Exhibit 99.1
February 23, 2005
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 2004 FINANCIAL RESULTS
o GCI repurchases $41.3 million of equity from MCI
o Net income of $21.3 million or $0.34 per diluted share
o Consolidated revenues of $424.8 million
o EBITDA of $139.0 million, as adjusted
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported its 2004 results
with net income of $21.3 million, or diluted earnings per share of $0.34. The
company's 2004 net income compares to income of $15.5 million, or diluted
earnings per share of $0.24, in 2003. GCI recorded net income of $2.3 million or
$0.04 per share on a diluted basis in the fourth quarter of 2004 that compares
to net income of $3.7 million or $0.06 per share on a diluted basis for the
fourth quarter of 2003.
GCI's revenues for 2004 increased to $424.8 million, an increase of 8.7
percent over 2003 revenues of $390.8 million. For the fourth quarter of 2004,
revenues totaled $105.5 million as compared to $103.8 million in the fourth
quarter of 2003, an increase of 1.6 percent. Sequentially, revenues decreased
1.0 percent from third quarter 2004 revenues of $106.6 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for 2004 totaled $139.0 million as adjusted, to exclude $6.1 million in bond
premium expense. EBITDA for 2003 totaled $126.9 million as adjusted, to exclude
a $5.4 million impairment charge related to the shut down of a first generation
fiber to the lower 48. EBITDA for 2004 increased $12.1 million or 9.5 percent
over 2003. EBITDA for 2004 and 2003 included MCI bad debt recoveries of $4.2
million and $2.8 million, respectively.
Fourth quarter 2004 EBITDA totaled $32.2 million and compares to $36.5
million reported for the fourth quarter of 2003 as adjusted to exclude the $5.4
million impairment charge. Excluding the MCI bad debt recoveries of $0.8 million
and $2.2 million recorded in the fourth quarters of 2004 and 2003, respectively,
EBITDA decreased $2.9 million from the fourth quarter of 2003. The decrease in
EBITDA for the fourth quarter is attributable in part to approximately $1.6
million in expenses necessary to comply with the Sarbanes-Oxley Act of 2002
(SOX), increases in labor and benefits and special project revenue recognized in
the fourth quarter of 2003. Sequentially, fourth quarter 2004 EBITDA of $32.2
million decreased $4.2 million from the third quarter 2004 EBITDA of $36.7
million, after excluding the MCI bad debt recoveries of $0.8 million and $1.1
million in the fourth and third quarters of 2004, respectively. The decrease in
EBITDA is attributable, in part, to increased SOX expenses incurred in the
fourth quarter of 2004, certain credits recorded in the third quarter of 2004
and seasonality.
GCI continued its stock repurchase program during the fourth quarter of
2004 and first quarter of 2005. The company purchased 413,365 shares at an
average price of $10.57. GCI has purchased a total of 583,965 shares since the
inception of the program at an average price of $10.17 per share. The company
received senior lender approval to repurchase stock of up to $10 million
annually in November, 2004.
In addition to the stock repurchase program, the company purchased 3.8
million GCI Class A shares and $10 million face value of GCI Series C Preferred
Stock from MCI in a private transaction that closed December 7, 2004. The equity
repurchase totaled $41.3 million.
"This is our eighth consecutive year of record high revenues and
EBITDA," said Ron Duncan, GCI president. "We had a busy and successful year. In
addition to setting new financial records we refinanced $320 million in Senior
Notes at 7.25 percent, repurchased $47.2 million of GCI equity, including $41.3
million from MCI, completed the redundant leg of our undersea fiber, entered
into a wireless agreement with Dobson Communication and launched our conversion
of local phone services to our own cable facilities."
"Our 2004 results were solid as we grew all aspects of our businesses.
While much of the rest of the telecom industry still remains weak, we are well
positioned going into 2005. We anticipate revenues of $430 million to $440
million and EBITDA of approximately $145 million including the expected recovery
of most of the remaining $3.7 million MCI receivable from 2002. For the first
quarter of 2005 we expect revenues of $105 million to $107 million and EBITDA of
approximately $32 million to $33 million, before any MCI recoveries."
