Property and equipment in service, net of depreciation
    766,051       798,278  
Construction in progress
    77,549       31,144  
       Net property and equipment
    843,600       829,422  
 
               
Cable certificates
    191,635       191,635  
Goodwill
    73,932       73,932  
Wireless licenses
    25,967       25,967  
Other intangible assets, net of amortization
    16,435       17,717  
Deferred loan and senior notes costs, net of amortization
    13,418       13,661  
Other assets
    16,333       16,850  
    Total other assets
    337,720       339,762  
       Total assets
  $ 1,384,834       1,351,760  
                 
           
(Continued)
 


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
           
CONSOLIDATED BALANCE SHEETS
           
(Unaudited)
           
(Continued)
           
             
             
(Amounts in thousands)
           
   
June 30,
   
December 31,
 
Liabilities and Stockholders' Equity
 
2011
   
2010
 
             
Current liabilities:
           
  Current maturities of obligations under long-term debt and capital leases
  $ 7,693       7,652  
  Accounts payable
    39,496       35,589  
  Deferred revenue
    18,160       17,296  
  Accrued payroll and payroll related obligations
    20,792       22,132  
  Accrued interest
    7,326       13,456  
  Accrued liabilities
    12,910       12,557  
  Subscriber deposits
    1,222       1,271  
     Total current liabilities
    107,599       109,953  
 
               
Long-term debt, net
    830,595       779,201  
Obligations under capital leases, excluding current maturities
    81,433       84,144  
Obligation under capital lease due to related party
    1,890       1,885  
Deferred income taxes
    101,845       102,401  
Long-term deferred revenue
    56,645       49,175  
Other liabilities
    22,921       24,495  
       Total liabilities
    1,202,928       1,151,254  
 
               
                 
Commitments and contingencies
               
Stockholders’ equity:
               
  Common stock (no par):
               
   Class A. Authorized 100,000 shares; issued 42,762 and 44,213 shares
      at June 30, 2011 and December 31, 2010, respectively; outstanding
      42,508 and 43,958 shares at June 30, 2011 and December 31, 2010,
      respectively
    48,796       69,396  
                 
    Class B. Authorized 10,000 shares; issued and outstanding 3,176 and
      3,178 shares at June 30, 2011 and December 31, 2010, respectively;
      convertible on a share-per-share basis into Class A common stock
    2,683       2,677  
                 
    Less cost of 254 and 255 Class A common shares held in
      treasury at June 30, 2011 and December 31, 2010, respectively
    (2,240 )     (2,249 )
 
               
  Paid-in capital
    39,532       37,075  
  Retained earnings
    93,135       93,607  
       Total stockholders' equity
    181,906       200,506  
                 
       Total liabilities and stockholders' equity
  $ 1,384,834       1,351,760  


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                         
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
(Amounts in thousands, except per share amounts)
 
2011
   
2010
   
2011
   
2010
 
                         
Revenues
  $ 168,089       162,326       332,866       314,745  
 
                               
Cost of goods sold (exclusive of depreciation and amortization shown
  separately below)
    57,314       51,754       111,070       100,661  
Selling, general and administrative expenses
    57,697       54,704       116,590       107,961  
Depreciation and amortization expense
    30,632       30,820       62,352       61,946  
   Operating income
    22,446       25,048       42,854       44,177  
 
                               
Other income (expense):
                               
  Interest expense (including amortization of deferred loan fees)
    (17,294 )     (17,729 )     (34,746 )     (35,409 )
  Loss on extinguishment of debt
    (9,111 )     -       (9,111 )     -  
  Interest income
    4       76       8       137  
  Other
    (9 )     -       (33 )     -  
    Other expense, net
    (26,410 )     (17,653 )     (43,882 )     (35,272 )
                                 
     Income (loss) before income tax (expense) benefit
    (3,964 )     7,395       (1,028 )     8,905  
 
                               
Income tax (expense) benefit
    2,007       (5,465 )     556       (5,301 )
 
                               
     Net income (loss)
  $ (1,957 )     1,930       (472 )     3,604  
 
                               
Basic net income (loss) per Class A common share
  $ (0.04 )     0.04       (0.01 )     0.07  
                                 
Basic net income (loss) per Class B common share
  $ (0.04 )     0.04       (0.01 )     0.07  
                                 
