Exhibit 99.1
 
 
 


November 7, 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 THIRD QUARTER 2012 FINANCIAL RESULTS

·  
Consolidated revenue of $178.5 million
·  
Adjusted EBITDA of $59.4 million
·  
Net income of $3.7 million or $0.09 per diluted share

ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its third quarter 2012 results with revenues increasing to $178.5 million over revenues of $177.7 million in the third quarter of 2011. Adjusted EBITDA decreased 5.8 percent or $3.7 million from the third quarter of 2011 EBITDA of $63.1 million.

GCI’s third quarter 2012 net income totaled $3.7 million or earnings per diluted share of $0.09, a decrease from net income of $7.2 million or earnings per diluted share of $0.15 for the same period of 2011.

Third quarter 2012 revenues increased $2.4 million over revenues of $176.1 million in the second quarter of 2012. Adjusted EBITDA for the third quarter of 2012 was steady when compared to adjusted EBITDA of $59.4 million in the second quarter of 2012.

           “We made continued progress during the quarter preparing for the establishment of our Alaska Wireless Network venture,” said Ron Duncan, GCI president. “With the exception of data, where growth has been robust, our economic results and subscriber metrics were disappointing. Trends away from wireline voice services continue to pressure our results and changes to the lifeline program have reduced overall wireless results. However, we added a substantial number of postpaid customers during the quarter and look for this trend to increase as we continue to deploy higher speed wireless services throughout Alaska.”

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. GCI now expects adjusted EBITDA will be at or near the lower end of the guidance, excluding expenses related to The Alaska Wireless Network (“AWN”) transaction.

Highlights
·  
Managed Broadband revenues for the third quarter of 2012 totaled $22.7 million, an increase of $5.3 million or 30.3 percent over the third quarter of 2011, primarily as a result of sales of broadband service on GCI’s TERRA-Southwest terrestrial network.

·  
GCI received payment of $4.5 million for IRU capacity sold to a large carrier customer early in the third quarter of 2012. The IRU sale is treated as deferred revenue and will be recognized into income over the expected life of the capacity.

·  
GCI had 124,700 consumer and commercial cable modem customers at the end of the third quarter of 2012, an increase of 6,800 over the end of the third quarter 2011. Average monthly revenue per cable modem for the third quarter of 2012 was $62.85, an increase of 11.9 percent over $56.17 for the prior year.

 
 
 
·  
GCI entered into a second arrangement under the New Markets Tax Credit (NMTC) program to help fund Phase 3 of our TERRA-NW project. Phase 3 of our TERRA-NW project continues the extension of terrestrial broadband service to Kotzebue. The NMTC program was established in the Community Renewal Tax Relief Act of 2000 to induce capital investment in qualified low income communities and will fund $12.9 million, or almost half, of the expected total project cost.

Consumer
Consumer revenues were down $2.5 million from the third quarter of 2011 and $1.7 million from the second quarter of 2012. In the third quarter of 2012, data revenue growth was offset by decreases in voice, video and wireless compared to the third quarter of 2011. The decrease in third quarter revenue was primarily due to a $2.8 million decline in USF support for voice and wireless as compared to the third quarter of 2011.

Consumer voice revenues of $10.0 million decreased $3.2 million when compared to the prior year quarter and $0.5 million compared to the second 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 third quarter of 2012 totaled 71,900, a decrease of 7,200 lines from the third quarter of 2011 and 2,500 lines from the second quarter of 2012. USF support for consumer voice services decreased $0.9 million year over year.

Consumer video revenues of $28.4 million decreased $0.8 million from the third quarter of 2011 and the second quarter of 2012. The decrease is primarily due to a decline in basic video subscribers. Consumer basic video subscribers totaled 122,200 at the end of the third quarter of 2012, a decrease of 4,200 subscribers from the third quarter of 2011 and 300 subscribers from the second quarter of 2012. GCI has had a steady increase in the number of customers who subscribe only to cable modem service. Presumably these access-only customers are purchasing video programming from other sources including over-the-top providers such as Netflix and Hulu.