Customer Highlights:
o The local services business added 6,000 net access lines during 2004
and at year-end had 112,100 total access lines in service representing
an estimated 24 percent share of the total access line market in
Alaska. GCI added 8,500 voice access lines after excluding
approximately 2,500 Internet Service Provider dial-up lines that were
turned down during 2004. The company added approximately 1,700 access
lines in the fourth quarter of 2004.
o At the end of 2004, GCI had more than 8,000 Digital Local Phone Service
(DLPS) lines in service and plans to provision approximately 25,000
additional lines by the end of 2005.
o GCI had 101,600 statewide Internet customers at the end of 2004, an
increase of 5,900 subscribers as compared with 95,700 users at the end
of 2003. 65,500 of these Internet customers are using GCI cable modem
access services, an increase of 19,500 over the 46,000 at year-end
2003. The company added 500 Internet and 4,300 new cable modem
subscribers during the fourth quarter of 2004.
o GCI cable television services pass 207,248 homes and serve 134,742
basic subscribers at the end of 2004. Basic subscribers increased by
392 from the fourth quarter of 2003 and increased by 484 from the third
quarter of 2004.
o Digital programming tier subscribers at the end of 2004 total 46,100 an
increase of 11,200 subscribers for the year. GCI added 3,500 new
digital programming tier subscribers during the fourth quarter of 2004.
o Long-distance billable minutes increased 3.3 percent to 1.197 billion
minutes for the year 2004 as compared to 2003. Minutes for the fourth
quarter of 2004 decreased 4.4 percent from the prior year. Minutes
decreased 6.4 percent sequentially from the third quarter of 2004 due,
in part, to seasonality.
Long Distance Results
Long distance and related revenues for 2004 were up 6.1 percent to
$250.5 million as compared to $236.0 million for the prior year. Long distance
EBITDA in 2004, as adjusted, totaled $84.3 million, as compared to $81.7
million, as adjusted, in 2003, an increase of 3.2 percent. The increase in
year-over-year revenue is primarily attributable to an increase in managed
services and data network services revenues. EBITDA growth for 2004 is primarily
attributable to increased revenues.
For the fourth quarter of 2004, long distance revenues totaled $60.5
million as compared to revenues of $61.4 million in the fourth quarter of 2003
and $63.2 million in the third quarter of 2004. Long distance revenues decreased
1.5 percent from the prior year and 4.3 percent sequentially. Long distance
revenues year-over-year would have increased $0.7 million excluding $1.6 million
of special project revenue recorded in the fourth quarter of 2003. The fourth
quarter sequential revenue decreases are attributed in part to normal seasonal
patterns and from carrying fewer minutes on the company's network for other
common carriers. Long distance EBITDA decreased 25.4 percent for the fourth
quarter of 2004 to $17.3 million as compared to $23.2 million, as adjusted, in
the fourth quarter of the prior year and decreased $7.1 million from $24.4
million in the third quarter of 2004. Excluding the MCI bad debt recoveries of
$0.8 million in the fourth quarter of 2004 and $1.1 million in the third quarter
of 2004, EBITDA, as adjusted, would have decreased from the prior year and
sequentially, $4.5 million and $6.8 million, respectively. The EBITDA decreases
are attributable in part to fewer minutes carried on the company's network for
other common carriers, $1.6 million of special project revenue reported in the
prior year, increases in contract labor, personnel costs and Sarbanes-Oxley
related expenses.
Long-distance billable minutes increased 3.3 percent to 1.197 billion
minutes for the year 2004 as compared to 2003. Long distance minutes-of-use in
the fourth quarter of 2004 were down 4.4 percent as compared to the fourth
quarter of 2003 and decreased 6.4 percent from the third quarter of 2004. The
fourth quarter decrease in minutes from the same quarter a year ago is primarily
due to fewer minutes carried on the company's network for other common carriers
partially offset by an increase in retail minutes.
The total number of billed long distance customers at the end of 2004
increased to 91,300 from 85,600 at the end of 2003, and was up 1.1 percent from
September, 2004.
Cable Television Results
Cable television revenues for the year increased 5.6 percent to $101.4
million in 2004 from $96.0 million in 2003. EBITDA increased 7.3 percent to
$45.4 million from $42.3 million in 2003. The increase in revenues and EBITDA
for the year is due primarily to an increase in the average revenue per
subscriber as a result of increased penetration of packaged offerings, digital
programming service and cable modem services. Also
contributing to the growth was an increase in advertising revenue from the 2004
Olympics and the November 2004 elections.
