Exhibit 99.1
 


August 1, 2012

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 2012 FINANCIAL RESULTS

·  
Consolidated revenue of $176.1 million
·  
Adjusted EBITDA of $59.4 million
·  
Net income of $4.0 million or $0.09 per diluted share

ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its second quarter 2012 results with revenues increasing to $176.1 million over revenues of $168.1 million in the second quarter of 2011. Adjusted EBITDA increased 8.2 percent or $4.5 million over the second quarter of 2011 EBITDA of $54.9 million.

Revenues in the second quarter of 2012 were favorably impacted by the recognition of $1.6 million in revenues for services provided to a managed broadband customer for their fiscal year ended June 30, 2009, following a successful regulatory appeal. The EBITDA impact of $1.6 million in additional revenues was offset entirely by $1.8 million of costs related to the previously announced transaction to form The Alaska Wireless Network, LLC (”AWN”).

GCI’s second quarter 2012 net income totaled $4.0 million or earnings per diluted share of $0.09 and compares to a net loss of $2.0 million or loss per diluted share of $(0.04) for the same period of 2011.

Second quarter of 2012 revenues increased $4.2 million over revenues of $171.9 million in the first quarter of 2012. Adjusted EBITDA increased $4.6 million or 8.4 percent over adjusted EBITDA of $54.8 million in the first quarter of 2012.

           “We took a major step forward this quarter by reaching agreement with Alaska Communications to combine our wireless networks,” said Ron Duncan, GCI president. “Once implemented, we look forward to providing GCI customers the best overall wireless service in urban and rural Alaska. Adding Alaska Communications’ substantial mobile radio spectrum portfolio, LTE network, and wireless tower footprint to GCI’s wireless assets will result in a substantially more capable statewide 4G wireless platform.”

GCI previously provided guidance on revenues of $690 million to $720 million and adjusted EBITDA of $230 million to $240 million for the year 2012.

Highlights
·  
GCI entered into an agreement with Alaska Communications Systems Group, Inc. to form The Alaska Wireless Network, LLC (“AWN”) that will hold and operate both companies’ wireless facilities. AWN will provide a robust, statewide network with the spectrum, scale, advanced technology and cost structure necessary to compete with the national carriers. GCI will invest $100 million to gain a majority interest in a wireless network operation that is twice the size of its current one. The AWN transaction is subject to required governmental approvals and other customary conditions.

·  
GCI began selling the iPhone on April 20, 2012 and has sold 9,200 iPhones by the end of the second quarter of 2012. GCI estimates 40 percent of iPhones sales are to new subscribers. The iPhone has been well received by GCI’s customers and the costs associated with the launch have been within expectations.

·  
GCI had 141,000 wireless subscribers at the end of the second quarter of 2012 and is the second largest wireless service provider in Alaska. Wireless subscribers increased by 1,000 over the first quarter of 2012. Average monthly revenue per subscriber was $67.69, a decrease of 1.4 percent from $68.65 for the first quarter of 2012.

·  
Managed Broadband revenues for the second quarter of 2012 totaled $21.7 million, an increase of $7.1 million or 48.4 percent over the second quarter of 2011, primarily as a result of the turn-up of GCI’s TERRA-Southwest terrestrial network.

·  
GCI had 123,500 consumer and commercial cable modem customers at the end of the second quarter of 2012, an increase of 1,500 over the 122,000 cable modem customers at the end of the first quarter 2012. Average monthly revenue per cable modem for the second quarter of 2012 was $63.64, an increase of 19.0 percent over $53.46 for the prior year and an increase of 3.5 percent over the $61.48 figure posted for the first quarter of 2012.

Consumer
Consumer revenues were steady with the second quarter of 2011 and increased slightly over the first quarter of 2012. Data revenue growth was offset by decreases in voice, video and wireless.

Consumer voice revenues of $10.5 million decreased $3.1 million when compared to the prior year quarter and $0.8 million compared to the first quarter of 2012 as customers continue to abandon wireline service and shift to wireless. Consumer local access lines in service at the end of the second quarter of 2012 totaled 74,400, a decrease of 7,900 lines from the second quarter of 2011 and 1,700 lines from the first quarter of 2012.