Consumer data revenues of $21.4 million increased $3.3 million or 18.2 percent over the third quarter of 2011 and were steady with the second 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 third quarter of 2011 and cable modem customer counts increased by 1,400 on a sequential basis.

Consumer wireless revenues of $27.1 million decreased $1.8 million or 6.2 percent from the third quarter of 2011. The decrease was primarily due to a $1.9 million decline in USF support, a $0.9 million decrease in Lifeline revenues due to fewer subscribers, offset in part by an increase in plan fees. Wireless revenues were steady when compared to the second quarter of 2012. GCI served 122,800 consumer wireless subscribers at the end of the third quarter of 2012.

Consumer served 87,300 postpaid and pre-paid subscribers at the end of the third quarter of 2012, an increase of 4,600 over the end of the third quarter a year ago and an increase of 2,400 wireless customers sequentially. Post paid subscribers increased 2,300 year over year and 1,800 sequentially. Prepaid subscribers increased 2,300 over the end of the third quarter a year ago and increased by 600 customers sequentially.

 GCI served 35,500 Lifeline customers at the end of the third quarter of 2012. 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 7,600 Lifeline subscribers in the third quarter of 2012 as compared to the third quarter of 2011. Lifeline subscribers declined by 4,400 on a sequential basis. Lifeline subscriber counts could decline further as a result of the recertification process or future program changes.

 
 
 
Network Access
Network access revenues of $27.5 million decreased $2.0 million or 6.8 percent compared to the third quarter of 2011 and increased $1.5 million or 5.6 percent over the second quarter of 2012.

Voice revenues decreased $0.5 million to $5.7 million from the prior year and decreased $0.3 million from the second quarter of 2012. Data revenues were down $3.0 million when compared to $17.1 million in the third quarter of 2011 and increased $0.7 million to $14.1 million over the second quarter of 2012. The change in voice revenue is attributable to decreases in voice traffic and rate reductions. The decrease in data revenue when compared to the prior year quarter is attributable to a decrease in special project revenue for a new customer that occurred in the third quarter of 2011. The increase in third quarter data revenues over the second quarter of 2012 is primarily due an increase in wireless backhaul revenues.

Wireless revenues, primarily related to roaming traffic, increased by $1.6 million to $7.7 million, an increase of 26.2 percent over the prior year and increased by $1.1 million, or 16.2 percent on a sequential basis.

Commercial
Commercial revenues of $36.2 million increased 1.8 percent over the prior year quarter and increased 5.1 percent sequentially.

Commercial data service revenues were $23.6 million in the third quarter of 2012, an increase of $0.6 million over the third quarter of 2011 and an increase of $1.7 million over the second quarter of 2012. Commercial data service revenues include both transport charges for data circuits, professional services which are time and materials charges for GCI on-site support of customer operations and data center revenues. As summarized in the table below, data transport charges of $12.2 million increased by $0.8 million as compared to the third quarter of 2011, time and material charges for support activities decreased by $0.5 million to $11.1 million and data center revenues increased by $0.3 million over the third quarter of 2011.

Millions $
     Q3 2012       Q3 2011       Q2 2012  
Data Transport Charges
   $ 12.2     $ 11.4     $ 11.9  
Professional Services
     11.1       11.6       9.8  
Data Center Revenues
     0.3       0.0       0.2  
Total Data Revenues
   $ 23.6     $ 23.0     $ 21.9  

Commercial wireless revenues totaled $2.5 million for the third quarter of 2012 and were steady with the prior year and the second quarter of 2012. GCI had 16,600 commercial wireless subscribers at the end of the third quarter of 2012, an increase of 1,700 subscribers over the prior year and 400 subscribers sequentially. USF support for commercial wireless subscribers decreased by $0.1 million year over year.
 
Managed Broadband
Managed broadband revenues totaled $22.7 million in the third quarter of 2012, an increase of $5.3 million or 30.3 percent over the prior year and an increase of $1.0 million or 4.5 percent over the second quarter of 2012. The strong revenue growth is primarily due to an increase in broadband capacity utilized on the TERRA Southwest terrestrial network.


