Exhibit 99.1 
 

 
 


November 2, 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 THIRD QUARTER 2011 FINANCIAL RESULTS

·  
Consolidated revenue of $177.7 million
·  
Adjusted EBITDA of $63.1 million
·  
Net income of $7.2 million or $0.15 per diluted share

ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its third quarter 2011 results with revenues increasing to $177.7 million over revenues of $171.5 million in the third quarter of 2010. Adjusted EBITDA for the third quarter of 2011 was $63.1 million, an increase of $0.4 million over Adjusted EBITDA of $62.7 million for the third quarter of 2010. Adjusted EBITDA for the third quarter of 2011 increased $2.3 million or 3.7 percent after excluding the net benefit of $3.8 million of billing disputes offset by $1.9 million in accrued accident expenses reflected in the third quarter of 2010.

Net income for the third quarter totaled $7.2 million or earnings per diluted share of $0.15 and compares to net income of $7.6 million, or earnings per diluted share of $0.14 for the same period of 2010.

Third quarter revenues increased 5.7 percent or $9.6 million over second quarter of 2011 revenues. Adjusted EBITDA for the third quarter increased 14.9 percent or $8.2 million over the second quarter of 2011 Adjusted EBITDA.

“Third quarter results are significantly improved on a sequential basis.” said GCI president Ron Duncan. “However, year over year results are relatively flat and our overall performance is not as strong as we had expected. We are experiencing continued decreases in our wireline customer base as consumers cut the cord and move to wireless and growth in our wireless segment has been slower than anticipated due to delays in the turn up of our new high speed networks.”

“Construction of our important $88 million TERRA microwave project is basically complete and we expect to turn up service on it before the end of this year. For the first time residents of southwest Alaska will have access to high speed terrestrial broadband services.”

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. GCI expects 2011 revenues will be within the range of the revenue guidance. Adjusted EBITDA is now expected in the range of $225 million to $227 million for 2011.

Highlights
·  
GCI has substantially completed construction on TERRA-Southwest (TERRA-SW), its project to extend terrestrial broadband service to Bristol Bay and the Yukon-Kuskokwim Delta. The $88 million project will provide terrestrial broadband to 65 communities in Southwest Alaska for the first time. GCI will begin to cut over customers to terrestrial from satellite service before the end of the year 2011. TERRA-SW was originally scheduled to be completed by the end of 2013.
 
 
 

 

 
·  
GCI repurchased 1,919,900 shares of its Class A common stock in the third quarter of 2011 at an average price per share of $9.32. 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 third quarter of 2011 GCI had approximately 43.9 million shares outstanding.

·  
Managed broadband revenues increased $3.9 million or 28.5 percent over the third quarter of 2010 and increased $2.8 million or 18.9 percent over the second quarter of 2011.

·  
GCI is the second largest wireless provider in Alaska with 140,700 wireless subscribers at the end of the quarter. GCI launched 4G service in Anchorage in September and will upgrade service in the next ten largest communities to 3G service before the end of the year.

·  
GCI entered into an arrangement under the New Markets Tax Credit (NMTC) program with US Bancorp to help fund a $34.5 million project to extend terrestrial broadband service to communities in Northwest Alaska. This project is called TERRA-Northwest (TERRA-NW) and will complement the TERRA-SW project. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the Act) to induce capital investment in qualified low income communities. The Act permits taxpayers to claim credits against their federal income taxes of up to 39 percent of qualified investments. The NMTC program will provide $16.5 million of the total project. The Regulatory Commission of Alaska will provide another $5.3 million in grants for the project. GCI will provide the remaining $12.7 million to complete the project.

·  
On October 27, 2011 the FCC adopted an order that is expected to reform the methodology for distributing Universal Service Fund (“USF”) high cost support for voice and broadband services, as well as the system by which carriers compensate each other for terminating traffic. These changes are likely to alter how GCI will be compensated for providing services in the state. Putting aside any potential impact from the order, GCI expects to record approximately $54 million of USF high cost support revenue in 2011. Although the detailed order has not yet been released, GCI expects that high cost support for markets defined as urban will be subject to a five year transitional phase out beginning July 1, 2012. GCI anticipates that changes to the Universal Service Fund program will reduce high cost support revenue by approximately $5 million per year in both 2012 and 2013. Once the order has been released and fully analyzed, GCI will re-evaluate its on-going program of reinvestment in light of the potential impact of the regulatory changes on free cash flow.