Cable television revenues for the fourth quarter of 2004 increased 4.8
percent to $26.2 million as compared to $25.0 million in the fourth quarter of
2003, and increased 4.0 percent from $25.2 million in the third quarter of 2004.
EBITDA increased 11.8 percent to $12.3 million in the fourth quarter of 2004 as
compared to $11.0 million in the fourth quarter of 2003, and increased 16.0
percent from $10.6 million in the third quarter of 2004. The increase in
revenues and EBITDA year-over-year is due to the sales of higher value products
such as The Ultimate Package, the digital programming tier and cable modem
services.
Gross margin for the fourth quarter as a percentage of revenues
increased by 84 basis points year-over-year and increased by 198 basis points
sequentially. Increased sales of higher value products such as digital
programming and cable modems is helping to mitigate the effects of continuing
increases in program and copyright costs.
As of December 31, 2004, the company's cable and entertainment
operations passed 207,248 homes and served 134,742 basic subscribers (107,843
equivalent basic subscribers). Homes passed increased 2.5 percent and basic
subscribers increased by 392 during 2004. Average revenue per equivalent basic
subscriber increased 6.5 percent to $81.33 for the fourth quarter of 2004 as
compared to $76.34 for the fourth quarter of 2003, and increased 2.5 percent on
a sequential basis. The company experienced an increase of 484 subscribers to
its systems during the fourth quarter of 2004. GCI's packaged offering of long
distance, local, Internet and cable television service appears to be mitigating
the effects of DBS competition that accelerated during the fourth quarter of
2003.
The company offers digital programming tier(s) in Anchorage, Fairbanks,
Juneau, Kenai, Soldotna, Ketchikan and the Mat-Su Valley area. GCI has 73
percent of its basic cable subscribers receiving service through a digital
set-top box and 46,122 purchased the digital programming tier at the end of the
fourth quarter of 2004. GCI now offers 10 channels of HDTV to customers in the
Anchorage and Mat-Su Valley area.
The operating statistics below include capital expenditures and
customer information from cable services and the components of local services
and Internet services which offer services utilizing our cable services'
facilities.
GCI's capital expenditures by standard reporting category for the year
ending December 31, 2004 and 2003 follow (amounts in thousands):
2004 2003
----------- ------------
Customer premise equipment $ 16,772 10,713
Commercial 574 705
Scalable infrastructure 4,979 2,221
Line extensions 1,752 1,270
Upgrade/rebuild 9,476 3,800
Support capital 1,427 503
----------- ------------
$ 34,980 19,212
=========== ============
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 served by the cable television plant. At
December 31, 2004 and 2003, GCI's cable business had 122,700 and 121,900
customer relationships, respectively.
The standard definition of a revenue-generating unit is the sum of all
primary analog video, digital video, cable modem and DLPS customers, not
counting additional outlets. At December 31, 2004 and 2003, GCI's cable business
had 208,300 and 180,400 revenue generating units, respectively. The increase in
the revenue generating units of 8,900 and 2,200 from September 30, 2004 and
2003, respectively, is due primarily to an increase in the number of cable modem
customers partially offset by the seasonal decline in hotels that only subscribe
to cable television services for the summer tourist season. Each hotel room is
considered a revenue-generating unit.
Local Telephone Results
Local telephone service revenues for the year increased 20.5 percent to
$47.0 million as compared to $39.0 million in 2003. Local services generated a
$0.4 million EBITDA loss for 2004, compared to a loss of $2.5 million in 2003.
The $2.1 million improvement in EBITDA year-over-year is primarily related to
increasing market share. 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 local telephone business would have reported positive
EBITDA of $6.7 million for 2004.
Local telephone service revenues totaled $12.4 million in the fourth
quarter of 2004 as compared to $11.8 million in the prior year. Revenues
increased $0.9 million or 7.8 percent from the third quarter of 2004. Local
services generated a EBITDA loss of $0.4 million during the fourth quarter of
2004 as compared to the prior year fourth quarter EBITDA of $0.7 million and as
compared to the third quarter's EBITDA loss of $0.8 million. The decrease in
EBITDA of $1.1 million for the fourth quarter of 2004 was due primarily to
Universal Service Fund revenue accruals in the fourth quarter 2003.