 
 
 


Regulated Operations
Regulated operations revenues totaled $5.3 million in the third quarter of 2012 a decrease of $0.7 million from the prior year quarter and were steady with the second quarter of 2012. Regulated operations had 8,500 local access lines at the end of the third quarter of 2012, a decrease of 200 access lines from the second quarter of 2012.

Other Items
SG&A expenses for the third quarter of 2012 totaled $58.2 million, an increase of 6.9 percent as compared to $54.5 million for the third quarter of 2011. The increase is due to labor and related benefits and transaction costs related to AWN. As a percentage of revenues, SG&A expenses increased to 32.6 percent in the third quarter of 2012 as compared to 30.6 percent in the prior year. SG&A expenses for the third quarter decreased $1.8 million from the second quarter of 2012. The decrease is primarily related to fewer AWN related costs and lower health care expenses. AWN related costs totaled $0.5 million for the third quarter of 2012 and $2.6 million year to date.

GCI’s third quarter 2012 capital expenditures totaled $45.9 million as compared to $57.2 million in the third quarter of 2011 and $39.1 million in the second quarter of 2012. GCI expects capital expenditures to total approximately $150 million for the year 2012.

GCI will hold a conference call to discuss the quarter’s results on Thursday, November 8, 2012 beginning at 2 p.m. (Eastern). To access the briefing on November 8, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 888-831-8982 (International callers should dial 1-212-547-0180) 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 800-884-1524, access code 7461 (International callers should dial 1-402-280-9924.)

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 statewide mobile wireless network seamlessly links urban and rural Alaska.

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 Forms 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
  
2012
    
2011
  
             
Current assets:
            
  Cash and cash equivalents
   $ 27,555       29,387  
 
                
  Receivables
     183,097       141,827  
  Less allowance for doubtful receivables
     3,740       5,796  
     Net receivables
     179,357       136,031  
 
                
  Deferred income taxes
     15,555       15,555  
  Prepaid expenses
     8,151       7,899  
  Inventories
     11,948       7,522  
  Other current assets
     2,464       3,631  
       Total current assets
     245,030       200,025  
 
                
Property and equipment in service, net of depreciation
     817,798       849,121  
Construction in progress
     92,600       42,918  
       Net property and equipment
     910,398       892,039  
 
                
Cable certificates
     191,635       191,635  
Goodwill
     74,883       74,883  
Wireless licenses
     25,967       25,967  
Deferred loan and senior notes costs, net of amortization
     11,566       12,812  
Restricted cash
     10,445       15,910  
Other intangible assets, net of amortization
     15,472       15,835  
Other assets
     14,449       17,214  
    Total other assets
     344,417       354,256  
       Total assets
   $ 1,499,845       1,446,320  
                 
           
(Continued)
  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
         
 
(Amounts in thousands)
            
   
September 30,
    
December 31,
  
Liabilities and Stockholders' Equity
  
2012
    
2011
  
             
Current liabilities:
            
  Current maturities of obligations under long-term debt and capital leases
   $ 7,766       8,797  
  Accounts payable
     43,880       41,353  
  Deferred revenue
     23,903       22,003  
  Accrued payroll and payroll related obligations
     20,901       22,126  
  Accrued interest
     21,358       6,680  
  Accrued liabilities
     25,528       11,423  
  Subscriber deposits
     1,125       1,250  
     Total current liabilities
     144,461       113,632  
 
                
Long-term debt, net
     864,804       858,031  
Obligations under capital leases, excluding current maturities
     74,259       78,605  
Obligation under capital lease due to related party, excluding current maturity
     1,893       1,893  
Deferred income taxes
     124,619       114,234  
Long-term deferred revenue
     88,561       81,822  
Other liabilities
     25,705       24,456  
       Total liabilities
     1,324,302       1,272,673  
 
                
Commitments and contingencies
                
Stockholders’ equity:
                
  Common stock (no par):
                
