Exhibit 99.1
March 1, 2006
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 2005 FINANCIAL RESULTS
o Net income of $21.6 million or $0.38 per diluted share
o Consolidated revenues of $444.3 million
o EBITDA of $152.0 million, as adjusted
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported its 2005 results with
net income of $21.6 million, or diluted earnings per share of $0.38. The
company's 2005 net income compares to income of $21.3 million, or diluted
earnings per share of $0.34, in 2004. GCI recorded net income of $9.4 million or
$0.17 per share on a diluted basis in the fourth quarter of 2005 that compares
to net income of $2.3 million or $0.04 per share on a diluted basis for the
fourth quarter of 2004.
GCI's revenues for 2005 increased to $444.3 million, an increase of 4.6
percent over 2004 revenues of $424.8 million. For the fourth quarter of 2005,
revenues totaled $113.4 million as compared to $105.5 million in the fourth
quarter of 2004, an increase of 7.5 percent. Sequentially, revenues were
relatively unchanged when compared to third quarter 2005 revenues of $113.8
million.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for 2005 totaled $152.0 million as adjusted, to exclude $2.8 million in expenses
from the early extinguishment of debt. EBITDA for 2004 totaled $139.0 million as
adjusted, to exclude $6.1 million in bond premium expense. EBITDA for 2005
increased $13.0 million or 9.4 percent over 2004. EBITDA for 2005 and 2004
included MCI bad debt recoveries of $3.3 million and $4.2 million, respectively.
Fourth quarter 2005 EBITDA totaled $44.2 million and compares to $32.2
million reported for the fourth quarter of 2004. The increase is EBITDA is
attributable in part to a settlement of claims against a competitor totaling
$7.5 million net of certain costs and to an increase in other common carrier
traffic. Excluding the claims settlement EBITDA for the fourth quarter of 2005
was $36.7 million, an increase of $4.5 million from the fourth quarter of 2004.
Sequentially, fourth quarter 2005 EBITDA of $44.2 million increased $6.0
million from the third quarter 2005 EBITDA of $38.2 million, as adjusted for out
of period restructuring charges and the loss for early extinguishment of debt.
Excluding the claims settlement, fourth quarter EBITDA would have declined $1.5
million from the third quarter 2005.
GCI anticipates revenues of $450 million to $460 million and EBITDA of
$150 million to 154 million for the year 2006. First quarter revenues are
expected to range between $112 million to $114 million and EBITDA is expected to
exceed $37 million.
"We just completed our ninth consecutive year of record revenues and
EBITDA," said Ron Duncan, GCI president. "We achieved our critical goals,
restructured the company to better align our organization with our markets and
received regulatory authority to enter the local phone market throughout most of
Alaska. In the process we generated significant free cash flows and ended the
year with more than $44 million in cash. The coming year promises to be one of
significant additional opportunity."
Highlights
o Long-distance billable minutes increased 14.9 percent to 1.375
billion minutes for the year 2005 as compared to 2004. Minutes for
the fourth quarter of 2005 increased 19.6 percent from the prior
year. Minutes decreased 7.6 percent sequentially from the third
quarter of 2005 due, in part, to seasonality.
o GCI cable television services pass 215,037 homes and serve 137,004
basic subscribers at the end of 2005. Cable customers increased by
2,262 from the fourth quarter of 2004 and increased by 569 from the
third quarter of 2005. Average revenue per equivalent basic
subscriber grew to $82.88 per month at the end of the fourth quarter
of 2005. Revenue generating units (RGUs) for the quarter increased
by 13.4 percent over the prior year.
o GCI has provisioned more than 22,000 lines on its Digital Local
Phone Service (DLPS) facilities at the end of the year 2005. GCI
expects to provision approximately 20,000 additional lines on its
own facilities by the end of 2006.
o The company added approximately 1,000 access lines in the fourth
quarter of 2005. GCI added 1,900 voice access lines after excluding
approximately 1,100 Internet Service Provider dial-up lines that
were turned down during 2005. The local services business added 800
net access lines during 2005 and at year-end had 112,900 total
access lines in service representing an estimated 26 percent share
of the total access line market in Alaska.
