Grizzly Merger Sub 1 (GLIBP) 8-K Gci Reports First Quarter 2010 Financial Results

Exhibit 99.1 

May 5, 2010

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 FIRST QUARTER 2010 FINANCIAL RESULTS

·   Consolidated revenue of $152.4 million

·   Adjusted EBITDA of $51.1 million

·   Net income of $1.7 million or $0.03 per diluted share

ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its first quarter 2010 results with revenues increasing to $152.4 million and adjusted EBITDA increasing to $51.1 million. Revenues for the first quarter of 2010 increased 2.5 percent over revenues of $148.7 million in the first quarter of 2009. Adjusted EBITDA increased $4.6 million or 9.9 percent over first quarter of 2009 EBITDA of $46.4 million. EBITDA margin for the first quarter of 2010 improved to 33.5 percent as compared to 31.2 percent in the first quarter of 2009.

GCI’s first quarter 2010 net income totaled $1.7 million or earnings per diluted share of $0.03 and compares to net income of $0.4 million, or earnings per diluted share of $0.00 for the same period of 2009.

First quarter 2010 revenues increased $4.9 million or 3.3 percent over total revenues of $147.5 million in the fourth quarter of 2009. Adjusted EBITDA increased $6.1 million or 13.6 percent over adjusted EBITDA of $45.0 million in the fourth quarter of 2009.

“GCI turned in another great quarter driven by increasing consumer customer metrics in all categories,” said GCI president Ron Duncan.

           “The strength of our bundled service offerings combined with the power of our Internet service, which offers the highest speeds available in Alaska, continues to bring new customers in the door. Continuously improving products and new service offerings deepen existing customer relationships and add incremental revenue. This all adds up to the best customer experience in Alaska and the most rapidly growing consumer business in the state.”

           "While network access revenues are down both year-over-year and sequentially this quarter represents the first one to experience the full impact of our new rate structures. We expect our network access business to be more stable from here on.”

“Alaska’s economy remains steady. Higher energy prices will maintain the state’s operating budget and the legislature proposed a record state capital budget which will stimulate construction activities throughout the state.”

Highlights

·   Consumer revenues for the first quarter of 2010 totaled $80.4 million, an increase of 13.6 percent over the first quarter of 2009 and an increase of 6.0 percent over the fourth quarter of 2009. Revenue increases were strong for voice, video, data and wireless services.

·   GCI added 2,700 wireless subscribers in the first quarter of 2010. Wireless subscribers totaled 128,100 at the end of the quarter.

·   GCI won a State of Alaska contract for approximately 3,500 wireless phones. The phones are expected to be provisioned on GCI’s network before the end of the third quarter of 2010.

·   Total GCI access lines were 146,700 at the end of the first quarter of 2010, representing an estimated 35 percent share of the total access line market in Alaska. Access lines increased by 2,000 lines over the fourth quarter of 2009.

·   GCI’s facilities-based access lines totaled 109,900, representing 75 percent of its 146,700 total access lines at the end of the first quarter of 2010, an increase of 2,600 lines over the fourth quarter of 2009 and an increase of 8,700 lines when compared to the end of the first quarter of the prior year.

·   GCI had 113,600 consumer and commercial cable modem customers at the end of the first quarter of 2010, an increase of 2,900 over the 110,700 cable modem customers at the end of the fourth quarter 2009. Average monthly revenue per cable modem totaled $45.85 for the first quarter of 2010 as compared to $40.97 in the prior year, an increase of 11.9 percent and is up 0.5 percent over $45.63 for the fourth quarter of 2009.

·   GCI had 149,200 basic video subscribers at the end of the first quarter of 2010, a decrease of 700 from the first quarter of 2009 and an increase of 1,600 over the fourth quarter of 2009.

·   GCI repurchased 52,500 shares of its Class A common shares at a cost of approximately $0.3 million or $5.78 per share. Depending on company performance, market conditions, liquidity, and subject to board oversight GCI may continue repurchasing its own shares.

