Exhibit 99.1
August 3, 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 SECOND QUARTER 2005 FINANCIAL RESULTS
o Consolidated revenue of $110.7 million
o Net income of $5.3 million or $0.09 per diluted share
o EBITDA of $36.4 million
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today reported net income of $5.3
million, or earnings per diluted share of $0.09, for the second quarter of 2005.
The company's second quarter net income compares to income of $7.7 million, or
earnings per diluted share of $0.13 in the same period of 2004.
GCI's second quarter 2005 revenues totaled $110.7 million, an increase
of 6.6 percent over the second quarter of 2004. GCI's second quarter 2005
revenues increased 3.9 percent from the first quarter 2005 revenues of $106.5
million.
Second quarter 2005 earnings before interest, taxes, depreciation,
amortization and accretion (EBITDA) totaled $36.4 million. EBITDA increased $1.5
million or 4.3 percent over $34.9 million in the second quarter of 2004. Second
quarter 2005 EBITDA of $36.4 million compares to EBITDA of $34.5 million in the
first quarter of 2005, an increase of $1.9 million or 5.5 percent over the first
quarter of 2005.
For the second quarter of 2005, GCI met its revenue and EBITDA
guidance. The company expected revenues and EBITDA to exceed the first quarter
results, excluding the effects of any receivable recovery from MCI. GCI recorded
$1.0 million in EBITDA relating to the use of the MCI credit during the quarter.
Both revenue and EBITDA for the second quarter were in line with
guidance provided by the company. GCI expects third quarter revenue and EBITDA
to exceed those achieved in the second quarter and still anticipates revenues of
$430 million to $440 million and EBITDA of $145 million for 2005, including the
expected recovery of the remaining MCI receivable.
"The second quarter continues our solid performance for the year.
Revenue, EBITDA and free cash flow all increased over the first quarter and we
repurchased 359,125 shares of our stock," said Ron Duncan, GCI president. "We
expect continued growth in all three measurements during the third quarter."
"I'm also pleased to announce that the Board of Directors elected Steve
Brett to serve as our chairman at our most recent meeting. Steve succeeds Donne
Fisher who has served as our chairman since 2002. Mr. Fisher will continue to
serve as a director."
Highlights
o Long-distance billable minutes increased 18.3 percent to 347.6 million
minutes for the second quarter as compared to the same quarter of 2004,
and increased 14.9 percent sequentially.
o Cable customers increased by 1,328 during the period and average revenue
per equivalent basic subscriber grew to $81.75 per month. Revenue
generating units (RGUs) for the quarter increased by 15 percent over the
prior year.
o GCI has provisioned approximately 12,800 customers on its Digital Local
Phone Service (DLPS) facilities at the end of the second quarter and
expects to have more than 25,000 customers using that technology by the
end of 2005.
o During the second quarter GCI repurchased 359,125 shares of its Class A
Common shares at an average price of $8.34. Since the inception of the
stock repurchase program in the third quarter of 2004 the company
repurchased more than 9 percent of its diluted shares outstanding at an
average price of $9.02 per share.
Long Distance Results
For the second quarter of 2005, long distance revenues totaled $64.2
million as compared to revenues of $60.9 million in the second quarter of 2004
and $60.00 million in the first quarter of 2005. The increase in revenues is
primarily attributable to an increase in minutes sold to other carriers.
Long distance EBITDA increased 4.8 percent for the second quarter of
2005 to $22.0 million as compared to $21.0 million in the second quarter of the
prior year. Long distance EBITDA for the second quarter of 2005 was up $3.2
million sequentially, an increase of 17.0 percent, from $18.8 million in the
first quarter. Long distance EBITDA included MCI bad debt recoveries of $1.0
million in the second quarter of 2005, $1.1 million in the second quarter of
2004 and $0.9 million in the first quarter of 2005. The increase in EBITDA for
the first quarter of 2005 is primarily due to an increase in minutes carried on
the network.
Total minutes-of-use were up 18.3 percent in the second quarter of 2005
when compared to the second quarter of 2004. Minutes-of-use are up 14.9 percent
compared to the first quarter of 2005.