o GCI has 77,400 cable modem access customers at the end of 2005, an
increase of 11,900 over the 65,500 at year-end 2004. The company
added 3,200 new cable modem subscribers during the fourth quarter of
2005. As expected, GCI ended 2005 with 93,900 statewide Internet
customers down 7,700 from 101,600 users at the end of 2004. GCI
customers continue to migrate from dial up access service to cable
modem.
o After the Blackout Period expired during the fourth quarter and
through January 2006, GCI repurchased 399,300 shares of its Class A
Common shares at an average price of $10.03 per share. The company
has repurchased more than 2,491,000 shares during 2005 and through
January 2006 at an average price of $9.25 per share. Since September
2004, GCI has repurchased 6,601,000 Class A Common shares at an
average price of $8.76 per share and retired $10 million face value
of Series C Preferred Stock.
Long Distance Results
Long distance and related revenues for 2005 were up 2.6 percent to $256.9
million as compared to $250.5 million for the prior year. Long distance EBITDA
in 2005, as adjusted, totaled $91.7 million, as compared to $84.3 million, as
adjusted, in 2004, an increase of 8.8 percent. The increase in year-over-year
revenue is primarily attributable to an increase in other common carrier
traffic. EBITDA growth for 2005 is primarily attributable to $7.5 million of net
EBITDA associated with the claims settlement.
For the fourth quarter of 2005, long distance revenues totaled $65.2
million as compared to revenues of $60.5 million in the fourth quarter of 2004
and $67.6 million in the third quarter of 2005. Long distance revenues increased
7.8 percent from the prior year and decreased 3.6 percent sequentially. Long
distance EBITDA increased 58.4 percent for the fourth quarter of 2005 to $27.4
million as compared to $17.3 million, in the fourth quarter of the prior year
and increased $3.0 million from $24.4 million, as adjusted, in the third quarter
of 2005. The EBITDA increase both year-over-year and sequentially are primarily
attributable to the $7.5 million settlement in the fourth quarter of 2005.
Additionally, the year-over-year EBITDA increase was favorably impacted by more
minutes carried on the company's network for other common carriers while the
quarter-over-quarter numbers, as expected, were affected by seasonality.
Long-distance billable minutes increased 14.9 percent to 1.375 billion
minutes for the year 2005 as compared to 2004. Long distance minutes-of-use in
the fourth quarter of 2005 were up 19.6 percent as compared to the fourth
quarter of 2004 and decreased 7.6 percent from the third quarter of 2005. The
fourth quarter increase in minutes from the same quarter a year ago is primarily
due to more minutes carried on the company's network for other common carriers.
Cable Television Results
Cable television revenues for the year increased 3.8 percent to $105.3
million in 2005 from $101.4 million in 2004. EBITDA decreased 2.2 percent to
$44.4 million from $45.4 million in 2004. The increase in revenues for the year
is due primarily to an increase in the average revenue per subscriber as a
result of increased penetration of packaged offerings, digital programming
service and cable modem services. The decrease in EBITDA is due to continued
increases in programming and operating costs. Additionally, advertising revenues
were unusually high in 2004 due to the 2004 Olympics and the November 2004
elections.
Cable television revenues for the fourth quarter of 2005 increased 2.7
percent to $26.9 million as compared to $26.2 million in the fourth quarter of
2004, and increased 2.7 percent from $26.2 million in the third quarter of 2005.
EBITDA decreased 8.1 percent to $11.3 million in the fourth quarter of 2005 as
compared to $12.3 million in the fourth quarter of 2004, and increased 6.6
percent from $10.6 million, as adjusted, in the third quarter of 2005. The
decrease in EBITDA from the prior year is due to an increase in programming and
operating costs. The sequential increase in EBITDA is due to lower operating
costs offset in part by increases in programming costs.
Gross margin for the fourth quarter as a percentage of revenues decreased
by 402 basis points from the prior year and decreased by 99 basis points
sequentially.
As of December 31, 2005, the company's cable and entertainment operations
passed 215,037 homes and served 137,004 basic subscribers (108,417 equivalent
basic subscribers). Homes passed increased 3.8 percent and basic subscribers
increased by 1.7 percent during 2005. Average revenue per equivalent basic
subscriber increased 1.9 percent to $82.88 for the fourth quarter of 2005 as
compared to $81.33 for the fourth quarter of 2004, and increased 1.1 percent on
a sequential basis. The company experienced an increase of 569 subscribers to
its systems during the fourth quarter of 2005.
