Grizzly Merger Sub 1 (GLIBP) 8-K Gci Reports Preliminary Second Quarter 2008 Financial Results

July 30, 2008

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 PRELIMINARY SECOND QUARTER 2008 FINANCIAL RESULTS

·   Consolidated revenue of $142.5 million

·   EBITDAS of $43.4 million

·   Net income of $3.6 million or $0.07 per diluted share

ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported preliminary second quarter 2008 revenues of $142.5 million, an increase of 9.7 percent over the second quarter of 2007. Second quarter 2008 earnings before interest, taxes, depreciation, amortization and share based compensation expense (EBITDAS) totaled $43.4 million. EBITDAS increased $1.8 million or 4.2 percent from the second quarter of 2007. The increase in EBITDAS was attributable to growth in all segments except network access.

GCI’s second quarter 2008 net income is expected to be $3.6 million, or earnings per diluted share of $0.07. The company’s second quarter net income compares to net income of $5.9 million, or earnings per diluted share of $0.11 in the same period of 2007.

Second quarter 2008 revenue increased along all products lines when compared to the prior year. Second quarter results include the acquisition of the United companies as of June 1, 2008.

Revenues for the company increased $7.8 million, or 5.8 percent, over first quarter 2008 revenues of $134.7 million. Second quarter EBITDAS of $43.4 million increased 13.6 percent from $38.2 million in the first quarter of 2008.

“We just concluded another excellent quarter,” said GCI president Ron Duncan. “GCI’s second quarter results set new records for both revenue and EBITDAS. Our strong financial results are being driven by solid and growing customer metrics across all categories. We are on target to achieve our goals for 2008 and 2009.”

“GCI achieved a number of important milestones since the end of the first quarter. We closed our acquisition of the United companies. We successfully transitioned all our rural telecommunications traffic to the Galaxy 18 satellite. Shortly after the end of the quarter we closed our acquisition of Alaska Wireless, LLC. This acquisition jump starts GCI’s rural wireless initiative and along with our own rural wireless build-out will allow GCI to provide wireless service in more than 40 rural communities before the end of the year and more than 200 rural communities within the next 24 months. The build-out plans for our urban wireless networks are proceeding and we hope to close our acquisition of the remaining interest in Alaska DigiTel prior to the end of the third quarter.”

“The third quarter marks the start of our wireless transition. Significant amounts of EBITDAS will be shifted from our network access business to our consumer and commercial business units as a result of the transition of AT&T Mobility traffic off of our carrier network and our transition of wireless customers from the AT&T network to our own,” said Duncan. This process will add significantly to EBITDAS when it is complete by this time next year. I anticipate continued improvement in customer counts and operating metrics during the third quarter. Financial results should be similar to the just completed quarter. Third quarter EBITDAS may be burdened some by the costs and pace of the wireless transition. I am confident, however, that we will hit our announced goals for both 2008 and 2009.”

GCI reaffirms 2008 guidance for revenues of $550 million to $560 million and EBITDAS of more than $165 million. Additionally GCI anticipates total cash receipts in excess of $45 million during 2008 as a result of fiber IRU agreements which are not otherwise reflected in current guidance. Second quarter 2008 results exceeded guidance for revenues of $133 million to $136 million and for EBITDAS in excess of the first quarter. Third quarter revenues are expected to total $138 million to $141 million, not including revenues from the amortization of fiber sales.

           Highlights

·   Consumer revenues totaled $62.1 million, an increase of 12.7 percent over the prior year quarter and an increase of 1.2 percent over the first quarter of 2008. The increases were across all products and services.

·   GCI local access lines increased by 14,800 over the first quarter of 2008. The increase includes access lines from the acquisition of the United companies. Consumer, network access, commercial and other local access lines totaled 137,700 at the end of the second quarter of 2008, representing an estimated 32 percent share of the total access line market in Alaska. GCI began providing local access services on its own facilities in the Nome market during the second quarter of 2008.