Consumer video revenues of $29.2 million decreased 1.1 percent from the second quarter of 2011 and increased 0.7 percent over the first quarter of 2012. The decrease is primarily due to a decline in basic video subscribers. Consumer basic video subscribers totaled 122,500 at the end of the second quarter of 2012, a decrease of 4,400 subscribers from the second quarter of 2011 and 1,700 subscribers from the first quarter of 2012.

Consumer data revenues of $21.5 million increased 24.7 percent over the second quarter of 2011 and 5.3 percent over the first quarter of 2012. The increase in consumer data revenues is due to an increase in cable modem customers and increasing monthly usage. GCI added 6,300 consumer cable modem customers over the second quarter of 2011 and cable modem customer counts increased by 1,000 on a sequential basis.

Consumer wireless revenues of $27.3 million decreased $0.9 million or 3.1 percent from the second quarter of 2011. The decrease was primarily due to a $2.3 million decline in USF support offset in part by increases in plan fee and handset revenues. Wireless revenues were steady when compared to the first quarter of 2012. Consumer had a decrease of 1,600 wireless customers from the end of the second quarter a year ago and an increase of 300 wireless customers sequentially.

 GCI serves 124,800 consumer wireless subscribers of whom approximately 40,000 are Lifeline customers. In compliance with FCC Lifeline program reforms, GCI is required to recertify all Lifeline subscribers, enrolled as of June 1, 2012, by the end of 2012, with current subscribers to be recertified annually thereafter. The ongoing implementation of GCI’s existing qualification standards along with initiation of the FCC recertification process have contributed to a decrease of 3,500 Lifeline subscribers in the second quarter of 2012 as compared to the second quarter of 2011. Lifeline subscribers declined by 1,500 on a sequential basis. Increases in GCI’s postpaid and prepaid subscribers have mostly outgrown Lifeline losses in previous quarters. Lifeline subscriber counts could decline further as a result of the recertification process or future program changes.

Network Access
Network access revenues of $26.0 million increased 3.4 percent compared to the second quarter of 2011 and increased 3.3 percent over the first quarter of 2012.

Voice revenues increased 9.6 percent to $6.0 million over the prior year and increased 7.2 percent over the first quarter of 2012. Data revenues were down 10.7 percent when compared to the second quarter of 2011 and 6.6 percent from the first quarter of 2012. The change in voice and data revenues is primarily attributable to rate adjustments resulting from increased competition.

Wireless revenues, primarily related to roaming traffic, increased by $2.0 million to $6.6 million, an increase of 41.7 percent over the prior year and increased by $1.4 million, or 26.0 percent on a sequential basis.

Commercial
Commercial revenues of $34.5 million were steady with the prior year and the first quarter of 2012.

Commercial data service revenues include both transport charges for data circuits, time and materials charges for GCI on-site support of customer operations and data center revenues. Data transport charges of $11.9 million increased by $0.8 million as compared to the second quarter of 2011, time and material charges for support activities decreased by $0.6 million to $9.8 million and data center revenues increased by $0.2 million for the second quarter of 2012. Commercial data service revenues were $21.9 million in the second quarter of 2012, an increase of $0.4 million over the second quarter of 2011 and were steady with the first quarter of 2012.

GCI is now offering data center services based at its South Anchorage Distribution Center. The 10,000 sf data center is a secure facility separate from GCI’s network monitoring and operations.

Commercial wireless revenues totaled $2.5 million for the second quarter of 2012 and were steady with the prior year and increased $0.2 million sequentially. GCI had 16,200 commercial wireless subscribers at the end of the second quarter of 2012, an increase of 1,600 subscribers over the prior year and 700 subscribers sequentially.
 
 Managed Broadband
Managed broadband revenues totaled $21.7 million in the second quarter of 2012, an increase of $7.1 million or 48.4 percent over the prior year and an increase of $2.7 million or 14.1 percent over the first quarter of 2012. The strong revenue growth is primarily due to the increase in broadband service capacity resulting from the turn up of the TERRA Southwest terrestrial network.

Regulated Operations
Regulated operations revenues totaled $5.4 million in the second quarter of 2012 and were steady with the second quarter of 2011 and the first quarter of 2012. Regulated operations had 8,700 local access lines at the end of the second quarter of 2012, a decrease of 200 access lines from the first quarter of 2012.

