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| 8-K - GENERAL COMMUNICATION, INC. FORM 8-K - GRIZZLY MERGER SUB 1, LLC | gciform8k11032011.htm |
Exhibit 99.1
November 2, 2011
John Lowber, (907) 868-5628; jlowber@gci.com
Bruce Broquet, (907) 868-6660; bbroquet@gci.com
David Morris, (907) 265-5396; dmorris@gci.com
FOR IMMEDIATE RELEASE
GCI REPORTS THIRD QUARTER 2011 FINANCIAL RESULTS
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·
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Consolidated revenue of $177.7 million
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·
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Adjusted EBITDA of $63.1 million
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Net income of $7.2 million or $0.15 per diluted share
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ANCHORAGE, AK – General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today reported its third quarter 2011 results with revenues increasing to $177.7 million over revenues of $171.5 million in the third quarter of 2010. Adjusted EBITDA for the third quarter of 2011 was $63.1 million, an increase of $0.4 million over Adjusted EBITDA of $62.7 million for the third quarter of 2010. Adjusted EBITDA for the third quarter of 2011 increased $2.3 million or 3.7 percent after excluding the net benefit of $3.8 million of billing disputes offset by $1.9 million in accrued accident expenses reflected in the third quarter of 2010.
Net income for the third quarter totaled $7.2 million or earnings per diluted share of $0.15 and compares to net income of $7.6 million, or earnings per diluted share of $0.14 for the same period of 2010.
Third quarter revenues increased 5.7 percent or $9.6 million over second quarter of 2011 revenues. Adjusted EBITDA for the third quarter increased 14.9 percent or $8.2 million over the second quarter of 2011 Adjusted EBITDA.
“Third quarter results are significantly improved on a sequential basis.” said GCI president Ron Duncan. “However, year over year results are relatively flat and our overall performance is not as strong as we had expected. We are experiencing continued decreases in our wireline customer base as consumers cut the cord and move to wireless and growth in our wireless segment has been slower than anticipated due to delays in the turn up of our new high speed networks.”
“Construction of our important $88 million TERRA microwave project is basically complete and we expect to turn up service on it before the end of this year. For the first time residents of southwest Alaska will have access to high speed terrestrial broadband services.”
GCI previously provided guidance on revenues of $685 million to $700 million and adjusted EBITDA of $233 million to $238 million for the year 2011. GCI expects 2011 revenues will be within the range of the revenue guidance. Adjusted EBITDA is now expected in the range of $225 million to $227 million for 2011.
Highlights
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GCI has substantially completed construction on TERRA-Southwest (TERRA-SW), its project to extend terrestrial broadband service to Bristol Bay and the Yukon-Kuskokwim Delta. The $88 million project will provide terrestrial broadband to 65 communities in Southwest Alaska for the first time. GCI will begin to cut over customers to terrestrial from satellite service before the end of the year 2011. TERRA-SW was originally scheduled to be completed by the end of 2013.
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GCI repurchased 1,919,900 shares of its Class A common stock in the third quarter of 2011 at an average price per share of $9.32. GCI is authorized to repurchase $114.4 million of its common equity depending on company performance, market conditions, and liquidity and subject to board oversight. At the end of the third quarter of 2011 GCI had approximately 43.9 million shares outstanding.
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Managed broadband revenues increased $3.9 million or 28.5 percent over the third quarter of 2010 and increased $2.8 million or 18.9 percent over the second quarter of 2011.
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GCI is the second largest wireless provider in Alaska with 140,700 wireless subscribers at the end of the quarter. GCI launched 4G service in Anchorage in September and will upgrade service in the next ten largest communities to 3G service before the end of the year.
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GCI entered into an arrangement under the New Markets Tax Credit (NMTC) program with US Bancorp to help fund a $34.5 million project to extend terrestrial broadband service to communities in Northwest Alaska. This project is called TERRA-Northwest (TERRA-NW) and will complement the TERRA-SW project. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the Act) to induce capital investment in qualified low income communities. The Act permits taxpayers to claim credits against their federal income taxes of up to 39 percent of qualified investments. The NMTC program will provide $16.5 million of the total project. The Regulatory Commission of Alaska will provide another $5.3 million in grants for the project. GCI will provide the remaining $12.7 million to complete the project.