The number of billed long distance customers totaled 91,300 at the end
of the second quarter of 2005, an increase of 0.7 percent from 90,700 at the end
of the second quarter of 2004. Billed long distance customers decreased 0.5
percent from 91,800 at the end of the first quarter of 2005.
Cable Television Results
Cable television revenues for the second quarter increased 4.4 percent
to $26.3 million from $25.2 million in the second quarter of 2004, and increased
1.5 percent from $25.9 million in the first quarter of 2005. EBITDA of $11.0
million for the second quarter of 2005 decreased $0.5 million as compared to
$11.5 million in the second quarter of 2004, and decreased $0.6 million when
compared to $11.6 million in the first quarter of 2005. The year-over-year and
sequential increases in revenues are due primarily to the sales of new video and
cable modem services. The decrease in EBITDA in the second quarter as compared
to the prior year is primarily due to refunds and rebates received from cable
television programmers in second quarter of 2004 that were significantly greater
than similar credits received in the second quarter of 2005. EBITDA for the
second quarter of 2005 decreased sequentially from the first quarter of 2005 due
to an increase in operating costs of approximately $0.5 million.
Gross margins in the second quarter of 2005, as a percentage of
revenues, decreased by 354 basis points from the second quarter of 2004 and by
170 basis points sequentially. The decrease in gross margins is primarily due to
the smaller programming refunds and rebates received in the second quarter of
2005.
As of June 30, 2005, the company's cable television operations passed
210,950 homes and served 137,428 subscribers (106,787 equivalent basic
subscribers). For the second quarter, average
revenue per equivalent basic subscriber was $81.75, an increase of 4.4 percent
when compared to second quarter 2004 average revenue of $78.27. Average revenue
increased 2.6 percent, from $79.64, from the first quarter of 2005. The company
experienced an increase of 1,328 subscribers from the first quarter of 2005. The
increase in subscribers for the second quarter of 2005 compares to an increase
of 1,192 subscribers in the second quarter of 2004. The increase in subscribers
is primarily due to the seasonal increase in hotel customers partially offset by
a seasonal decline in residential customers.
The company offers digital programming tiers in all of its major
markets. The Anchorage, Mat-Su Valley, Fairbanks, Kodiak and Ketchikan systems
have been fully converted to digital. Eighty percent of GCI's basic cable
subscribers receive service through a digital set-top box. More than 97 percent
of the set top boxes deployed in GCI's systems are digital and 48,745 customers
purchase additional special interest programming through a digital tier. GCI
offers 10 channels of HDTV to customers in the Anchorage area.
GCI cable modem service is available to more than 90 percent of the
homes in Alaska. Approximately 33.3 percent of homes passed and 60 percent of
GCI residential subscribers have cable modem service.
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
six-month periods ending June 30, 2005 and 2004 follow (amounts in thousands):
2005 2004
----------- -----------
Customer premise equipment $ 7,138 6,970
Commercial 169 213
Scalable infrastructure 1,818 2,805
Line extensions 1,362 149
Upgrade/rebuild 7,442 3,355
Support capital 508 595
----------- -----------
Sub-total 18,437 14,087
Remaining capital expenditures 29,253 50,060
----------- -----------
$ 47,690 64,147
=========== ===========
At June 30, 2005 and 2004, GCI's cable business had 125,400 and 123,300
customer relationships, respectively. 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 June 30, 2005 and 2004, GCI's cable business had 220,500 and 192,000
revenue generating units, respectively. The increase in the revenue generating
units of 4,700 and 28,500 from March 31, 2005 and June 30, 2004, respectively,
is due to an increase in the number of cable modem and Digital Local Phone
Service (DLPS) customers. The 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.
Local Telephone Results
For the second quarter of 2005, local telephone service revenues
totaled $12.7 million, an increase of 13.4 percent, when compared to $11.2
million in the second quarter of 2004. Revenue was down $0.6 million or 4.5
percent from $13.3 million in the first quarter of 2005. The increase in
year-over-year revenues is primarily attributable to increased receipts from the
Universal Service
Fund (USF.) The decrease in sequential revenues is primarily attributable to an
adjustment of USF during the first quarter, which added $1.2 million in
out-of-period revenues.
