May 4, 2011
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 2011 FINANCIAL RESULTS
| · | Consolidated revenue of $164.8 million |
| · | Adjusted EBITDA of $53.3 million |
| · | Net income of $1.5 million or $0.03 per diluted share |
ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its first quarter 2011 results with revenues increasing to $164.8 million over revenues of $152.4 million in the first quarter of 2010. Adjusted EBITDA increased $2.3 million or 4.5 percent over the first quarter of 2010 EBITDA of $51.1 million. EBITDA margin decreased to 32.4 percent as compared to 33.5 percent for the prior year.
GCI’s first quarter 2011 net income totaled $1.5 million or earnings per diluted share of $0.03 and compares to net income of $1.7 million, or earnings per diluted share of $0.03 for the same period of 2010.
First quarter of 2011 revenues were level with fourth quarter of 2010 revenues. Adjusted EBITDA increased $3.0 million or 6.0% over adjusted EBITDA of $50.3 million in the fourth quarter of 2010.
“We made steady progress toward our long term goals during the first quarter of 2011,” said GCI president Ron Duncan. “Our metrics continue to be solid and we’re on plan for the year. Much of our effort during the quarter was directed toward preparations for our TERRA construction project. I’m pleased to say that we are on track with our permitting and are fairly confident that we will be able to complete most of the TERRA project this year, thus bringing TERRA revenues and EBITDA on line more than a year ahead of schedule. When finished, TERRA will provide terrestrial connectivity from Anchorage through to Bethel improving voice, data and wireless connectivity for more than 30,000 Alaskans who today rely solely on satellites for service.”
GCI previously provided guidance on revenues of $685 million to $700 million and adjusted EBITDA of $233 million to $238 million for the year 2011. GCI’s first quarter results are consistent with achieving its annual guidance.
Highlights
| · | GCI repurchased 620,520 shares of its Class A common stock in the first quarter of 2011 at an average price per share of $11.26. GCI is authorized to repurchase $123.5 million of its common equity depending on company performance, market conditions, and liquidity, and subject to board oversight. At the end of the first quarter of 2011 GCI had approximately 46.8 million shares outstanding. |
| · | GCI is the second largest wireless provider in Alaska with 140,200 wireless subscribers at the end of the quarter, an increase of 1.1 percent over the end of the fourth quarter of 2010. |
| · | Consumer revenues for the first quarter of 2011 totaled $88.4 million, an increase of 10.0 percent over the first quarter of 2010. Revenue increases were strong in the data and wireless product lines during the first quarter of 2011. |
| · | Commercial revenues increased $4.1 million to $31.8 million as compared to $27.7 million in the first quarter of 2010 and decreased $1.4 million from $33.2 million in the fourth quarter of 2010. The increase in revenues for the year was primarily due to an increase in data service revenues, mostly from the oil sector. The decreases in sequential revenues were also related to oil sector data service revenues which were impacted by seasonality. |
| · | GCI had 145,300 access lines at the end of the first quarter of 2011, representing an estimated 36 percent share of the total access line market in Alaska. Access lines increased by 500 lines over the fourth quarter of 2010. |
| · | GCI’s facilities-based access lines totaled 114,300, representing 78.7 percent of its total access lines at the end of the first quarter of 2011. Reported facilities based access lines increased 4,400 lines over the fourth quarter of 2010. The increase in lines is primarily due to the result of a review of the database and a reclassification of lines from the off-net to the on-net category. |
| · | GCI had 118,000 consumer and commercial cable modem customers at the end of the first quarter of 2011, an increase of 1,600 over the 116,400 cable modem customers at the end of the fourth quarter 2010. Average monthly revenue per cable modem for the first quarter of 2011 was $52.21, an increase of 13.9 percent over the $45.85 figure posted for the prior year and a decrease of 2.4 percent from the $53.47 figure posted for the fourth quarter of 2010. |
Consumer
Consumer revenues increased 10.0 percent to $88.4 million as compared to $80.4 million in the first quarter of 2010 and increased 2.0 percent over the fourth quarter of 2010. Data and wireless subscriber growth continue to drive strong financial results in the consumer business.