·   GCI has provisioned 89,700 access lines on its own facilities at the end of the second quarter of 2008, an increase of 18,600 lines over the first quarter of 2008 and an increase of 35,000 lines when compared to the end of the second quarter of the prior year. The increase in provisioned lines includes 12,200 lines acquired from the United companies. The company had provisioned 54,700 access lines on its own facilities at the end of the second quarter of 2007. Plant upgrades were completed in the Fairbanks, Seward and Homer markets during the second quarter.

·   GCI had 100,000 consumer and commercial cable modem access customers at the end of the second quarter of 2008, an increase of 300 over the 99,700 cable modem customers at the end of the first quarter 2008. Average monthly revenue per cable modem totaled $37.77 for the second quarter of 2008 as compared to $36.71 for the first quarter of 2008, an increase of 2.9 percent. The increase in average monthly revenues arises primarily from customers upgrading to plans with increased levels of service.

·   GCI has 84,100 wireless subscribers, an increase of 3,900 subscribers from the first quarter of 2008.

·   GCI’s contractors began laying 750 miles of undersea fiber that will connect 50,000 residents in several communities in Southeast Alaska. The $33 million project is expected to be completed before the end of 2008.

·   GCI is on track with its redundant fiber route to Fairbanks and with its diverse fiber route along Turnagain Arm near Anchorage. The Turnagain Arm project eliminates a current bottleneck where all of the fiber routes out of Alaska come unacceptably close together and when completed will allow GCI’s lower 48 fiber ring to fully meet the diversity requirements of the United States Department of Defense.

Consumer

Consumer revenues increased 12.7 percent to $62.1 million compared to $55.1 million in the second quarter of 2007 and increased 1.2 percent over the first quarter of 2008. The increased revenue is from all consumer product offerings.

Consumer voice revenues were up 4.4 percent over the prior year and 2.3 percent over the first quarter of 2008. Consumer local access lines in service for the second quarter were up approximately 9,700 lines compared to the second quarter of 2007. Access lines in the second quarter increased by 1,300 over the first quarter of 2008. Voice revenues continue to increase due to sales of voice services in existing and newly opened markets.

GCI serves 60,500 consumer access lines on its own facilities, an increase of 5,000 lines from the first quarter of 2008

Consumer video revenues increased 7.4 percent over the prior year and were up slightly from the first quarter of 2008. The increase in year-over-year revenue is due in part to an increase in video subscribers purchasing higher tier services including high definition or digital service and renting high definition/digital video recorders. Consumer video subscribers totaled 130,300, an increase of 5,600 subscribers over the second quarter of 2007 and a seasonal decrease of 400 subscribers from the first quarter of 2008.

Consumer data revenues increased 25.6 percent over the prior year and 2.9 percent over the first quarter of 2008. The increase in consumer data revenues is due to an increase in cable modem customers and an increase in average monthly revenue per modem subscriber. The increase in average monthly revenues arises in part from customers upgrading to plans with increased levels of service. GCI added 8,400 consumer cable modem customers over the prior year and 100 customers during the second quarter of 2008.

Consumer wireless revenues increased to $13.9 million, an increase of 22.9 percent over the second quarter of 2007. The increase in wireless revenues is primarily due to an increase in wireless subscribers, including those of the company’s wireless subsidiary, Alaska DigiTel.

Network Access

Network access revenues increased 0.7 percent to $41.9 million as compared to $41.6 million in the second quarter of 2007 and increased 6.9 percent over the first quarter of 2008.

Voice revenues, as expected, decreased 5.5 percent from the prior year and increased 5.8 percent over the first quarter of 2008. The decrease in voice revenues from the prior year is primarily due to the effects of rate reductions for other common carriers. Network access minutes increased 2.7 percent to 326.2 million minutes for the second quarter of 2008 as compared to the second quarter of 2007. Minutes for the second quarter of 2008 increased 3.7 percent from the first quarter of 2008.