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On October 27, 2011 the FCC adopted an order that is expected to reform the methodology for distributing Universal Service Fund (“USF”) high cost support for voice and broadband services, as well as the system by which carriers compensate each other for terminating traffic. These changes are likely to alter how GCI will be compensated for providing services in the state. Putting aside any potential impact from the order, GCI expects to record approximately $54 million of USF high cost support revenue in 2011. Although the detailed order has not yet been released, GCI expects that high cost support for markets defined as urban will be subject to a five year transitional phase out beginning July 1, 2012. GCI anticipates that changes to the Universal Service Fund program will reduce high cost support revenue by approximately $5 million per year in both 2012 and 2013. Once the order has been released and fully analyzed, GCI will re-evaluate its on-going program of reinvestment in light of the potential impact of the regulatory changes on free cash flow.
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GCI had 139,200 access lines at the end of the third quarter of 2011, representing an estimated 36 percent share of the total access line market in Alaska. Access lines decreased by 3,200 lines from the second quarter of 2011. The line decreases were primarily consumer access lines.
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GCI’s facilities-based access lines totaled 109,700, representing 78.8 percent of its total access lines at the end of the third quarter of 2011. Reported facilities based access lines decreased 2,600 lines from the second quarter of 2011. The decrease in facilities based access lines were primarily consumer access lines.
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GCI had 117,900 consumer and commercial cable modem customers at the end of the third quarter of 2011, an increase of 1,500 over the 116,400 cable modem customers at the end of the second quarter 2011. Average monthly revenue per cable modem for the third quarter of 2011 was $57.43, an increase of 13.5 percent over the $50.61 figure posted for the prior year and 6.6 percent from the $53.85 figure posted for the second quarter of 2011.
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Consumer
Consumer revenues increased 0.6 percent to $89.3 million as compared to $88.7 million in the third quarter of 2010 and $88.6 million in the second quarter of 2011. Data and wireless continue to support financial results in the consumer business.
Consumer voice revenues of $13.2 million, as expected, were lower as compared to $14.6 million the third quarter of 2010 and $13.6 million in the second quarter of 2011. Consumer local access lines in service at the end of the third quarter of 2011 totaled 79,100, a decrease of 5,600 lines from the third quarter of 2010 and 3,200 lines from the second quarter of 2011. The decrease in access lines is primarily a result of customers discontinuing wire line service and relying solely on wireless devices. While GCI has consistently grown share in the wire line market, the share growth is no longer sufficient to offset the decreasing overall size of the wire line access market. Troop deployment also contributed to the decrease in local access lines, which GCI expects to continue through and past the end of the year as new troop deployments have been announced.
GCI serves 73,200 consumer access lines on its own facilities, a decrease of 3,900 and 2,700 lines from the third quarter of 2010 and the second quarter of 2011, respectively. More than 92 percent of consumer access lines are provisioned exclusively on GCI facilities.
Consumer video revenues of $29.2 million decreased 1.9 percent from the third quarter of 2010 and 1.3 percent from the second quarter of 2011. The decrease from the prior year is largely due to a decrease in video subscribers. Consumer basic video subscribers totaled 126,400 at the end of the third quarter of 2011, a decrease of 500 subscribers from the second quarter of 2011.
Consumer data revenues of $18.1 million increased 14.5 percent over the third quarter of 2010 and 4.8 percent over the second quarter of 2011. The increase in consumer data revenues over the prior year is due to an increase in cable modem customers and increasing average monthly usage per cable modem. GCI added 2,400 consumer cable modem customers over the third quarter of 2010 and 1,400 cable modem customer on a sequential basis.
Consumer wireless revenues of $28.9 million for the third quarter of 2011 were steady with the third quarter of 2010 and increased 2.6 percent over the second quarter of 2011. Consumer has added 2,900 wireless customers over the end of the third quarter a year ago, an increase of 2.4 percent. Consumer wireless customers decreased by 600 lines as compared to the end of the second quarter of 2011. Sequential wireless gross additions were unfavorably impacted by the implementation of a new policy for Lifeline customers which reduced net wireless subscriber counts for the third quarter by more than 1,600 and for the year by more than 2,600. The delay in GCI’s roll out of higher speed wireless service offerings has resulted in slower post-paid customer growth than originally expected.
Network Access
Network access revenues increased 4.5 percent to $29.5 million as compared to $28.2 million in the third quarter of 2010 and increased 17.2 percent or $4.3 million as compared to the second quarter of 2011.