Consumer voice revenues of $13.8 million were steady when compared to the first and fourth quarters of 2010. Consumer local access lines in service at the end of the first quarter of 2011 totaled 85,100, a decrease of 700 lines from the first quarter of 2010 and an increase of 300 lines over the fourth quarter of 2010.
GCI serves 78,000 consumer access lines on its own facilities, an increase of 600 lines over the fourth quarter of 2010. More than 91 percent of consumer access lines are provisioned exclusively on GCI facilities.
Consumer video revenues of $30.3 million increased 4.5 percent over the first quarter of 2010 and were steady with the fourth quarter of 2010. The increase is due in part to increases in video subscribers purchasing higher tiered services and renting high definition/digital video recorder converters. Consumer basic video subscribers totaled 130,200 at the end of the first quarter of 2011, an increase of 200 subscribers from the fourth quarter of 2010 and a decrease of 1,200 subscribers from the first quarter of 2010.
Consumer data revenues of $16.7 million increased 18.2 percent over the first quarter of 2010 and were steady with the fourth quarter of 2010. The increase in consumer data revenues is due to an increase in cable modem customers and increasing average monthly usage per cable modem. GCI added 4,100 consumer cable modem customers over the first quarter of 2010 and cable modem customer counts increased by 1,500 on a sequential basis.
Consumer wireless revenues increased to $27.6 million in the first quarter of 2011, an increase of 18.2 percent over the first quarter of 2010 and a 6.9 percent increase over the fourth quarter of 2010 driven by an increase in wireless subscribers and an increase USF payment rates in the first quarter of 2011. Consumer has added 9,000 wireless customers over the end of the first quarter a year ago, an increase of 7.7 percent. Consumer has added 1,600 wireless customers as compared to the end of the fourth quarter of 2010.
Network Access
Network access revenues decreased 4.1 percent to $25.1 million as compared to $26.2 million in the first quarter of 2010 and decreased 2.5 percent from the fourth quarter of 2010.
Voice revenues decreased 2.8 percent to $6.5 million from the prior year and 1.4 percent from the fourth quarter of 2010. The decrease in voice revenues is primarily due to decreasing average revenue per minute. Long distance minutes decreased 1.5 percent from the prior year and increased 3.1 percent over the fourth quarter of 2010.
Data revenues were down 8.3 percent compared to the first quarter of 2010 and 1.1 percent from the fourth quarter of 2010. The decrease in data revenues is primarily attributable to lower rates resulting from the extension of national pricing schedules into the Alaska market and the continuing shift to IP-based transport.
Wireless revenues, primarily related to roaming traffic, increased 14.4 percent to $3.7 million over the prior year and decreased 9.4 percent sequentially. The decrease in sequential revenues is primarily due to seasonality and decreasing roaming rates for wireless data in the Alaska market.
Commercial
Commercial revenues increased $4.1 million to $31.8 million as compared to $27.7 million in the first quarter of 2010 and decreased $1.4 million from $33.2 million in the fourth quarter of 2010. The increase in revenues for the year was primarily due to an increase in data service revenues, mostly from the oil sector. The decreases in sequential revenues were also related to oil sector data service revenues which were impacted by seasonality.
Voice revenues for the first quarter of 2011 were steady when compared to the first quarter of 2010 and the fourth quarter of 2010. Long distance minutes decreased 4.4 percent from the prior year and increased 3.7% over the fourth quarter of 2010. Local access lines at the end of the first quarter of 2011 increased by 400 lines sequentially. Local access lines served entirely on GCI’s facilities increased by 4,800 lines when compared to the prior year and increased by 4,000 over the fourth quarter of 2010. The increase in lines is primarily due to the correction of a classification error in calculating the number of lines on our facilities.
