May 2, 2012
John Lowber, (907) 868-5628; jlowber@gci.com
Bruce Broquet, (907) 868-6660; bbroquet@gci.com
David Morris, (907) 265-5396; dmorris@gci.com
FOR IMMEDIATE RELEASE
GCI REPORTS FIRST QUARTER 2012 FINANCIAL RESULTS
| · | Consolidated revenue of $171.9 million |
| · | Adjusted EBITDA of $54.8 million |
| · | Net income of $1.4 million or $0.03 per diluted share |
ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its first quarter 2012 results with revenues increasing 4.3 percent to $171.9 million over revenues of $164.8 million in the first quarter of 2011. Adjusted EBITDA increased $1.5 million or 2.8 percent over the first quarter of 2011 EBITDA of $53.3 million. Revenues and EBITDA for the first quarter of 2012 were impacted by a $1.3 million decrease in USF support when compared to the first quarter of the prior year.
GCI’s first quarter 2012 net income totaled $1.4 million or earnings per diluted share of $0.03 and compares to net income of $1.4 million, or earnings per diluted share of $0.02 for the first quarter of 2011.
First quarter of 2012 revenues increased $3.1 million or 1.8 percent over revenues of $168.8 million in the fourth quarter of 2011. Adjusted EBITDA increased $2.6 million or 4.9 percent over adjusted EBITDA of $52.3 million in the fourth quarter of 2011.
“Strong results in four out of five business units, led by managed broadband, offset weak results in consumer to bring the quarter in approximately in accordance with our expectations,” said GCI president Ron Duncan. “The consumer group continues to suffer from soft customer metrics. We launched the iPhone last week and intend to use the iPhone in a number of new bundles and service packages to get the consumer metrics back on track. We are exceedingly pleased with the results in managed broadband that is the primary beneficiary of our new TERRA Southwest network.
Highlights
| · | GCI repurchased 862,250 shares of its Class A common stock in the first quarter of 2012 at an average price per share of $10.40. GCI is authorized to repurchase more than $88 million of its shares depending on company performance, market conditions, liquidity, and subject to board oversight. At the end of the first quarter of 2012 GCI had approximately 41.6 million shares outstanding. |
| · | Managed broadband revenues for the first quarter of 2012 totaled $19.0 million, an increase of 36.0 percent over the first quarter of 2011 and 10.6 percent over the fourth quarter of 2011. The strong revenue growth is primarily due to the increase in broadband service capacity resulting from the turn up of the TERRA Southwest terrestrial network. |
| · | GCI had 122,000 consumer and commercial cable modem customers at the end of the first quarter of 2012, an increase of 2,600 over the 119,400 cable modem customers at the end of the fourth quarter 2011. Average monthly revenue per cable modem for the first quarter of 2012 was $61.48, an increase of 19.6 percent over the $51.39 figure posted for the prior year and an increase of 1.9 percent over the $60.32 figure posted for the fourth quarter of 2011. |
| · | GCI had 136,900 access lines at the end of the first quarter of 2012, representing an estimated 36 percent share of the total access line market in Alaska. Access lines decreased by 1,200 lines from the fourth quarter of 2011. |
| · | GCI’s facilities-based access lines totaled 109,500, representing 80.0 percent of its total access lines at the end of the first quarter of 2012. Total facilities-based access lines remained steady compared to the prior quarter primarily due to the continuing effort to transition leased commercial access lines to GCI owned facilities. |
Consumer
Consumer revenues for the first quarter of 2012 totaled $87.8 million and were relatively unchanged from $88.4 million in the first quarter of 2011 and increased 1.7 percent over the fourth quarter of 2011. Voice and wireless revenues in the first quarter of 2012 were about equally impacted by a decrease in USF support totaling $1.2 million as compared to the first quarter of 2011.
Consumer voice revenues of $11.3 million decreased $2.5 million when compared to the prior year quarter and were steady with the fourth quarter of 2011. Consumer local access lines in service at the end of the first quarter of 2012 totaled 76,100, an expected decrease of 9,000 lines from the first quarter of 2011 and 1,500 lines from the fourth quarter of 2011.