Eighty percent of GCI's basic cable subscribers receive service through a
digital set-top box. More than 98 percent of the set top boxes deployed in GCI's
systems are digital and 53,682 customers purchase additional special interest
programming through a digital tier. GCI offers 14 channels of HDTV to customers
in the Anchorage area.
GCI cable modem service is available to more than 90 percent of the homes
in Alaska. Approximately 36 percent of homes passed and 63 percent of GCI
residential subscribers have cable modem service.
The operating statistics below include capital expenditures and customer
information from cable services and the components of our local services and
Internet services utilizing our cable services' facilities.
GCI's capital expenditures by standard reporting category for the year
ending December 31, 2005 and 2004 follow (amounts in thousands):
2005 2004
-------- -------
Customer premise equipment $ 18,600 16,772
Upgrade/rebuild 11,761 9,476
Line extensions 3,877 1,752
Scalable infrastructure 2,702 4,979
Support capital 935 1,427
Commercial 331 574
-------- -------
Sub-total 38,206 34,980
Other capital expenditures 42,945 77,599
-------- -------
Total capital expenditures $ 81,151 112,579
======== =======
At December 31, 2005 and 2004, GCI's cable business had 123,500 and
122,700 customer relationships, respectively. The standard definition of a
customer relationship is the number of customers who receive at least one level
of service, encompassing voice, video, and data services, without regard to
which services customers purchase. These relationships do not include local
telephone customers except those receiving phone service through the cable
television plant.
At December 31, 2005 and 2004, GCI's cable business had 236,300 and
208,300 revenue generating units, respectively. The increase in the revenue
generating units of 8,900 and 28,000 from September 30, 2005 and December 31,
2004, respectively, is due to an increase in the number of cable modem and DLPS
customers. The definition of a revenue-generating unit is the sum of all primary
analog video, digital video, high-speed data and telephony customers, not
counting additional outlets.
Local Telephone Results
Local telephone service revenues for the year increased 10.4 percent to
$51.9 million as compared to $47.0 million in 2004. Local services generated
$3.1 million of EBITDA for 2005, compared to a loss of $0.4 million in 2004. The
$3.5 million improvement in EBITDA year-over-year is primarily related to an
increase in support from the Universal Services Program and to a lesser extent
cost savings from DLPS. If the local telephone business received credit for
access cost savings on calls placed by GCI long distance customers who are also
GCI local customers, the local telephone business would have reported positive
EBITDA of $9.9 million for 2005.
Local telephone service revenues totaled $13.4 million in the fourth
quarter of 2005 as compared to $12.4 million in the prior year. Revenues
increased $0.9 million or 7.2 percent from the third quarter of 2005. Local
services generated EBITDA of $1.7 million during the fourth quarter of 2005 as
compared to the prior year fourth quarter EBITDA loss of $0.4 million and as
compared to EBITDA of $0.0 million, as adjusted, for the third quarter of 2005.
The increase in EBITDA for the fourth quarter of 2005 is due primarily to
support from the Universal Service Program and cost savings from DLPS.
GCI added approximately 1,000 local access lines in the fourth quarter, an
increase of 0.9 percent over the third quarter of 2005. The company had 112,900
access lines in service at the end of 2005, an increase of 800 access lines or
0.7 percent over the year 2004. GCI added 1,900 voice access lines after
excluding approximately 1,100 Internet Service Provider dial-up lines that were
turned down during 2005. GCI estimates it has attained a 26 percent local
service market share in Alaska. Approximately 86 percent of GCI's access lines
are provisioned on its own facilities or on resold local loops.
In early April 2004, GCI began converting customers to its DLPS
technology. The rollout of DLPS enables GCI to avoid wholesale and loop rental
charged by the incumbent local exchange carrier. GCI has provisioned more than
22,000 lines on its Digital Local Phone Service (DLPS) facilities at the end of
the year 2005. GCI expects to provision approximately 20,000 additional lines on
its own facilities by the end of 2006.
Internet Access Results
Internet access revenues for 2005 totaled $30.2 million, an increase of
16.2 percent over 2004 revenues of $26.0 million. Internet EBITDA for the year
totaled $12.8 million, an increase of $3.2 million over $9.6 million reported
for 2004. The revenue and EBITDA increases result from the migration of existing
customers from dial-up to cable modem access and customers adding more features
and services, increasing economies of scale, and effective operating cost
controls.