Data revenues for the second quarter of 2008 were up 16.3 percent compared to second quarter 2007 and increased 6.8 percent over the first quarter of 2008. The increase in data revenues over the prior year is primarily due to an increase in circuits sold.

Commercial

Commercial revenues increased 4.8 percent to $27.4 million as compared to $26.2 million in the second quarter of 2007 and increased 3.2 percent from $26.6 million in the first quarter of 2008. Commercial revenues increased from the prior year primarily due to an increase in time and materials revenues. Revenues increased along all commercial product lines over the first quarter of 2008.

A second quarter decrease in voice revenues as compared to the prior year was primarily due to a decrease in average revenue per minute and a 3.5 percent decrease in long distance minutes. Sequentially, commercial minutes increased 0.3 percent over the first quarter of 2008. GCI increased commercial local access lines by 2,500 over the second quarter of 2007 and 1,900 when compared to the first quarter of 2008.

Commercial video revenues increased 7.2 percent on a year-over-year basis and increased 18.1 percent sequentially over the first quarter of 2008. The increase in video revenues year-over-year is due primarily to a 15.4 percent increase in subscribers. The sequential increase in revenues is due mostly to an increase in advertising revenues.

Commercial data network revenues in the second quarter of 2008 totaled $16.6 million, an increase of 13.9 percent when compared to $14.6 million in the second quarter of 2007 and $0.4 million or 2.3 percent, when compared to $16.2 million in the first quarter of 2008.

Commercial data network revenues comprise $9.5 million in monthly recurring charges for data services and $7.1 million in charges billed on a time and materials basis largely for personnel providing on site customer support. This latter category can vary significantly based on project activity. For the second quarter of 2008 monthly recurring data revenues increased by approximately $0.9 million when compared to the second quarter 2007 and $0.3 million compared to the first quarter 2008. Time and material charges increased by $1.1 million as compared to the second quarter of 2007 and increased by $0.1 million as compared to the first quarter of 2008.

Managed Broadband                                                      

   Managed broadband revenues totaled $9.1 million in the second quarter of 2008, an increase of 31.4 percent from $7.0 million in the second quarter of 2007. Revenue for the second quarter was up 21.4 percent from the $7.5 million reported in the first quarter of 2008. The large increases in revenues were due primarily to one time equipment sales.

Regulated Operations

GCI acquired United Utilities, Inc. (UUI) and its wholly owned subsidiary United-KUC, Inc., as part of its acquisition of the United companies on June 1, 2008.  UUI and United-KUC are incumbent local exchange carriers that obtain their revenues from rates derived from the regulated revenue requirement for each service they provide.

UUI’s consolidated regulated revenues for one month of the second quarter totaled $1.9 million and its EBTIDAS totaled $0.4 million. UUI consolidated has 12,200 local access lines at the end of the second quarter of 2008.

Other Items

During the second quarter of 2008 GCI’s capital expenditures totaled $167.4 million as compared to $52.7 million in the first quarter of 2008. GCI’s capital expenditures include those of Alaska DigiTel and include capital lease assets totaling $98.6 million attributable to the Galaxy 18 Satellite.

While the company believes that the financial results included in this press release are materially correct, the company's auditors have not yet concluded all aspects of their review of our financial statements. Accordingly, the financial results included herein should be considered preliminary and may be subject to change following conclusion of the review.

GCI will hold a conference call to discuss the quarter’s results on Thursday, July 31, 2008 beginning at 2 p.m. (Eastern). To access the briefing on July 31, dial 888-791-1856 (International callers should dial 210-234-0001) and identify your call as “GCI.” In addition to the conference call, GCI will make available net conferencing. To access the call via net conference, log on to www.gci.com and follow the instructions. A replay of the call will be available for 72-hours by dialing 866-413-9161, access code 7461 (International callers should dial 203-369-0666.)