GCI serves 70,700 consumer access lines on its own facilities, a decrease of 1,300 lines from the fourth quarter of 2011. More than 92 percent of consumer access lines are provisioned exclusively on GCI facilities.
Consumer video revenues of $29.0 million decreased 4.3 percent from the first quarter of 2011 and 1.9 percent from the fourth quarter of 2011. The decreases are primarily due to a decrease in basic video subscribers. Consumer basic video subscribers totaled 124,200 at the end of the first quarter of 2012, a decrease of 800 subscribers from the fourth quarter of 2011 and a decrease of 6,000 subscribers from the first quarter of 2011.
Consumer data revenues of $20.4 million increased 22.4 percent over the first quarter of 2011 and grew 2.6 percent over the fourth quarter of 2011. 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 3,500 consumer cable modem customers over the first quarter of 2011 and cable modem customer counts increased by 2,400 on a sequential basis.
Consumer wireless revenues of $27.1 million decreased 2.0 percent from the first quarter of 2011 and increased 7.0 percent sequentially. Consumer had a decrease of 2,000 wireless customers from the end of the first quarter a year ago and a decrease of 100 wireless customers sequentially.
Network Access
Network access revenues of $25.2 million were steady with the first quarter of 2011 and decreased $0.6 million or 2.1 percent from the fourth quarter of 2011.
Voice revenues, as expected, decreased 14.0 percent to $5.6 million from the prior year and increased 2.5 percent over the fourth quarter of 2011.
Data revenues of $14.4 million decreased $0.6 million from the first quarter of 2011 and were down $1.0 million from the fourth quarter of 2011. The decrease in data revenues is primarily attributable to lower rates.
Wireless revenues, primarily related to roaming traffic, increased 44.2 percent over the prior year to $5.3 million and increased 5.6 percent sequentially.
Commercial
Commercial revenues increased $2.5 million to $34.3 million as compared to $31.8 million in the first quarter of 2011 and were steady with the fourth quarter of 2011. Voice and wireless revenues in the first quarter were impacted by a small decrease in USF support as compared to the first quarter of 2011.
Voice revenues for the first quarter of 2012 decreased $0.5 million from the first quarter of 2011 and increased $0.4 million over the fourth quarter of 2011. Local access lines at the end of the first quarter of 2012 increased by 500 lines 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 $10.4 million increased by $1.0 million as compared to the first quarter of 2011 and time and material charges for support activities increased by $1.7 million to $11.5 million for the first quarter of 2012 as a result of increased activity primarily in the oil sector. Commercial data service revenues were $21.8 million in the first quarter of 2012, an increase of $2.7 million over the first quarter of 2011 and a decrease of $0.5 million from the fourth quarter of 2011.
Commercial wireless revenues totaled $2.3 million for the first quarter of 2012 and were steady with the prior year and decreased $0.2 million sequentially. GCI had 15,500 commercial wireless subscribers at the end of the first quarter of 2012, an increase of 1,800 subscribers over the prior year and 200 subscribers sequentially.
Managed Broadband
Managed Broadband revenues for the first quarter of 2012 totaled $19.0 million, an increase of 36.0 percent over the first quarter of 2011 and 10.6 percent over the fourth quarter of 2011. The strong revenue growth is primarily due to the increase in broadband service capacity resulting from the turn up of the TERRA Southwest terrestrial network.
Regulated Operations
Regulated operations revenues totaled $5.5 million in the first quarter of 2012 and were steady with the first quarter of 2011. Regulated operations revenues for the first quarter of 2012 increased 9.8 percent over the fourth quarter of 2011. Regulated operations had 8,900 local access lines at the end of the first quarter of 2012, a decrease of 200 access lines from the fourth quarter of 2011.
Other Items
SG&A expenses for the first quarter of 2012 totaled $63.0 million, an increase of 6.9 percent as compared to $58.9 million for the first quarter of 2011. The increase is due in part to increases in health care costs and labor and related benefits, and the noncash value of services contributed to the University of Alaska. As a percentage of revenues, SG&A expenses increased to 36.6 percent in the first quarter of 2012 as compared to 35.7 percent in the prior year.