Internet access revenues increased 23.4 percent to $7.9 million in the
fourth quarter of 2005 as compared to $6.4 million for the fourth quarter of
2004 and increased 3.9 percent from $7.6 million in the third quarter of 2005.
Fourth quarter 2005 EBITDA of $3.7 million is an improvement of $0.6 million as
compared to $3.1 million in the fourth quarter of 2004, and is an improvement of
$0.5 million from $3.2 million, as adjusted, for the third quarter of 2005.
GCI has 77,400 cable modem access customers at the end of 2005, an
increase of 11,900 over the 65,500 at year-end 2004. The company added 900
Internet and 3,200 new cable modem subscribers during the fourth quarter of
2005. As expected, GCI ended 2005 with 93,900 statewide Internet customers down
7,700 from 101,600 users at the end of 2004. As expected, GCI customers continue
to migrate from dial up access service to cable modem.
Total cable modem revenues (including cable and Internet portions) for the
fourth quarter of 2005 increased 4.9 percent sequentially when compared to the
third quarter of 2005 and increased 9.4 percent year-over-year. At the end of
the fourth quarter of 2005 GCI's average revenue per cable modem (ARPM) was
$29.37 as compared to $30.48 at the end of the third quarter of 2005 and $31.94
at the end of the fourth quarter of 2004. The increase in sequential and
year-over-year revenues is due to the increase in modem customers. The decline
in ARPM is due to an increase in the percentage of total customers taking GCI's
discounted cable modem products.
Other Items
GCI previously announced a reorganization plan on August 22, 2005. The
plan was developed to more efficiently meet the demands of technological and
product convergence. Beginning with the first quarter of 2006 GCI will report
its results along customer lines rather than product lines. The company is
organized under Consumer, Commercial, Network Access (renamed from Carrier as
previously announced) and Managed Broadband segments, replacing the Long
Distance, Cable, Local Access and Internet services segments.
During 2005, core capital expenditures totaled $81.2 million, as compared
to $80.4 million in 2004, excluding $32.2 million in capital expenditures
related to an undersea fiber completed during 2004. GCI expects core capital
expenditures to total approximately $85 million for the year 2006.
GCI will hold a conference call to discuss 2005 results, including the
fourth quarter, on Thursday, March 2, 2006 beginning at 2 p.m. (Eastern). To
access the briefing on March 2, call the conference operator between 1:50 p.m.
and 2 p.m. (Eastern) at 800-857-0373. (International callers should dial
773-799-3727) 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. The call will be
archived online for two weeks. A replay of the call will be available at 4 p.m.
(Eastern) for 72-hours by dialing 800-216-6079, access code 7461 (International
callers should dial 402-220-3893.)
GCI is the largest Alaska-based and operated integrated telecommunications
provider. A pioneer in bundled services, GCI provides local, wireless, and long
distance telephone, cable television, Internet and data communication services
throughout Alaska. More information about the company can be found at
www.gci.com.