In the second quarter, local services generated EBITDA of $0.4 million,
an improvement of $0.2 million over the $0.2 million of EBITDA in the second
quarter of 2004. The second quarter EBITDA of $0.4 million compares to EBITDA of
$1.1 million in the first quarter of 2005. The sequential decrease in EBITDA is
due primarily to the $1.2 million out-of-period adjustment in the first quarter
of 2005.
The rates paid by GCI to lease loops and UNE access elements from ACS
were approximately 20 percent higher during the second quarter of 2005 as
compared to the second quarter of 2004. This resulted primarily from a rate
increase granted to ACS by state regulators in the second half of 2004. GCI
estimates that conversion of customers from leased ACS facilities to its own
network offset approximately 65 percent of the impact of this rate increase in
the second quarter of 2005.
GCI began converting customers to its own network using its DLPS
technology in 2004. The roll out of DLPS enables GCI to avoid wholesale and loop
rental costs from local phone lines leased from the incumbent local exchange
carrier. GCI has provisioned approximately 12,800 customers completely on its
DLPS facilities at the end of the second quarter of 2005 and expects to have
more than 25,000 customers similarly provisioned by the end of 2005.
At the end of the second quarter of 2005, GCI provided local service
to approximately 111,900 access lines statewide. This represents a net decrease
of 700 access lines when compared to the 112,600 access lines reported at the
end of the first quarter of 2005. The decrease in residential and Internet
Service Provider access lines was partially offset by an increase in business
voice access lines. The decrease in access lines were expected as fewer
residential customers are maintaining second voice lines and are migrating from
dial-up internet service to cable modem. The company estimates it maintains 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.
Internet Access Results
Internet access revenues for the second quarter of 2005 totaled $7.5
million. Revenues were up 15.4 percent as compared to second quarter 2004
revenues of $6.5 million and 2.7 percent as compared to the prior quarter
revenue of $7.3 million. EBITDA for the second quarter of 2005 totaled $3.0
million, an improvement of $0.8 million year-over-year and relatively unchanged
from the first quarter of 2005. Second quarter 2004 EBITDA was $2.2 million and
first quarter 2005 EBITDA was $3.0 million. The increase in Internet access
revenues and EBITDA results from the migration of existing customers to cable
modem access, customers adding more features and services and increasing
economies of scale.
At the end of the second quarter of 2005, GCI had 70,200 cable modem
customers, an increase of 23.6 percent from the second quarter of 2004 and 1.9
percent from the first quarter of 2005. Dial-up access customers decreased by
4,700 as a result of customers migrating to cable modems and due to a data base
clean-up of "Free Net" customers. GCI is implementing a new customer service
information system and further non-revenue affecting adjustments to the Free Net
customer data base may occur before the transition is completed by the end of
the third quarter of 2005.
Total cable modem revenues for the second quarter of 2005 increased 2.1
percent when compared to the first quarter of 2005 and increased 6.3 percent
year-over-year. At the end of the second quarter of 2005 GCI's average revenue
per cable modem (ARPM) was $30.87 as compared to $30.97 at the end of the first
quarter of 2005 and $36.84 at the end of the second quarter of 2004. The
increase in sequential and 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.
Other Items
During the second quarter of 2005 GCI's capital expenditures totaled
$23.3 million as compared to $24.4 million in the first quarter of 2005.
GCI will hold a conference call to discuss the quarter's results on
Thursday, August 4, 2005 beginning at 2 p.m. (Eastern). To access the briefing
on August 5, dial 888-603-6970 (international callers should dial 517-308-9002)
and identify your call as "GCI." In addition to the conference call, GCI will
make available net conferencing. To access the call via net conference, log on
to www.gci.com and follow the instructions. A replay of the call will be
available for 72-hours by dialing 866-475-8043, access code 7461 (international
callers should dial 203-369-1516.)