     Class A. Authorized 100,000 shares; issued 38,818 and 39,296 shares
     at September 30, 2012 and December 31, 2011, respectively;
     outstanding 38,625 and 39,043 shares at September 30, 2012 and
     December 31, 2011, respectively
     25,543       26,179  
                 
    Class B. Authorized 10,000 shares; issued and outstanding 3,169 and
     3,171 shares at September 30, 2012 and December 31, 2011,
     respectively; convertible on a share-per-share basis into Class A
     common stock
     2,676       2,679  
                 
    Less cost of 193 and 253 Class A shares held in treasury at
      September 30, 2012, and December 31, 2011, respectively
     (1,707 )     (2,225 )
 
                
  Paid-in capital
     26,232       32,795  
  Retained earnings
     107,022       97,911  
       Total General Communication, Inc. stockholders' equity
     159,766       157,339  
  Non-controlling interest
     15,777       16,308  
       Total stockholders' equity
     175,543       173,647  
       Total liabilities and stockholders' equity
   $ 1,499,845       1,446,320  


 
 
 

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)
  
2012
    
2011
    
2012
    
2011
  
                         
Revenues
   $ 178,494       177,703       526,505       510,569  
 
                                
Cost of goods sold (exclusive of depreciation and amortization shown
  separately below)
     62,754       60,664       177,687       171,734  
Selling, general and administrative expenses
     58,228       54,453       181,258       171,043  
Depreciation and amortization expense
     32,120       30,653       97,850       93,298  
   Operating income
     25,392       31,933       69,710       74,494  
 
                                
Other income (expense):
                                
  Interest expense (including amortization of deferred loan fees)
     (16,765 )     (16,678 )     (50,868 )     (51,424 )
  Loss of extinguishment of debt
     -       -       -       (9,111 )
  Interest income
     2       22       8       30  
  Other
     164       (59 )     117       (92 )
     Other expense, net
     (16,599 )     (16,715 )     (50,743 )     (60,597 )
                                 
   Income before income tax expense
     8,793       15,218       18,967       13,897  
 
                                
Income tax expense
     (5,270 )     (7,979 )     (10,387 )     (7,303 )
 
                                
   Net income
     3,523       7,239       8,580       6,594  
Net loss attributable to non-controlling interest
     177       -       531       -  
                                 
   Net income attributable to General Communication, Inc.
   $ 3,700       7,239       9,111       6,594  
                                 
Basic net income attributable to General Communication, Inc.
  common stockholders per Class A common share
   $ 0.09       0.16       0.22       0.14  
                                 
Basic net income attributable to General Communication, Inc.
  common stockholders per Class B common share
   $ 0.09       0.16       0.22       0.14  
                                 
Diluted net income attributable to General Communication, Inc.
  common stockholders per Class A common share
   $ 0.09       0.15       0.22       0.13  
                                 
Diluted net income attributable to General Communication, Inc.
  common stockholders per Class B common share
   $ 0.09       0.15       0.22       0.13  
                                 
Common shares used to calculate Class A basic EPS
     38,600       41,768       38,614       42,940  
                                 
Common shares used to calculate Class A diluted EPS
     42,000       45,464       42,177       46,682  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
 
(Amounts in thousands)
                                                                    
   
Third Quarter 2012
    
Third Quarter 2011
  
         
Network
          
Managed
    
 Regulated
          
Network
          
Managed
    
 Regulated
  
   
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
    
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
  
Revenues
                                                                        
  Voice
   $ 9,968       5,664       6,896       -         5,319       27,847     $ 13,164       6,213       7,137       -       5,990       32,504  
  Video
     28,394       -       3,142       -         -       31,536       29,155       -       2,830       -       -       31,985  
  Data
     21,379       14,093       23,622       22,685         -       81,779       18,088       17,140       23,040       17,407       -       75,675  
  Wireless
     27,066       7,718       2,548       -         -       37,332       28,860       6,114       2,565       -       -       37,539  
    Total
     86,807       27,475       36,208       22,685         5,319       178,494       89,267       29,467       35,572       17,407       5,990       177,703  
                                                                                                   