GCI’s first quarter 2012 capital expenditures totaled $26.6 million as compared to $28.3 million in 2011.
GCI will hold a conference call to discuss the quarter’s results on Thursday, May 3, 2012 beginning at 2 p.m. (Eastern). To access the briefing on May 3, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 888-566-7703 (International callers should dial 1-630-395-0020) and identify your call as “GCI.” In addition to the conference call, GCI will make available net conferencing. To access the call via net conference, log on to www.gci.com and follow the instructions. A replay of the call will be available for 72-hours by dialing 800-925-0728, access code 7461 (International callers should dial 1-402-998-1627.)
GCI is the largest telecommunications company in Alaska. GCI’s cable plant, which provides voice, video, and broadband data services, passes 80 percent of Alaska households. GCI operates Alaska’s most extensive terrestrial/subsea fiber optic network which connects not only Anchorage but also Fairbanks and Juneau/Southeast Alaska to the lower 48 states with a diversely routed, protected fiber network. GCI’s 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 | | 2012 | | | 2011 | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 30,018 | | | | 29,387 | |
| | | | | | | | | |
| Receivables | | | 150,934 | | | | 141,827 | |
| Less allowance for doubtful receivables | | | 5,011 | | | | 5,796 | |
| Net receivables | | | 145,923 | | | | 136,031 | |
| | | | | | | | | |
| Deferred income taxes | | | 15,555 | | | | 15,555 | |
| Prepaid expenses | | | 9,419 | | | | 7,899 | |
| Inventories | | | 9,507 | | | | 7,522 | |
| Other current assets | | | 3,527 | | | | 3,631 | |
| Total current assets | | | 213,949 | | | | 200,025 | |
| | | | | | | | | |
| Property and equipment in service, net of depreciation | | | 835,832 | | | | 849,121 | |
| Construction in progress | | | 51,736 | | | | 42,918 | |
| Net property and equipment | | | 887,568 | | | | 892,039 | |
| | | | | | | | | |
| Cable certificates | | | 191,635 | | | | 191,635 | |
| Goodwill | | | 74,883 | | | | 74,883 | |
| Wireless licenses | | | 25,967 | | | | 25,967 | |
| Restricted Cash | | | 14,804 | | | | 15,910 | |
| Other intangible assets, net of amortization | | | 15,612 | | | | 15,835 | |
| Deferred loan and senior notes costs, net of amortization | | | 12,262 | | | | 12,812 | |
| Other assets | | | 16,104 | | | | 17,214 | |
| Total other assets | | | 351,267 | | | | 354,256 | |
| Total assets | | $ | 1,452,784 | | | | 1,446,320 | |
| | | | | | | | | |
| | | | | | | (Continued) | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | | | | | | |
| CONSOLIDATED BALANCE SHEETS | | | | | | |
| (Unaudited) | | | | | | |
| (Continued) | | | | | | |
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| (Amounts in thousands) | | | | | | |
| | | March 31, | | | December 31, | |
| Liabilities and Stockholders' Equity | | 2012 | | | 2011 | |
| | | | | | | |
| Current liabilities: | | | | | | |
| Current maturities of obligations under long-term debt and capital leases | | $ | 9,507 | | | | 8,797 | |
| Accounts payable | | | 37,067 | | | | 41,353 | |
| Deferred revenue | | | 23,181 | | | | 22,003 | |
| Accrued payroll and payroll related obligations | | | 20,285 | | | | 22,126 | |
| Accrued interest | | | 21,366 | | | | 6,680 | |
| Accrued liabilities | | | 14,032 | | | | 11,423 | |
| Subscriber deposits | | | 1,206 | | | | 1,250 | |
| Total current liabilities | | | 126,644 | | | | 113,632 | |
| | | | | | | | | |
| Long-term debt, net | | | 859,617 | | | | 858,031 | |