Other Items
SG&A expenses for the second quarter of 2012 totaled $60.0 million, an increase of 4.1 percent as compared to $57.7 million for the second quarter of 2011. The increase is due to transaction costs related to AWN and labor and related benefits. As a percentage of revenues, SG&A expenses decreased to 34.1 percent in the second quarter of 2012 as compared to 34.3 percent in the prior year. SG&A expenses for the second quarter decreased $2.9 million from the first quarter of 2012. The decrease is primarily related to lower health care costs, less expense recorded for fiber capacity contributed to the University of Alaska during the second quarter, and declines in other categories of general and administrative expenses offset by costs related to AWN.

GCI’s second quarter 2012 capital expenditures totaled $39.1 million as compared to $45.6 million in the second quarter of 2011 and $26.6 million in the first quarter of 2012. GCI expects capital expenditures to total $150 million for the year 2012, which is an increase of $15 million over previous guidance of approximately $135 million.

GCI’s share repurchase program expired during March of 2012. Due to material non-public information related to the AWN transaction and the launch of the iPhone, GCI was prevented from implementing a new repurchase program for the second quarter of 2012. GCI has authorizations to make up to $93.9 million in repurchases, dependent on leverage, liquidity, company performance, market conditions and subject to continued oversight by GCI’s Board of Directors.

GCI will hold a conference call to discuss the quarter’s results on Thursday, August 2, 2012 beginning at 2 p.m. (Eastern). To access the briefing on August 2, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 888-790-3403 (International callers should dial 1-415-228-3889) 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 888-562-4207, access code 7461 (International callers should dial 203-369-3178.)

GCI is the largest telecommunications company in Alaska. GCI’s cable plant, which provides voice, video, and broadband data services, passes 80 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 TERRA-Southwest fiber/microwave system links 65 communities in the Bristol Bay and Yukon-Kuskokwim Delta to Anchorage bringing terrestrial broadband Internet access to the region for the first time. 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
  
2012
    
2011
  
             
Current assets:
            
  Cash and cash equivalents
   $ 22,116       29,387  
 
                
  Receivables
     161,840       141,827  
  Less allowance for doubtful receivables
     3,199       5,796  
     Net receivables
     158,641       136,031  
 
                
  Deferred income taxes
     15,555       15,555  
  Prepaid expenses
     9,302       7,899  
  Inventories
     16,023       7,522  
  Other current assets
     3,366       3,631  
       Total current assets
     225,003       200,025  
 
                
Property and equipment in service, net of depreciation
     822,859       849,121  
Construction in progress
     71,668       42,918  
       Net property and equipment
     894,527       892,039  
 
                
Cable certificates
     191,635       191,635  
Goodwill
     74,883       74,883  
Wireless licenses
     25,967       25,967  
Restricted cash
     14,804       15,910  
Other intangible assets, net of amortization
     16,344       15,835  
Deferred loan and senior notes costs, net of amortization
     11,917       12,812  
Other assets
     14,777       17,214  
    Total other assets
     350,327       354,256  
       Total assets
   $ 1,469,857       1,446,320  
                 
           
(Continued)
  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
  
CONSOLIDATED BALANCE SHEETS
  
(Unaudited)
  
(Continued)
  
             
             
(Amounts in thousands)
            
   
June 30,
    
December 31,
  
Liabilities and Stockholders' Equity
  
2012
    
2011
  
             
Current liabilities:
            
  Current maturities of obligations under long-term debt and capital leases
   $ 7,612       8,797  
  Accounts payable
     39,382       41,353  
  Deferred revenue
     25,018       22,003  
  Accrued payroll and payroll related obligations
     21,533       22,126  
  Accrued interest
     6,753       6,680  
  Accrued liabilities
     15,216       11,423  
  Subscriber deposits
     1,346       1,250  
     Total current liabilities
     116,860       113,632  
 
                
Long-term debt, net
     874,505       858,031  
Obligations under capital leases, excluding current maturities
     75,777       78,605  
Obligation under capital lease due to related party, excluding current maturity
     1,893       1,893  
Deferred income taxes
     119,350       114,234  
Long-term deferred revenue
     86,096       81,822  
Other liabilities
     24,082       24,456  
       Total liabilities
     1,298,563       1,272,673  
 