GCI had 112,100 access lines in service at the end of 2004, an
increase of 6,000 access lines or 5.7 percent over the year 2003. GCI added
8,500 voice access lines after excluding approximately 2,500 Internet Service
Provider dial-up lines that were turned down during 2004. The company added
approximately 1,700 local access lines in the fourth quarter, an increase of 1.5
percent over the third quarter of 2004. The company estimates it has attained a
24 percent local service market share 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 rollout of DLPS enables GCI to avoid wholesale and loop rental
charged by the incumbent local exchange carrier. At the end of 2004, GCI had
more than 8,000 DLPS lines in service and plans to provision approximately
25,000 additional lines by the end of 2005.
Internet Access Results
As of December 31, 2004, GCI had 101,600 statewide Internet customers,
an increase of 5,900 customers over the prior year 2003. GCI's total statewide
Internet customers at the end of 2004 included 65,500 subscribers using cable
modem access, an increase of 19,500 customers as compared to 46,000 cable modem
customers at the end of 2003.
Internet access revenues for 2004 totaled $26.0 million, an increase of
31.3 percent over 2003 revenues of $19.8 million. Internet EBITDA for the year
totaled $9.6 million, an improvement of $4.2 million as compared to $5.4 million
for 2003. The revenue and EBITDA increases results from more customers served,
the migration of existing customers from dial-up to cable modem access and
customers adding more features and services, increasing economies of scale, and
effective operating cost controls.
Internet access revenues increased 16.4 percent to $6.4 million in the
fourth quarter of 2004 as compared to $5.5 million for the fourth quarter of
2003. Internet access revenues decreased 4.5 percent from $6.7 million in the
third quarter of 2004. Fourth quarter 2004 EBITDA of $3.1 million is an
improvement of $1.5 million as compared to $1.6 million in the fourth quarter of
2003, and is an improvement of $0.7 million over the third quarter of 2004.
GCI added 500 new Internet subscribers and 4,300 cable modem customers
in the fourth quarter of 2004.
Total cable modem revenues for the fourth quarter of 2004 increased 4.3
percent sequentially when compared to the third quarter of 2004 and increased
19.1 percent year-over-year. At the end of the fourth quarter of 2004 GCI's
average revenue per cable modem (ARPM) was $31.94 as compared to $33.51 at the
end of the third quarter of 2004 and $37.63 at the end of the fourth quarter of
2003. The increase in sequential and year-over-year revenues is due to the
increase in modem customers. The decline in ARPM is due to an increase in the
percentage of total customers taking GCI's discounted cable modem products.
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 2004, core capital expenditures totaled $80.4 million, as
compared to $46.0 million in 2003. GCI recorded $32.2 million in capital
expenditures related to the new undersea fiber during 2004.
GCI will hold a conference call to discuss 2004 results, including the
fourth quarter, on Thursday, February 24, 2005 beginning at 2 p.m. (Eastern). To
access the briefing on February 24, call the MCI conference operator between
1:50 p.m. and 2 p.m. (Eastern) at 888-455-3614. (International callers should
dial 312-470-0009) 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. The call
will be archived online for two weeks. A replay of the call will be available at
4 p.m. (Eastern) for 72-hours by dialing 866-435-1327, access code 7461
(International callers should dial 203-369-1023.)