Commercial video revenues increased $0.5 million over the prior year and declined $0.4 million sequentially.
Commercial data service 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 $9.4 million increased by $0.7 million as compared to the first quarter of 2010 and time and material charges for support activities increased by $2.9 million to $9.7 million for the first quarter of 2011 as a result of increased activity primarily in the oil sector. Commercial data service revenues were $19.1 million in the first quarter of 2011, an increase of $3.6 million from the first quarter of 2010 and a decrease of $1.2 million from the fourth quarter of 2010.
Commercial wireless revenues totaled $2.3 million for the first quarter of 2011 and were steady with the first and fourth quarters of 2010. GCI had 13,700 Commercial wireless subscribers at the end of the first quarter of 2011, an increase of 3,100 subscribers over the prior year and a decrease of 100 subscribers sequentially.
Managed Broadband
Managed broadband revenues totaled $14.0 million in the first quarter of 2011, an increase of 15.8 percent over the prior year and steady with the fourth quarter of 2010.
Regulated Operations
Regulated operations revenues totaled $5.4 million in the first quarter of 2011 as compared to $6.1 million in the first quarter of 2010. Regulated operations revenues for the first quarter of 2011 were steady when compared to the fourth quarter of 2010. Regulated operations had 9,800 local access lines at the end of the first quarter of 2011, a decrease of 1,000 lines from the first quarter of 2010 and a decrease of 200 lines from the fourth quarter of 2010.
Other Items
SG&A expenses for the first quarter of 2011 totaled $58.9 million, an increase of 10.6 percent as compared to $53.3 million for the first quarter of 2010. The increase is due in part to increases in health care costs and labor and related benefits. As a percentage of revenues, SG&A expenses increased to 36 percent in the first quarter of 2011 as compared to 35 percent in the prior year.
GCI’s first quarter 2011 capital expenditures totaled $28.3 million as compared to $16.8 million in the first quarter of 2010 and $32.1 million in the fourth quarter of 2010.
GCI will hold a conference call to discuss the quarter’s results on Thursday, May 5, 2011 beginning at 2 p.m. (Eastern). To access the briefing on May 5, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 888-324-2612 (International callers should dial 1-517-308-9360) 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 866-501-0084, access code 7461 (International callers should dial 203-369-1814.)
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 | | 2011 | | | 2010 | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 29,253 | | | | 33,070 | |
| | | | | | | | | |
| Receivables | | | 138,328 | | | | 132,856 | |
| Less allowance for doubtful receivables | | | 8,374 | | | | 9,189 | |
| Net receivables | | | 129,954 | | | | 123,667 | |
| | | | | | | | | |
| Deferred income taxes | | | 10,145 | | | | 10,145 | |
| Prepaid expenses | | | 7,861 | | | | 5,950 | |
| Inventories | | | 6,796 | | | | 5,804 | |
| Other current assets | | | 3,881 | | | | 3,940 | |
| Total current assets | | | 187,890 | | | | 182,576 | |
| | | | | | | | | |
| Property and equipment in service, net of depreciation | | | 779,439 | | | | 798,278 | |
| Construction in progress | | | 47,817 | | | | 31,144 | |
| Net property and equipment | | | 827,256 | | | | 829,422 | |