Consumer

Consumer revenues increased 13.6 percent to $80.4 million as compared to $70.7 million in the first quarter of 2009 and increased 6.0 percent over the fourth quarter of 2009. Revenue increases were strong for voice, video, data and wireless services.

Consumer voice revenues of $13.9 million were steady when compared to the first quarter a year ago and up 4.5 percent over the fourth quarter of 2009. The first quarter of 2009 included a $0.7 million out of period USF adjustment. Consumer local access lines in service for the first quarter were up 4,400 lines over the first quarter of 2009. Access lines in the first quarter increased by 1,600 compared to the fourth quarter of 2009.

GCI serves 77,300 consumer access lines on its own facilities, an increase of 2,100 lines over the fourth quarter of 2009. More than 90 percent of consumer access lines are provisioned exclusively on GCI facilities.

Consumer video revenues of $29.0 million increased 6.0 percent over the prior year and increased 0.5 percent over the fourth quarter of 2009. The increases are due in part to increases in video subscribers purchasing higher tiered services and renting high definition/digital video recorder converters. Consumer video subscribers totaled 131,400 at the end of the first quarter of 2010, an increase of 1,400 subscribers over the first quarter of 2009 and an increase of 900 subscribers over the fourth quarter of 2009.

Consumer data revenues of $14.1 million increased 20.1 percent over the prior year and 3.3 percent over the fourth quarter of 2009. The increase in consumer data revenues is due to an increase in cable

modem customers and increasing average monthly revenue per cable modem. GCI added 8,800 consumer cable modem customers over the prior year and cable modem customer counts increased by 2,900 on a sequential basis.

Consumer wireless revenues increased to $23.4 million, an increase of 32.2 percent over the first quarter of 2009. The increase in wireless revenues is primarily due to an increase in wireless subscribers. Consumer has added 20,400 wireless customers over the end of the first quarter a year ago, an increase of 21.0 percent. Consumer wireless revenues increased $3.4 million sequentially, an increase of 16.9 percent, over the fourth quarter of 2009. Consumer added 2,400 wireless customers as compared to the end of the fourth quarter of 2009.

Network Access

Network access revenues decreased 21.1 percent to $26.2 million as compared to $33.2 million in the first quarter of 2009 and decreased 4.8 percent from the fourth quarter of 2009.

Voice revenues, as expected, decreased 53.5 percent from the prior year and 32.5 percent from the fourth quarter of 2009. The decrease in voice revenues is primarily due to decreasing average revenue per minute and the transition of voice traffic to dedicated networks. The declining revenue per minute is largely due to renegotiating long-term contracts with our largest carriers during 2009. The first quarter of 2010 is the first full quarter that reflects all of the renegotiated contract rates.

Data revenues were down 9.1 percent compared to the first quarter 2009 and increased 9.2 percent over the fourth quarter of 2009. The decrease in data revenues from the prior year is primarily attributable to lower rates resulting from increased competition.

Wireless revenues, primarily related to roaming traffic, increased $2.3 million over the prior year and increased $0.5 million sequentially.

Commercial

Commercial revenues decreased $0.3 million to $27.7 million as compared to $28.0 million in the first quarter of 2009 and increased $0.3 million over $27.4 million in the fourth quarter of 2009.

Voice revenues decreased 1.8 percent from the prior year and increased 5.2 percent sequentially. Commercial voice revenues for the first quarter actually increased excluding a $0.4 million of out of period USF adjustment in the first quarter of 2009. Long distance minutes decreased 8.1 percent from the prior year and increased 3.5 percent over the fourth quarter of 2009. Commercial local access lines increased by 1,500 over the first quarter of 2009 and, 700 sequentially.

Commercial video revenues increased $0.3 million over the prior year and declined $0.3 million sequentially.