GCI is the largest Alaska-based and operated integrated
telecommunications provider. 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) December 31,
Assets 2004 2003
- --------------------------------------------------------------------------------------- ------------------ -----------------
Current assets:
Cash and cash equivalents $ 31,452 10,435
------------------ -----------------
Receivables 74,429 70,235
Less allowance for doubtful receivables 2,317 1,954
------------------ -----------------
Net receivables 72,112 68,281
Prepaid and other current assets 10,336 12,159
Deferred income taxes, net 5,549 7,195
Property held for sale 2,282 2,173
Inventories 1,215 1,513
Notes receivable from related parties 475 1,885
------------------ -----------------
Total current assets 123,421 103,641
------------------ -----------------
Property and equipment in service, net of depreciation 432,249 369,039
Construction in progress 22,505 33,618
------------------ -----------------
Net property and equipment 454,754 402,657
------------------ -----------------
Cable certificates 191,241 191,241
Goodwill 41,972 41,972
Other intangible assets, net of amortization of $1,625 and $1,656 6,265 4,195
at December 31, 2004 and 2003, respectively
Deferred loan and senior notes costs, net of amortization of $2,602 10,341 5,757
and $5,308 at December 31, 2004 and 2003, respectively
Notes receivable from related parties 3,345 4,281
Other assets 9,508 9,276
------------------ -----------------
Total other assets 262,672 256,722
------------------ -----------------
Total assets $ 840,847 763,020
================== =================
(Continued)
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
(Amounts in thousands) December 31,
Liabilities, Redeemable Preferred Stock, and Stockholders' Equity 2004 2003
- --------------------------------------------------------------------------------------- ------------------ -----------------
Current liabilities:
Current maturities of obligations under capital leases and long-term debt $ 6,407 5,139
Accounts payable 28,742 34,133
Deferred revenue 16,253 21,275
Accrued payroll and payroll related obligations 15,350 17,545
Accrued interest 8,747 8,645
Accrued liabilities 6,849 8,156
Subscriber deposits 437 651
------------------ -----------------
Total current liabilities 82,785 95,544
Long-term debt 436,969 345,000
Obligations under capital leases, excluding current maturities 32,750 38,959
Obligation under capital lease due to related party, excluding current 672 677
maturity
Deferred income taxes, net of deferred income tax benefit 40,767 24,168
Other liabilities 8,385 6,366
------------------ -----------------
Total liabilities 602,328 510,714
------------------ -----------------
Redeemable preferred stock 4,249 25,664
------------------ -----------------
Stockholders' equity :
Common stock (no par):
Class A. Authorized 100,000 shares; issued 51,825 and 52,589 186,883 202,362
shares at December 31, 2004 and 2003, respectively
Class B. Authorized 10,000 shares; issued 3,862 and 3,868 shares 3,248 3,269
at December 31, 2004 and 2003, respectively; convertible on a
share-per-share basis into Class A common stock
Less cost of 426 and 338 Class A common shares held in treasury at (2,922) (1,917)
December 31, 2004 and 2003, respectively
Paid-in capital 14,957 12,836
Notes receivable with related parties issued upon stock option exercise (3,016) (4,971)
Retained earnings 35,120 15,371
Accumulated other comprehensive loss - (308)
------------------ -----------------
Total stockholders' equity 234,270 226,642
------------------ -----------------
Commitments and contingencies
Total liabilities, redeemable preferred stock, and stockholders' equity $ 840,847 763,020
================== =================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(Unaudited)
(Amounts in thousands, except per share amounts) 2004 2003 2002
----------------- ----------------- -----------------
Revenues $ 424,826 390,797 367,842
Cost of goods sold (exclusive of depreciation, amortization
and accretion shown separately below) 139,563 125,383 123,564
Selling, general and administrative expenses 147,360 138,693 129,029
Bad debt expense (recovery) (1,074) (178) 13,124
Impairment charge - 5,434 -
Depreciation, amortization and accretion expense 63,113 53,388 56,400
----------------- ----------------- -----------------
Operating income 75,864 68,077 45,725
----------------- ----------------- -----------------
Other income (expense):
Interest expense (27,586) (34,745) (29,316)
Loss on early extinguishment of debt (6,136) - -
Amortization and write-off of loan and senior notes fees (3,790) (7,732) (4,612)
Interest income 363 560 525
----------------- ----------------- -----------------
Other expense, net (37,149) (41,917) (33,403)
----------------- ----------------- -----------------
Net income before income taxes and cumulative
effect of a change in accounting principle 38,715 26,160 12,322
Income tax expense 17,463 10,074 5,659
----------------- ----------------- -----------------
Net income before cumulative effect of a change
in accounting principle 21,252 16,086 6,663
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 - (544) -