GCI is the largest telecommunications company in Alaska. The company’s cable plant, which provides voice, video, and broadband data services, passes 90 percent of Alaska households. GCI operates Alaska’s most extensive terrestrial/subsea fiber optic network, which by the end of 2008, will connect not only Anchorage but also Fairbanks, and Juneau/Southeast to the lower 48 states with a diversely routed, protected fiber network. The company’s satellite network provides communications services to small towns and villages throughout rural Alaska. GCI is now in the process of constructing Alaska’s first truly statewide mobile wireless network, which will seamlessly link 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 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 may 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.

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GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)	(Preliminary)
	June 30,		December 31,
Assets	2008		2007
Current assets:
Cash and cash equivalents	$	95,703		13,074
Receivables		107,502		97,913
Less allowance for doubtful receivables		1,864		1,657
Net receivables		105,638		96,256
Deferred income taxes		10,423		5,734
Prepaid expenses		6,246		5,356
Inventories		5,390		2,541
Short-term investments		5,230		-
Other current assets		558		717
Total current assets		229,188		123,678
Property and equipment in service, net of depreciation		692,742		504,273
Construction in progress		115,809		69,409
Net property and equipment		808,551		573,682
Cable certificates		191,565		191,565
Goodwill		48,211		42,181
Wireless licenses		25,907		25,757
Other intangible assets, net of amortization		18,080		11,769
Deferred loan and senior notes costs, net of amortization		6,726		6,202
Other assets		11,197		9,399
Total other assets		301,686		286,873
Total assets	$	1,339,425		984,233
			(Continued)

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Continued)
(Amounts in thousands)	(Preliminary)
	June 30,			December 31,
Liabilities, Minority Interest, and Stockholders' Equity	2008			2007
Current liabilities:
Current maturities of obligations under long-term debt and capital leases	$	9,242			2,375
Accounts payable		46,094			35,747
Deferred revenue		20,886			16,600
Accrued payroll and payroll related obligations		17,401			16,329
Accrued liabilities		9,439			7,536
Accrued interest		9,322			8,927
Subscriber deposits		1,020			877
Total current liabilities		113,404			88,391
Long-term debt		707,540			536,115
Obligations under capital leases, excluding current maturities		96,254			2,290
Obligation under capital lease due to related party, excluding current   maturity		1,864			469
Deferred income taxes		93,671			84,294
Long-term deferred revenue		37,738			624
Other liabilities		19,768			12,617
Total liabilities		1,070,239			724,800
Minority interest		6,502			6,478
Commitments and contingencies
Stockholders’ equity:
Common stock (no par):
Class A.  Authorized 100,000 shares; issued 49,930 and 50,437      shares at June 30, 2008 and December 31, 2007, respectively;      outstanding 49,461 and 49,425 shares at June30, 2008 and      December 31, 2007, respectively		150,706			155,980
Class B.  Authorized 10,000 shares; issued 3,256 and 3,257 shares at      June 30, 2008 and December 31, 2007, respectively; outstanding      3,254 and 3,255 shares at June 30, 2008 and December 31, 2007,      respectively; convertible on a share-per-share basis into Class A      common stock		2,750			2,751
Less cost of 471 and 473 Class A and Class B common shares held in       treasury at June 30, 2008 and December 31, 2007, respectively		(3,422	)		(3,448	)
Paid-in capital		23,522			20,132
Retained earnings		89,128			77,540
Total stockholders' equity		262,684			252,955
Total liabilities, minority interest, and stockholders' equity	$	1,339,425			984,233

