Exhibit 99.1
November 3, 2004
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 THIRD QUARTER 2004 FINANCIAL RESULTS
o Consolidated revenue of $106.6 million
o Net income of $9.3 million or $0.15 per diluted share
o EBITDA of $36.7 million
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported net income of $9.3
million, or earnings per diluted share of $0.15, for the third quarter of 2004.
The company's third quarter net income compares to income of $4.5 million, or
earnings per diluted share of $0.07 in the same period of 2003.
GCI's third quarter 2004 revenues totaled $106.6 million, an increase
of 8.4 percent over third quarter 2003 revenues of $98.3 million. For the
current quarter, earnings before interest, taxes, depreciation, amortization and
accretion (EBITDA) totaled $36.7 million. Third quarter 2004 EBITDA increased
$6.0 million or 19.5 percent over the same quarter in 2003. Third quarter 2003
EBITDA totaled $30.7 million.
Sequentially, revenues for the company increased 2.7 percent from
second quarter 2004 revenues of $103.8 million. GCI's third quarter EBITDA of
$36.7 million compares to EBITDA of $34.9 million in the second quarter of 2004.
For the third quarter of 2004, GCI exceeded its revenue guidance and
EBITDA guidance. The company expected revenues of approximately $103 million to
$105 million, and EBITDA in excess of $31 million, excluding the effects of any
receivable recovery from MCI. GCI recorded a benefit of approximately $1.1
million relating to the use of the MCI credit during the quarter.
GCI began its stock repurchase program during the third quarter. The
company purchased 170,600 shares to date at an average price of $9.16 per share.
"GCI"s third quarter revenues and EBITDA keep us on track to report
another record year in 2004," said Ron Duncan, GCI president. "We have the
strongest product set in the marketplace and continue to grow our customer
base."
"We expect fourth quarter revenues of approximately $101 million to
$103 million and EBITDA of approximately $32 million, excluding the effects of
any receivable recovery from MCI. We expect to exceed the high end of our 2004
guidance for total revenues of $410 million to $420 million and EBITDA of $129
million to $134 million, before any benefit from credits against services
purchased from MCI."
Customer Highlights
o The local services business was down 200 access lines during the third
quarter, serving 110,400 local lines, an estimated 24 percent share of the
total access line market in Alaska. Access lines declined due to a
reduction in Internet Service Provider (ISP) lines.
o GCI had 101,100 statewide Internet customers at the end of third
quarter 2004. At the end of the third quarter of 2004, 61,200 of these
Internet customers are using GCI cable modem service, an increase of 4,400
over the second quarter of 2004. The number of customers served on GCI's
statewide dial-up Internet platform continued to decrease during the third
quarter. Most of these customers migrated to cable modems.
o GCI cable television services pass 205,986 homes and serve 134,258
subscribers. Subscribers decreased sequentially by 915 subscribers from the
second quarter of 2004. The decrease in subscribers is primarily
attributable to normal seasonal declines of hotel customers. Residential
subscribers were stable during the quarter.
o Long-distance billable minutes decreased 1.1 percent to 310.8 million
minutes for the third quarter as compared to the same quarter of 2003, and
increased 5.8 percent sequentially.
Long Distance Results
For the third quarter of 2004, long distance revenues totaled $63.2
million as compared to revenues of $60.2 million in the third quarter of 2003
and $60.9 million in the second quarter of 2004. Long distance revenues
increased 5.0 percent year-over-year and 3.8 percent sequentially. The revenue
increases were attributed to an increase in long haul fiber, private line,
dedicated and other data services revenues and managed network services
revenues. The revenue increases offset a decrease in switched minutes revenues
which were down 10.3 percent when compared to a year ago and up slightly
sequentially. The decrease in switched minutes revenues as compared to the prior
year is due to fewer minutes carried and lower rates.