----------------- ----------------- -----------------
Net income $ 21,252 15,542 6,663
================= ================= =================
Basic net income per common share:
Net income before cumulative effect of a change
in accounting principle $ 0.35 0.25 0.08
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 - (0.01) -
----------------- ----------------- -----------------
Net income $ 0.35 0.24 0.08
================= ================= =================
Diluted net income per common share:
Net income before cumulative effect of a change
in accounting principle $ 0.34 0.25 0.08
Cumulative effect of a change in accounting
principle, net of income tax benefit of $367 - (0.01) -
----------------- ----------------- -----------------
Net income $ 0.34 0.24 0.08
================= ================= =================
Common shares used to calculate basic EPS 56,989 55,675 55,081
================= ================= =================
Common shares used to calculate diluted EPS 58,196 56,440 55,665
================= ================= =================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Year Ended December 31, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 250,463 101,437 46,957 25,969 424,826
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 76,525 26,959 29,088 6,991 139,563
------------------------------------------------------------------
Contribution 173,938 74,478 17,869 18,978 285,263
Selling, general and
administrative expenses 91,598 28,100 18,285 9,377 147,360
Bad debt expense (recovery) (2,006) 932 - - (1,074)
------------------------------------------------------------------
EBITDA, as adjusted 84,346 45,446 (416) 9,601 138,977
Less loss on early extinguishment of debt 6,136 - - - 6,136
Less impairment charge - - - - -
------------------------------------------------------------------
EBITDA 78,210 45,446 (416) 9,601 132,841
Add loss on early extinguishment of debt 6,136 - - - 6,136
Less depreciation, amortization and
accretion expense 35,150 19,038 4,941 3,984 63,113
------------------------------------------------------------------
Operating income (loss) $ 49,196 26,408 (5,357) 5,617 75,864
==================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited) Year Ended December 31, 2004
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 84,346 84,346
Cable 45,446 45,446
Local Services (416) (416)
Internet 9,601 9,601
-------------------------------------------------------
83,930 9,601 45,446 138,977
EBITDA, as Adjusted, Reallocations:
Long Distance (47,958) 47,958 -
Cable 10,759 (10,759) -
Local Services (239) 239 -
-------------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 35,733 68,557 34,687 138,977
=======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Year Ended December 31, 2003
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 235,953 96,004 38,998 19,842 390,797
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 69,771 25,988 23,761 5,863 125,383
------------------------------------------------------------------
Contribution 166,182 70,016 15,237 13,979 265,414
Selling, general and
administrative expenses 85,285 27,101 17,718 8,589 138,693
Bad debt expense (recovery) (829) 651 - - (178)
------------------------------------------------------------------
EBITDA, as adjusted 81,726 42,264 (2,481) 5,390 126,899
Less loss on early extinguishment of debt - - - - -
Less impairment charge 5,434 - - - 5,434
------------------------------------------------------------------
EBITDA 76,292 42,264 (2,481) 5,390 121,465
Add loss on early extinguishment of debt - - - - -
Less depreciation, amortization and
accretion expense 28,831 17,296 3,553 3,708 53,388
------------------------------------------------------------------
Operating income (loss) $ 47,461 24,968 (6,034) 1,682 68,077
==================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited) Year Ended December 31, 2003
Voice Data Video Combined
------------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 81,726 81,726
Cable 42,264 42,264
Local Services (2,481) (2,481)
Internet 5,390 5,390
------------------------------------------------------
79,245 5,390 42,264 126,899
EBITDA, as Adjusted, Reallocations:
Long Distance (37,045) 37,045 -
Cable 9,636 (9,636) -
Local Services (109) 109 -
------------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 42,091 52,180 32,628 126,899
======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended December 31, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 60,532 26,194 12,399 6,377 105,502
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 18,410 6,648 7,904 1,723 34,685
------------------------------------------------------------------
Contribution 42,122 19,546 4,495 4,654 70,817
Selling, general and
administrative expenses 25,069 7,120 4,870 1,589 38,648
Bad debt expense (recovery) (197) 169 - - (28)
------------------------------------------------------------------
EBITDA, as adjusted 17,250 12,257 (375) 3,065 32,197
Impairment charge - - - - -
------------------------------------------------------------------
EBITDA 17,250 12,257 (375) 3,065 32,197
Less depreciation, amortization and
accretion expense 8,132 4,966 2,014 1,242 16,354