Cost of goods sold
     33,027       6,194       16,607       5,230         1,696       62,754       27,436       9,531       17,232       4,540       1,925       60,664  
                                                                                                   
    Contribution
     53,780       21,281       19,601       17,455         3,623       115,740       61,831       19,936       18,340       12,867       4,065       117,039  
                                                                                                   
Less SG&A
     33,699       6,157       10,028       5,723         2,621       58,228       31,737       6,300       9,358       4,031       3,027       54,453  
Less Other
     -       -       -       (164 )       -       (164 )     -       -       -       59       -       59  
    EBITDA
     20,081       15,124       9,573       11,896         1,002       57,676       30,094       13,636       8,982       8,777       1,038       62,527  
                                                                                                   
Add share-based
  compensation
     723       224       286       155         7       1,395       173       56       104       51       -       384  
Add accretion
     112       35       33       21         -       201       106       37       31       16       -       190  
Add loss from
  non-controlling interest
     -       -       -       177         -       177       -       -       -       -       -       -  
    Adjusted EBITDA
   $ 20,916       15,383       9,892       12,249         1,009       59,449     $ 30,373       13,729       9,117       8,844       1,038       63,101  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
 
(Amounts in thousands)
                                                                    
   
Third Quarter 2012
    
Second Quarter 2012
  
         
Network
          
Managed
    
 Regulated
          
Network
          
Managed
    
 Regulated
  
   
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
    
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
  
Revenues
                                                                        
  Voice
   $ 9,968       5,664       6,896       -       5,319       27,847     $ 10,483       5,962       6,804       -       5,409       28,658  
  Video
     28,394       -       3,142       -       -       31,536       29,235       -       3,236       -       -       32,471  
  Data
     21,379       14,093       23,622       22,685       -       81,779       21,523       13,412       21,917       21,717       -       78,569  
  Wireless
     27,066       7,718       2,548       -       -       37,332       27,254       6,643       2,509       -       -       36,406  
    Total
     86,807       27,475       36,208       22,685       5,319       178,494       88,495       26,017       34,466       21,717       5,409       176,104  
                                                                                                 
Cost of goods sold
     33,027       6,194       16,607       5,230       1,696       62,754       30,587       6,186       15,502       4,268       1,530       58,073  
                                                                                                 
    Contribution
     53,780       21,281       19,601       17,455       3,623       115,740       57,908       19,831       18,964       17,449       3,879       118,031  
                                                                                                 
Less SG&A
     33,699       6,157       10,028       5,723       2,621       58,228       34,514       6,573       10,583       5,774       2,604       60,048  
Less Other
     -       -       -       (164 )     -       (164 )     -       -       -       (84 )     -       (84 )
    EBITDA
     20,081       15,124       9,573       11,896       1,002       57,676       23,394       13,258       8,381       11,759       1,275       58,067  
                                                                                                 
Add share-based
  compensation
     723       224       286       155       7       1,395       440       129       194       94       8       865  
Add accretion
     112       35       33       21       -       201       85       27       24       16       -       152  
Add loss from
   non-controlling interest
     -       -       -       177       -       177       -       -       -       177       -       177  
Add non-cash contribution
     -       -       -       -       -       -       89       28       26       17       -       160  
    Adjusted EBITDA
   $ 20,916       15,383       9,892       12,249       1,009       59,449     $ 24,008       13,442       8,625       12,063       1,283       59,421  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
 
(Amounts in thousands)
                                                                    
   
Nine Months Ended September 30, 2012
    
Nine Months Ended September 30, 2011
  
         
Network
          
Managed
    
 Regulated
          
Network
          
Managed
    
 Regulated
  
   
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
    
Consumer
    
Access
    
Commercial
    
Broadband
    
Operations
    
Totals
  
Revenues
                                                                        
  Voice
   $ 31,731       17,190       20,786       -       16,265       85,972     $ 40,541       18,124       22,050       -       16,958       97,673  
  Video
     86,651       -       9,498       -       -       96,149       89,040       -       8,606       -       -       97,646  
  Data
     63,351       41,858       67,376       63,431       -       236,016       52,046       47,135       63,653       46,041       -       208,875  
  Wireless
     81,381       19,632       7,355       -       -       108,368       84,611       14,456       7,308       -       -       106,375  
    Total
     263,114       78,680       105,015       63,431       16,265       526,505       266,238       79,715       101,617       46,041       16,958       510,569  
                                                                                                 