                
Commitments and contingencies
                
Stockholders’ equity:
                
  Common stock (no par):
                
     Class A. Authorized 100,000 shares; issued 38,843 and 39,296 shares
     at June 30, 2012, and December 31, 2011, respectively; outstanding
     38,650 and 39,043 shares at June 30, 2012, and December 31, 2011,
     respectively
     25,909       26,179  
                 
    Class B. Authorized 10,000 shares; issued and outstanding 3,171
     shares each at June 30, 2012, and December 31, 2011; convertible
     on a share-per-share basis into Class A common stock
     2,678       2,679  
                 
    Less cost of 193 and 253 Class A shares held in treasury at
      June 30, 2012, and December 31, 2011, respectively
     (1,707 )     (2,225 )
 
                
  Paid-in capital
     25,138       32,795  
  Retained earnings
     103,322       97,911  
       Total General Communication, Inc. stockholders' equity
     155,340       157,339  
  Non-controlling interest
     15,954       16,308  
       Total stockholders' equity
     171,294       173,647  
       Total liabilities and stockholders' equity
   $ 1,469,857       1,446,320  

 
 
 



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)
  
2012
    
2011
    
2012
    
2011
  
                         
Revenues
   $ 176,104       168,089       348,011       332,866  
 
                                
Cost of goods sold (exclusive of depreciation and amortization shown
  separately below)
     58,073       57,314       114,933       111,070  
Selling, general and administrative expenses
     60,048       57,697       123,030       116,590  
Depreciation and amortization expense
     33,350       30,779       65,730       62,645  
   Operating income
     24,633       22,299       44,318       42,561  
 
                                
Other income (expense):
                                
  Interest expense (including amortization of deferred loan fees)
     (16,948 )     (17,294 )     (34,103 )     (34,746 )
  Loss of extinguishment of debt
     -       (9,111 )     -       (9,111 )
  Interest income
     4       4       6       8  
  Other
     84       (9 )     (47 )     (33 )
     Other expense, net
     (16,860 )     (26,410 )     (34,144 )     (43,882 )
                                 
   Income (loss) before income tax expense (benefit)
     7,773       (4,111 )     10,174       (1,321 )
 
                                
Income tax (expense) benefit
     (3,968 )     2,067       (5,117 )     (676 )
 
                                
   Net income (loss)
     3,805       (2,044 )     5,057       (645 )
Net loss attributable to non-controlling interest
     177       -       354       -  
                                 
   Net income (loss) attributable to General Communication, Inc.
   $ 3,982       (2,044 )     5,411       (645 )
                                 
Basic net income (loss) attributable to General Communication, Inc.
  common stockholders per Class A common share
   $ 0.10       (0.04 )     0.13       (0.01 )
                                 
Basic net income (loss) attributable to General Communication, Inc.
  common stockholders per Class B common share
   $ 0.10       (0.04 )     0.13       (0.01 )
                                 
Diluted net income (loss) attributable to General Communication, Inc.
  common stockholders per Class A common share
   $ 0.09       (0.04 )     0.13       (0.02 )
                                 
Diluted net income (loss)attributable to General Communication, Inc.
  common stockholders per Class B common share
   $ 0.09       (0.04 )     0.13       (0.02 )
                                 
Common shares used to calculate Class A basic EPS
     38,516       43,098       38,629       43,536  
                                 
Common shares used to calculate Class A diluted EPS
     42,149       46,276       42,230       46,714  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
  
SUPPLEMENTAL SCHEDULES
  
(Unaudited)
  
(Amounts in thousands)
                                                                    
   
Second Quarter 2012
    
Second Quarter 2011
  
         
Network
          
Managed
    
 Regulated
          
Network
          
Managed
    
 Regulated
  
   
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
    
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
  
Revenues
                                                                        
  Voice
   $ 10,483       5,962       6,804       -       5,409       28,658     $ 13,625       5,441       7,340       -       5,529       31,935  
  Video
     29,235       -       3,236       -       -       32,471       29,546       -       2,936       -       -       32,482  
  Data
     21,523       13,412       21,917       21,717       -       78,569       17,257       15,023       21,518       14,639       -       68,437  
  Wireless
     27,254       6,643       2,509       -       -       36,406       28,126       4,687       2,422       -       -       35,235  
    Total
     88,495       26,017       34,466       21,717       5,409       176,104       88,554       25,151       34,216       14,639       5,529       168,089  
                                                                                                 