The foregoing contains forward-looking statements regarding the company's
expected results that are based on management's expectations as well as on a
number of assumptions concerning future events. Actual results 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) December 31,
Assets 2005 2004
- ------------------------------------------------------------------- ----------- -------
Current assets:
Cash and cash equivalents $ 44,362 31,452
----------- -------
Receivables 79,579 74,429
Less allowance for doubtful receivables 5,317 2,317
----------- -------
Net receivables 74,262 72,112
Deferred income taxes, net 19,596 13,893
Prepaid expenses 8,347 7,907
Property held for sale 2,312 2,282
Inventories 1,556 1,215
Notes receivable from related parties 922 475
Other current assets 2,572 2,429
----------- -------
Total current assets 153,929 131,765
----------- -------
Property and equipment in service, net of depreciation 453,008 432,249
Construction in progress 8,337 22,505
----------- -------
Net property and equipment 461,345 454,754
----------- -------
Cable certificates 191,565 191,241
Goodwill 42,181 41,972
Other intangible assets, net of amortization of $2,869 and $1,625
at December 31, 2005 and 2004, respectively 6,201 6,265
Deferred loan and senior notes costs, net of amortization of $1,451
and $2,602 at December 31, 2005 and 2004, respectively 8,011 10,341
Notes receivable from related parties 2,544 3,345
Other assets 9,299 9,508
----------- -------
Total other assets 259,801 262,672
----------- -------
Total assets $ 875,075 849,191
=========== =======
(Continued)
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
(Amounts in thousands) December 31,
Liabilities, Redeemable Preferred Stock, and Stockholders' Equity 2005 2004
- ------------------------------------------------------------------------------ ----------- -------
Current liabilities:
Current maturities of obligations under long-term debt and capital leases $ 1,769 6,407
Accounts payable 23,217 28,742
Accrued payroll and payroll related obligations 17,925 15,350
Deferred revenue 16,439 16,253
Accrued interest 9,588 8,747
Accrued liabilities 6,814 6,849
Subscriber deposits 361 437
----------- -------
Total current liabilities 76,113 82,785
Long-term debt 474,115 436,969
Obligations under capital leases, excluding current maturities - 32,750
Obligation under capital lease due to related party, excluding current
maturity 628 672
Deferred income taxes, net of deferred income tax asset 70,283 49,111
Other liabilities 9,546 8,385
----------- -------
Total liabilities 630,685 610,672
----------- -------
Redeemable preferred stock - 4,249
----------- -------
Stockholders' equity:
Common stock (no par):
Class A. Authorized 100,000 shares; issued 51,200 and 51,825
shares at December 31, 2005 and 2004, respectively 178,351 186,883
Class B. Authorized 10,000 shares; issued 3,843 and 3,862 shares
at December 31, 2005 and 2004, respectively; convertible on a
share-per-share basis into Class A common stock 3,247 3,248
Less cost of 291 and 288 Class A and Class B common shares held in
treasury at December 31, 2005 and 2004, respectively (1,730) (1,702)
Paid-in capital 16,425 14,957
Notes receivable with related parties issued upon stock option exercise (1,722) (3,016)
Retained earnings 49,819 33,900
----------- -------
Total stockholders' equity 244,390 234,270
----------- -------
Commitments and contingencies
Total liabilities, redeemable preferred stock, and stockholders' equity $ 875,075 849,191
=========== =======
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(Unaudited)
(Amounts in thousands, except per share amounts) 2005 2004 2003
----------- ------- -------
Revenues $ 444,326 424,826 390,797
Cost of goods sold (exclusive of depreciation and
amortization shown separately below) 134,861 139,563 125,383
Selling, general and administrative expenses 154,462 147,360 138,693
Restructuring charge 1,967 - -
Bad debt expense (recovery) 1,080 (1,074) (178)
Impairment charge - - 5,434
Depreciation and amortization expense 74,126 62,871 52,767
----------- ------- -------
Operating income 77,830 76,106 68,698
----------- ------- -------
Other income (expense):
Interest expense (34,116) (27,828) (35,366)
Loss on termination of capital lease and early
extinguishment of debt (2,797) (6,136) -
Amortization and write-off of loan and senior notes fees (3,406) (3,790) (7,732)
Interest income 624 363 560
----------- ------- -------
Other expense, net (39,695) (37,391) (42,538)
----------- ------- -------
Net income before income taxes and cumulative
effect of a change in accounting principle 38,135 38,715 26,160
Income tax expense 16,534 17,463 10,074
----------- ------- -------
Net income before cumulative effect of a change