·  
GCI had 139,200 access lines at the end of the third quarter of 2011, representing an estimated 36 percent share of the total access line market in Alaska. Access lines decreased by 3,200 lines from the second quarter of 2011. The line decreases were primarily consumer access lines.

·  
GCI’s facilities-based access lines totaled 109,700, representing 78.8 percent of its total access lines at the end of the third quarter of 2011. Reported facilities based access lines decreased 2,600 lines from the second quarter of 2011. The decrease in facilities based access lines were primarily consumer access lines.

·  
GCI had 117,900 consumer and commercial cable modem customers at the end of the third quarter of 2011, an increase of 1,500 over the 116,400 cable modem customers at the end of the second quarter 2011. Average monthly revenue per cable modem for the third quarter of 2011 was $57.43, an increase of 13.5 percent over the $50.61 figure posted for the prior year and 6.6 percent from the $53.85 figure posted for the second quarter of 2011.

 
 

 
Consumer
Consumer revenues increased 0.6 percent to $89.3 million as compared to $88.7 million in the third quarter of 2010 and $88.6 million in the second quarter of 2011. Data and wireless continue to support financial results in the consumer business.

Consumer voice revenues of $13.2 million, as expected, were lower as compared to $14.6 million the third quarter of 2010 and $13.6 million in the second quarter of 2011. Consumer local access lines in service at the end of the third quarter of 2011 totaled 79,100, a decrease of 5,600 lines from the third quarter of 2010 and 3,200 lines from the second quarter of 2011. The decrease in access lines is primarily 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, the share growth is no longer sufficient to offset the decreasing overall size of the wire line access market. Troop deployment also contributed to the decrease in local access lines, which GCI expects to continue through and past the end of the year as new troop deployments have been announced.

GCI serves 73,200 consumer access lines on its own facilities, a decrease of 3,900 and 2,700 lines from the third quarter of 2010 and the second quarter of 2011, respectively. More than 92 percent of consumer access lines are provisioned exclusively on GCI facilities.

Consumer video revenues of $29.2 million decreased 1.9 percent from the third quarter of 2010 and 1.3 percent from the second quarter of 2011. The decrease from the prior year is largely due to a decrease in video subscribers. Consumer basic video subscribers totaled 126,400 at the end of the third quarter of 2011, a decrease of 500 subscribers from the second quarter of 2011.

Consumer data revenues of $18.1 million increased 14.5 percent over the third quarter of 2010 and 4.8 percent over the second 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 2,400 consumer cable modem customers over the third quarter of 2010 and 1,400 cable modem customer on a sequential basis.
 
Consumer wireless revenues of $28.9 million for the third quarter of 2011 were steady with the third quarter of 2010 and increased 2.6 percent over the second quarter of 2011. Consumer has added 2,900 wireless customers over the end of the third quarter a year ago, an increase of 2.4 percent. Consumer wireless customers decreased by 600 lines as compared to the end of the second quarter of 2011. Sequential wireless gross additions were unfavorably impacted by the implementation of a new policy for Lifeline customers which reduced net wireless subscriber counts for the third quarter by more than 1,600 and for the year by more than 2,600. The delay in GCI’s roll out of higher speed wireless service offerings has resulted in slower post-paid customer growth than originally expected.

Network Access
Network access revenues increased 4.5 percent to $29.5 million as compared to $28.2 million in the third quarter of 2010 and increased 17.2 percent or $4.3 million as compared to the second quarter of 2011.

 
 

 
Voice revenues, as expected, decreased 28.1 percent to $6.2 million from the prior year and increased 14.2 percent over the second quarter of 2011. The decrease in voice revenues for the year is primarily due to the continued decrease in the wired voice market as a result of wireless and data substitution. Long distance minutes decreased 1.4 percent from the prior year and increased 8.0 percent over the second quarter of 2011. The sequential increase in revenues and minutes is primarily due to seasonality.
 
Data revenues increased $3.2 million or 20.6 percent compared to the third quarter of 2010 and increased $2.1 million or 14.1 percent compared to the second quarter of 2011. The increase in data revenues is due in part to the continuing shift to IP-based transport and $1.9 million in revenues due to special project work for a new customer.