Cost of goods sold
     30,587       6,186       15,502       4,268       1,530       58,073       28,011       6,576       16,932       4,580       1,215       57,314  
                                                                                                 
    Contribution
     57,908       19,831       18,964       17,449       3,879       118,031       60,543       18,575       17,284       10,059       4,314       110,775  
                                                                                                 
Less SG&A
     34,514       6,573       10,583       5,774       2,604       60,048       33,288       6,570       10,233       4,513       3,093       57,697  
Less Other
     -       -       -       (84 )     -       (84 )     -       -       -       9       -       9  
    EBITDA
     23,394       13,258       8,381       11,759       1,275       58,067       27,255       12,005       7,051       5,537       1,221       53,069  
                                                                                                 
Add share-based compensation
     440       129       194       94       8       865       894       301       319       156       -       1,670  
Add accretion
     85       27       24       16       -       152       109       38       31       16       -       194  
Add loss from
  non-controlling interest
     -       -       -       177       -       177       -       -       -       -       -       -  
Add non-cash contribution
     89       28       26       17       -       160       -       -       -       -       -       -  
    Adjusted EBITDA
   $ 24,008       13,442       8,625       12,063       1,283       59,421     $ 28,258       12,344       7,401       5,709       1,221       54,933  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
  
SUPPLEMENTAL SCHEDULES
  
(Unaudited)
  
(Amounts in thousands)
                                                                    
   
Second Quarter 2012
    
First Quarter 2012
  
         
Network
          
Managed
    
 Regulated
          
Network
          
Managed
    
 Regulated
  
   
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
    
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
  
Revenues
                                                                        
  Voice
   $ 10,483       5,962       6,804       -       5,409       28,658     $ 11,280       5,564       7,086       -       5,537       29,467  
  Video
     29,235       -       3,236       -       -       32,471       29,022       -       3,120       -       -       32,142  
  Data
     21,523       13,412       21,917       21,717       -       78,569       20,449       14,353       21,837       19,029       -       75,668  
  Wireless
     27,254       6,643       2,509       -       -       36,406       27,061       5,271       2,298       -       -       34,630  
    Total
     88,495       26,017       34,466       21,717       5,409       176,104       87,812       25,188       34,341       19,029       5,537       171,907  
                                                                                                 
Cost of goods sold
     30,587       6,186       15,502       4,268       1,530       58,073       28,618       6,023       15,700       4,889       1,630       56,860  
                                                                                                 
    Contribution
     57,908       19,831       18,964       17,449       3,879       118,031       59,194       19,165       18,641       14,140       3,907       115,047  
                                                                                                 
Less SG&A
     34,514       6,573       10,583       5,774       2,604       60,048       35,832       7,208       10,694       6,271       2,977       62,982  
Less Other
     -       -       -       (84 )     -       (84 )     -       -       -       131       -       131  
    EBITDA
     23,394       13,258       8,381       11,759       1,275       58,067       23,362       11,957       7,947       7,738       930       51,934  
                                                                                                 
Add share-based compensation
     440       129       194       94       8       865       884       279       333       229       5       1,730  
Add accretion
     85       27       24       16       -       152       104       33       31       20       -       188  
Add loss from
   non-controlling interest
     -       -       -       177       -       177       -       -       -       177       -       177  
Add non-cash contribution
     89       28       26       17       -       160       444       141       130       85       -       800  
    Adjusted EBITDA
   $ 24,008       13,442       8,625       12,063       1,283       59,421     $ 24,794       12,410       8,441       8,249       935       54,829  

 
 
 


GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
  
SUPPLEMENTAL SCHEDULES
  
(Unaudited)
  
(Amounts in thousands)
                                                                    