in accounting principle 21,601 21,252 16,086
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 - - (544)
----------- ------- -------
Net income $ 21,601 21,252 15,542
=========== ======= =======
Basic net income per common share:
Net income before cumulative effect of a change
in accounting principle $ 0.39 0.35 0.25
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 - - (0.01)
----------- ------- -------
Net income $ 0.39 0.35 0.24
=========== ======= =======
Diluted net income per common share:
Net income before cumulative effect of a change
in accounting principle $ 0.38 0.34 0.25
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 - - (0.01)
----------- ------- -------
Net income $ 0.38 0.34 0.24
=========== ======= =======
Common shares used to calculate basic EPS 54,684 56,989 55,675
=========== ======= =======
Common shares used to calculate diluted EPS 55,874 58,196 56,440
=========== ======= =======
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
(Amounts in thousands)
Traditional Summary
Year Ended December 31, 2005
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------
Revenues $ 256,946 105,293 51,860 30,227 444,326
Cost of goods sold (exclusive of depreciation
and amortization shown separately below) 69,043 29,925 28,359 7,534 134,861
------------------------------------------------------
Contribution 187,903 75,368 23,501 22,693 309,465
Selling, general and
administrative expenses 95,147 29,908 19,858 9,549 154,462
Restructuring charge 1,319 302 194 152 1,967
Bad debt expense (recovery) (289) 804 397 168 1,080
------------------------------------------------------
EBITDA, as adjusted 91,726 44,354 3,052 12,824 151,956
Loss on early extinguishment of debt and
termination of capital lease 2,797 - - - 2,797
------------------------------------------------------
EBITDA 88,929 44,354 3,052 12,824 149,159
Add loss on early extinguishment of debt and
termination of capital lease 2,797 - - - 2,797
Less depreciation and amortization expense 41,961 21,000 7,205 3,960 74,126
------------------------------------------------------
Operating income (loss) $ 49,765 23,354 (4,153) 8,864 77,830
======================================================
Year Ended December 31, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------
Revenues 250,463 101,437 46,957 25,969 424,826
Cost of goods sold (exclusive of depreciation
and amortization shown separately below) 76,525 26,959 29,088 6,991 139,563
------------------------------------------------------
Contribution 173,938 74,478 17,869 18,978 285,263
Selling, general and
administrative expenses 91,598 28,100 18,285 9,377 147,360
Restructuring charge - - - - -
Bad debt expense (recovery) (2,006) 932 - - (1,074)
------------------------------------------------------
EBITDA, as adjusted 84,346 45,446 (416) 9,601 138,977
Loss on early extinguishment of debt and
termination of capital lease 6,136 - - - 6,136
------------------------------------------------------
EBITDA 78,210 45,446 (416) 9,601 132,841
Add loss on early extinguishment of debt and
termination of capital lease 6,136 - - - 6,136
Less depreciation and amortization expense 34,958 18,988 4,941 3,984 62,871
------------------------------------------------------
Operating income (loss) 49,388 26,458 (5,357) 5,617 76,106
======================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Year Ended December 31, 2005
Voice Data Video Combined
------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 91,726 91,726
Cable 44,354 44,354
Local Services 3,052 3,052
Internet 12,824 12,824
------------------------------------------
94,778 12,824 44,354 151,956
EBITDA, as Adjusted, Reallocations:
Long Distance (49,086) 49,086 -
Cable 11,437 (11,437) -
Local Services (353) 353 -
------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 45,339 73,700 32,917 151,956
==========================================
Year Ended December 31, 2004
Voice Data Video Combined
------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance 84,346 84,346
Cable 45,446 45,446
Local Services (416) (416)
Internet 9,601 9,601
------------------------------------------
83,930 9,601 45,446 138,977
EBITDA, as Adjusted, Reallocations:
Long Distance (47,958) 47,958 -
Cable 10,759 (10,759) -
Local Services (239) 239 -
------------------------------------------
Integrated Summary EBITDA, as Adjusted 35,733 68,557 34,687 138,977
==========================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
(Amounts in thousands)
Traditional Summary
Three Months Ended December 31, 2005
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------
Revenues $ 65,182 26,871 13,397 7,940 113,390
Cost of goods sold (exclusive of depreciation and