Commercial data services revenues include both transmission charges for data circuits and time and materials charges for GCI on-site support of customer operations. Data transport charges of $8.7 million were steady as compared to the first quarter of 2009 while time and material charges for support activities decreased by $1.1 million to $6.8 million for the first quarter of 2010 as a result of reduced activity primarily in the state’s oil sector. Commercial data service revenues were $15.5 million in the first quarter of 2010, down $1.0 million from the first quarter of 2009 and down $0.2 million from the fourth quarter of 2009.

Commercial wireless revenues totaled $2.1 million for the first quarter, an increase of 42.8 percent over the prior year and an increase of 17.6 percent over the fourth quarter of 2009. GCI had 10,600 commercial wireless subscribers at the end of the first quarter, an increase of 300 subscribers over the fourth quarter of 2009.

GCI won a State of Alaska contract for approximately 3,500 wireless phones. The phones are expected to be provisioned on GCI’s network before the end of the third quarter of 2010.

Managed Broadband

Managed broadband revenues totaled $12.1 million in the first quarter of 2010, an increase of 13.9 percent over $10.6 million in the first quarter of 2009. Revenue for the first quarter was up 4.6 percent over the $11.6 million reported in the fourth quarter of 2009.

Regulated Operations

Regulated operations revenues totaled $6.1 million in the first quarter of 2010 as compared to $6.2 million in the first quarter of 2009. Regulated operations revenues for the first quarter of 2010 increased $0.8 million over the fourth quarter of 2009. Regulated operations has 10,800 local access lines at the end of the first quarter of 2010, a decrease of 300 access lines from the fourth quarter of 2009.

Other Items

GCI’s first quarter 2010 capital expenditures totaled $16.8 million as compared to $24.4 million in the first quarter of 2009 and $33.6 million in the fourth quarter of 2009.

GCI will hold a conference call to discuss the quarter’s results on Thursday, May 6, 2010 beginning at 2 p.m. (Eastern). To access the briefing on May 6, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 800-593-7188 (International callers should dial 1-312-470-7059) 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 866-514-4272, access code 7461 (International callers should dial 203-369-2013.)

GCI is the largest telecommunications company in Alaska. GCI’s cable plant, which provides voice, video, and broadband data services, passes 90 percent of Alaska households. GCI operates Alaska’s most extensive terrestrial / subsea fiber optic network which connects not only Anchorage but also Fairbanks, and Juneau / Southeast Alaska to the lower 48 states with a diversely routed, protected fiber network. GCI’s satellite network provides communications services to small towns and communities throughout rural Alaska. GCI’s newly constructed statewide mobile wireless network seamlessly links urban and rural Alaska for the first time in the state’s history.

      A pioneer in bundled services, GCI is the top provider of voice, data, and video services to Alaska consumers with a 70 percent share of the consumer broadband market. GCI is also the leading provider of communications services to enterprise customers, particularly large enterprise customers with complex data networking needs. More information about GCI can be found at www.gci.com.

The foregoing contains forward-looking statements regarding GCI’s expected results that are based on management’s expectations as well as on a number of assumptions concerning future events. Actual

results might differ materially from those projected in the forward looking statements due to uncertainties and other factors, many of which are outside GCI’s control. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in GCI’s cautionary statement sections of Form 10-K and 10-Q filed with the Securities and Exchange Commission.

#    #    #

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)
	March 31,		December 31,
Assets	2010		2009
Current assets:
Cash and cash equivalents	$	68,565		48,776
Receivables		136,392		147,859
Less allowance for doubtful receivables		8,023		7,060
Net receivables		128,369		140,799
Deferred income taxes		17,618		17,618
Prepaid expenses		7,217		4,491
Inventories		7,047		9,278
Investment securities		905		895
Other current assets		4,676		4,977
Total current assets		234,397		226,834
Property and equipment in service, net of depreciation		812,132		823,080
Construction in progress		24,212		26,161
Net property and equipment		836,344		849,241
Cable certificates		191,565		191,565
Goodwill		73,452		73,452
Wireless licenses		25,967		25,967
Other intangible assets, net of amortization		18,371		19,561
Deferred loan and senior notes costs, net of amortization		14,802		13,168
Other assets		18,980		18,609
Total other assets		343,137		342,322
Total assets	$	1,413,878		1,418,397
			(Continued)