Wireless revenues, primarily related to roaming traffic, increased 14.1 percent to $6.1 million over the prior year and 30.4 percent sequentially. The increase in revenues is primarily due to seasonality.

Commercial
Commercial revenues of $35.6 million were level with the third quarter of 2010 and increased $1.4 million over $34.2 million in the second quarter of 2011.

Voice revenues for the third quarter of 2011 decreased 11.1 percent or $0.9 million when compared to the third quarter of 2010 and were relatively steady when compared with the second quarter of 2011. Long distance minutes decreased 4.6 percent from the prior year and increased 1.3 percent over the second quarter of 2011. Local access lines at the end of the second quarter of 2011 increased by 100 lines sequentially. Local access lines served entirely on GCI’s facilities increased by 4,900 lines when compared to the prior year and increased by 200 over the second 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 of $2.8 million were relatively steady with the prior year and the second quarter of 2011. Commercial video subscribers total 20,000 at the end of the third quarter of 2011 an increase of 2,200 subscribers when compared to the end of the third quarter of the prior year. Commercial video subscribers at the end of the third quarter decreased by 300 subscribers from the second quarter of 2011.
 
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 $10.3 million increased by $1.1 million as compared to the third quarter of 2010 and time and material charges for support activities decreased $0.3 million from the third quarter of 2010. Commercial data service revenues were $23.0 million in the third quarter of 2011, an increase of $0.8 million over the third quarter of 2010 and $1.5 million over the second quarter of 2011. The sequential increase in data service revenues is primarily attributed to a seasonal increase in time and material charges for support activities in the state’s oil sector.

Commercial wireless revenues totaled $2.6 million for the third quarter of 2011 and increased 13.5 percent or $0.3 million over the third quarter of 2010 and were steady with the second quarter of 2011. GCI had 14,900 commercial wireless subscribers at the end of the third quarter of 2011, an increase of 1,300 subscribers over the prior year and 300 subscribers sequentially.

 
 

 
Managed Broadband
Managed broadband revenues increased $3.9 million or 28.5 percent over the third quarter of 2010 and increased $2.8 million or 18.9 percent over the second quarter of 2011. The increase in revenues for the year and sequentially is due to an increase in activity by rural school districts and rural health agencies.

Regulated Operations
Regulated operations revenues totaled $6.0 million in the third quarter of 2011, an increase of $0.4 million over the third quarter of 2010 and $0.5 million over the second quarter of 2011. Regulated operations had 9,300 local access lines at the end of the third quarter of 2011, a decrease of 900 lines from the third quarter of 2010 and a decrease of 100 lines from the second quarter of 2011.

Other Items
SG&A expenses for the third quarter of 2011 totaled $54.5 million, a decrease of 7.0 percent as compared to $58.5 million for the third quarter of 2010. The decrease is due a reduction in success sharing costs and the absence of costs associated with an accident involving our company-owned aircraft in August 2010. As a percentage of revenues, SG&A expenses decreased to 31 percent as compared to 34 percent in the second quarter of 2011 and the prior year.

GCI’s third quarter 2011 capital expenditures totaled $57.2 million as compared to $24.7 million in the third quarter of 2010 and $45.6 million in the second quarter of 2011. The third quarter 2011 capital expenditures include $31.6 million related to the TERRA-SW project and compares to $20.6 million spent in the second quarter of 2011. GCI has incurred $77.1 million of the estimated total cost for the project of $88 million. GCI has received RUS loan and grant funds for the project totaling $30.7 million.

GCI will hold a conference call to discuss the quarter’s results on Thursday, November 3, 2011 beginning at 2 p.m. (Eastern). To access the briefing on November 3, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 800-779-8168 (International callers should dial 1-312-470-7398) 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 866-402-3767, access code 7461 (International callers should dial 203-369-0554.)