   
Six Months Ended June 30, 2012
    
Six Months Ended June 30, 2011
  
         
Network
          
Managed
    
 Regulated
          
Network
          
Managed
    
 Regulated
  
   
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
    
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
  
Revenues
                                                                        
  Voice
   $ 21,763       11,526       13,890       -       10,946       58,125     $ 27,377       11,911       14,913       -       10,968       65,169  
  Video
     58,257       -       6,356       -       -       64,613       59,885       -       5,776       -       -       65,661  
  Data
     41,972       27,765       43,754       40,746       -       154,237       33,958       29,995       40,613       28,634       -       133,200  
  Wireless
     54,315       11,914       4,807       -       -       71,036       55,751       8,342       4,743       -       -       68,836  
    Total
     176,307       51,205       68,807       40,746       10,946       348,011       176,971       50,248       66,045       28,634       10,968       332,866  
                                                                                                 
Cost of goods sold
     59,205       12,209       31,202       9,157       3,160       114,933       55,319       13,241       31,798       8,494       2,218       111,070  
                                                                                                 
    Contribution
     117,102       38,996       37,605       31,589       7,786       233,078       121,652       37,007       34,247       20,140       8,750       221,796  
                                                                                                 
Less SG&A
     70,346       13,781       21,277       12,045       5,581       123,030       66,664       13,348       20,769       8,980       6,829       116,590  
Less Other
     -       -       -       47       -       47       -       -       -       33       -       33  
    EBITDA
     46,756       25,215       16,328       19,497       2,205       110,001       54,988       23,659       13,478       11,127       1,921       105,173  
                                                                                                 
Add share-based compensation
     1,324       408       527       323       13       2,595       1,514       514       542       270       -       2,840  
Add accretion
     533       169       156       102       -       960       149       51       43       23       -       266  
Add loss from
   non-controlling interest
     -       -       -       354       -       354       -       -       -       -       -       -  
Add non-cash contribution
     189       60       55       36       -       340       -       -       -       -       -       -  
    Adjusted EBITDA
   $ 48,802       25,852       17,066       20,312       2,218       114,250     $ 56,651       24,224       14,063       11,420       1,921       108,279  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
  
KEY PERFORMANCE INDICATORS
  
(Unaudited)
  
                                           
                     
June 30, 2012
    
June 30, 2012
  
                     
as compared to
    
as compared to
  
   
June 30,
    
June 30,
    
March 31,
    
June 30,
    
March 31,
    
June 30,
    
March 31,
  
   
2012
    
2011
    
2012
    
2011
    
2012
    
2011
    
2012
  
Consumer
                                          
Voice
                                          
  Total local access lines in service
     74,400       82,300       76,100       (7,900 )     (1,700 )     -9.6 %     -2.2 %
Local access lines in service on GCI facilities
     69,300       75,900       70,700       (6,600 )     (1,400 )     -8.7 %     -2.0 %
                                                         
Video
                                                        
Basic subscribers
     122,500       126,900       124,200       (4,400 )     (1,700 )     -3.5 %     -1.4 %
Digital programming tier subscribers
     72,200       77,400       74,600       (5,200 )     (2,400 )     -6.7 %     -3.2 %
HD/DVR converter boxes
     88,400       87,700       90,300       700       (1,900 )     0.8 %     -2.1 %
  Homes passed
     242,400       239,000       242,200       3,400       200       1.4 %     0.1 %
                                                         
Data
                                                        
  Cable modem subscribers
     111,700       105,400       110,700       6,300       1,000       6.0 %     0.9 %
                                                         
Wireless
                                                        
  Wireless lines in service
     124,800       126,400       124,500       (1,600 )     300       -1.3 %     0.2 %
                                                         
Commercial
                                                        
Voice
                                                        
  Total local access lines in service
     51,800       50,800       51,900       1,000       (100 )     2.0 %     -0.2 %
Local access lines in service on GCI facilities
     30,200       27,000       29,900       3,200       300       11.9 %     1.0 %
                                                         
Video
                                                        
  Hotels and mini-headend
  subscribers
     19,300       18,300       16,100       1,000       3,200       5.5 %     19.9 %
  Basic subscribers
     1,900       2,000       1,900       (100 )     -       -5.0 %     0.0 %
   Total basic subscribers
     21,200       20,300       18,000       900       3,200       4.4 %     17.8 %
                                                         
Data
                                                        
  Cable modem subscribers
     11,800       11,000       11,300       800       500       7.3 %     4.4 %
                                                         
Wireless
                                                        
  Wireless lines in service
     16,200       14,600       15,500       1,600       700       11.0 %     4.5 %
                                                         
Regulated Operations
                                                        
Voice:
                                                        