| | | | | | | | | |
| Cable certificates | | | 191,635 | | | | 191,635 | |
| Goodwill | | | 73,932 | | | | 73,932 | |
| Wireless licenses | | | 25,967 | | | | 25,967 | |
| Other intangible assets, net of amortization | | | 16,695 | | | | 17,717 | |
| Deferred loan and senior notes costs, net of amortization | | | 13,171 | | | | 13,661 | |
| Other assets | | | 17,616 | | | | 16,850 | |
| Total other assets | | | 339,016 | | | | 339,762 | |
| Total assets | | $ | 1,354,162 | | | | 1,351,760 | |
| | | | | | | | | |
| | | | | | | (Continued) | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |
| CONSOLIDATED BALANCE SHEETS | |
| (Unaudited) | |
| (Continued) | |
| | | | | | | |
| | | | | | | |
| (Amounts in thousands) | | | | | | |
| | | March 31, | | | December 31, | |
| Liabilities and Stockholders' Equity | | 2011 | | | 2010 | |
| | | | | | | |
| Current liabilities: | | | | | | |
| Current maturities of obligations under long-term debt and capital leases | | $ | 7,609 | | | | 7,652 | |
| Accounts payable | | | 35,486 | | | | 35,589 | |
| Deferred revenue | | | 17,540 | | | | 17,296 | |
| Accrued payroll and payroll related obligations | | | 19,905 | | | | 22,132 | |
| Accrued interest | | | 17,007 | | | | 13,456 | |
| Accrued liabilities | | | 12,458 | | | | 12,557 | |
| Subscriber deposits | | | 1,218 | | | | 1,271 | |
| Total current liabilities | | | 111,223 | | | | 109,953 | |
| | | | | | | | | |
| Long-term debt, net | | | 786,753 | | | | 779,201 | |
| Obligations under capital leases, excluding current maturities | | | 82,804 | | | | 84,144 | |
| Obligation under capital lease due to related party, excluding current maturity | | | 1,888 | | | | 1,885 | |
| Deferred income taxes | | | 103,852 | | | | 102,401 | |
| Long-term deferred revenue | | | 48,816 | | | | 49,175 | |
| Other liabilities | | | 22,387 | | | | 24,495 | |
| Total liabilities | | | 1,157,723 | | | | 1,151,254 | |
| | | | | | | | | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
| Common stock (no par): | | | | | | | | |
Class A. Authorized 100,000 shares; issued 43,910 and 44,213 shares at March 31, 2011 and December 31, 2010, respectively; outstanding 43,655 and 43,958 shares at March 31, 2011 and December 31, 2010, respectively | | | 62,293 | | | | 69,396 | |
| | | | | | | | | |
Class B. Authorized 10,000 shares; issued and outstanding 3,177 and 3,178 shares at March 31, 2011 and December 31, 2010, respectively; convertible on a share-per-share basis into Class A common stock | | | 2,684 | | | | 2,677 | |
| | | | | | | | | |
Less cost of 255 Class A shares held in treasury at March 31, 2011 and December 31, 2010 | | | (2,249 | ) | | | (2,249 | ) |
| | | | | | | | | |
| Paid-in capital | | | 38,619 | | | | 37,075 | |
| Retained earnings | | | 95,092 | | | | 93,607 | |
| Total stockholders' equity | | | 196,439 | | | | 200,506 | |
| | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,354,162 | | | | 1,351,760 | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |
| CONSOLIDATED INCOME STATEMENT | |
| | | (Unaudited) | |
| | | Three Months Ended | |
| | | March 31, | | | | |
| (Amounts in thousands, except per share amounts) | | 2011 | | | 2010 | |
| | | | | | | |
| Revenues | | $ | 164,777 | | | | 152,419 | |
| | | | | | | | | |
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | | | 53,756 | | | | 48,907 | |
| Selling, general and administrative expenses | | | 58,893 | | | | 53,257 | |
| Depreciation and amortization expense | | | 31,720 | | | | 31,126 | |