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 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)
           
   
September 30,
   
December 31,
 
Assets
 
2011
   
2010
 
             
Current assets:
           
  Cash and cash equivalents
  $ 34,634       33,070  
 
               
  Receivables
    168,840       132,856  
  Less allowance for doubtful receivables
    6,273       9,189  
     Net receivables
    162,567       123,667  
 
               
  Deferred income taxes
    10,145       10,145  
  Prepaid expenses
    8,434       5,950  
  Inventories
    7,949       5,804  
  Other current assets
    3,658       3,940  
       Total current assets
    227,387       182,576  
 
               
Property and equipment in service, net of depreciation
    762,170       798,278  
Construction in progress
    108,692       31,144  
       Net property and equipment
    870,862       829,422  
 
               
Cable certificates
    191,635       191,635  
Goodwill
    73,932       73,932  
Wireless licenses
    25,967       25,967  
Restricted cash
    16,546       -  
Other intangible assets, net of amortization
    16,549       17,717  
Deferred loan and senior notes costs, net of amortization
    13,223       13,661  
Other assets
    15,271       16,850  
    Total other assets
    353,123       339,762  
       Total assets
  $ 1,451,372       1,351,760  
                 
           
(Continued)
 

 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Continued)
             
             
(Amounts in thousands)
           
   
September 30,
   
December 31,
 
Liabilities and Stockholders' Equity
 
2011
   
2010
 
             
Current liabilities:
           
  Current maturities of obligations under long-term debt and capital leases
  $ 8,042       7,652  
  Accounts payable
    49,726       35,589  
  Deferred revenue
    18,583       17,296  
  Accrued payroll and payroll related obligations
    20,313       22,132  
  Accrued interest
    21,969       13,456  
  Accrued liabilities
    11,370       12,557  
  Subscriber deposits
    1,304       1,271  
     Total current liabilities
    131,307       109,953  
 
               
Long-term debt, net
    852,374       779,201  
Obligations under capital leases, excluding current maturities
    80,031       84,144  
Obligation under capital lease due to related party
    1,893       1,885  
Deferred income taxes
    109,804       102,401  
Long-term deferred revenue
    63,914       49,175  
Other liabilities
    22,433       24,495  
       Total liabilities
    1,261,756       1,151,254  
 
               
                 
Commitments and contingencies
               
Stockholders’ equity:
               
  Common stock (no par):
               
   Class A. Authorized 100,000 shares; issued 40,966 and 44,213 shares at
      September 30, 2011 and December 31, 2010, respectively; outstanding
      40,712 and 43,958 shares at September 30, 2011 and December 31,
      2010, respectively
    31,535       69,396  
                 
    Class B. Authorized 10,000 shares; issued and outstanding 3,172 and
      3,178 shares at September 30, 2011 and December 31, 2010,
      respectively; convertible on a share-per-share basis into Class A
      common stock
    2,680       2,677  
                 
    Less cost of 254 and 255 Class A common shares held in
      treasury at September 30, 2011 and December 31, 2010, respectively
    (2,240       (2,249 )
 
               
  Paid-in capital
    40,750       37,075  
  Retained earnings
    100,345       93,607  
       Total General Communication, Inc. stockholders' equity
    173,070       200,506  
  Noncontrolling interest
    16,546       -  
       Total stockholders' equity
    189,616       200,506  
                 
       Total liabilities and stockholders' equity
  $ 1,451,372       1,351,760  


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
(Amounts in thousands, except per share amounts)
 
2011
   
2010
   
2011
   
2010
 
                         
Revenues
  $ 177,703       171,509       510,569       486,254  
 
                               
Cost of goods sold (exclusive of depreciation and amortization shown
  separately below)
    60,664       52,486       171,734       153,147  
Selling, general and administrative expenses
    54,453       58,532       171,043       166,493  
Depreciation and amortization expense
    30,702       30,288       93,054       92,234  
   Operating income
    31,884       30,203       74,738       74,380  
 
                               
Other income (expense):
                               
  Interest expense (including amortization of deferred loan fees)
    (16,678 )     (17,760 )     (51,424 )     (53,169 )
  Loss on extinguishment of debt
    -       -       (9,111 )     -  
  Interest income
    22       99       30       236  
  Other
    (59 )     -       (92 )     -  
    Other expense, net
    (16,715 )     (17,661 )     (60,597 )     (52,933 )
                                 
     Income before income tax expense
    15,169       12,542       14,141       21,447  
 
                               
Income tax expense
    (7,959 )     (4,959 )     (7,403 )     (10,260 )
 
                               
     Net income
  $ 7,210       7,583       6,738       11,187  
 
                               
Basic net income per Class A common share
  $ 0.16       0.14       0.15       0.20  
                                 
Basic net income per Class B common share
  $ 0.16       0.14       0.15       0.20  
                                 