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Amounts in thousands, except per share amounts)	2008 (preliminary)			2007 (as restated)			2008 (preliminary)			2007 (as restated)
Revenues	$	142,461			129,890			277,135			254,921
Cost of goods sold (exclusive of depreciation and amortization shown   separately below)		52,448			45,579			103,759			93,569
Selling, general and administrative expenses		48,260			43,430			94,666			87,035
Depreciation and amortization expense		23,527			21,437			46,309			42,303
Operating income		18,226			19,444			32,401			32,014
Other income (expense):
Interest expense		(10,899	)		(8,557	)		(19,584	)		(16,875	)
Loan and senior notes fees		(879	)		(216	)		(1,102	)		(396	)
Interest income		402			161			483			345
Minority interest		26			(24	)		(24	)		(11	)
Other expense, net		(11,350	)		(8,636	)		(20,227	)		(16,937	)
Income before income tax expense		6,876			10,808			12,174			15,077
Income tax expense		3,281			4,890			6,050			6,853
Net income available to common shareholders	$	3,595			5,918			6,124			8,224
Basic net income available to common shareholders per common share	$	0.07			0.11			0.12			0.15
Diluted net income available to common shareholders per common share	$	0.07			0.11			0.11			0.14
Common shares used to calculate basic EPS		52,320			53,201			52,289			53,230
Common shares used to calculate diluted EPS		52,745			54,698			52,950			54,815
Note:
We reclassified $3.3 million and $8.2 million of network maintenance and operations expense from selling, general and administrative expense to Cost of Goods Sold for the three and six months ended June 30, 2007, respectively, to make our income statement classification more consistent with that of our peers.

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
	Second Quarter 2008 (preliminary)																Second Quarter 2007 (as restated)
				Network						Managed		Regulated							Network				Managed
	Consumer			Access			Commercial			Broadband		Operations		Totals			Consumer		Access		Commercial		Broadband		Totals
Revenues
Voice	$	12,117			23,213			7,280			-		1,879		44,489			11,608		24,577		8,045		-		44,230
Video		25,668			-			2,149			-		-		27,817			23,907		-		2,004		-		25,911
Data		10,386			17,988			16,584			9,134		-		54,092			8,269		15,469		14,561		6,953		45,252
Wireless		13,942			690			1,431			-		-		16,063			11,344		1,570		1,583		-		14,497
Total		62,113			41,891			27,444			9,134		1,879		142,461			55,128		41,616		26,193		6,953		129,890
Cost of goods   sold (exclusive   of depreciation   and amortization)		23,689			11,529			13,912			3,020		298		52,448			22,375		8,722		12,257		2,225		45,579
Contribution		38,424			30,362			13,532			6,114		1,581		90,013			32,753		32,894		13,936		4,728		84,311
Less SG&A		26,054			9,579			8,312			3,093		1,222		48,260			22,034		9,597		9,118		2,681		43,430
Add other   income   (expense)		(12	)		(10	)		(4	)		-		-		(26	)		10		10		4		-		24
EBITDA		12,382			20,793			5,224			3,021		359		41,779			10,709		23,287		4,814		2,047		40,857
Add share-based   compensation		637			522			317			117		-		1,593			256		256		182		69		763
EBITDAS	$	13,019			21,315			5,541			3,138		359		43,372			10,965		23,543		4,996		2,116		41,620
Note:
We reclassified $3.3 million of network maintenance and operations expense from selling, general and administrative expense to Cost of Goods Sold for the three months ended June 30, 2007 to make our income statement classification more consistent with that of our peers.

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
	Second Quarter 2008 (preliminary)																First Quarter 2008
				Network						Managed		Regulated							Network				Managed
	Consumer			Access			Commercial			Broadband		Operations		Totals			Consumer		Access		Commercial		Broadband		Totals
Revenues
Voice	$	12,117			23,213			7,280			-		1,879		44,489			11,844		21,942		7,214		-		41,000
Video		25,668			-			2,149			-		-		27,817			25,647		-		1,820		-		27,467
Data		10,386			17,988			16,584			9,134		-		54,092			10,096		16,839		16,209		7,526		50,670
Wireless		13,942			690			1,431			-		-		16,063			13,796		393		1,348		-		15,537
Total		62,113			41,891			27,444			9,134		1,879		142,461			61,383		39,174		26,591		7,526		134,674
Cost of goods   sold (exclusive   of depreciation   and amortization)		23,689			11,529			13,912			3,020		298		52,448			24,701		10,255		14,071		2,284		51,311
Contribution		38,424			30,362			13,532			6,114		1,581		90,013			36,682		28,919		12,520		5,242		83,363
Less SG&A		26,054			9,579			8,312			3,093		1,222		48,260			25,353		9,586		8,612		2,855		46,406
Add other   income   (expense)		(12	)		(10	)		(4	)		-		-		(26	)		22		19		9		-		50
EBITDA		12,382			20,793			5,224			3,021		359		41,779			11,307		19,314		3,899		2,387		36,907
Add share-based   compensation		637			522			317			117		-		1,593			496		421		253		90		1,260
EBITDAS	$	13,019			21,315			5,541			3,138		359		43,372			11,803		19,735		4,152		2,477		38,167