Voice revenues, as expected, decreased 28.1 percent to $6.2 million from the prior year and increased 14.2 percent over the second quarter of 2011. The decrease in voice revenues for the year is primarily due to the continued decrease in the wired voice market as a result of wireless and data substitution. Long distance minutes decreased 1.4 percent from the prior year and increased 8.0 percent over the second quarter of 2011. The sequential increase in revenues and minutes is primarily due to seasonality.
Data revenues increased $3.2 million or 20.6 percent compared to the third quarter of 2010 and increased $2.1 million or 14.1 percent compared to the second quarter of 2011. The increase in data revenues is due in part to the continuing shift to IP-based transport and $1.9 million in revenues due to special project work for a new customer.
Wireless revenues, primarily related to roaming traffic, increased 14.1 percent to $6.1 million over the prior year and 30.4 percent sequentially. The increase in revenues is primarily due to seasonality.
Commercial
Commercial revenues of $35.6 million were level with the third quarter of 2010 and increased $1.4 million over $34.2 million in the second quarter of 2011.
Voice revenues for the third quarter of 2011 decreased 11.1 percent or $0.9 million when compared to the third quarter of 2010 and were relatively steady when compared with the second quarter of 2011. Long distance minutes decreased 4.6 percent from the prior year and increased 1.3 percent over the second quarter of 2011. Local access lines at the end of the second quarter of 2011 increased by 100 lines sequentially. Local access lines served entirely on GCI’s facilities increased by 4,900 lines when compared to the prior year and increased by 200 over the second quarter of 2011. The increase in lines over the prior year is primarily due to the correction of a classification error in calculating the number of lines on our facilities.
Commercial video revenues of $2.8 million were relatively steady with the prior year and the second quarter of 2011. Commercial video subscribers total 20,000 at the end of the third quarter of 2011 an increase of 2,200 subscribers when compared to the end of the third quarter of the prior year. Commercial video subscribers at the end of the third quarter decreased by 300 subscribers from the second quarter of 2011.
Commercial data service revenues include both transmission charges for data circuits and time and materials charges for GCI on-site support of customer operations. Data transport charges of $10.3 million increased by $1.1 million as compared to the third quarter of 2010 and time and material charges for support activities decreased $0.3 million from the third quarter of 2010. Commercial data service revenues were $23.0 million in the third quarter of 2011, an increase of $0.8 million over the third quarter of 2010 and $1.5 million over the second quarter of 2011. The sequential increase in data service revenues is primarily attributed to a seasonal increase in time and material charges for support activities in the state’s oil sector.
Commercial wireless revenues totaled $2.6 million for the third quarter of 2011 and increased 13.5 percent or $0.3 million over the third quarter of 2010 and were steady with the second quarter of 2011. GCI had 14,900 commercial wireless subscribers at the end of the third quarter of 2011, an increase of 1,300 subscribers over the prior year and 300 subscribers sequentially.
Managed Broadband
Managed broadband revenues increased $3.9 million or 28.5 percent over the third quarter of 2010 and increased $2.8 million or 18.9 percent over the second quarter of 2011. The increase in revenues for the year and sequentially is due to an increase in activity by rural school districts and rural health agencies.
Regulated Operations
Regulated operations revenues totaled $6.0 million in the third quarter of 2011, an increase of $0.4 million over the third quarter of 2010 and $0.5 million over the second quarter of 2011. Regulated operations had 9,300 local access lines at the end of the third quarter of 2011, a decrease of 900 lines from the third quarter of 2010 and a decrease of 100 lines from the second quarter of 2011.
Other Items
SG&A expenses for the third quarter of 2011 totaled $54.5 million, a decrease of 7.0 percent as compared to $58.5 million for the third quarter of 2010. The decrease is due a reduction in success sharing costs and the absence of costs associated with an accident involving our company-owned aircraft in August 2010. As a percentage of revenues, SG&A expenses decreased to 31 percent as compared to 34 percent in the second quarter of 2011 and the prior year.
GCI’s third quarter 2011 capital expenditures totaled $57.2 million as compared to $24.7 million in the third quarter of 2010 and $45.6 million in the second quarter of 2011. The third quarter 2011 capital expenditures include $31.6 million related to the TERRA-SW project and compares to $20.6 million spent in the second quarter of 2011. GCI has incurred $77.1 million of the estimated total cost for the project of $88 million. GCI has received RUS loan and grant funds for the project totaling $30.7 million.
GCI will hold a conference call to discuss the quarter’s results on Thursday, November 3, 2011 beginning at 2 p.m. (Eastern). To access the briefing on November 3, call the conference operator between 1:50-2:00 p.m. (Eastern Time) at 800-779-8168 (International callers should dial 1-312-470-7398) 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 866-402-3767, access code 7461 (International callers should dial 203-369-0554.)