Diluted net income (loss) per Class A common share
  $ (0.04 )     0.04       (0.01 )     0.07  
                                 
Diluted net income (loss) per Class B common share
  $ (0.04 )     0.04       (0.01 )     0.07  
                                 
Common shares used to calculate Class A basic EPS
    43,098       51,489       43,536       51,534  
                                 
Common shares used to calculate Class A diluted EPS
    46,276       54,745       46,714       54,786  


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
 
(Amounts in thousands)
                                                                   
   
Second Quarter 2011
   
Second Quarter 2010
 
         
Network
         
Managed
   
Regulated
         
Network
         
Managed
   
Regulated
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
 
Revenues
                                                                       
  Voice
  $ 13,625       5,441       7,340       -       5,529       31,935     $ 15,254       7,176       8,448       -       5,607       36,485  
  Video
    29,546       -       2,936       -       -       32,482       29,352       -       2,639       -       -       31,991  
  Data
    17,257       15,023       21,518       14,639       -       68,437       14,608       15,823       18,831       10,387       -       59,649  
  Wireless
    28,126       4,687       2,422       -       -       35,235       27,935       4,113       2,153       -       -       34,201  
    Total
    88,554       25,151       34,216       14,639       5,529       168,089       87,149       27,112       32,071       10,387       5,607       162,326  
                                                                                                 
Cost of goods sold
    28,011       6,576       16,932       4,580       1,215       57,314       26,192       6,379       15,097       3,160       926       51,754  
                                                                                                 
    Contribution
    60,543       18,575       17,284       10,059       4,314       110,775       60,957       20,733       16,974       7,227       4,681       110,572  
                                                                                                 
Less SG&A
    33,288       6,570       10,233       4,513       3,093       57,697       30,445       7,897       9,179       4,219       2,964       54,704  
Less other
    -       -       -       9       -       9       -       -       -       -       -       -  
    EBITDA
    27,255       12,005       7,051       5,537       1,221       53,069       30,512       12,836       7,795       3,008       1,717       55,868  
                                                                                                 
Add share-based compensation
    894       301       319       156       -       1,670       825       390       273       155       -       1,643  
Add accretion
    109       38       31       16       -       194       -       -       -       -       -       -  
Add other
    -       -       -       -       -       -       (82 )     (39 )     (24 )     (15 )     -       (160 )
    Adjusted EBITDA
  $ 28,258       12,344       7,401       5,709       1,221       54,933     $ 31,255       13,187       8,044       3,148       1,717       57,351  
                                                                                                 
                                                                                                 
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
 
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
                                                                                         
   
Second Quarter 2011
     
First Quarter 2011
           
Network
           
Managed
   
Regulated
           
Network
           
Managed
   
Regulated
 
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
 
Revenues
                                                                                               
  Voice
  $ 13,625       5,441       7,340       -       5,529       31,935     $ 13,752       6,470       7,573       -       5,439       33,234  
  Video
    29,546       -       2,936       -       -       32,482       30,339       -       2,840       -       -       33,179  
  Data
    17,257       15,023       21,518       14,639       -       68,437       16,701       14,972       19,095       13,995       -       64,763  
  Wireless
    28,126       4,687       2,422       -       -       35,235       27,625       3,655       2,321       -       -       33,601  
    Total
    88,554       25,151       34,216       14,639       5,529       168,089       88,417       25,097       31,829       13,995       5,439       164,777  
                                                                                                 
Cost of goods sold
    28,011       6,576       16,932       4,580       1,215       57,314       27,308       6,665       14,866       3,914       1,003       53,756  
                                                                                                 
    Contribution
    60,543       18,575       17,284       10,059       4,314       110,775       61,109       18,432       16,963       10,081       4,436       111,021  
                                                                                                 
Less SG&A
    33,288       6,570       10,233       4,513       3,093       57,697       33,375       6,778       10,537       4,467       3,736       58,893  
Less other
    -       -       -       9       -       9       -       -       -       24       -       24  
    EBITDA
    27,255       12,005       7,051       5,537       1,221       53,069       27,734       11,654       6,426       5,590       700       52,104  
                                                                                                 
Add share-based compensation
    894       301       319       156       -       1,670       619       212       224       115       -       1,170  
Add accretion
    109       38       31       16       -       194       41       14       12       6       -       72  
    Adjusted EBITDA
  $ 28,258       12,344       7,401       5,709       1,221       54,933     $ 28,393       11,880       6,662       5,711       700       53,346  
                                                                                                 