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)																	��
	Six Months Ended June 30, 2008 (preliminary)												Six Months Ended June 30, 2007 (as restated)
			Network				Managed		Regulated						Network					Managed
	Consumer		Access		Commercial		Broadband		Operations		Totals		Consumer		Access			Commercial		Broadband		Totals
Revenues
Voice	$	23,978		45,155		14,494		-		1,879		85,506		22,961		48,848			15,902		-		87,711
Video		51,315		-		3,969		-		-		55,284		47,538		-			3,770		-		51,308
Data		20,482		34,827		32,793		16,660		-		104,762		16,216		30,397			28,515		13,874		89,002
Wireless		27,721		1,083		2,779		-		-		31,583		22,016		2,697			2,187		-		26,900
Total		123,496		81,065		54,035		16,660		1,879		277,135		108,731		81,942			50,374		13,874		254,921
Cost of goods   sold (exclusive   of depreciation   and amortization)		48,391		21,783		27,983		5,304		298		103,759		44,332		19,961			24,525		4,751		93,569
�� Contribution		75,105		59,282		26,052		11,356		1,581		173,376		64,399		61,981			25,849		9,123		161,352
Less SG&A		51,406		19,166		16,924		5,948		1,222		94,666		44,068		19,262			18,183		5,522		87,035
Add other   income   (expense)		11		9		4		-		-		24		4		5			2		-		11
EBITDA		23,688		40,107		9,124		5,408		359		78,686		20,327		42,714			7,664		3,601		74,306
Add share-based   compensation		1,134		943		569		207		-		2,853		596		594			411		147		1,748
EBITDAS	$	24,822		41,050		9,693		5,615		359		81,539		20,923		43,308			8,075		3,748		76,054
Note:
We reclassified $8.2 million of network maintenance and operations expense from selling, general and administrative expense to Cost of Goods Sold for the six months ended June 30, 2007 to make our income statement classification more consistent with that of our peers.