| Obligations under capital leases, excluding current maturities | | | 77,286 | | | | 78,605 | |
| Obligation under capital lease due to related party, excluding current maturity | | | 1,893 | | | | 1,893 | |
| Deferred income taxes | | | 115,383 | | | | 114,234 | |
| Long-term deferred revenue | | | 81,541 | | | | 81,822 | |
| Other liabilities | | | 23,800 | | | | 24,456 | |
| Total liabilities | | | 1,286,164 | | | | 1,272,673 | |
| | | | | | | | | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| Stockholders’ equity: | | | | | | | | |
| Common stock (no par): | | | | | | | | |
Class A. Authorized 100,000 shares; issued 38,648 and 39,296 shares at March 31, 2012 and December 31, 2011, respectively; outstanding 38,455 and 39,043 shares at March 31, 2012 and December 31, 2011, respectively | | | 25,680 | | | | 26,179 | |
| | | | | | | | | |
Class B. Authorized 10,000 shares; issued and outstanding 3,171 shares each at March 31, 2012 and December 31, 2011; convertible on a share-per-share basis into Class A common stock | | | 2,678 | | | | 2,679 | |
| | | | | | | | | |
Less cost of 193 and 253 Class A shares held in treasury at March 31, 2012 and December 31, 2011 | | | (1,706 | ) | | | (2,225 | ) |
| | | | | | | | | |
| Paid-in capital | | | 24,497 | | | | 32,795 | |
| Retained earnings | | | 99,340 | | | | 97,911 | |
| Total General Communication, Inc. stockholders' equity | | | 150,489 | | | | 157,339 | |
| Non-controlling interest | | | 16,131 | | | | 16,308 | |
| Total stockholders' equity | | | 166,620 | | | | 173,647 | |
| Total liabilities and stockholders' equity | | $ | 1,452,784 | | | | 1,446,320 | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | | | | | | |
| CONSOLIDATED INCOME STATEMENTS | | | | | | |
| (Unaudited) | | | | | | |
| | | Three Months Ended March 31, | |
| | | | | | | |
| (Amounts in thousands, except per share amounts) | | 2012 | | | 2011 | |
| | | | | | | |
| Revenues | | $ | 171,907 | | | | 164,777 | |
| | | | | | | | | |
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | | | 56,860 | | | | 53,756 | |
| Selling, general and administrative expenses | | | 62,982 | | | | 58,893 | |
| Depreciation and amortization expense | | | 32,380 | | | | 31,866 | |
| Operating income | | | 19,685 | | | | 20,262 | |
| | | | | | | | | |
| Other income (expense): | | | | | | | | |
| Interest expense (including amortization of deferred loan fees) | | | (17,155 | ) | | | (17,452 | ) |
| Interest income | | | 2 | | | | 4 | |
| Other | | | (131 | ) | | | (24 | ) |
| Other expense, net | | | (17,284 | ) | | | (17,472 | ) |
| | | | | | | | | |
| Income before income tax expense | | | 2,401 | | | | 2,790 | |
| | | | | | | | | |
| Income tax expense | | | (1,149 | ) | | | (1,391 | ) |
| | | | | | | | | |
| Net income | | | 1,252 | | | | 1,399 | |
| Net loss attributable to non-controlling interest | | | 177 | | | | - | |
| | | | | | | | | |
| Net income attributable to General Communication, Inc. | | $ | 1,429 | | | | 1,399 | |
| | | | | | | | | |
Basic net income attributable to General Communication, Inc. common stockholders per Class A common share | | $ | 0.03 | | | | 0.03 | |
| | | | | | | | | |
Basic net income attributable to General Communication, Inc. common stockholders per Class B common share | | $ | 0.03 | | | | 0.03 | |
| | | | | | | | | |
Diluted net income attributable to General Communication, Inc. common stockholders per Class A common share | | $ | 0.03 | | | | 0.02 | |
| | | | | | | | | |
Diluted net income attributable to General Communication, Inc. common stockholders per Class B common share | | $ | 0.03 | | | | 0.02 | |
| | | | | | | | | |