amortization shown separately below) 10,685 7,900 6,779 1,907 27,271
---------------------------------------------------
Contribution 54,497 18,971 6,618 6,033 86,119
Selling, general and
administrative expenses 25,865 7,479 4,904 2,396 40,644
Restructuring charge 73 - - - 73
Bad debt expense (recovery) 1,139 164 (21) (74) 1,208
---------------------------------------------------
EBITDA 27,420 11,328 1,735 3,711 44,194
Less depreciation and amortization expense 10,491 5,619 2,091 1,362 19,563
---------------------------------------------------
Operating income (loss) $ 16,929 5,709 (356) 2,349 24,631
===================================================
Three Months Ended December 31, 2004
Long Local
Distance Cable Services Internet Combined
--------------------------------------------------
Revenues 60,532 26,194 12,399 6,377 105,502
Cost of goods sold (exclusive of depreciation and
amortization shown separately below) 18,410 6,648 7,904 1,723 34,685
--------------------------------------------------
Contribution 42,122 19,546 4,495 4,654 70,817
Selling, general and
administrative expenses 25,069 7,120 4,870 1,589 38,648
Restructuring charge - - - - -
Bad debt expense (recovery) (197) 169 - - (28)
--------------------------------------------------
EBITDA 17,250 12,257 (375) 3,065 32,197
Less depreciation and amortization expense 8,036 4,954 2,014 1,242 16,246
--------------------------------------------------
Operating income (loss) 9,214 7,303 (2,389) 1,823 15,951
==================================================
Integrated Summary EBITDA
(Unaudited)
Three Months Ended December 31, 2005
Voice Data Video Combined
--------------------------------------
Traditional Summary EBITDA
Long Distance $ 27,420 27,420
Cable 11,328 11,328
Local Services 1,735 1,735
Internet 3,711 3,711
--------------------------------------
29,155 3,711 11,328 44,194
EBITDA, Reallocations:
Long Distance (11,163) 11,163 -
Cable 2,966 (2,966) -
Local Services (114) 114 -
--------------------------------------
Integrated Summary EBITDA $ 17,878 17,954 8,362 44,194
======================================
Three Months Ended December 31, 2004
Voice Data Video Combined
--------------------------------------
Traditional Summary EBITDA
Long Distance 17,250 17,250
Cable 12,257 12,257
Local Services (375) (375)
Internet 3,065 3,065
--------------------------------------
16,875 3,065 12,257 32,197
EBITDA, Reallocations:
Long Distance (11,435) 11,435 -
Cable 2,679 (2,679) -
Local Services (98) 98 -
--------------------------------------
Integrated Summary EBITDA 5,342 17,277 9,578 32,197
======================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
(Amounts in thousands)
Traditional Summary
Three Months Ended December 31, 2005
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------
Revenues $ 65,182 26,871 13,397 7,940 113,390
Cost of goods sold (exclusive of depreciation and
amortization shown separately below) 10,685 7,900 6,779 1,907 27,271
---------------------------------------------------
Contribution 54,497 18,971 6,618 6,033 86,119
Selling, general and
administrative expenses 25,865 7,479 4,904 2,396 40,644
Restructuring charge 73 - - - 73
Bad debt expense (recovery) 1,139 164 (21) (74) 1,208
Add restructuring charge - - - - -
---------------------------------------------------
EBITDA, as adjusted 27,420 11,328 1,735 3,711 44,194
Loss on termination of capital lease - - - - -
Less restructuring charge - - - - -
---------------------------------------------------
EBITDA 27,420 11,328 1,735 3,711 44,194
Loss on termination of capital lease - - - - -
Less depreciation and amortization expense 10,491 5,619 2,091 1,362 19,563
---------------------------------------------------
Operating income (loss) $ 16,929 5,709 (356) 2,349 24,631
===================================================
Three Months Ended September 30, 2005
Long Local
Distance Cable Services Internet Combined
---------------------------------------------------
Revenues 67,548 26,179 12,467 7,567 113,761
Cost of goods sold (exclusive of depreciation and
amortization shown separately below) 19,939 7,437 7,101 1,868 36,345
---------------------------------------------------
Contribution 47,609 18,742 5,366 5,699 77,416
Selling, general and
administrative expenses 23,402 7,722 5,154 2,342 38,620
Restructuring charge 1,246 302 194 152 1,894
Bad debt expense (recovery) (572) 289 197 117 31
Add restructuring charge 848 206 132 103 1,289
---------------------------------------------------
EBITDA, as adjusted 24,381 10,635 (47) 3,191 38,160
Loss on termination of capital lease (2,797) - - - (2,797)
Less restructuring charge (848) (206) (132) (103) (1,289)
---------------------------------------------------
EBITDA 20,736 10,429 (179) 3,088 34,074