GCI is the largest telecommunications company in Alaska. GCI’s cable plant, which provides voice, video, and broadband data services, passes 90 percent of Alaska households. GCI operates Alaska’s most extensive terrestrial/subsea fiber optic network which connects not only Anchorage but also Fairbanks and Juneau/Southeast Alaska to the lower 48 states with a diversely routed, protected fiber network. GCI’s satellite network provides communications services to small towns and communities throughout rural Alaska. GCI’s statewide mobile wireless network seamlessly links urban and rural Alaska for the first time in the state’s history.
A pioneer in bundled services, GCI is the top provider of voice, data, and video services to Alaska consumers with a 70 percent share of the consumer broadband market. GCI is also the leading provider of communications services to enterprise customers, particularly large enterprise customers with complex data networking needs. More information about GCI can be found at www.gci.com.
The foregoing contains forward-looking statements regarding GCI’s expected results that are based on management’s expectations as well as on a number of assumptions concerning future events. Actual results might differ materially from those projected in the forward looking statements due to uncertainties and other factors, many of which are outside GCI’s control. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in GCI’s cautionary statement sections of Form 10-K and 10-Q filed with the Securities and Exchange Commission.
# # #
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GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(Unaudited)
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(Amounts in thousands)
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September 30,
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December 31,
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Assets
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2011
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2010
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Current assets:
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Cash and cash equivalents
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$ | 34,634 | 33,070 | |||||
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Receivables
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168,840 | 132,856 | ||||||
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Less allowance for doubtful receivables
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6,273 | 9,189 | ||||||
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Net receivables
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162,567 | 123,667 | ||||||
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Deferred income taxes
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10,145 | 10,145 | ||||||
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Prepaid expenses
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8,434 | 5,950 | ||||||
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Inventories
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7,949 | 5,804 | ||||||
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Other current assets
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3,658 | 3,940 | ||||||
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Total current assets
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227,387 | 182,576 | ||||||
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Property and equipment in service, net of depreciation
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762,170 | 798,278 | ||||||
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Construction in progress
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108,692 | 31,144 | ||||||
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Net property and equipment
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870,862 | 829,422 | ||||||
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Cable certificates
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191,635 | 191,635 | ||||||
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Goodwill
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73,932 | 73,932 | ||||||
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Wireless licenses
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25,967 | 25,967 | ||||||
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Restricted cash
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16,546 | - | ||||||
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Other intangible assets, net of amortization
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16,549 | 17,717 | ||||||
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Deferred loan and senior notes costs, net of amortization
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13,223 | 13,661 | ||||||
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Other assets
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15,271 | 16,850 | ||||||
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Total other assets
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353,123 | 339,762 | ||||||
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Total assets
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$ | 1,451,372 | 1,351,760 | |||||
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(Continued)
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GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(Unaudited)
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(Continued)
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(Amounts in thousands)
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September 30,
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December 31,
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Liabilities and Stockholders' Equity
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2011
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2010
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Current liabilities:
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Current maturities of obligations under long-term debt and capital leases
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$ | 8,042 | 7,652 | |||||
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Accounts payable
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49,726 | 35,589 | ||||||
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Deferred revenue
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18,583 | 17,296 | ||||||
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Accrued payroll and payroll related obligations
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20,313 | 22,132 | ||||||
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Accrued interest
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21,969 | 13,456 | ||||||
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Accrued liabilities
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11,370 | 12,557 | ||||||