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Continued)
(Amounts in thousands)
	March 31,			December 31,
Liabilities and Stockholders' Equity	2010			2009
Current liabilities:
Current maturities of obligations under long-term debt and capital leases	$	10,264			9,892
Accounts payable		26,881			30,697
Deferred revenue		21,627			21,404
Accrued interest		18,084			14,821
Accrued payroll and payroll related obligations		17,256			21,874
Accrued liabilities		11,629			15,037
Subscriber deposits		1,415			1,549
Total current liabilities		107,156			115,274
Long-term debt, net		774,363			771,247
Obligations under capital leases, excluding current maturities		88,020			89,279
Obligation under capital lease due to related party		1,878			1,876
Deferred income taxes		100,221			100,386
Long-term deferred revenue		51,824			52,342
Other liabilities		21,607			21,676
Total liabilities		1,145,069			1,152,080
Commitments and contingencies
Stockholders’ equity:
Common stock (no par):
Class A. Authorized 100,000 shares; issued 51,913 and 51,899 shares      at March 31, 2010 and December 31, 2009, respectively; outstanding      51,589 and 51,627 shares at March 31, 2010 and December 31,      2009, respectively		149,411			150,911
Class B. Authorized 10,000 shares; issued and outstanding 3,185 and      3,186 shares at March 31, 2010 and December 31, 2009, respectively;      convertible on a share-per-share basis into Class A common stock		2,683			2,684
Less cost of 324 and 272 Class A common shares held in       treasury at March 31, 2010 and December 31, 2009, respectively		(2,340	)		(2,339	)
Paid-in capital		33,034			30,410
Retained earnings		86,021			84,651
Total stockholders' equity		268,809			266,317
Total liabilities and stockholders' equity	$	1,413,878			1,418,397

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
	(Unaudited)
	Three Months Ended
	March 31,
(Amounts in thousands, except per share amounts)	2010			2009
Revenues	$	152,419			148,689
Cost of goods sold (exclusive of depreciation and amortization shown   separately below)		48,907			47,857
Selling, general and administrative expenses		53,257			56,586
Depreciation and amortization expense		31,126			30,734
Operating income		19,129			13,512
Other income (expense):
Interest expense (including amortization of deferred loan fees)		(17,680	)		(12,647	)
Interest income		61			8
Other expense, net		(17,619	)		(12,639	)
Income before income tax expense or benefit		1,510			873
Income tax (expense) benefit		164			(519	)
Net income		1,674			354
Basic net income per share of Class A and Class B common stock:
Basic net income per common share	$	0.03			0.01
Diluted net income per share of Class A and Class B common stock:
Diluted net income per common share	$	0.03			0.00
Common shares used to calculate basic EPS		54,764			52,434
Common shares used to calculate diluted EPS		55,035			52,810