Diluted net income per Class A common share
  $ 0.15       0.14       0.13       0.20  
                                 
Diluted net income per Class B common share
  $ 0.15       0.14       0.13       0.20  
                                 
Common shares used to calculate Class A basic EPS
    41,768       51,496       42,940       51,521  
                                 
Common shares used to calculate Class A diluted EPS
    45,464       54,940       46,682       54,808  

 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
                                                                   
   
Third Quarter 2011
   
Third Quarter 2010
 
         
Network
         
Managed
   
Regulated
         
Network
         
Managed
   
Regulated
 
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
 
Revenues
                                                                       
  Voice
  $ 13,164       6,213       7,137       -       5,990       32,504     $ 14,601       8,636       8,025       -       5,595       36,857  
  Video
    29,155       -       2,830       -       -       31,985       29,720       -       2,953       -       -       32,673  
  Data
    18,088       17,140       23,040       17,407       -       75,675       15,797       14,208       22,211       13,548       -       65,764  
  Wireless
    28,860       6,114       2,565       -       -       37,539       28,595       5,360       2,260       -       -       36,215  
    Total
    89,267       29,467       35,572       17,407       5,990       177,703       88,713       28,204       35,449       13,548       5,595       171,509  
                                                                                                 
Cost of goods sold
    27,436       9,531       17,232       4,540       1,925       60,664       25,374       5,547       16,731       3,545       1,289       52,486  
                                                                                                 
    Contribution
    61,831       19,936       18,340       12,867       4,065       117,039       63,339       22,657       18,718       10,003       4,306       119,023  
                                                                                                 
Less SG&A
    31,737       6,300       9,358       4,031       3,027       54,453       33,248       8,178       9,955       4,392       2,759       58,532  
Less other
    -       -       -       59       -       59       -       -       -       -       -       -  
    EBITDA
    30,094       13,636       8,982       8,777       1,038       62,527       30,091       14,479       8,763       5,611       1,547       60,491  
                                                                                                 
Add share-based
  compensation
    173       56       104       51       -       384       1,121       549       362       215       3       2,250  
Add accretion
    106       37       31       16       -       190       -       -       -       -       -       -  
    Adjusted EBITDA
  $ 30,373       13,729       9,117       8,844       1,038       63,101     $ 31,212       15,028       9,125       5,826       1,550       62,741  
                                                                                                 
                                                                                                 
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
                                                                                         
   
Third Quarter 2011
     
Second Quarter 2011
   
           
Network
           
Managed
   
Regulated
           
Network
           
Managed
   
Regulated
 
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
 
Revenues
                                                                                               
  Voice
  $ 13,164       6,213       7,137       -       5,990       32,504     $ 13,625       5,441       7,340       -       5,529       31,935  
  Video
    29,155       -       2,830       -       -       31,985       29,546       -       2,936       -       -       32,482  
  Data
    18,088       17,140       23,040       17,407       -       75,675       17,257       15,023       21,518       14,639       -       68,437  
  Wireless
    28,860       6,114       2,565       -       -       37,539       28,126       4,687       2,422       -       -       35,235  
    Total
    89,267       29,467       35,572       17,407       5,990       177,703       88,554       25,151       34,216       14,639       5,529       168,089  
                                                                                                 
Cost of goods sold
    27,436       9,531       17,232       4,540       1,925       60,664       28,011       6,576       16,932       4,580       1,215       57,314  
                                                                                                 
    Contribution
    61,831       19,936       18,340       12,867       4,065       117,039       60,543       18,575       17,284       10,059       4,314       110,775  
                                                                                                 
Less SG&A
    31,737       6,300       9,358       4,031       3,027       54,453       33,288       6,570       10,233       4,513       3,093       57,697  
Less other
    -       -       -       59       -       59       -       -       -       9       -       9  
    EBITDA
    30,094       13,636       8,982       8,777       1,038       62,527       27,255       12,005       7,051       5,537       1,221       53,069  
                                                                                                 
Add share-based
  compensation
    173       56       104       51       -       384       894       301       319       156       -       1,670  
Add accretion
    106       37       31       16       -       190       109       38       31       16       -       194  
    Adjusted EBITDA
  $ 30,373       13,729       9,117       8,844       1,038       63,101     $ 28,258       12,344       7,401       5,709       1,221       54,933  
                                                                                                 