| Common shares used to calculate Class A basic EPS | | | 38,741 | | | | 43,979 | |
| | | | | | | | | |
| Common shares used to calculate Class A diluted EPS | | | 42,342 | | | | 47,747 | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES | |
| SUPPLEMENTAL SCHEDULES | |
| (Unaudited) | |
| (Amounts in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | First Quarter 2012 | | | First Quarter 2011 | |
| | | | | | Network | | | | | | Managed | | | Regulated | | | | | | Network | | | | | | Managed | | | Regulated | |
| | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | |
| Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | $ | 11,280 | | | | 5,564 | | | | 7,086 | | | | - | | | | 5,537 | | | | 29,467 | | | $ | 13,752 | | | | 6,470 | | | | 7,573 | | | | - | | | | 5,439 | | | | 33,234 | |
| Video | | | 29,022 | | | | - | | | | 3,120 | | | | - | | | | - | | | | 32,142 | | | | 30,339 | | | | - | | | | 2,840 | | | | - | | | | - | | | | 33,179 | |
| Data | | | 20,449 | | | | 14,353 | | | | 21,837 | | | | 19,029 | | | | - | | | | 75,668 | | | | 16,701 | | | | 14,972 | | | | 19,095 | | | | 13,995 | | | | - | | | | 64,763 | |
| Wireless | | | 27,061 | | | | 5,271 | | | | 2,298 | | | | - | | | | - | | | | 34,630 | | | | 27,625 | | | | 3,655 | | | | 2,321 | | | | - | | | | - | | | | 33,601 | |
| Total | | | 87,812 | | | | 25,188 | | | | 34,341 | | | | 19,029 | | | | 5,537 | | | | 171,907 | | | | 88,417 | | | | 25,097 | | | | 31,829 | | | | 13,995 | | | | 5,439 | | | | 164,777 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of goods sold | | | 28,618 | | | | 6,023 | | | | 15,700 | | | | 4,889 | | | | 1,630 | | | | 56,860 | | | | 27,308 | | | | 6,665 | | | | 14,866 | | | | 3,914 | | | | 1,003 | | | | 53,756 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Contribution | | | 59,194 | | | | 19,165 | | | | 18,641 | | | | 14,140 | | | | 3,907 | | | | 115,047 | | | | 61,109 | | | | 18,432 | | | | 16,963 | | | | 10,081 | | | | 4,436 | | | | 111,021 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less SG&A | | | 35,832 | | | | 7,208 | | | | 10,694 | | | | 6,271 | | | | 2,977 | | | | 62,982 | | | | 33,375 | | | | 6,778 | | | | 10,537 | | | | 4,467 | | | | 3,736 | | | | 58,893 | |
| Less Other | | | - | | | | - | | | | - | | | | 131 | | | | - | | | | 131 | | | | - | | | | - | | | | - | | | | 24 | | | | - | | | | 24 | |
| EBITDA | | | 23,362 | | | | 11,957 | | | | 7,947 | | | | 7,738 | | | | 930 | | | | 51,934 | | | | 27,734 | | | | 11,654 | | | | 6,426 | | | | 5,590 | | | | 700 | | | | 52,104 | |
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Add share-based compensation | | | 884 | | | | 279 | | | | 333 | | | | 229 | | | | 5 | | | | 1,730 | | | | 619 | | | | 212 | | | | 224 | | | | 115 | | | | - | | | | 1,170 | |
| Add accretion | | | 104 | | | | 33 | | | | 31 | | | | 20 | | | | - | | | | 188 | | | | 41 | | | | 13 | | | | 12 | | | | 6 | | | | - | | | | 72 | |
Add loss from noncontrolling interest | | | - | | | | - | | | | - | | | | 177 | | | | - | | | | 177 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
Add non-cash contribution | | | 444 | | | | 141 | | | | 130 | | | | 85 | | | | - | | | | 800 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Adjusted EBITDA | | $ | 24,794 | | | | 12,410 | | | | 8,441 | | | | 8,249 | | | | 935 | | | | 54,829 | | | $ | 28,394 | | | | 11,879 | | | | 6,662 | | | | 5,711 | | | | 700 | | | | 53,346 | |
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| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| SUPPLEMENTAL SCHEDULES |
| (Unaudited) |