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Subscriber deposits
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1,304 | 1,271 | ||||||
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Total current liabilities
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131,307 | 109,953 | ||||||
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Long-term debt, net
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852,374 | 779,201 | ||||||
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Obligations under capital leases, excluding current maturities
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80,031 | 84,144 | ||||||
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Obligation under capital lease due to related party
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1,893 | 1,885 | ||||||
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Deferred income taxes
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109,804 | 102,401 | ||||||
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Long-term deferred revenue
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63,914 | 49,175 | ||||||
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Other liabilities
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22,433 | 24,495 | ||||||
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Total liabilities
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1,261,756 | 1,151,254 | ||||||
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Commitments and contingencies
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Stockholders’ equity:
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Common stock (no par):
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Class A. Authorized 100,000 shares; issued 40,966 and 44,213 shares at
September 30, 2011 and December 31, 2010, respectively; outstanding
40,712 and 43,958 shares at September 30, 2011 and December 31,
2010, respectively
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31,535 | 69,396 | ||||||
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Class B. Authorized 10,000 shares; issued and outstanding 3,172 and
3,178 shares at September 30, 2011 and December 31, 2010,
respectively; convertible on a share-per-share basis into Class A
common stock
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2,680 | 2,677 | ||||||
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Less cost of 254 and 255 Class A common shares held in
treasury at September 30, 2011 and December 31, 2010, respectively
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(2,240 | (2,249 | ) | |||||
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Paid-in capital
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40,750 | 37,075 | ||||||
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Retained earnings
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100,345 | 93,607 | ||||||
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Total General Communication, Inc. stockholders' equity
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173,070 | 200,506 | ||||||
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Noncontrolling interest
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16,546 | - | ||||||
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Total stockholders' equity
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189,616 | 200,506 | ||||||
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Total liabilities and stockholders' equity
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$ | 1,451,372 | 1,351,760 | |||||
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GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
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CONSOLIDATED INCOME STATEMENTS
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(Unaudited)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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(Amounts in thousands, except per share amounts)
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2011
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2010
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2011
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2010
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Revenues
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$ | 177,703 | 171,509 | 510,569 | 486,254 | |||||||||||
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Cost of goods sold (exclusive of depreciation and amortization shown
separately below)
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60,664 | 52,486 | 171,734 | 153,147 | ||||||||||||
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Selling, general and administrative expenses
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54,453 | 58,532 | 171,043 | 166,493 | ||||||||||||
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Depreciation and amortization expense
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30,702 | 30,288 | 93,054 | 92,234 | ||||||||||||
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Operating income
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31,884 | 30,203 | 74,738 | 74,380 | ||||||||||||
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Other income (expense):
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Interest expense (including amortization of deferred loan fees)
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(16,678 | ) | (17,760 | ) | (51,424 | ) | (53,169 | ) | ||||||||
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Loss on extinguishment of debt
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- | - | (9,111 | ) | - | |||||||||||
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Interest income
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22 | 99 | 30 | 236 | ||||||||||||
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Other
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(59 | ) | - | (92 | ) | - | ||||||||||
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Other expense, net
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(16,715 | ) | (17,661 | ) | (60,597 | ) | (52,933 | ) | ||||||||
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Income before income tax expense
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15,169 | 12,542 | 14,141 | 21,447 | ||||||||||||
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Income tax expense
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(7,959 | ) | (4,959 | ) | (7,403 | ) | (10,260 | ) | ||||||||
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Net income
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$ | 7,210 | 7,583 | 6,738 | 11,187 | |||||||||||
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Basic net income per Class A common share
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$ | 0.16 | 0.14 | 0.15 | 0.20 | |||||||||||
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Basic net income per Class B common share
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$ | 0.16 | 0.14 | 0.15 | 0.20 | |||||||||||