Long distance EBITDA, increased 19.0 percent for the third quarter of
2004 to $24.4 million as compared to $20.5 million in the third quarter of the
prior year. Long distance EBITDA for the third quarter of 2004 was up $3.4
million sequentially from $21.0 million in the second quarter of 2004. Long
distance EBITDA included MCI bad debt recoveries of $1.1 million in the third
quarter of 2004, $0.6 million in the third quarter of 2003 and $1.1 million in
the second quarter of 2004. The EBITDA increases were primarily attributed to
changes in the revenue mix from minute driven traffic to data traffic.
Total minutes-of-use are down 1.1 percent in the third quarter of 2004
when compared to the third quarter of 2003. Sequentially, minutes-of-use are up
5.8 percent compared to the second quarter of 2004.
The total number of billed long distance customers were relatively
unchanged when customer counts are compared between September 2004 and June
2004.
Cable Television Results
Cable television revenues for the third quarter increased 6.3 percent
to $25.2 million from $23.7 million in the third quarter of 2003, and were
steady from $25.2 million in the second quarter of 2004. EBITDA of $10.6 million
for the third quarter of 2004 increased 9.3 percent from the third quarter of
2003, and decreased 7.8 percent when compared to $11.5 million in the second
quarter of 2004. The year over year increase in revenues and EBITDA is due
primarily to the increase in sales of digital special interest (Digital) cable
television, rental of Digital set-top boxes, advertisement sales and sales of
cable modem services. The sequential decrease in EBITDA is primarily
attributable to certain refunds and rebates received from cable television
programmers during the second quarter of 2004.
Gross margins, as a percentage of revenues, increased by 51 basis
points year-over-year and decreased 213 basis points sequentially. The
sequential decrease in gross margins is primarily attributable to the
aforementioned refunds and rebates received from programmers in the prior
quarter. The growth rate from Digital and cable modems is helping to mitigate
the effects of continuing increases in programming and copyright costs.
As of September 30, 2004, the company's cable television operations
passed 205,986 homes and served 134,258 subscribers (106,132 equivalent basic
subscribers). For the third quarter, average revenue per equivalent basic
subscriber was $79.36, an increase of 10.6 percent when compared to the third
quarter 2003 average revenue of $71.77. Sequentially, average revenue was up 1.4
percent, from $78.27, over the second quarter of 2004. Total subscribers
decreased sequentially by 915 when compared to the second quarter of 2004. The
decrease in subscribers is primarily attributable to a seasonal decrease in
hotel customers. The total number of residential customers was relatively
unchanged for the third quarter. This compares to a sequential decrease of 1,930
subscribers in the third quarter of 2003.
GCI served 42,568 Digital customers at the end of the third quarter of
2004, an increase of 3,800 customers compared to the second quarter of 2004. The
sequential increase in Digital customers was due to the launch of several new
service packages. The Anchorage system has been completely upgraded to a digital
only system.
The operating statistics below include capital expenditures and
customer information from cable services and the components of our local
services and Internet services utilizing our cable services' facilities.
GCI's capital expenditures by standard reporting category for the nine
months periods ending September 30, 2004 and 2003 follow (amounts in thousands):
2004 2003
---------- ---------
Customer premise equipment $ 12,136 6,880
Commercial 348 395
Scalable infrastructure 3,782 1,000
Line extensions 517 645
Upgrade/rebuild 6,516 1,816
Support capital 1,013 313
---------- ---------
Sub-total 24,312 11,049
Remaining reportable segments and All Other
capital expenditures 58,498 23,344
---------- ---------
$ 82,810 34,393
========== =========
The standard definition of a customer relationship is the number of
customers who receive at least one level of service, encompassing voice, video,
and data services, without regard to which services customers purchase. These
relationships do not include local telephone customers except those receiving
phone service through the cable television plant. At September 30, 2004 and
2003, GCI's cable business had 122,100 and 122,400 customer relationships,
respectively.