| (Amounts in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | First Quarter 2012 | | | | Fourth Quarter 2011 | | |
| | | | | | | Network | | | | | | | Managed | | | Regulated | | | | | | | Network | | | | | | | Managed | | | Regulated | |
| | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | | | Consumer | | | Access | | | Commercial | | | Broadband | | | Operations | | | Totals | |
| Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | $ | 11,280 | | | | 5,564 | | | | 7,086 | | | | - | | | | 5,537 | | | | 29,467 | | | $ | 11,511 | | | | 5,429 | | | | 6,662 | | | | - | | | | 5,044 | | | | 28,646 | |
| Video | | | 29,022 | | | | - | | | | 3,120 | | | | - | | | | - | | | | 32,142 | | | | 29,595 | | | | - | | | | 2,999 | | | | - | | | | - | | | | 32,594 | |
| Data | | | 20,449 | | | | 14,353 | | | | 21,837 | | | | 19,029 | | | | - | | | | 75,668 | | | | 19,931 | | | | 15,321 | | | | 22,308 | | | | 17,207 | | | | - | | | | 74,767 | |
| Wireless | | | 27,061 | | | | 5,271 | | | | 2,298 | | | | - | | | | - | | | | 34,630 | | | | 25,299 | | | | 4,991 | | | | 2,515 | | | | - | | | | - | | | | 32,805 | |
| Total | | | 87,812 | | | | 25,188 | | | | 34,341 | | | | 19,029 | | | | 5,537 | | | | 171,907 | | | | 86,336 | | | | 25,741 | | | | 34,484 | | | | 17,207 | | | | 5,044 | | | | 168,812 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of goods sold | | | 28,618 | | | | 6,023 | | | | 15,700 | | | | 4,889 | | | | 1,630 | | | | 56,860 | | | | 27,938 | | | | 5,972 | | | | 16,140 | | | | 3,987 | | | | 1,628 | | | | 55,665 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Contribution | | | 59,194 | | | | 19,165 | | | | 18,641 | | | | 14,140 | | | | 3,907 | | | | 115,047 | | | | 58,398 | | | | 19,769 | | | | 18,344 | | | | 13,220 | | | | 3,416 | | | | 113,147 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less SG&A | | | 35,832 | | | | 7,208 | | | | 10,694 | | | | 6,271 | | | | 2,977 | | | | 62,982 | | | | 36,550 | | | | 8,189 | | | | 10,959 | | | | 5,234 | | | | 3,546 | | | | 64,478 | |
| Less Other | | | - | | | | - | | | | - | | | | 131 | | | | - | | | | 131 | | | | - | | | | - | | | | - | | | | 205 | | | | - | | | | 205 | |
| EBITDA | | | 23,362 | | | | 11,957 | | | | 7,947 | | | | 7,738 | | | | 930 | | | | 51,934 | | | | 21,848 | | | | 11,580 | | | | 7,385 | | | | 7,781 | | | | (130 | ) | | | 48,464 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Add share-based compensation | | | 884 | | | | 279 | | | | 333 | | | | 229 | | | | 5 | | | | 1,730 | | | | 1,769 | | | | 646 | | | | 630 | | | | 335 | | | | 16 | | | | 3,396 | |
| Add accretion | | | 104 | | | | 33 | | | | 31 | | | | 20 | | | | - | | | | 188 | | | | 93 | | | | 30 | | | | 27 | | | | 13 | | | | - | | | | 163 | |
Add loss from noncontrolling interest | | | - | | | | - | | | | - | | | | 177 | | | | - | | | | 177 | | | | - | | | | - | | | | - | | | | 238 | | | | - | | | | 238 | |
Add non-cash contribution | | | 444 | | | | 141 | | | | 130 | | | | 85 | | | | - | | | | 800 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Adjusted EBITDA | | $ | 24,794 | | | | 12,410 | | | | 8,441 | | | | 8,249 | | | | 935 | | | | 54,829 | | | $ | 23,710 | | | | 12,256 | | | | 8,042 | | | | 8,367 | | | | (114 | ) | | | 52,261 | |
| GENERAL COMMUNICATION, INC. AND SUBSIDIARIES |
| KEY PERFORMANCE INDICATORS |
| (Unaudited) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | March 31, 2012 | | | March 31, 2012 | |
| | | | | | | | | | | | as compared to | | | as compared to | |
| | | March 31, | | | March 31, | | | December 31, | | March 31, | | | December 31, | | March 31, | | | December 31, | |
| | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | | | 2011 | |