| Operating income | | | 20,408 | | | | 19,129 | |
| | | | | | | | | |
| Other income (expense): | | | | | | | | |
| Interest expense (including amortization of deferred loan fees) | | | (17,452 | ) | | | (17,680 | ) |
| Interest income | | | 4 | | | | 61 | |
| Other | | | (24 | ) | | | - | |
| Other expense, net | | | (17,472 | ) | | | (17,619 | ) |
| | | | | | | | | |
| Income before income tax expense or benefit | | | 2,936 | | | | 1,510 | |
| | | | | | | | | |
| Income tax (expense) benefit | | | (1,451 | ) | | | 164 | |
| | | | | | | | | |
| Net income | | $ | 1,485 | | | | 1,674 | |
| | | | | | | | | |
| Basic net income per Class A common share | | $ | 0.03 | | | | 0.03 | |
| | | | | | | | | |
| Basic net income per Class B common share | | $ | 0.03 | | | | 0.03 | |
| | | | | | | | | |
| Diluted net income per Class A common share | | $ | 0.03 | | | | 0.03 | |
| | | | | | | | | |
| Diluted net income per Class B common share | | $ | 0.03 | | | | 0.03 | |
| | | | | | | | | |
| Common shares used to calculate Class A basic EPS | | | 43,979 | | | | 51,579 | |
| | | | | | | | | |
| Common shares used to calculate Class A diluted EPS | | | 47,747 | | | | 55,035 | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| SUPPLEMENTAL SCHEDULES |
| (Unaudited) |
| (Amounts in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | First Quarter 2011 | | | First Quarter 2010 | |
| | | | | | Network | | | | | | Managed | | | Regulated | | | | | | Network | | | | | | Managed | | | Regulated | |
| | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | |
| Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | $ | 13,752 | | | | 6,470 | | | | 7,573 | | | | - | | | | 5,439 | | | | 33,234 | | | $ | 13,856 | | | | 6,659 | | | | 7,843 | | | | - | | | | 6,060 | | | | 34,418 | |
| Video | | | 30,339 | | | | - | | | | 2,840 | | | | - | | | | - | | | | 33,179 | | | | 29,024 | | | | - | | | | 2,317 | | | | - | | | | - | | | | 31,341 | |
| Data | | | 16,701 | | | | 14,972 | | | | 19,095 | | | | 13,995 | | | | - | | | | 64,763 | | | | 14,126 | | | | 16,329 | | | | 15,502 | | | | 12,085 | | | | - | | | | 58,042 | |
| Wireless | | | 27,625 | | | | 3,655 | | | | 2,321 | | | | - | | | | - | | | | 33,601 | | | | 23,362 | | | | 3,195 | | | | 2,061 | | | | - | | | | - | | | | 28,618 | |
| Total | | | 88,417 | | | | 25,097 | | | | 31,829 | | | | 13,995 | | | | 5,439 | | | | 164,777 | | | | 80,368 | | | | 26,183 | | | | 27,723 | | | | 12,085 | | | | 6,060 | | | | 152,419 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cost of goods sold | | | 27,308 | | | | 6,665 | | | | 14,866 | | | | 3,914 | | | | 1,003 | | | | 53,756 | | | | 25,633 | | | | 6,528 | | | | 12,371 | | | | 3,218 | | | | 1,157 | | | | 48,907 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Contribution | | | 61,109 | | | | 18,432 | | | | 16,963 | | | | 10,081 | | | | 4,436 | | | | 111,021 | | | | 54,735 | | | | 19,655 | | | | 15,352 | | | | 8,867 | | | | 4,903 | | | | 103,512 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less SG&A | | | 33,375 | | | | 6,778 | | | | 10,537 | | | | 4,467 | | | | 3,736 | | | | 58,893 | | | | 29,166 | | | | 7,844 | | | | 9,144 | | | | 4,043 | | | | 3,060 | | | | 53,257 | |