------------------------------------------------------------------
Operating income (loss) $ 9,118 7,291 (2,389) 1,823 15,843
==================================================================
Integrated Summary EBITDA
(Unaudited) Three Months Ended December 31, 2004
Voice Data Video Combined
-------------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 17,250 17,250
Cable 12,257 12,257
Local Services (375) (375)
Internet 3,065 3,065
-------------------------------------------------------
16,875 3,065 12,257 32,197
EBITDA Reallocations:
Long Distance (11,435) 11,435 -
Cable 2,679 (2,679) -
Local Services (98) 98 -
-------------------------------------------------------
Integrated Summary EBITDA $ 5,342 17,277 9,578 32,197
=======================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended December 31, 2003
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 61,432 24,995 11,787 5,540 103,754
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 18,799 6,553 6,316 1,526 33,194
------------------------------------------------------------------
Contribution 42,633 18,442 5,471 4,014 70,560
Selling, general and
administrative expenses 21,645 7,315 4,816 2,368 36,144
Bad debt expense (recovery) (2,226) 116 - - (2,110)
------------------------------------------------------------------
EBITDA, as adjusted 23,214 11,011 655 1,646 36,526
Impairment charge 5,434 - - - 5,434
------------------------------------------------------------------
EBITDA 17,780 11,011 655 1,646 31,092
Less depreciation, amortization and
accretion expense 8,045 3,855 941 1,179 14,020
------------------------------------------------------------------
Operating income (loss) $ 9,735 7,156 (286) 467 17,072
==================================================================
Integrated Summary EBITDA
(Unaudited) Three Months Ended December 31, 2003
Voice Data Video Combined
------------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 23,214 23,214
Cable 11,011 11,011
Local Services 655 655
Internet 1,646 1,646
------------------------------------------------------
23,869 1,646 11,011 36,526
EBITDA Reallocations:
Long Distance (11,448) 11,448 -
Cable 2,469 (2,469) -
Local Services (26) 26 -
------------------------------------------------------
Integrated Summary EBITDA $ 12,395 15,589 8,542 36,526
======================================================
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.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Three Months Ended
December 31, 2004 December 31, 2003 September 30, 2004
-------------------- ------------------- ---------------------
EBITDA, as adjusted (Note 1) $ 32.2 36.5 36.7
Impairment charge --- (5.4) ---
-------------------- ------------------- ---------------------
EBITDA (Note 2) 32.2 31.1 36.7
Depreciation, amortization and accretion
expense (16.4) (14.0) (15.3)
-------------------- ------------------- ---------------------
Operating income 15.8 17.1 21.4
-------------------- ------------------- ---------------------
Other income (expense):
Interest expense (7.3) (7.6) (6.7)
Amortization and write-off of loan and
senior notes fee expense (0.4) (5.4) (0.4)
Interest income 0.1 0.1 0.1
-------------------- ------------------- ---------------------
Other expense, net (7.6) (12.9) (7.0)
-------------------- ------------------- ---------------------
Net income before income taxes 8.2 4.2 14.4
Income tax expense (5.9) (0.5) (5.1)
-------------------- ------------------- ---------------------
Net income $ 2.3 3.7 9.3
==================== =================== =====================
Year Ended
December 31, 2004 December 31, 2003
--------------------- -------------------
EBITDA, as adjusted (Note 1) $ 139.0 126.9
Loss on early extinguishment of debt (6.1) ---
Impairment charge --- (5.4)
--------------------- -------------------
EBITDA (Note 2) 132.9 121.5
Depreciation, amortization and accretion
expense (63.1) (53.4)
Loss on early extinguishment of debt 6.1 ---
--------------------- -------------------
Operating income 75.9 68.1
--------------------- -------------------
Other income (expense):
Interest expense (27.6) (34.8)
Loss on early extinguishment of debt (6.1) ---
Amortization and write-off of loan and
senior notes fee expense (3.8) (7.7)
Interest income 0.3 0.5
--------------------- -------------------
Other expense, net (37.2) (42.0)
--------------------- -------------------
Net income before income taxes and
cumulative effect of a change in
accounting principle 38.7 26.1
Income tax expense (17.4) (10.1)
--------------------- -------------------
Net income before cumulative effect
of a change in accounting principle 21.3 16.0
Cumulative effect of a change in accounting
principle, net of income tax benefit of
$0.4 --- (0.5)
--------------------- -------------------
Net income $ 21.3 15.5
===================== ===================
Notes:
(1) EBITDA (as defined in Note 2 below) before deducting Loss on Early
Extinguishment of Debt during the year ended December 31, 2004 and
Impairment Charge during the three months and year ended December 31,
2003.
(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, Income Tax Expense, and
Depreciation, Amortization and Accretion 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.