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
                                                                                         
   
Nine Months Ended September 30, 2011
     
Nine Months Ended September 30, 2010
   
           
Network
           
Managed
   
Regulated
           
Network
           
Managed
   
Regulated
 
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
   
Consumer
   
Access
   
Commercial
   
Broadband
   
Operations
   
Totals
 
Revenues
                                                                                               
  Voice
  $ 40,541       18,124       22,050       -       16,958       97,673     $ 43,711       22,471       24,316       -       17,262       107,760  
  Video
    89,040       -       8,606       -       -       97,646       88,096       -       7,909       -       -       96,005  
  Data
    52,046       47,135       63,653       46,041       -       208,875       44,531       46,360       56,544       36,020       -       183,455  
  Wireless
    84,611       14,456       7,308       -       -       106,375       79,892       12,668       6,474       -       -       99,034  
    Total
    266,238       79,715       101,617       46,041       16,958       510,569       256,230       81,499       95,243       36,020       17,262       486,254  
                                                                                                 
Cost of goods sold
    82,755       22,772       49,030       13,034       4,143       171,734       77,199       18,454       44,199       9,923       3,372       153,147  
                                                                                                 
    Contribution
    183,483       56,943       52,587       33,007       12,815       338,835       179,031       63,045       51,044       26,097       13,890       333,107  
                                                                                                 
Less SG&A
    98,402       19,647       30,126       13,012       9,856       171,043       92,858       23,919       28,279       12,654       8,783       166,493  
Less other
    -       -       -       92       -       92       -       -       -       -       -       -  
    EBITDA
    85,081       37,296       22,461       19,903       2,959       167,700       86,173       39,126       22,765       13,443       5,107       166,614  
                                                                                                 
Add share-based
  compensation
    1,686       569       646       323       -       3,224       2,329       1,119       785       460       3       4,696  
Add accretion
    257       88       73       38       -       456       -       -       -       -       -       -  
Less other
    -       -       -       -       -       -       (82 )     (39 )     (24 )     (15 )     -       (160 )
    Adjusted EBITDA
  $ 87,024       37,953       23,180       20,264       2,959       171,380     $ 88,420       40,206       23,526       13,888       5,110       171,150  


 
 

 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(Unaudited)
                                           
                     
September 30, 2011
   
September 30, 2011
 
                     
as compared to
   
as compared to
 
   
September 30,
   
September 30,
   
June 30,
   
September 30,
   
June 30,
   
September 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
   
2011
   
2010
   
2011
 
Consumer
                                         
Voice
                                         
Long-distance subscribers
    81,700       89,000       84,600       (7,300 )     (2,900 )     -8.2 %     -3.4 %
Total local access lines in service
    79,100       84,700       82,300       (5,600 )     (3,200 )     -6.6 %     -3.9 %
Local access lines in service on GCI facilities
    73,200       77,100       75,900       (3,900 )     (2,700 )     -5.1 %     -3.6 %
                                                         
Video
                                                       
Basic subscribers
    126,400       130,500       126,900       (4,100 )     (500 )     -3.1 %     -0.4 %
Digital programming tier subscribers
    76,700       80,600       77,400       (3,900 )     (700 )     -4.8 %     -0.9 %
HD/DVR converter boxes
    87,400       87,500       87,700       (100 )     (300 )     -0.1 %     -0.3 %
Homes passed
    239,800       234,900       239,000       4,900       800       2.1 %     0.3 %
                                                         
Data
                                                       
Cable modem subscribers
    106,800       104,400       105,400       2,400       1,400       2.3 %     1.3 %
                                                         
Wireless
                                                       
Wireless lines in service
    125,800       122,900       126,400       2,900       (600 )     2.4 %     -0.5 %
                                                         
Network Access Services
                                                       
Data:
                                                       
Total ISP access lines in service
    1,600       1,700       1,600       (100 )     -       -5.9 %     0.0 %
Total ISP access lines in service on GCI facilities
    1,400       1,300       1,400       100       -       7.7 %     0.0 %
                                                         
Commercial
                                                       
Voice:
                                                       
Long-distance subscribers
    8,600       9,300       9,100       (700 )     (500 )     -7.5 %     -5.5 %
Total local access lines in service
    49,200       48,100       49,100       1,100       100       2.3 %     0.2 %
Local access lines in service on GCI facilities
    25,800       20,900       25,600       4,900       200       23.4 %     0.8 %
                                                         