| Less Other | | | - | | | | - | | | | - | | | | 24 | | | | - | | | | 24 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| EBITDA | | | 27,734 | | | | 11,654 | | | | 6,426 | | | | 5,590 | | | | 700 | | | | 52,104 | | | | 25,569 | | | | 11,811 | | | | 6,208 | | | | 4,824 | | | | 1,843 | | | | 50,255 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Add share-based compensation | | | 619 | | | | 212 | | | | 224 | | | | 115 | | | | - | | | | 1,170 | | | | 384 | | | | 180 | | | | 149 | | | | 90 | | | | - | | | | 803 | |
| Add accretion | | | 41 | | | | 14 | | | | 12 | | | | 6 | | | | - | | | | 72 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Adjusted EBITDA | | $ | 28,393 | | | | 11,880 | | | | 6,662 | | | | 5,711 | | | | 700 | | | | 53,346 | | | $ | 25,953 | | | | 11,991 | | | | 6,357 | | | | 4,914 | | | | 1,843 | | | | 51,058 | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |
| SUPPLEMENTAL SCHEDULES | |
| (Unaudited) | |
| (Amounts in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | First Quarter 2011 | | | Fourth Quarter 2010 | |
| | | | | | Network | | | | | | Managed | | | Regulated | | | | | | Network | | | | | | Managed | | | Regulated | |
| | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | |
| Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | $ | 13,752 | | | | 6,470 | | | | 7,573 | | | | - | | | | 5,439 | | | | 33,234 | | | $ | 13,606 | | | | 6,561 | | | | 7,404 | | | | - | | | | 5,443 | | | | 33,014 | |
| Video | | | 30,339 | | | | - | | | | 2,840 | | | | - | | | | - | | | | 33,179 | | | | 30,379 | | | | - | | | | 3,269 | | | | - | | | | - | | | | 33,648 | |
| Data | | | 16,701 | | | | 14,972 | | | | 19,095 | | | | 13,995 | | | | - | | | | 64,763 | | | | 16,833 | | | | 15,134 | | | | 20,279 | | | | 13,942 | | | | - | | | | 66,188 | |
| Wireless | | | 27,625 | | | | 3,655 | | | | 2,321 | | | | - | | | | - | | | | 33,601 | | | | 25,850 | | | | 4,033 | | | | 2,263 | | | | - | | | | - | | | | 32,146 | |
| Total | | | 88,417 | | | | 25,097 | | | | 31,829 | | | | 13,995 | | | | 5,439 | | | | 164,777 | | | | 86,668 | | | | 25,728 | | | | 33,215 | | | | 13,942 | | | | 5,443 | | | | 164,996 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cost of goods sold | | | 27,308 | | | | 6,665 | | | | 14,866 | | | | 3,914 | | | | 1,003 | | | | 53,756 | | | | 27,282 | | | | 6,576 | | | | 15,686 | | | | 4,089 | | | | 1,037 | | | | 54,670 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Contribution | | | 61,109 | | | | 18,432 | | | | 16,963 | | | | 10,081 | | | | 4,436 | | | | 111,021 | | | | 59,386 | | | | 19,152 | | | | 17,529 | | | | 9,853 | | | | 4,406 | | | | 110,326 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less SG&A | | | 33,375 | | | | 6,778 | | | | 10,537 | | | | 4,467 | | | | 3,736 | | | | 58,893 | | | | 34,271 | | | | 9,649 | | | | 10,559 | | | | 4,683 | | | | 3,153 | | | | 62,315 | |
| Less Other | | | - | | | | - | | | | - | | | | 24 | | | | - | | | | 24 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| EBITDA | | | 27,734 | | | | 11,654 | | | | 6,426 | | | | 5,590 | | | | 700 | | | | 52,104 | | | | 25,115 | | | | 9,503 | | | | 6,970 | | | | 5,170 | | | | 1,253 | | | | 48,011 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Add share-based compensation | �� | | 619 | | | | 212 | | | | 224 | | | | 115 | | | | - | | | | 1,170 | | | | 1,032 | | | | 479 | | | | 332 | | | | 191 | | | | 3 | | | | 2,037 | |
| Add accretion | | | 41 | | | | 14 | | | | 12 | | | | 6 | | | | - | | | | 72 | | | | 149 | | | | 71 | | | | 43 | | | | 26 | | | | - | | | | 289 | |
| Adjusted EBITDA | | $ | 28,393 | | | | 11,880 | | | | 6,662 | | | | 5,711 | | | | 700 | | | | 53,346 | | | $ | 26,296 | | | | 10,053 | | | | 7,345 | | | | 5,387 | | | | 1,256 | | | | 50,337 | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |
| KEY PERFORMANCE INDICATORS | |
| (Unaudited) | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | March 31, 2011 | | | March 31, 2011 | |
| | | | | | | | | | | | as compared to | | | as compared to | |
| | | March 31, | | | March 31, | | | December 31, | | March 31, | | | December 31, | | March 31, | | | December 31, | |
| | | 2011 | | | 2010 | | | 2010 | | | 2010 | | | 2010 | | | 2010 | | | 2010 | |
| Consumer | | | | | | | | | | | | | | | | | | | | | |
| Voice | | | | | | | | | | | | | | | | | | | | | |
| Long-distance subscribers | | | 87,900 | | | | 91,200 | | | | 88,200 | | | | (3,300 | ) | | | (300 | ) | | | -3.6 | % | | | -0.3 | % |
| Total local access lines in service | | | 85,100 | | | | 85,800 | | | | 84,800 | | | | (700 | ) | | | 300 | | | | -0.8 | % | | | 0.4 | % |
| Local access lines in service on GCI facilities | | | 78,000 | | | | 77,300 | | | | 77,400 | | | | 700 | | | | 600 | | | | 0.9 | % | | | 0.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Video | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic subscribers | | | 130,200 | | | | 131,400 | | | | 130,000 | | | | (1,200 | ) | | | 200 | | | | -0.9 | % | | | 0.2 | % |
| Digital programming tier subscribers | | | 81,600 | | | | 81,400 | | | | 81,800 | | | | 200 | | | | (200 | ) | | | 0.2 | % | | | -0.2 | % |
| HD/DVR converter boxes | | | 89,300 | | | | 86,000 | | | | 88,100 | | | | 3,300 | | | | 1,200 | | | | 3.8 | % | | | 1.4 | % |
| Homes passed | | | 239,000 | | | | 232,900 | | | | 238,500 | | | | 6,100 | | | | 500 | | | | 2.6 | % | | | 0.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cable modem subscribers | | | 107,200 | | | | 103,100 | | | | 105,700 | | | | 4,100 | | | | 1,500 | | | | 4.0 | % | | | 1.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless lines in service | | | 126,500 | | | | 117,500 | | | | 124,900 | | | | 9,000 | | | | 1,600 | | | | 7.7 | % | | | 1.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Network Access Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total ISP access lines in service | | | 1,700 | | | | 1,700 | | | | 1,700 | | | | - | | | | - | | | | 0.0 | % | | | 0.0 | % |
| Total ISP access lines in service on GCI facilities | | | 1,300 | | | | 1,400 | | | | 1,300 | | | | (100 | ) | | | - | | | | -7.1 | % | | | 0.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Long-distance subscribers | | | 9,100 | | | | 9,400 | | | | 9,100 | | | | (300 | ) | | | - | | | | -3.2 | % | | | 0.0 | % |
| Total local access lines in service | | | 48,700 | | | | 48,400 | | | | 48,300 | | | | 300 | | | | 400 | | | | 0.6 | % | | | 0.8 | % |
| Local access lines in service on GCI facilities | | | 25,200 | | | | 20,400 | | | | 21,200 | | | | 4,800 | | | | 4,000 | | | | 23.5 | % | | | 18.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Video | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hotels and mini-headend subscribers | | | 15,200 | | | | 16,100 | | | | 15,300 | | | | (900 | ) | | | (100 | ) | | | -5.6 | % | | | -0.7 | % |
| Basic subscribers | | | 2,000 | | | | 1,700 | | | | 1,800 | | | | 300 | | | | 200 | | | | 17.6 | % | | | 11.1 | % |