| Consumer | | | | | | | | | | | | | | | | | | | | | |
| Voice | | | | | | | | | | | | | | | | | | | | | |
| Total local access lines in service | | | 76,100 | | | | 85,100 | | | | 77,600 | | | | (9,000 | ) | | | (1,500 | ) | | | -10.6 | % | | | -1.9 | % |
| Local access lines in service on GCI facilities | | | 70,700 | | | | 78,000 | | | | 72,000 | | | | (7,300 | ) | | | (1,300 | ) | | | -9.4 | % | | | -1.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Video | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic subscribers | | | 124,200 | | | | 130,200 | | | | 125,000 | | | | (6,000 | ) | | | (800 | ) | | | -4.6 | % | | | -0.6 | % |
| Digital programming tier subscribers | | | 74,600 | | | | 81,600 | | | | 75,600 | | | | (7,000 | ) | | | (1,000 | ) | | | -8.6 | % | | | -1.3 | % |
| HD/DVR converter boxes | | | 90,300 | | | | 89,300 | | | | 89,400 | | | | 1,000 | | | | 900 | | | | 1.1 | % | | | 1.0 | % |
| Homes passed | | | 242,200 | | | | 239,000 | | | | 242,100 | | | | 3,200 | | | | 100 | | | | 1.3 | % | | | 0.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cable modem subscribers | | | 110,700 | | | | 107,200 | | | | 108,300 | | | | 3,500 | | | | 2,400 | | | | 3.3 | % | | | 2.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless lines in service | | | 124,500 | | | | 126,500 | | | | 124,600 | | | | (2,000 | ) | | | (100 | ) | | | -1.6 | % | | | -0.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total local access lines in service | | | 51,900 | | | | 50,400 | | | | 51,400 | | | | 1,500 | | | | 500 | | | | 3.0 | % | | | 1.0 | % |
| Local access lines in service on GCI facilities | | | 29,900 | | | | 26,500 | | | | 28,700 | | | | 3,400 | | | | 1,200 | | | | 12.8 | % | | | 4.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Video | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hotels and mini-headend subscribers | | | 16,100 | | | | 15,200 | | | | 15,700 | | | | 900 | | | | 400 | | | | 5.9 | % | | | 2.5 | % |
| Basic subscribers | | | 1,900 | | | | 2,000 | | | | 1,900 | | | | (100 | ) | | | - | | | | -5.0 | % | | | 0.0 | % |
| Total basic subscribers | | | 18,000 | | | | 17,200 | | | | 17,600 | | | | 800 | | | | 400 | | | | 4.7 | % | | | 2.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cable modem subscribers | | | 11,300 | | | | 10,800 | | | | 11,100 | | | | 500 | | | | 200 | | | | 4.6 | % | | | 1.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless lines in service | | | 15,500 | | | | 13,700 | | | | 15,300 | | | | 1,800 | | | | 200 | | | | 13.1 | % | | | 1.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Regulated Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total local access lines in service | | | 8,900 | | | | 9,800 | | | | 9,100 | | | | (900 | ) | | | (200 | ) | | | -9.2 | % | | | -2.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | March 31, 2012 | | | March 31, 2012 | |
| | | Three Months Ended | | | | | | | as Compared to | | | as Compared to | |
| | | March 31, | | | March 31, | | | December 31, | | March 31, | | | December 31, | | March 31, | | | December 31, | |
| | | | 2012 | | | | 2011 | | | | 2011 | | | | 2011 | | | | 2011 | | | | 2011 | | | | 2011 | |
| Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Video | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average monthly gross revenue per subscriber | | $ | 77.72 | | | $ | 77.60 | | | $ | 78.51 | | | $ | 0.12 | | | $ | (0.79 | ) | | | 0.2 | % | | | -1.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Wireless | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average monthly gross revenue per subscriber | | $ | 68.65 | | | $ | 69.46 | | | $ | 61.40 | | | $ | (0.81 | ) | | $ | 7.25 | | | | -1.2 | % | | | 11.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Voice | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Long-distance minutes carried (in millions) | | | 238.3 | | | | 243.4 | | | | 231.3 | | | | (5.1 | ) | | | 7.0 | | | | -2.1 | % | | | 3.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average monthly gross revenue per cable modem subscriber | | $ | 61.48 | | | $ | 51.39 | | | $ | 60.32 | | | $ | 10.09 | | | $ | 1.16 | | | | 19.6 | % | | | 1.9 | % |
| General Communication, Inc. | | | | | | | | | |
| Non-GAAP Financial Reconciliation Schedule | | | | | | | | | |
| (Unaudited, Amounts in Millions) | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, | | | March 31, | | | December 31, | |
| | | 2012 | | | 2011 | | | 2011 | |
| Net income (loss) | | $ | 1.3 | | | | 1.4 | | | | (1.2 | ) |
| Income tax expense | | | 1.1 | | | | 1.4 | | | | 0.1 | |
Income (loss) before income tax expense | | | 2.4 | | | | 2.8 | | | | (1.1 | ) |
| | | | | | | | | | | | | |
| Other expense: | | | | | | | | | | | | |
| Interest expense (including amortization of deferred loan fees) | | | 17.2 | | | | 17.5 | | | | 16.9 | |
| Other | | | 0.1 | | | | - | | | | 0.2 | |
| Other expense, net | | | 17.3 | | | | 17.5 | | | | 17.1 | |
| | | | | | | | | | | | | |
| Operating income | | | 19.7 | | | | 20.3 | | | | 16.0 | |
| Depreciation and amortization expense | | | 32.3 | | | | 31.8 | | | | 32.7 | |
| Other | | | (0.1 | ) | | | - | | | | (0.2 | ) |
| | | | | | | | | | | | | |
| EBITDA (Note 2) | | | 51.9 | | | | 52.1 | | | | 48.5 | |
| Share-based compensation | | | 1.7 | | | | 1.1 | | | | 3.4 | |
| Accretion | | | 0.2 | | | | 0.1 | | | | 0.2 | |
| Non-controlling interest | | | 0.2 | | | | - | | | | 0.2 | |
| Non-cash contribution adjustment | | | 0.8 | | | | - | | | | - | |
| Adjusted EBITDA (Note 1) | | $ | 54.8 | | | | 53.3 | | | | 52.3 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | |
| (1) EBITDA (as defined in Note 2 below) before deducting share-based compensation, | |
| accretion expense, loss attributable to non-controlling interest and non-cash | | | | | |
| contribution adjustment. | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| (2) Earnings Before Interest, Taxes, Depreciation and Amortization is the sum of Net | | | | |
| Income, Interest Expense (including Amortization of Deferred Loan Fees), Interest | | | | | |
| Income, Income Tax Expense, and Depreciation and Amortization Expense. | | | | | |
| EBITDA is not presented as an alternative measure of net income, operating | | | | | |
| income or cash flow from operations, as determined in accordance with accounting | | | | |
| principles generally accepted in the United States of America. GCI's management | | | | |
| uses EBITDA to evaluate the operating performance of its business, and as a | | | | | |
| measure of performance for incentive compensation purposes. GCI believes | | | | | |
| EBITDA is a measure used as an analytical indicator of income generated to service | | | | |
| debt and fund capital expenditures. In addition, multiples of current or projected | | | | | |
| EBITDA are used to estimate current or prospective enterprise value. EBITDA does | | | | |
| not give effect to cash used for debt service requirements, and thus does not reflect | | | | |
| funds available for investment or other discretionary uses. EBITDA as presented | | | | | |
| herein may not be comparable to similarly titled measures reported by other | | | | | |
| companies. | | | | | | | | | | | | |