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) June 30, December 31,
Assets 2005 2004
- --------------------------------------------------------------------------------------- ------------------ ----------------
Current assets:
Cash and cash equivalents $ 17,625 31,452
------------------ ----------------
Receivables 75,723 74,429
Less allowance for doubtful receivables 2,489 2,317
------------------ ----------------
Net receivables 73,234 72,112
Deferred income taxes, net 14,279 13,893
Prepaid expenses 7,211 7,907
Property held for sale 3,414 2,282
Inventories 1,499 1,215
Notes receivable from related parties 399 475
Other current assets 1,297 2,429
------------------ ----------------
Total current assets 118,958 131,765
------------------ ----------------
Property and equipment in service, net of depreciation 428,425 432,249
Construction in progress 36,972 22,505
------------------ ----------------
Net property and equipment 465,397 454,754
------------------ ----------------
Cable certificates 191,241 191,241
Goodwill 41,972 41,972
Other intangible assets, net of amortization of $2,230 and $1,625
at June 30, 2005 and December 31, 2004, respectively 6,496 6,265
Deferred loan and senior notes costs, net of amortization of $3,532
and $2,602 at June 30, 2005 and December 31, 2004, respectively 9,497 10,341
Notes receivable from related parties 3,395 3,345
Other assets 12,010 9,508
------------------ ----------------
Total other assets 264,611 262,672
------------------ ----------------
Total assets $ 848,966 849,191
================== ================
(Continued)
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
(Unaudited)
(Amounts in thousands) June 30, December 31,
Liabilities, Redeemable Preferred Stock, and Stockholders' Equity 2005 2004
- --------------------------------------------------------------------------------------- ------------------ ----------------
Current liabilities:
Current maturities of obligations under long-term debt and capital leases $ 22,467 6,407
Accounts payable 28,305 28,742
Accrued payroll and payroll related obligations 15,896 15,350
Deferred revenue 15,147 16,253
Accrued interest 8,724 8,747
Accrued liabilities 5,787 6,849
Subscriber deposits 389 437
------------------ ----------------
Total current liabilities 96,715 82,785
Long-term debt 421,352 436,969
Obligations under capital leases, excluding current maturities 29,664 32,750
Obligation under capital lease due to related party, excluding current
maturity 652 672
Deferred income taxes, net of deferred income tax benefit 56,906 49,111
Other liabilities 9,541 8,385
------------------ ----------------
Total liabilities 614,830 610,672
------------------ ----------------
Redeemable preferred stock - 4,249
------------------ ----------------
Stockholders' equity :
Common stock (no par):
Class A. Authorized 100,000 shares; issued 51,028 and 51,825
shares at June 30, 2005 and December 31, 2004, respectively 178,814 186,883
Class B. Authorized 10,000 shares; issued 3,850 and 3,862 shares
at June 30, 2005 and December 31, 2004, respectively; convertible
on a share-per-share basis into Class A common stock 3,248 3,248
Less cost of 295 and 288 Class A common shares held in treasury at
June 30, 2005 and December 31, 2004, respectively (1,732) (1,702)
Paid-in capital 15,157 14,957
Notes receivable with related parties issued upon stock option exercise (2,978) (3,016)
Retained earnings 41,627 33,900
------------------ ----------------
Total stockholders' equity 234,136 234,270
------------------ ----------------
Commitments and contingencies
Total liabilities, redeemable preferred stock, and stockholders' equity $ 848,966 849,191
================== ================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(Amounts in thousands, except per share amounts) 2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues $ 110,665 103,786 217,175 212,702
Cost of goods sold (exclusive of depreciation, amortization
and accretion shown separately below) 36,045 33,257 71,245 72,002
Selling, general and administrative expenses 38,019 36,102 75,199 1,506
Bad debt expense (recovery) 194 (487) (159) (884)
Depreciation, amortization and accretion expense 18,397 15,704 36,151 31,462
---------- ---------- ---------- ----------
Operating income 18,010 19,210 34,739 38,616
---------- ---------- ---------- ----------
Other income (expense):
Interest expense (8,354) (6,036) (16,636) (13,553)
Loss on early extinguishment of debt - - - (6,136)
Amortization and write-off of loan and senior notes fees (448) (387) (931) (3,014)
Interest income 112 79 291 187
---------- ---------- ---------- ----------
Other expense, net (8,690) (6,344) (17,276) (22,516)
---------- ---------- ---------- ----------