Loss on termination of capital lease 2,797 - - - 2,797
Less depreciation and amortization expense 10,713 5,184 1,833 779 18,509
---------------------------------------------------
Operating income (loss) 12,820 5,245 (2,012) 2,309 18,362
===================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited)
Three Months Ended December 31, 2005
Voice Data Video Combined
--------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $27,420 27,420
Cable 11,328 11,328
Local Services 1,735 1,735
Internet 3,711 3,711
--------------------------------------
29,155 3,711 11,328 44,194
EBITDA, as Adjusted, Reallocations:
Long Distance (11,163) 11,163 -
Cable 2,966 (2,966) -
Local Services (114) 114 -
--------------------------------------
Integrated Summary EBITDA, as Adjusted $17,878 17,954 8,362 44,194
======================================
Three Months Ended September 30, 2005
Voice Data Video Combined
--------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance 24,381 24,381
Cable 10,635 10,635
Local Services (47) (47)
Internet 3,191 3,191
--------------------------------------
24,334 3,191 10,635 38,160
EBITDA, as Adjusted, Reallocations:
Long Distance (13,413) 13,413 -
Cable 2,846 (2,846) -
Local Services (87) 87 -
--------------------------------------
Integrated Summary EBITDA, as Adjusted 10,834 19,537 7,789 38,160
======================================
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Three Months Ended
December 31, December 31, September 30,
2005 2004 2005
------------ ------------ -------------
EBITDA, as adjusted (Note 2) $ 44.2 32.2 38.2
Loss on termination of capital lease --- --- (2.8)
Restructuring charge adjustment --- --- (1.3)
------- ----- ------
EBITDA (Note 1) 44.2 32.2 34.1
Depreciation and amortization expense (19.6) (16.2) (18.5)
Loss on termination of capital lease --- --- 2.8
------- ----- ------
Operating income 24.6 16.0 18.4
------- ----- ------
Other income (expense):
Interest expense (8.4) (7.5) (9.1)
Loss on termination of capital
lease --- --- (2.8)
Amortization and write-off of loan
and senior notes fee expense (0.2) (0.4) (2.2)
Interest income 0.1 0.1 0.3
------- ----- ------
Other expense, net (8.5) (7.8) (13.8)
------- ----- ------
Net income before income taxes 16.1 8.2 4.6
Income tax expense (6.7) (5.9) (2.3)
------- ----- ------
Net income $ 9.4 2.3 2.3
======= ===== ======
Year Ended
December 31, December 31,
2005 2004
------------ ------------
EBITDA, as adjusted (Note 2) $ 151.9 139.0
Loss on termination of capital lease and early
extinguishment of debt (2.8) (6.1)
------- -----
EBITDA (Note 1) 149.1 132.9
Depreciation and amortization expense (74.1) (62.9)
Loss on termination of capital lease and early
extinguishment of debt 2.8 6.1
------- -----
Operating income 77.8 76.1
------- -----
Other income (expense):
Interest expense (34.1) (27.8)
Loss on termination of capital lease and early
extinguishment of debt (2.8) (6.1)
Amortization and write-off of loan and senior
notes fee expense (3.4) (3.8)
Interest income 0.6 0.3
------- -----
Other expense, net (39.7) (37.4)
------- -----
Net income before income taxes 38.1 38.7
Income tax expense (16.5) (17.4)
------- -----
Net income $ 21.6 21.3
======= =====
Notes:
(1) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is
the sum of Net Income, Interest Expense, Amortization and Write-off of
Loan and Senior Notes Fees, Interest Income, Income Tax Expense, and
Depreciation and Amortization Expense. EBITDA is not presented as an
alternative measure of net income, operating income or cash flow from
operations, as determined in accordance with accounting principles
generally accepted in the United States of America. GCI's management uses
EBITDA to evaluate the operating performance of its business, and as a
measure of performance for incentive compensation purposes. GCI believes
EBITDA is a measure used as an analytical indicator of income generated to
service debt and fund capital expenditures. In addition, multiples of
current or projected EBITDA are used to estimate current or prospective
enterprise value. EBITDA does not give effect to cash used for debt
service requirements, and thus does not reflect funds available for
investment or other discretionary uses. EBITDA as presented herein may not
be comparable to similarly titled measures reported by other companies.
(2) EBITDA (as defined in Note 1 above) before deducting Loss on Termination
of Capital Lease and Early Extinguishment of Debt for the years ended
December 31, 2005 and 2004 and before deducting Loss on Termination of
Capital Lease for the three months ended September 30, 2005 and adjusting
for the Restructuring Charge during the three months ended December 31,
2005 and September 30, 2005.