The standard definition of a revenue-generating unit is the sum of all
primary analog video, digital video, high-speed data and telephony customers,
not counting additional outlets. At September 30, 2004 and 2003, GCI's cable
business had 199,400 and 178,200 revenue generating units, respectively. The
increase in the revenue generating units of 7,400 and 21,200 from June 30, 2004
and September 30, 2003 respectively, is due to an increase in the number of
cable modem and Digital Local Phone Service (DLPS) customers.
Local Telephone Results
For the third quarter 2004, local telephone service revenues totaled
$11.5 million, an increase of 21.1 percent, when compared to $9.5 million in the
third quarter of 2003. Sequentially, revenue was up $0.3 million or 2.7 percent
from $11.2 million in the second quarter of 2004. The increase in year-over-year
revenues is attributable to increasing customer counts, Universal Service Fund
and directory services revenues.
In the third quarter, local services generated an EBITDA loss of $0.8
million, an improvement of $0.1 million over the $0.9 million loss in the third
quarter of 2003. Sequentially, the third quarter EBITDA loss of $0.8 million
compares to EBITDA of $0.2 million in the second quarter of 2004. The sequential
decline in EBITDA is primarily due to an increase in operating costs
attributable to the conversion of Anchorage customers to DLPS and the increase
in Anchorage UNE rates. If the local telephone business received credit for
access cost savings on calls placed by GCI long distance customers who are also
GCI local customers, the company's local telephone business would have reported
EBITDA of $1.1 million in the third quarter of 2004.
At the end of the third quarter of 2004, GCI provided local service to
approximately 110,400 access lines statewide. This represents a total decline of
200 access lines, or 0.2 percent, when compared to the 110,600 access lines
reported at the end of the second quarter of 2004. During the third quarter GCI
turned down more than 1,800 ISP access lines. Total access lines, not including
ISP lines turned down, increased by 1,600 during the third quarter of 2004. The
company estimates it has attained a 24 percent share of the total access line
market in Alaska. Approximately 85 percent of GCI's access lines are provisioned
on its own facilities or on resold local loops.
In early April 2004, GCI began converting customers to its DLPS
technology. The roll out of DLPS will enable GCI to avoid wholesale and loop
rental costs from local phone lines leased from the incumbent local exchange
carrier. GCI now expects to provision 7,000 to 8,000 DLPS lines by the end of
2004. More than 5,000 DLPS lines are currently in service.
Internet Access Results
Internet access revenues for the third quarter of 2004 totaled $6.7
million, an increase of 36.7 percent year-over-year and 3.1 percent
sequentially. Third quarter 2003 revenues were $4.9 million and second quarter
2004 revenues were $6.5 million. EBITDA for the third quarter totaled $2.4
million, an improvement of $1.1 million year-over-year and $0.2 million
sequentially. Third quarter 2003 EBITDA was $1.3 million and second quarter 2004
EBITDA was $2.2 million. The increase in Internet access revenues and EBITDA
results from the migration of existing customers to cable modem access and
customers adding more features and services, increasing economies of scale and
effective cost containment controls.
At the end of the third quarter of 2004, GCI had 101,100 statewide
Internet customers, an increase of 800 customers sequentially and an increase of
7,200 year-over-year. GCI's statewide Internet customers included 61,200
subscribers using cable modem access. This represents an increase of 4,400
subscribers, or 7.7 percent, over the prior quarter's subscriber count of
56,800. On a year-over-year basis, GCI experienced a 43.0 percent increase in
cable modem subscribers, from 42,800 at the end of the third quarter of 2003.
At the end of the third quarter of 2004 GCI's average revenue per cable
modem (ARPM) was $33.51 as compared to $36.84 at the end of the second quarter
of 2004 and $39.64 at the end of the third quarter of 2003. Total cable modem
revenues for the third quarter of 2004 decreased 1.7 percent sequentially when
compared to the second quarter of 2004 and increased 19.6 percent
year-over-year. The increase in year-over-year revenues is due to the increase
in the number of modem customers. The decline in ARPM is due to an increase in
the percentage of total customers taking GCI's discounted cable modem products.