Net income before income taxes 9,320 12,866 17,463 16,100
Income tax expense 4,036 5,141 7,516 6,450
---------- ---------- ---------- ----------
Net income 5,284 7,725 9,947 9,650
Preferred stock dividends 55 363 148 847
---------- ---------- ---------- ----------
Net income available to common shareholders $ 5,229 7,362 9,799 8,803
========== ========== ========== ==========
Basic net income per common share $ 0.10 0.13 0.18 0.15
========== ========== ========== ==========
Diluted net income per common share $ 0.09 0.13 0.18 0.15
========== ========== ========== ==========
Common shares used to calculate basic EPS 54,637 56,994 54,815 56,873
========== ========== ========== ==========
Common shares used to calculate diluted EPS 55,612 60,380 55,919 58,072
========== ========== ========== ==========
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Six Months Ended June 30, 2005
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 124,216 52,243 25,996 14,720 217,175
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 38,419 14,588 14,479 3,759 71,245
------------------------------------------------------------------
Contribution 85,797 37,655 11,517 10,961 145,930
Selling, general and
administrative expenses 45,881 14,707 9,800 4,811 75,199
Bad debt expense (recovery) (856) 351 221 125 (159)
------------------------------------------------------------------
EBITDA, as adjusted 40,772 22,597 1,496 6,025 70,890
Less loss on early extinguishment of debt - - - - -
-----------------------------------------------------------------
EBITDA 40,772 22,597 1,496 6,025 70,890
Add loss on early extinguishment of debt - - - - -
Less depreciation, amortization and
accretion expense 20,829 10,222 3,281 1,819 36,151
------------------------------------------------------------------
Operating income (loss) $ 19,943 12,375 (1,785) 4,206 34,739
==================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited) Six Months Ended June 30, 2005
Voice Data Video Combined
----------------------------------------------------
Traditional Summary EBITDA as Adjusted:
Long Distance $ 40,772 40,772
Cable 22,597 22,597
Local Services 1,496 1,496
Internet 6,025 6,025
----------------------------------------------------
42,268 6,025 22,597 70,890
EBITDA, as Adjusted, Reallocations:
Long Distance (24,510) 24,510 -
Cable 5,625 (5,625) -
Local Services (152) 152 -
----------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 17,606 36,312 16,972 70,890
====================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Six Months Ended June 30, 2004
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 126,736 50,033 23,010 12,923 212,702
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 41,652 13,414 13,368 3,568 72,002
-----------------------------------------------------------------
Contribution 85,084 36,619 9,642 9,355 140,700
Selling, general and
administrative expenses 43,666 13,666 8,928 5,246 71,506
Bad debt expense (recovery) (1,286) 402 - - (884)
-----------------------------------------------------------------
EBITDA, as adjusted 42,704 22,551 714 4,109 70,078
Less loss on early extinguishment of debt 6,136 - - - 6,136
-----------------------------------------------------------------
EBITDA 36,568 22,551 714 4,109 63,942
Add loss on early extinguishment of debt 6,136 - - - 6,136
Less depreciation, amortization and
accretion expense 18,266 9,370 1,963 1,863 31,462
-----------------------------------------------------------------
Operating income (loss) $ 24,438 13,181 (1,249) 2,246 38,616
=================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited) Six Months Ended June 30, 2004
Voice Data Video Combined
----------------------------------------------------
Traditional Summary EBITDA, as Adjusted:
Long Distance $ 42,704 42,704
Cable 22,551 22,551
Local Services 714 714
Internet 4,109 4,109
----------------------------------------------------
43,418 4,109 22,551 70,078
EBITDA, as Adjusted, Reallocations:
Long Distance (23,523) 23,523 -
Cable 5,502 (5,502) -
Local Services (88) 88 -
----------------------------------------------------
Integrated Summary EBITDA, as Adjusted $ 19,807 33,222 17,049 70,078
====================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended June 30, 2005
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 64,209 26,344 12,701 7,411 110,665
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 19,386 7,578 7,203 1,878 36,045
------------------------------------------------------------------
Contribution 44,823 18,766 5,498 5,533 74,620
Selling, general and
administrative expenses 23,103 7,590 4,943 2,383 38,019
Bad debt expense (recovery) (233) 179 159 89 194
------------------------------------------------------------------
EBITDA 21,953 10,997 396 3,061 36,407