Cost of goods sold
     92,232       18,403       47,809       14,387       4,856       177,687       82,755       22,772       49,030       13,034       4,143       171,734  
                                                                                                 
    Contribution
     170,882       60,277       57,206       49,044       11,409       348,818       183,483       56,943       52,587       33,007       12,815       338,835  
                                                                                                 
Less SG&A
     104,045       19,938       31,305       17,768       8,202       181,258       98,402       19,647       30,126       13,012       9,856       171,043  
Less Other
     -       -       -       (117 )     -       (117 )     -       -       -       92       -       92  
    EBITDA
     66,837       40,339       25,901       31,393       3,207       167,677       85,081       37,296       22,461       19,903       2,959       167,700  
                                                                                                 
Add share-based
  compensation
     2,047       632       813       478       20       3,990       1,686       569       646       323       -       3,224  
Add accretion
     301       95       88       57       -       541       257       88       73       38       -       456  
Add loss from
   non-controlling interest
     -       -       -       531       -       531       -       -       -       -       -       -  
Add non-cash contribution
     533       169       156       102       -       960       -       -       -       -       -       -  
    Adjusted EBITDA
   $ 69,718       41,235       26,958       32,561       3,227       173,699     $ 87,024       37,953       23,180       20,264       2,959       171,380  

 
 
 

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(Unaudited)
                                           
                     
September 30, 2012
    
September 30, 2012
  
                     
as compared to
    
as compared to
  
   
September 30,
    
September 30,
    
June 30,
    
September 30,
    
June 30,
    
September 30,
    
June 30,
  
   
2012
    
2011
    
2012
    
2011
    
2012
    
2011
    
2012
  
Consumer
                                          
Voice
                                          
Total local access lines in service
     71,900       79,100       74,400       (7,200 )     (2,500 )     -9.1 %     -3.4 %
Local access lines in service on GCI facilities
     66,900       73,200       69,300       (6,300 )     (2,400 )     -8.6 %     -3.5 %
                                                         
Video
                                                        
Basic subscribers
     122,200       126,400       122,500       (4,200 )     (300 )     -3.3 %     -0.2 %
Digital programming tier subscribers
     72,000       76,700       72,200       (4,700 )     (200 )     -6.1 %     -0.3 %
HD/DVR converter boxes
     89,200       87,400       88,400       1,800       800       2.1 %     0.9 %
Homes passed
     248,400       239,800       242,400       8,600       6,000       3.6 %     2.5 %
                                                         
Data
                                                        
Cable modem subscribers
     113,100       106,800       111,700       6,300       1,400       5.9 %     1.3 %
                                                         
Wireless
                                                        
Wireless Lifeline lines in service
     35,500       43,100       39,900       (7,600 )     (4,400 )     -17.6 %     -11.0 %
Wireless Postpaid lines in service
     76,000       73,700       74,200       2,300       1,800       3.1 %     2.4 %
Wireless Prepaid lines in service
     11,300       9,000       10,700       2,300       600       25.6 %     5.6 %
                                                         
Commercial
                                                        
Voice
                                                        
Total local access lines in service
     51,800       50,800       51,800       1,000       -       2.0 %     0.0 %
Local access lines in service on GCI facilities
     30,500       27,200       30,200       3,300       300       12.1 %     1.0 %
                                                         
Video
                                                        
Hotels and mini-headend
  subscribers
     18,500       18,000       19,300       500       (800 )     2.8 %     -4.1 %
Basic subscribers
     1,900       2,000       1,900       (100 )     -       -5.0 %     0.0 %
   Total basic subscribers
     20,400       20,000       21,200       400       (800 )     2.0 %     -3.8 %
                                                         