  Total local access lines in service
     8,700       9,400       8,900       (700 )     (200 )     -7.4 %     -2.2 %
                                                         
                           
June 30, 2012
    
June 30, 2012
  
   
Three Months Ended
    
as Compared to
    
as Compared to
  
   
June 30,
  
June 30,
  
March 31,
    
June 30,
    
March 31,
  
June 30,
    
March 31,
  
     2012    2011      2012      2011      2012      2011      2012  
Consumer
                                                        
Video
                                                        
  Average monthly revenue per
  subscriber
   $ 78.89     $ 76.47     $ 77.72     $ 2.42     $ 1.17       3.2 %     1.5 %
                                                         
Wireless
                                                        
  Average monthly revenue per
  subscriber
   $ 67.69     $ 70.52     $ 68.65     $ (2.83 )   $ (0.96 )     -4.0 %     -1.4 %
                                                         
Total
                                                        
Voice
                                                        
  Long-distance minutes carried
  (in millions)
     241.3       238.7       238.3       2.6       3.0       1.1 %     1.3 %
                                                         
Data
                                                        
  Average monthly revenue per
  cable modem subscriber
   $ 63.64     $ 53.46     $ 61.48     $ 10.18     $ 2.16       19.0 %     3.5 %

 
 
 

General Communication, Inc.
                  
Non-GAAP Financial Reconciliation Schedule
              
(Unaudited, Amounts in Millions)
                  
                   
                   
   
Three Months Ended
  
   
June 30,
    
June 30,
    
March 31,
  
   
2012
    
2011
    
2012
  
Net income (loss)
   $ 3.8       (2.0 )     1.3  
Income tax expense (benefit)
     4.0       (2.1 )     1.1  
   Income (loss) before income tax expense (benefit)
     7.8       (4.1 )     2.4  
                         
Other expense:
                        
   Interest expense (including
   amortization of deferred loan fees)
     16.9       17.3       17.2  
   Loss on extingushment of debt
     -       9.1       -  
   Other
     -       -       0.1  
      Other expense, net
     16.9       26.4       17.3  
                         
      Operating income
     24.7       22.3       19.7  
Depreciation and amortization expense
     33.4       30.8       32.3  
Other
     -       -       (0.1 )
                         
EBITDA (Note 2)
     58.1       53.1       51.9  
Share-based compensation
     0.9       1.7       1.7  
Accretion
     0.1       0.1       0.2  
Non-controlling interest
     0.2       -       0.2  
Non-cash contribution adjustment
     0.1       -       0.8  
Adjusted EBITDA (Note 1)
   $ 59.4       54.9       54.8  

 
 
 

General Communication, Inc.
            
Non-GAAP Financial Reconciliation Schedule
        
(Unaudited, Amounts in Millions)
            
             
             
   
Six Months Ended
  
   
June 30,
    
June 30,
  
   
2012
    
2011
  
Net income (loss)
   $ 5.1       (0.6 )
Income tax expense (benefit)
     5.1       (0.7 )
   Income (loss) before income tax expense (benefit)
     10.2       (1.3 )
                 
Other expense:
                
   Interest expense (including
   amortization of deferred loan fees)
     34.1       34.7  
   Loss on extingushment of debt
     -       9.1  
   Other
     -       0.1  
      Other expense, net
     34.1       43.9  
                 
      Operating income
     44.3       42.6  
Depreciation and amortization expense
     65.7       62.6  
Other
     -        -  
                 
EBITDA (Note 2)
     110.0       105.2  
Share-based compensation
     2.6       2.8  
Accretion
     0.3       0.3  
Non-controlling interest
     0.4       -  
Non-cash contribution adjustment
     1.0       -  
Adjusted EBITDA (Note 1)
   $ 114.3       108.3  

 
Notes:
(1) EBITDA (as defined in Note 2 below) before deducting share-based compensation,
accretion expense, loss attributable to non-controlling interest and non-cash
contribution adjustment.
 
(2) Earnings Before Interest, Taxes, Depreciation and Amortization is the sum of Net
Income (Loss), Interest Expense (including Amortization of Deferred Loan Fees), Interest
Income, Income Tax Expense (Benefit), and Depreciation and Amortization Expense.
EBITDA is not presented as an alternative measure of net income (loss), 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.