Less depreciation, amortization and
accretion expense 10,875 5,124 1,674 724 18,397
------------------------------------------------------------------
Operating income (loss) $ 11,078 5,873 (1,278) 2,337 18,010
==================================================================
Integrated Summary EBITDA
(Unaudited) Three Months Ended June 30, 2005
Voice Data Video Combined
----------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 21,953 21,953
Cable 10,997 10,997
Local Services 396 396
Internet 3,061 3,061
----------------------------------------------------
22,349 3,061 10,997 36,407
EBITDA, Reallocations:
Long Distance (12,557) 12,557 -
Cable 2,826 (2,826) -
Local Services (84) 84 -
----------------------------------------------------
Integrated Summary EBITDA $ 9,708 18,528 8,171 36,407
====================================================
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
====================================================
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE
(Unaudited)
Traditional Summary Three Months Ended March 31, 2005
Long Local
Distance Cable Services Internet Combined
------------------------------------------------------------------
Revenues $ 60,007 25,899 13,295 7,309 106,510
Cost of goods sold (exclusive of depreciation,
amortization and accretion shown separately below) 19,033 7,010 7,276 1,881 35,200
-----------------------------------------------------------------
Contribution 40,974 18,889 6,019 5,428 71,310
Selling, general and
administrative expenses 22,778 7,117 4,857 2,428 37,180
Bad debt expense (recovery) (623) 172 62 36 (353)
-----------------------------------------------------------------
EBITDA 18,819 11,600 1,100 2,964 34,483
Less depreciation, amortization and
accretion expense 9,954 5,098 1,607 1,095 17,754
-----------------------------------------------------------------
Operating income (loss) $ 8,865 6,502 (507) 1,869 16,729
=================================================================
Integrated Summary EBITDA, as Adjusted
(Unaudited) Three Months Ended March 31, 2005
Voice Data Video Combined
----------------------------------------------------
Traditional Summary EBITDA:
Long Distance $ 18,819 18,819
Cable 11,600 11,600
Local Services 1,100 1,100
Internet 2,964 2,964
----------------------------------------------------
19,919 2,964 11,600 34,483
EBITDA Reallocations:
Long Distance (11,953) 11,953 -
Cable 2,799 (2,799) -
Local Services (68) 68 -
----------------------------------------------------
Integrated Summary EBITDA $ 7,898 17,784 8,801 34,483
====================================================
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Three Months Ended
June 30, 2005 June 30, 2004 March 31, 2005
-------------------- ------------------- ---------------------
EBITDA (Note 1) $ 36.4 34.9 34.5
Depreciation, amortization and accretion
expense (18.4) (15.7) (17.8)
-------------------- ------------------- ---------------------
Operating income 18.0 19.2 16.7
-------------------- ------------------- ---------------------
Other income (expense):
Interest expense (8.4) (6.0) (8.3)
Amortization of loan and senior notes
fee expense (0.4) (0.4) (0.5)
Interest income 0.1 0.1 0.2
-------------------- ------------------- ---------------------
Other expense, net (8.7) (6.3) (8.6)
-------------------- ------------------- ---------------------
Net income before income taxes 9.3 12.9 8.1
Income tax expense (4.0) (5.2) (3.5)
-------------------- ------------------- ---------------------
Net income $ 5.3 7.7 4.6
==================== =================== =====================
Six Months Ended
June 30, 2005 June 30, 2004
-------------------- -------------------
EBITDA, as adjusted (Note 2) $ 70.9 70.1
Loss on early extinguishment of debt --- (6.1)
-------------------- -------------------
EBITDA (Note 1) 70.9 64.0
Depreciation, amortization and accretion
expense (36.2) (31.5)
Loss on early extinguishment of debt --- 6.1
-------------------- -------------------
Operating income 34.7 38.6
-------------------- -------------------
Other income (expense):
Interest expense (16.7) (13.6)
Loss on early extinguishment of debt --- (6.1)
Amortization and write-off of loan and
senior notes fee expense (0.9) (3.0)
Interest income 0.3 0.2
-------------------- -------------------
Other expense, net (17.3) (22.5)
-------------------- -------------------
Net income before income taxes 17.4 16.1
Income tax expense (7.5) (6.4)
-------------------- -------------------
Net income $ 9.9 9.7
==================== ===================
Notes:
(1) 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.
(2) EBITDA (as defined in Note 1 above) before deducting Loss on Early
Extinguishment of Debt during the six months ended June 30, 2004.