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(Unaudited)
							June 30, 2008						June 30, 2008
							as compared to						as compared to
	June 30,		June 30,		March 31,		June 30,			March 31,			June 30,			March 31,
	2008		2007		2008		2007			2008			2007			2008
Consumer
Voice
Long-distance subscribers		89,800		90,500		90,400		(700	)		(600	)		-0.8	%		-0.7	%
Total local access lines in service		78,100		68,400		76,800		9,700			1,300			14.2	%		1.7	%
Local access lines in service on GCI facilities		60,500		41,800		55,500		18,700			5,000			44.7	%		9.0	%
Video
Basic subscribers		130,300		124,700		130,700		5,600			(400	)		4.5	%		-0.3	%
Digital programming tier subscribers		68,200		61,000		68,100		7,200			100			11.8	%		0.1	%
HD/DVR converter boxes		56,900		40,200		55,400		16,700			1,500			41.5	%		2.7	%
Homes passed		226,900		221,100		225,700		5,800			1,200			2.6	%		0.5	%
Data
Cable modem subscribers		91,000		82,600		90,900		8,400			100			10.2	%		0.1	%
Wireless
Wireless lines in service		77,000		62,900		73,000		14,100			4,000			22.4	%		5.5	%
Network Access Services
Data:
Total ISP access lines in service		2,000		2,600		2,600		(600	)		(600	)		-23.1	%		-23.1	%
Commercial
Voice:
Long-distance subscribers		10,400		11,100		10,400		(700	)		-			-6.3	%		0.0	%
Total local access lines in service		45,400		42,900		43,500		2,500			1,900			5.8	%		4.4	%
Local access lines in service on GCI facilities		15,400		10,700		13,400		4,700			2,000			43.9	%		14.9	%
Video
Hotels and mini-headend   subscribers		15,700		13,600		14,000		2,100			1,700			15.4	%		12.1	%
Basic subscribers		2,000		2,100		2,000		(100	)		-			-4.8	%		0.0	%
Total basic subscribers		17,700		15,700		16,000		2,000			1,700			12.7	%		10.6	%
Data
Cable modem subscribers		9,000		8,100		8,800		900			200			11.1	%		2.3	%
Wireless
Wireless lines in service		7,100		6,700		7,200		400			(100	)		6.0	%		-1.4	%
Regulated Operations
Voice:
Total local access lines in service		12,200	NA		NA		NA			NA			NA			NA
							June 30, 2008						June 30, 2008
	Three Months Ended						as Compared to						as Compared to
	June 30,		June 30,		March 31,		June 30,			March 31,			June 30,			March 31,
	2008		2007		2008		2007			2008			2007			2008
Consumer
Voice
Long-distance minutes carried   (in millions)		32.0		33.6		33.7		(1.6	)		(1.7	)		-4.8	%		-5.0	%
Video
Average monthly gross revenue per subscriber	$	65.86	$	63.79	$	66.09	$	2.07		$	(0.23	)		3.2	%		-0.3	%
Wireless
Average monthly gross revenue per subscriber	$	57.39	$	55.25	$	56.76	$	2.14		$	0.63			3.9	%		1.1	%
Network Access Services
Voice
Long-distance minutes carried   (in millions)		326.2		317.7		314.6		8.5			11.6			2.7	%		3.7	%
Commercial
Voice:
Long-distance minutes carried   (in millions)		32.9		34.1		32.8		(1.2	)		0.1			-3.5	%		0.3	%
Total
Long-distance minutes carried   (in millions)		391.1		385.4		381.1		5.7			10.0			1.5	%		2.6	%

General Communication, Inc.

Non-GAAP Financial Reconciliation Schedule

(Unaudited, Amounts in Millions)

	Three Months Ended
	June 30, 2008 (preliminary)			June 30, 2007 (as restated)			March 31, 2008
Net income	$	3.6			5.9			2.5
Income tax expense		3.3			4.9			2.8
Income before income tax expense		6.9			10.8			5.3
Other (income) expense:
Interest expense		10.9			8.6			8.7
Loan and senior notes fees		0.8			0.2			0.2
Interest income		(0.4	)		(0.2	)		(0.1	)
Minority interest		---			---			0.1
Other expense, net		11.3			8.6			8.9
Operating income		18.2			19.4			14.2
Depreciation and amortization expense		23.5			21.4			22.8
Minority interest		---			---			(0.1	)
EBITDA (Note 2)		41.7			40.8			36.9
Share-based compensation expense		1.7			0.8			1.3
EBITDAS (Note 1)	$	43.4			41.6			38.2

	Six Months Ended
	June 30, 2008 (preliminary)			June 30, 2007 (as restated)
Net income	$	6.1			8.2
Income tax expense		6.1			6.9
Income before income tax expense		12.2			15.1
Other (income) expense:
Interest expense		19.6			16.9
Loan and senior notes fees		1.1			0.4
Interest income		(0.5	)		(0.4	)
Minority interest		---			---
Other expense, net		20.2			16.9
Operating income		32.4			32.0
Depreciation and amortization expense		46.3			42.3
Minority interest		---			---
EBITDA (Note 2)		78.7			74.3
Share-based compensation expense		2.8			1.7
EBITDAS (Note 1)	$	81.5			76.1

Notes:

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

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