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
                                                                                         
   
Six Months Ended June 30, 2011
   
Six Months Ended June 30, 2010
           
Network
           
Managed
   
Regulated
           
Network
           
Managed
   
Regulated
 
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
 
Revenues
                                                                                               
  Voice
  $ 27,377       11,911       14,913       -       10,968       65,169     $ 29,110       13,835       16,291       -       11,667       70,903  
  Video
    59,885       -       5,776       -       -       65,661       58,376       -       4,956       -       -       63,332  
  Data
    33,958       29,995       40,613       28,634       -       133,200       28,734       32,152       34,333       22,472       -       117,691  
  Wireless
    55,751       8,342       4,743       -       -       68,836       51,297       7,308       4,214       -       -       62,819  
    Total
    176,971       50,248       66,045       28,634       10,968       332,866       167,517       53,295       59,794       22,472       11,667       314,745  
                                                                                                 
Cost of goods sold
    55,319       13,241       31,798       8,494       2,218       111,070       51,825       12,907       27,468       6,378       2,083       100,661  
                                                                                                 
    Contribution
    121,652       37,007       34,247       20,140       8,750       221,796       115,692       40,388       32,326       16,094       9,584       214,084  
                                                                                                 
Less SG&A
    66,664       13,348       20,769       8,980       6,829       116,590       59,611       15,741       18,324       8,261       6,024       107,961  
Less other
    -       -       -       33       -       33       -       -       -       -       -       -  
    EBITDA
    54,988       23,659       13,478       11,127       1,921       105,173       56,081       24,647       14,002       7,833       3,560       106,123  
                                                                                                 
Add share-based compensation
    1,514       514       542       270       -       2,840       1,208       570       423       245       -       2,446  
Add accretion
    149       51       43       23       -       266       -       -       -       -       -       -  
Add other
    -       -       -       -       -       -       (82 )     (39 )     (24 )     (15 )     -       (160 )
    Adjusted EBITDA
  $ 56,651       24,224       14,063       11,420       1,921       108,279     $ 57,207       25,178       14,401       8,063       3,560       108,409  


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(Unaudited)
                                           
                     
June 30, 2011
   
June 30, 2011
 
                     
as compared to
   
as compared to
 
   
June 30,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
 
   
2011
   
2010
   
2011
   
2010
   
2011
   
2010
   
2011
 
Consumer
                                         
Voice
                                         
Long-distance subscribers
    84,600       90,200       87,900       (5,600 )     (3,300 )     -6.2 %     -3.8 %
Total local access lines in
  service
    82,300       85,100       85,100       (2,800 )     (2,800 )     -3.3 %     -3.3 %
Local access lines in service on
  GCI facilities
    75,900       77,100       78,000       (1,200 )     (2,100 )     -1.6 %     -2.7 %
                                                         
Video
                                                       
Basic subscribers
    126,900       131,200       130,200       (4,300 )     (3,300 )     -3.3 %     -2.5 %
Digital programming tier
  subscribers
    77,400       80,600       81,600       (3,200 )     (4,200 )     -4.0 %     -5.1 %
HD/DVR converter boxes
    87,700       86,500       89,300       1,200       (1,600 )     1.4 %     -1.8 %
Homes passed
    239,000       234,700       239,000       4,300       -       1.8 %     0.0 %
                                                         
Data
                                                       
Cable modem subscribers
    105,400       103,500       107,200       1,900       (1,800 )     1.8 %     -1.7 %
                                                         
Wireless
                                                       
Wireless lines in service
    126,400       119,000       126,500       7,400       (100 )     6.2 %     -0.1 %
                                                         
Network Access Services
                                                       
Data:
                                                       
Total ISP access lines in service
    1,600       1,700       1,700       (100 )     (100 )     -5.9 %     -5.9 %
Total ISP access lines in service
  on GCI facilities
    1,400       1,400       1,300                                  
                                                         
Commercial
                                                       
Voice:
                                                       
Long-distance subscribers
    9,100       9,400       9,100       (300 )     -       -3.2 %     0.0 %
Total local access lines in
  service
    49,100       48,000       48,700       1,100       400       2.3 %     0.8 %
Local access lines in service on
  GCI facilities
    25,600       20,600       25,200       5,000       400       24.3 %     1.6 %
                                                         