The sequential decline in total modem revenues is due to some customers shifting
to lower priced services partially offset by growth in total modem revenues.
GCI began offering Internet access services during 1998 and its dial-up
Internet service is offered in most major Alaska markets. GCI is the largest
Internet access provider in Alaska.
Other Items
During the three months ending September 30, 2004, core capital
expenditures increased to $18.2 million as compared to $17.6 million in the
second quarter of 2004. Additionally, GCI spent $0.4 million relating to its new
undersea fiber in the third quarter of 2004. GCI generated approximately $11.4
million in free cash flow during the third quarter.
GCI will hold a conference call to discuss the quarter's results on
Thursday, November 4, 2004 beginning at 2 p.m. (Eastern). To access the briefing
on November 4, dial 888-390-6586 (international callers should dial
210-234-8000) 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 800-839-2291, access code 7461
(international callers should dial 402-998-1194.)
GCI is the largest telecommunications company in Alaska. A pioneer in
bundled services, GCI provides local, wireless, and long distance telephone,
cable television, Internet and data communication services throughout Alaska.
More information about the company can be found at www.gci.com.
The foregoing contains forward-looking statements regarding the
company's expected results that are based on management's expectations as well
as on a number of assumptions concerning future events. Actual results might
differ materially from those projected in the forward looking statements due to
uncertainties and other factors, many of which are outside GCI's control.
Additional information concerning factors that could cause actual results to
differ materially from those in the forward looking statements is contained in
GCI's cautionary statement sections of Form 10-K and 10-Q filed with the
Securities and Exchange Commission.
# # #
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands) September 30, December 31,
Assets 2004 2003
- ---------------------------------------------------------------------------------- --------------- ----------------
Current assets:
Cash and cash equivalents $ 8,769 10,435
--------------- ----------------
Receivables 75,600 70,235
Less allowance for doubtful receivables 2,069 1,954
--------------- ----------------
Net receivables 73,531 68,281
Prepaid and other current assets 6,743 12,159
Deferred income taxes, net 5,621 7,195
Inventories 2,555 1,513
Property held for sale 1,046 2,173
Notes receivable from related parties 354 1,885
--------------- ----------------
Total current assets 98,619 103,641
--------------- ----------------
Property and equipment in service, net of depreciation 421,128 369,039
Construction in progress 19,940 33,618
--------------- ----------------
Net property and equipment 441,068 402,657
--------------- ----------------
Cable certificates 191,241 191,241
Goodwill 41,972 41,972
Other intangible assets, net of amortization of $2,087 and $1,656
at September 30, 2004 and December 31, 2003, respectively 5,078 4,195
Deferred loan and senior notes costs, net of amortization of $2,226
and $5,308 at September 30, 2004 and December 31, 2003, respectively 9,102 5,757
Notes receivable from related parties 4,230 4,281
Other assets 9,315 9,276
--------------- ----------------
Total other assets 260,938 256,722
--------------- ----------------
Total assets $ 800,625 763,020
=============== ================
(Continued)
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
(Amounts in thousands) September 30, December 31,
Liabilities, Redeemable Preferred Stock, and Stockholders' Equity 2004 2003
- ---------------------------------------------------------------------------------- --------------- ----------------
Current liabilities:
Current maturities of obligations under capital leases $ 6,313 5,139
Accounts payable 27,350 34,133
Accrued payroll and payroll related obligations 14,025 17,545
Deferred revenue 13,844 21,275
Accrued liabilities 7,389 8,156
Accrued interest 2,860 8,645
Subscriber deposits 471 651
--------------- ----------------
Total current liabilities 72,252 95,544
Long-term debt 377,060 345,000
Obligations under capital leases, excluding current maturities 34,244 38,959
Obligation under capital lease due to related party, excluding current
maturity 680 677
Deferred income taxes, net of deferred income tax benefit 35,985 24,168
Other liabilities 6,811 6,366
--------------- ----------------
Total liabilities 527,032 510,714