| Total basic subscribers | | | 17,200 | | | | 17,800 | | | | 17,100 | | | | (600 | ) | | | 100 | | | | -3.4 | % | | | 0.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cable modem subscribers | | | 10,800 | | | | 10,500 | | | | 10,700 | | | | 300 | | | | 100 | | | | 2.9 | % | | | 0.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless lines in service | | | 13,700 | | | | 10,600 | | | | 13,800 | | | | 3,100 | | | | (100 | ) | | | 29.2 | % | | | -0.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Regulated Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total local access lines in service | | | 9,800 | | | | 10,800 | | | | 10,000 | | | | (1,000 | ) | | | (200 | ) | | | -9.3 | % | | | -2.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | March 31, 2011 | | March 31, 2011 |
| | | Three Months Ended | | | as Compared to | | | as Compared to | |
| | | March 31, | | | March 31, | | | December 31, | | March 31, | | | December 31, | | March 31, | | | December 31, | |
| | | | 2011 | | | | 2010 | | | | 2010 | | | | 2010 | | | | 2010 | | | | 2010 | | | | 2010 | |
| Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Long-distance minutes carried (in millions) | | | 24.4 | | | | 28.3 | | | | 26.2 | | | | (3.9 | ) | | | (1.8 | ) | | | -13.8 | % | | | -6.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Video | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average monthly gross revenue per subscriber | | $ | 77.60 | | | $ | 73.80 | | | $ | 77.77 | | | $ | 3.80 | | | $ | (0.17 | ) | | | 5.1 | % | | | -0.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average monthly gross revenue per subscriber | | $ | 69.46 | | | $ | 62.31 | | | $ | 64.88 | | | $ | 7.15 | | | $ | 4.58 | | | | 11.5 | % | | | 7.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Network Access Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Long-distance minutes carried (in millions) | | | 190.7 | | | | 193.6 | | | | 185.0 | | | | (2.9 | ) | | | 5.7 | | | | -1.5 | % | | | 3.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Long-distance minutes carried (in millions) | | | 28.3 | | | | 29.6 | | | | 27.3 | | | | (1.3 | ) | | | 1.0 | | | | -4.4 | % | | | 3.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Long-distance minutes carried (in millions) | | | 243.4 | | | | 251.5 | | | | 238.5 | | | | (8.1 | ) | | | 4.9 | | | | -3.2 | % | | | 2.1 | % |
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
| | | Three Months Ended | |
| | | March 31, 2011 | | | March 31, 2010 | | | December 31, 2010 | |
| Net income (loss) | | $ | 1.5 | | | | 1.7 | | | | (2.2 | ) |
| Income tax expense (benefit) | | | 1.4 | | | | (0.2 | ) | | | (0.8 | ) |
| Income (loss) before income tax expense (benefit) | | | 2.9 | | | | 1.5 | | | | (3.0 | ) |
| | | | | | | | | | | | | |
| Other expense: | | | | | | | | | | | | |
Interest expense (including amortization of deferred loan fees) | | | 17.5 | | | | 17.7 | | | | 17.1 | |
| Other expense, net | | | 17.5 | | | | 17.7 | | | | 17.1 | |
| | | | | | | | | | | | | |
| Operating income | | | 20.4 | | | | 19.2 | | | | 14.1 | |
| Depreciation and amortization expense | | | 31.7 | | | | 31.1 | | | | 33.9 | |
| | | | | | | | | | | | | |
| EBITDA (Note 2) | | | 52.1 | | | | 50.3 | | | | 48.0 | |
| Share-based compensation | | | 1.1 | | | | 0.8 | | | | 2.0 | |
| Accretion | | | 0.1 | | | | --- | | | | 0.3 | |
| Adjusted EBITDA (Note 1) | | $ | 53.3 | | | | 51.1 | | | | 50.3 | |
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 accretion expense. |
| | (2) Earnings Before Interest, Taxes, Depreciation and Amortization is the sum of Net Income, Interest Expense (including Amortization of Deferred Loan Fees), Interest Income, Income Tax Expense (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. |