Video
                                                       
Hotels and mini-headend
  subscribers
    18,300       18,500       15,200       (200 )     3,100       -1.1 %     20.4 %
Basic subscribers
    2,000       1,800       2,000       200       -       11.1 %     0.0 %
   Total basic subscribers
    20,300       20,300       17,200       -       3,100       0.0 %     18.0 %
                                                         
Data
                                                       
Cable modem subscribers
    11,000       10,800       10,800       200       200       1.9 %     1.9 %
                                                         
Wireless
                                                       
Wireless lines in service
    14,600       12,200       13,700       2,400       900       19.7 %     6.6 %
                                                         
Regulated Operations
                                                       
Voice:
                                                       
Total local access lines in
  service
    9,400       10,600       9,800       (1,200 )     (400 )     -11.3 %     -4.1 %
                                                         
                           
June 30, 2011
   
June 30, 2011
   
Three Months Ended
   
as Compared to
   
as Compared to
 
   
June 30,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
   
June 30,
   
March 31,
 
      2011       2010       2011       2010       2011       2010       2011  
Consumer
                                                       
Voice
                                                       
Long-distance minutes carried
  (in millions)
    23.2       26.7       24.4       (3.5 )     (1.2 )     -13.1 %     -4.9 %
                                                         
Video
                                                       
Average monthly gross revenue
  per subscriber
  $ 76.47     $ 74.54     $ 77.60     $ 1.93     $ (1.13 )     2.6 %     -1.5 %
                                                         
Wireless
                                                       
Average monthly gross revenue 
  per subscriber
  $ 70.52     $ 75.07     $ 69.46     $ (4.55 )   $ 1.06       -6.1 %     1.5 %
                                                         
Network Access Services
                                                       
Voice
                                                       
Long-distance minutes carried
  (in millions)
    187.5       201.3       190.7       (13.8 )     (3.2 )     -6.9 %     -1.7 %
                                                         
Commercial
                                                       
Voice:
                                                       
Long-distance minutes carried
  (in millions)
    28.0       29.4       28.3       (1.4 )     (0.3 )     -4.8 %     -1.1 %
                                                         
Total
                                                       
Long-distance minutes carried
  (in millions)
    238.7       257.4       243.4       (18.7 )     (4.7 )     -7.3 %     -1.9 %


 
 

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


   
Three Months Ended
 
   
June 30,
2011
   
June 30,
2010
   
March 31,
2011
 
Net income (loss)
  $ (2.0 )     1.9       1.5  
Income tax expense (benefit)
    (2.0 )     5.5       1.4  
Income (loss) before income tax expense (benefit)
    (4.0 )     7.4       2.9  
                         
Other expense:
                       
Interest expense
  (including amortization of deferred loan fees)
    17.3       17.8       17.5  
Interest income
    ---       (0.1 )     ---  
Loss on extinguishment of debt
    9.1       ---       ---  
Other expense, net
    26.4       17.7       17.5  
                         
Operating income
    22.4       25.1       20.4  
Depreciation and amortization expense
    30.6       30.8       31.7  
                         
EBITDA (Note 2)
    53.0       55.9       52.1  
Share-based compensation
    1.7       1.6       1.1  
Accretion
    0.2       ---       0.1  
Non-cash contribution adjustment
    ---       (0.1 )     ---  
Adjusted EBITDA (Note 1)
  $ 54.9       57.4       53.3  


 
 

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


             
   
Six Months Ended
 
   
June 30,
2011
   
June 30,
2010
 
Net income (loss)
  $ (0.5 )     3.6  
Income tax expense (benefit)
    (0.5 )     5.3  
Income (loss) before income tax expense (benefit)
    (1.0 )     8.9  
                 
Other (income) expense:
               
Interest expense
  (including amortization of deferred loan fees)
    34.8       35.4  
Interest income
    ---       (0.1 )
Loss on extinguishment of debt
    9.1       ---  
Other expense, net
    43.9       35.3  
                 
Operating income
    42.9       44.2  
Depreciation and amortization expense
    62.3       61.9  
                 
EBITDA (Note 2)
    105.2       106.1  
Share-based compensation
    2.8       2.4  
Accretion
    0.3       ---  
Non-cash contribution adjustment
    ---       (0.1 )
Adjusted EBITDA (Note 1)
  $ 108.3       108.4  



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

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