--------------- ----------------
Redeemable preferred stock 19,244 25,664
--------------- ----------------
Stockholders' equity : Common stock (no par):
Class A. Authorized 100,000 shares; issued 54,139 and 52,589
shares at September 30, 2004 and December 31, 2003, respectively 211,012 202,362
Class B. Authorized 10,000 shares; issued 3,866 and 3,868 shares at
September 30, 2004 and December 31, 2003, respectively;
convertible on a share-per-share basis into Class A common stock 3,267 3,269
Less cost of 380 and 338 Class A common shares held in treasury at
September 30, 2004 and December 31, 2003, respectively (2,284) (1,917)
Paid-in capital 13,617 12,836
Notes receivable with related parties issued upon stock option exercise (4,351) (4,971)
Retained earnings 33,088 15,371
Accumulated other comprehensive loss --- (308)
--------------- ----------------
Total stockholders' equity 254,349 226,642
--------------- ----------------
Commitments and contingencies
Total liabilities, redeemable preferred stock, and stockholders' equity $ 800,625 763,020
=============== ================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(Amounts in thousands, except per share amounts) 2004 2003 2004 2003
------------- ------------ ----------- -----------
Revenues $ 106,622 98,327 319,324 287,043
Cost of goods sold (exclusive of depreciation, amortization
and accretion shown separately below) 32,876 31,870 104,878 92,189
Selling, general and administrative expenses 37,324 35,262 108,830 102,549
Bad debt expense (recovery) (281) 533 (1,165) 1,932
Depreciation, amortization and accretion expense 15,297 13,067 46,759 39,368
------------- ----------- ------------ -----------
Operating income 21,406 17,595 60,022 51,005
------------- ----------- ------------ -----------
Other income (expense):
Interest expense (6,722) (8,845) (20,275) (27,137)
Loss on early extinguishment of debt --- --- (6,136) ---
Amortization and write-off of loan and senior notes fees (400) (631) (3,414) (2,329)
Interest income 86 162 273 493
------------- ----------- ------------- -----------
Other expense, net (7,036) (9,314) (29,552) (28,973)
------------- ----------- ------------ -----------
Net income before income taxes and cumulative
effect of a change in accounting principle 14,370 8,281 30,470 22,032
Income tax expense 5,075 3,752 11,525 9,598
------------- ----------- ------------ -----------
Net income before cumulative effect of a change
in accounting principle 9,295 4,529 18,945 12,434
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 --- --- --- (544)
------------- ----------- ------------ -----------
Net income $ 9,295 4,529 18,945 11,890
============= =========== ============ ===========
Basic net income per common share:
Net income before cumulative effect of a change
in accounting principle $ 0.15 0.07 0.31 0.20
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 --- --- --- (0.01)
------------- ----------- ------------ -----------
Net income $ 0.15 0.07 0.31 0.19
============= =========== ============ ===========
Diluted net income per common share:
Net income before cumulative effect of a change
in accounting principle $ 0.15 0.07 0.30 0.19
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 --- --- --- (0.01)
------------- ----------- ------------ -----------
Net income $ 0.15 0.07 0.30 0.18
============= =========== ============ ===========
Common shares used to calculate basic EPS 58,031 55,707 57,027 55,563
============= =========== ============ ===========
Common shares used to calculate diluted EPS 60,708 56,870 58,162 56,094
============= =========== ============ ===========
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Nine Months Ended September 30, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 189,931 75,243 34,558 19,592 319,324
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 58,115 20,311 21,184 5,268 104,878
------------------------------------------------------------------
Contribution 131,816 54,932 13,374 14,324 214,446
Selling, general and
administrative expenses 66,528 21,099 13,415 7,788 108,830
Bad debt expense (recovery) (1,808) 643 - - (1,165)
------------------------------------------------------------------
EBITDA, as adjusted 67,096 33,190 (41) 6,536 106,781
Less loss on early extinguishment of debt 6,136 - - - 6,136
------------------------------------------------------------------
EBITDA 60,960 33,190 (41) 6,536 100,645
Add loss on early extinguishment of debt 6,136 - - - 6,136
Less depreciation, amortization and
accretion expense 27,018 14,072 2,927 2,742 46,759