Video
                                                       
Hotels and mini-headend
  subscribers
    18,000       16,000       18,300       2,000       (300 )     12.5 %     -1.6 %
Basic subscribers
    2,000       1,800       2,000       200       -       11.1 %     0.0 %
   Total basic subscribers
    20,000       17,800       20,300       2,200       (300 )     12.4 %     -1.5 %
                                                         
Data
                                                       
Cable modem subscribers
    11,100       10,800       11,000       300       100       2.8 %     0.9 %
                                                         
Wireless
                                                       
Wireless lines in service
    14,900       13,600       14,600       1,300       300       9.6 %     2.1 %
                                                         
Regulated Operations
                                                       
Voice:
                                                       
Total local access lines in service
    9,300       10,200       9,400       (900 )     (100 )     -8.8 %     -1.1 %
                                                         
                           
September 30, 2011
   
September 30, 2011
 
   
Three Months Ended
           
as Compared to
   
as Compared to
 
   
September 30,
   
September 30,
   
June 30,
   
September 30,
   
June 30,
   
September 30,
   
June 30,
 
      2011       2010       2011       2010       2011       2010       2011  
Consumer
                                                       
Voice
                                                       
Long-distance minutes carried
  (in millions)
    22.3       25.6       23.2       (3.3 )     (0.9 )     -12.9 %     -3.9 %
                                                         
Video
                                                       
Average monthly gross revenue per subscriber
  $ 76.85     $ 75.85     $ 76.47     $ 1.00     $ 0.38       1.3 %     0.5 %
                                                         
Wireless
                                                       
Average monthly gross revenue per subscriber
  $ 72.60     $ 74.61     $ 70.52     $ (2.01 )   $ 2.08       -2.7 %     2.9 %
                                                         
Network Access Services
                                                       
Voice
                                                       
Long-distance minutes carried
  (in millions)
    202.5       205.4       187.5       (2.9 )     15.0       -1.4 %     8.0 %
                                                         
Commercial
                                                       
Voice:
                                                       
Long-distance minutes carried
  (in millions)
    28.4       29.8       28.0       (1.4 )     0.4       -4.7 %     1.4 %
                                                         
Total
                                                       
Long-distance minutes carried
  (in millions)
    253.2       260.8       238.7       (7.6 )     14.5       -2.9 %     6.1 %


 
 

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


   
Three Months Ended
 
   
September 30,
2011
   
September 30,
2010
   
June 31,
2011
 
Net income (loss)
  $ 7.2       7.6       (2.0 )
Income tax expense (benefit)
    8.0       4.9       (2.0 )
Income (loss) before income tax expense (benefit)
    15.2       12.5       (4.0 )
                         
Other expense:
                       
Interest expense
  (including amortization of deferred loan fees)
    16.7       17.8       17.3  
Interest income
    ---       (0.1 )     ---  
Loss on extinguishment of debt
    ---       ---       9.1  
Other expense, net
    16.7       17.7       26.4  
                         
Operating income
    31.9       30.2       22.4  
Depreciation and amortization expense
    30.7       30.3       30.6  
                         
EBITDA (Note 2)
    62.6       60.5       53.0  
Share-based compensation
    0.4       2.2       1.7  
Accretion
    0.1       ---       0.2  
Adjusted EBITDA (Note 1)
  $ 63.1       62.7       54.9  


 
 

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


             
   
Nine Months Ended
 
   
September 30,
2011
   
September 30,
2010
 
Net income
  $ 6.7       11.2  
Income tax expense
    7.4       10.2  
Income before income tax expense
    14.1       21.4  
                 
Other (income) expense:
               
Interest expense
  (including amortization of deferred loan fees)
    51.4       53.2  
Interest income
    ---       (0.2 )
Loss on extinguishment of debt
    9.1       ---  
Other
    0.1       ---  
Other expense, net
    60.6       53.0  
                 
Operating income
    74.7       74.4  
Depreciation and amortization expense
    93.1       92.2  
                 
EBITDA (Note 2)
    167.8       166.6  
Share-based compensation
    3.2       4.7  
Accretion
    0.4       ---  
Non-cash contribution adjustment
    ---       (0.1 )
Adjusted EBITDA (Note 1)
  $ 171.4       171.2  

 
 

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




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.