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
	First Quarter 2010												First Quarter 2009
			Network				Managed		Regulated						Network				Managed		Regulated
	Consumer		Access		Commercial		Broadband		Operations		Totals		Consumer		Access		Commercial		Broadband		Operations			Totals
Revenues
Voice	$	13,856		6,659		7,843		-		6,060		34,418	$	13,915		14,334		7,984		-		6,169			42,402
Video		29,024		-		2,317		-		-		31,341		27,370		-		2,050		-		-			29,420
Data		14,126		16,329		15,502		12,085		-		58,042		11,762		17,954		16,515		10,610		-			56,841
Wireless		23,362		3,195		2,061		-		-		28,618		17,672		911		1,443		-		-			20,026
Total		80,368		26,183		27,723		12,085		6,060		152,419		70,719		33,199		27,992		10,610		6,169			148,689
Cost of goods   sold		25,633		6,528		12,371		3,218		1,157		48,907		23,403		6,684		13,355		2,689		1,726			47,857
Contribution		54,735		19,655		15,352		8,867		4,903		103,512		47,316		26,515		14,637		7,921		4,443			100,832
Less SG&A		29,166		7,844		9,144		4,043		3,060		53,257		29,486		10,275		9,723		4,191		2,911			56,586
EBITDA		25,569		11,811		6,208		4,824		1,843		50,255		17,830		16,240		4,914		3,730		1,532			44,246
Add share-based   compensation		384		180		149		90		-		803		765		553		326		158		-			1,802
Add non-cash   contribution adjustment		-		-		-		-		-		-		183		126		61		30		-			400
Adjusted EBITDA	$	25,953		11,991		6,357		4,914		1,843		51,058	$	18,778		16,919		5,301		3,918		1,532			46,448
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
(Amounts in thousands)
	First Quarter 2010												Fourth Quarter 2009
			Network				Managed		Regulated						Network				Managed		Regulated
	Consumer		Access		Commercial		Broadband		Operations		Totals		Consumer		Access		Commercial		Broadband		Operations			Totals
Revenues
Voice	$	13,856		6,659		7,843		-		6,060		34,418	$	13,264		9,862		7,457		-		5,230	��		35,813
Video		29,024		-		2,317		-		-		31,341		28,872		-		2,584		-		-			31,456
Data		14,126		16,329		15,502		12,085		-		58,042		13,673		14,959		15,658		11,552		-			55,842
Wireless		23,362		3,195		2,061		-		-		28,618		19,977		2,669		1,753		-		-			24,399
Total		80,368		26,183		27,723		12,085		6,060		152,419		75,786		27,490		27,452		11,552		5,230			147,510
Cost of goods   sold		25,633		6,528		12,371		3,218		1,157		48,907		24,794		6,477		12,603		3,196		1,234			48,304
Contribution		54,735		19,655		15,352		8,867		4,903		103,512		50,992		21,013		14,849		8,356		3,996			99,206
Less SG&A		29,166		7,844		9,144		4,043		3,060		53,257		29,111		10,447		8,950		3,691		3,122			55,321
EBITDA		25,569		11,811		6,208		4,824		1,843		50,255		21,881		10,566		5,899		4,665		874			43,885
Add share-based   compensation		384		180		149		90		-		803		328		274		203		102		-			907
Add non-cash   contribution adjustment		-		-		-		-		-		-		74		49		25		12		-			160
Adjusted EBITDA	$	25,953		11,991		6,357		4,914		1,843		51,058	$	22,283		10,889		6,127		4,779		874			44,952

GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(Unaudited)
							March 31, 2010						March 31, 2010
							as compared to						as compared to
	March 31,		March 31,		December 31,		March 31,			December 31,			March 31,			December 31,
	2010		2009		2009		2009			2009			2009			2009
Consumer
Voice
Long-distance subscribers		91,200		88,700		90,500		2,500			700			2.8	%		0.8	%
Total local access lines in service		85,800		81,400		84,200		4,400			1,600			5.4	%		1.9	%
Local access lines in service on GCI facilities		77,300		69,900		75,200		7,400			2,100			10.6	%		2.8	%
Video
Basic subscribers		131,400		130,000		130,500		1,400			900			1.1	%		0.7	%
Digital programming tier subscribers		81,400		76,100		79,600		5,300			1,800			7.0	%		2.3	%
HD/DVR converter boxes		86,000		72,100		81,500		13,900			4,500			19.3	%		5.5	%
Homes passed		232,900		229,700		232,400		3,200			500			1.4	%		0.2	%
Data
Cable modem subscribers		103,100		94,300		100,200		8,800			2,900			9.3	%		2.9	%
Wireless
Wireless lines in service		117,500		97,100		115,100		20,400			2,400			21.0	%		2.1	%
Network Access Services
Data:
Total ISP access lines in service		1,700		1,700		1,700		-			-			0.0	%		0.0	%
Commercial
Voice:
Long-distance subscribers		9,400		9,700		9,500		(300	)		(100	)		-3.1	%		-1.1	%
Total local access lines in service		48,400		46,900		47,700		1,500			700			3.2	%		1.5	%
Local access lines in service on GCI facilities		20,400		18,000		19,600		2,400			800			13.3	%		4.1	%
Video
Hotels and mini-headend   subscribers		16,100		18,300		15,400		(2,200	)		700			-12.0	%		4.5	%
Basic subscribers		1,700		1,600		1,700		100			-			6.3	%		0.0	%
Total basic subscribers		17,800		19,900		17,100		(2,100	)		700			-10.6	%		4.1	%
Data
Cable modem subscribers		10,500		10,200		10,500		300			-			2.9	%		0.0	%
Wireless
Wireless lines in service		10,600		8,000		10,300		2,600			300			32.5	%		2.9	%
Regulated Operations
Voice:
Total local access lines in service		10,800		11,900		11,100		(1,100	)		(300	)		-9.2	%		-2.7	%
							March 31, 2010						March 31, 2010
	Three Months Ended						as Compared to						as Compared to
	March 31,		March 31,		December 31,		March 31,			December 31,			March 31,			December 31,
		2010		2009		2009		2009			2009			2009			2009
Consumer
Voice
Long-distance minutes carried   (in millions)		28.3		29.6		28.8		(1.3	)		(0.5	)		-4.4	%		-1.7	%
Video
Average monthly gross revenue per   subscriber	$	73.80	$	69.50	$	73.57	$	4.30		$	0.23			6.2	%		0.3	%
Wireless
Average monthly gross revenue per   subscriber	$	59.99	$	58.63	$	57.04	$	1.36		$	2.95			2.3	%		5.2	%
Network Access Services
Voice
Long-distance minutes carried   (in millions)		193.6		200.4		199.3		(6.8	)		(5.7	)		-3.4	%		-2.9	%
Commercial
Voice:
Long-distance minutes carried   (in millions)		29.6		32.2		28.6		(2.6	)		1.0			-8.1	%		3.5	%
Total
Long-distance minutes carried   (in millions)		251.5		262.2		256.7		(10.7	)		(5.2	)		-4.1	%		-2.0	%

General Communication, Inc.

Non-GAAP Financial Reconciliation Schedule

(Unaudited, Amounts in Millions)

	Three Months Ended
	March 31, 2010			March 31, 2009		December 31, 2009
Net income (loss)	$	1.7			0.4		(3.7	)
Income tax expense (benefit)		(0.2	)		0.5		(2.6	)
Income (loss) before income tax expense (benefit)		1.5			0.9		(6.3	)
Other (income) expense:
Interest expense   (including amortization and write-off of deferred loan fees)		17.7			12.6		19.7
Interest income		---			---		(0.1	)
Other expense, net		17.7			12.6		19.6
Operating income		19.2			13.5		13.3
Depreciation and amortization expense		31.1			30.7		30.6
EBITDA (Note 2)		50.3			44.2		43.9
Share-based compensation		0.8			1.8		0.9
Non-cash contribution adjustment		---			0.4		0.2
Adjusted EBITDA (Note 1)	$	51.1			46.4		45.0

General Communication, Inc.

Non-GAAP Financial Reconciliation Schedule

(Unaudited, Amounts in Millions)

Notes:

(1) EBITDA (as defined in Note 2 below) before deducting share-based compensation and non-cash contribution adjustment.

(2) Earnings Before Interest, Taxes, Depreciation and Amortization is the sum of Net Income (Loss), Interest Expense (including Amortization and Write-off of Deferred Loan Fees), Interest Income, Income Tax Expense (Benefit), and Depreciation and Amortization Expense.  EBITDA is not presented as an alternative measure of net income, 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.