------------------------------------------------------------------
Operating income (loss) $ 40,078 19,118 (2,968) 3,794 60,022
==================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited) Nine Months Ended September 30, 2004
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 67,096 67,096
Cable 33,190 33,190
Local Services (41) (41)
Internet 6,536 6,536
-------------------------------------------------------
67,055 6,536 33,190 106,781
EBITDA, as Adjusted, Reallocations:
Long Distance (36,523) 36,523 -
Cable 8,080 (8,080) -
Local Services (142) 142 -
-------------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 30,390 51,281 25,110 106,781
=======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Nine Months Ended September 30, 2003
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 174,521 71,009 27,211 14,302 287,043
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 50,972 19,435 17,445 4,337 92,189
------------------------------------------------------------------
Contribution 123,549 51,574 9,766 9,965 194,854
Selling, general and
administrative expenses 63,640 19,786 12,902 6,221 102,549
Bad debt expense (recovery) 1,397 535 - - 1,932
------------------------------------------------------------------
EBITDA, as adjusted 58,512 31,253 (3,136) 3,744 90,373
Less loss on early extinguishment of debt - - - - -
------------------------------------------------------------------
EBITDA 58,512 31,253 (3,136) 3,744 90,373
Add loss on early extinguishment of debt - - - - -
Less depreciation, amortization and
accretion expense 20,786 13,441 2,612 2,529 39,368
------------------------------------------------------------------
Operating income (loss) $ 37,726 17,812 (5,748) 1,215 51,005
==================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited) Nine Months Ended September 30, 2003
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 58,512 58,512
Cable 31,253 31,253
Local Services (3,136) (3,136)
Internet 3,744 3,744
-------------------------------------------------------
55,376 3,744 31,253 90,373
EBITDA, as Adjusted, Reallocations:
Long Distance (23,521) 23,521 -
Cable 4,930 (4,930) -
Local Services (113) 113 -
-------------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 31,742 32,308 26,323 90,373
=======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended September 30, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 63,195 25,210 11,548 6,669 106,622
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 16,463 6,897 7,816 1,700 32,876
------------------------------------------------------------------
Contribution 46,732 18,313 3,732 4,969 73,746
Selling, general and
administrative expenses 22,863 7,433 4,486 2,542 37,324
Bad debt expense (recovery) (522) 241 - - (281)
------------------------------------------------------------------
EBITDA 24,391 10,639 (754) 2,427 36,703
Less depreciation, amortization and
accretion expense 8,752 4,702 964 879 15,297
------------------------------------------------------------------
Operating income (loss) $ 15,639 5,937 (1,718) 1,548 21,406
==================================================================
Integrated Summary EBITDA
(Unaudited) Three Months Ended September 30, 2004
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 24,391 24,391
Cable 10,639 10,639
Local Services (754) (754)
Internet 2,427 2,427
-------------------------------------------------------
23,637 2,427 10,639 36,703
EBITDA Reallocations:
Long Distance (13,000) 13,000 -
Cable 2,578 (2,578) -
Local Services (53) 53 -
-------------------------------------------------------
Integrated Summary EBITDA $ 10,584 18,058 8,061 36,703
=======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended September 30, 2003
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 60,166 23,699 9,540 4,922 98,327
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 17,822 6,604 5,933 1,511 31,870
------------------------------------------------------------------
Contribution 42,344 17,095 3,607 3,411 66,457
Selling, general and
administrative expenses 21,485 7,222 4,470 2,085 35,262
Bad debt expense (recovery) 365 168 - - 533
------------------------------------------------------------------
EBITDA 20,494 9,705 (863) 1,326 30,662
Less depreciation, amortization and
accretion expense 6,983 4,379 876 829 13,067
------------------------------------------------------------------
Operating income (loss) $ 13,511 5,326 (1,739) 497 17,595
==================================================================
Integrated Summary EBITDA
(Unaudited) Three Months Ended September 30, 2003