Data
                                                        
Cable modem subscribers
     11,600       11,100       11,800       500       (200 )     4.5 %     -1.7 %
                                                         
Wireless
                                                        
Wireless lines in service
     16,600       14,900       16,200       1,700       400       11.4 %     2.5 %
                                                         
Regulated Operations
                                                        
Voice:
                                                        
Total local access lines in service
     8,500       9,300       8,700       (800 )     (200 )     -8.6 %     -2.3 %
                                                         
                           
September 30, 2012
    
September 30, 2012
  
   
Three Months Ended
    
as Compared to
    
as Compared to
  
   
September 30,
    
September 30,
    
June 30,
    
September 30,
    
June 30,
    
September 30,
    
June 30,
  
     2012      2011      2012      2011      2012      2011      2012  
Consumer
                                                        
Video
                                                        
Average monthly revenue per
  subscriber
   $ 77.45     $ 76.85     $ 78.89     $ 0.60     $ (1.44 )     0.8 %     -1.8 %
                                                         
Wireless
                                                        
Average monthly revenue per
  subscriber
   $ 67.98     $ 72.60     $ 67.69     $ (4.62 )   $ 0.29       -6.4 %     0.4 %
                                                         
Total
                                                        
Voice
                                                        
Long-distance minutes carried
  (in millions)
     243.0       253.2       241.3       (10.2 )     1.7       -4.0 %     0.7 %
                                                         
Data
                                                        
Average monthly revenue per
  cable modem subscriber
   $ 62.85     $ 56.17     $ 63.64     $ 6.68     $ (0.79 )     11.9 %     -1.2 %

 
 
 

General Communication, Inc.
                  
Non-GAAP Financial Reconciliation Schedule
                  
(Unaudited, Amounts in Millions)
                  
                   
                   
   
Three Months Ended
  
   
September 30,
    
September 30,
    
June 30,
  
   
2012
    
2011
    
2012
  
Net income
   $ 3.5       7.2       3.8  
Income tax expense
     5.3       8.0       4.0  
Income before income tax expense
     8.8       15.2       7.8  
                         
Other expense:
                        
Interest expense (including
   amortization of deferred loan fees)
     16.8       16.7       16.9  
Loss on extingushment of debt   
     -       -       -  
Other
     (0.2 )     -       -  
Other expense, net
     16.6       16.7       16.9  
                         
Operating income
     25.4       31.9       24.7  
Depreciation and amortization expense
     32.1       30.7       33.4  
Other
     0.2       -       -  
                         
EBITDA (Note 2)
     57.7       62.6       58.1  
Share-based compensation
     1.4       0.4       0.9  
Accretion
     0.2       0.1       0.1  
Non-controlling interest
     0.1       -       0.2  
Non-cash contribution adjustment
     -       -       0.1  
Adjusted EBITDA (Note 1)
   $ 59.4       63.1       59.4  


 
 
 

General Communication, Inc.
            
Non-GAAP Financial Reconciliation Schedule
            
(Unaudited, Amounts in Millions)
            
             
             
   
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2012
    
2011
  
Net income
   $ 8.6       6.6  
Income tax expense
     10.4       7.3  
Income before income tax expense
     19.0       13.9  
                 
Other expense:
                
Interest expense (including
   amortization of deferred loan fees)
     50.9       51.4  
Loss on extingushment of debt
     -       9.1  
Other
     (0.2 )     0.1  
Other expense, net
     50.7       60.6  
                 
Operating income
     69.7       74.5  
Depreciation and amortization expense
     97.9       93.3  
Other
     0.1       -  
                 
EBITDA (Note 2)
     167.7       167.8  
Share-based compensation
     4.0       3.2  
Accretion
     0.5       0.4  
Non-controlling interest
     0.5       -  
Non-cash contribution adjustment
     1.0       -  
Adjusted EBITDA (Note 1)
   $ 173.7       171.4  
 
 
 
 
 
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, 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.