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 20,494 20,494
Cable 9,705 9,705
Local Services (863) (863)
Internet 1,326 1,326
-------------------------------------------------------
19,631 1,326 9,705 30,662
EBITDA Reallocations:
Long Distance (9,477) 9,477 -
Cable 2,372 (2,372) -
Local Services (27) 27 -
-------------------------------------------------------
Integrated Summary EBITDA $ 10,127 13,202 7,333 30,662
=======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended June 30, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 60,870 25,181 11,218 6,517 103,786
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 18,274 6,352 6,822 1,809 33,257
------------------------------------------------------------------
Contribution 42,596 18,829 4,396 4,708 70,529
Selling, general and
administrative expenses 22,276 7,115 4,246 2,465 36,102
Bad debt expense (recovery) (678) 191 - - (487)
------------------------------------------------------------------
EBITDA 20,998 11,523 150 2,243 34,914
Less depreciation, amortization and
accretion expense 9,003 4,691 1,071 939 15,704
------------------------------------------------------------------
Operating income (loss) $ 11,995 6,832 (921) 1,304 19,210
==================================================================
Integrated Summary EBITDA
(Unaudited) Three Months Ended June 30, 2004
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA
Long Distance $ 20,998 20,998
Cable 11,523 11,523
Local Services 150 150
Internet 2,243 2,243
-------------------------------------------------------
21,148 2,243 11,523 34,914
EBITDA, Reallocations:
Long Distance (11,648) 11,648 -
Cable 2,764 (2,764) -
Local Services (57) 57 -
-------------------------------------------------------
Integrated Summary EBITDA $ 9,443 16,712 8,759 34,914
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Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Three Months Ended
September 30, 2004 September 30, 2003 June 30, 2004
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EBITDA (Note 2) $ 36.7 30.7 34.9
Depreciation, amortization and accretion
expense (15.3) (13.1) (15.7)
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Operating income 21.4 17.6 19.2
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Other income (expense):
Interest expense (6.7) (8.9) (6.0)
Loss on early extinguishment of debt --- --- ---
Amortization and write-off of loan and
senior notes fee expense (0.4) (0.6) (0.4)
Interest income 0.1 0.2 0.1
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Other expense, net (7.0) (9.3) (6.3)
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Net income before income taxes 14.4 8.3 12.9
Income tax expense 5.1 3.8 5.2
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Net income $ 9.3 4.5 7.7
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Nine Months Ended
September 30, 2004 September 30, 2003
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EBITDA, as adjusted (Note 1) $ 106.8 90.4
Loss on early extinguishment of debt (6.1) ---
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EBITDA (Note 2) 100.7 90.4
Depreciation, amortization and accretion
expense (46.8) (39.4)
Loss on early extinguishment of debt 6.1 ---
-------------------- ----------------------
Operating income 60.0 51.0
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Other income (expense):
Interest expense (20.3) (27.1)
Loss on early extinguishment of debt (6.1) ---
Amortization and write-off of loan and
senior notes fee expense (3.4) (2.4)
Interest income 0.2 0.5
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Other expense, net (29.6) (29.0)
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Net income before income taxes and
cumulative effect of a change in
accounting principle 30.4 22.0
Income tax expense 11.5 9.6
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Net income before cumulative effect of
a change in accounting principle 18.9 12.4
Cumulative effect of a change in
accounting principle, net of income tax
benefit of $0.4 --- (0.5)
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Net income $ 18.9 11.9
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Notes:
(1) EBITDA (as defined in Note 2 below) before deducting Loss on Early
Extinguishment of Debt during the nine months ended September 30, 2004.
(2) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is
the sum of Net Income, Interest Expense, Amortization and Write-off of
Loan and Senior Notes Fees, Interest Income, Taxes, and Depreciation,
Amortization and Accretion. 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.