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Diluted net income per Class A common share
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$ | 0.15 | 0.14 | 0.13 | 0.20 | |||||||||||
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Diluted net income per Class B common share
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$ | 0.15 | 0.14 | 0.13 | 0.20 | |||||||||||
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Common shares used to calculate Class A basic EPS
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41,768 | 51,496 | 42,940 | 51,521 | ||||||||||||
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Common shares used to calculate Class A diluted EPS
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45,464 | 54,940 | 46,682 | 54,808 | ||||||||||||
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GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
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SUPPLEMENTAL SCHEDULES
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(Unaudited)
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(Amounts in thousands)
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Third Quarter 2011
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Third Quarter 2010
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Network
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Managed
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Regulated
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Network
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Managed
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Regulated
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Consumer
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Access
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Commercial
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Broadband
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Operations
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Totals
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Consumer
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Access
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Commercial
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Broadband
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Operations
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Totals
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Revenues
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Voice
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$ | 13,164 | 6,213 | 7,137 | - | 5,990 | 32,504 | $ | 14,601 | 8,636 | 8,025 | - | 5,595 | 36,857 | ||||||||||||||||||||||||||||||||||
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Video
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29,155 | - | 2,830 | - | - | 31,985 | 29,720 | - | 2,953 | - | - | 32,673 | ||||||||||||||||||||||||||||||||||||
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Data
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18,088 | 17,140 | 23,040 | 17,407 | - | 75,675 | 15,797 | 14,208 | 22,211 | 13,548 | - | 65,764 | ||||||||||||||||||||||||||||||||||||
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Wireless
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28,860 | 6,114 | 2,565 | - | - | 37,539 | 28,595 | 5,360 | 2,260 | - | - | 36,215 | ||||||||||||||||||||||||||||||||||||
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Total
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89,267 | 29,467 | 35,572 | 17,407 | 5,990 | 177,703 | 88,713 | 28,204 | 35,449 | 13,548 | 5,595 | 171,509 | ||||||||||||||||||||||||||||||||||||
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Cost of goods sold
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27,436 | 9,531 | 17,232 | 4,540 | 1,925 | 60,664 | 25,374 | 5,547 | 16,731 | 3,545 | 1,289 | 52,486 | ||||||||||||||||||||||||||||||||||||
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Contribution
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61,831 | 19,936 | 18,340 | 12,867 | 4,065 | 117,039 | 63,339 | 22,657 | 18,718 | 10,003 | 4,306 | 119,023 | ||||||||||||||||||||||||||||||||||||
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Less SG&A
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31,737 | 6,300 | 9,358 | 4,031 | 3,027 | 54,453 | 33,248 | 8,178 | 9,955 | 4,392 | 2,759 | 58,532 | ||||||||||||||||||||||||||||||||||||
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Less other
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- | - | - | 59 | - | 59 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
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EBITDA
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30,094 | 13,636 | 8,982 | 8,777 | 1,038 | 62,527 | 30,091 | 14,479 | 8,763 | 5,611 | 1,547 | 60,491 | ||||||||||||||||||||||||||||||||||||
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Add share-based
compensation
|
173 | 56 | 104 | 51 | - | 384 | 1,121 | 549 | 362 | 215 | 3 | 2,250 | ||||||||||||||||||||||||||||||||||||
|
Add accretion
|
106 | 37 | 31 | 16 | - | 190 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
|
Adjusted EBITDA
|
$ | 30,373 | 13,729 | 9,117 | 8,844 | 1,038 | 63,101 | $ | 31,212 | 15,028 | 9,125 | 5,826 | 1,550 | 62,741 | ||||||||||||||||||||||||||||||||||
|
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
SUPPLEMENTAL SCHEDULES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Amounts in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Third Quarter 2011
|
Second Quarter 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Network
|
Managed
|
Regulated
|
Network
|
Managed
|
Regulated
|
|||||||||||||||||||||||||||||||||||||||||||
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
|||||||||||||||||||||||||||||||||||||
|
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Voice
|
$ | 13,164 | 6,213 | 7,137 | - | 5,990 | 32,504 | $ | 13,625 | 5,441 | 7,340 | - | 5,529 | 31,935 | ||||||||||||||||||||||||||||||||||
|
Video
|
29,155 | - | 2,830 | - | - | 31,985 | 29,546 | - | 2,936 | - | - | 32,482 | ||||||||||||||||||||||||||||||||||||
|
Data
|
18,088 | 17,140 | 23,040 | 17,407 | - | 75,675 | 17,257 | 15,023 | 21,518 | 14,639 | - | 68,437 | ||||||||||||||||||||||||||||||||||||
|
Wireless
|
28,860 | 6,114 | 2,565 | - | - | 37,539 | 28,126 | 4,687 | 2,422 | - | - | 35,235 | ||||||||||||||||||||||||||||||||||||
|
Total
|
89,267 | 29,467 | 35,572 | 17,407 | 5,990 | 177,703 | 88,554 | 25,151 | 34,216 | 14,639 | 5,529 | 168,089 | ||||||||||||||||||||||||||||||||||||
|
Cost of goods sold
|
27,436 | 9,531 | 17,232 | 4,540 | 1,925 | 60,664 | 28,011 | 6,576 | 16,932 | 4,580 | 1,215 | 57,314 | ||||||||||||||||||||||||||||||||||||
|
Contribution
|
61,831 | 19,936 | 18,340 | 12,867 | 4,065 | 117,039 | 60,543 | 18,575 | 17,284 | 10,059 | 4,314 | 110,775 | ||||||||||||||||||||||||||||||||||||
|
Less SG&A
|
31,737 | 6,300 | 9,358 | 4,031 | 3,027 | 54,453 | 33,288 | 6,570 | 10,233 | 4,513 | 3,093 | 57,697 | ||||||||||||||||||||||||||||||||||||
|
Less other
|
- | - | - | 59 | - | 59 | - | - | - | 9 | - | 9 | ||||||||||||||||||||||||||||||||||||
|
EBITDA
|
30,094 | 13,636 | 8,982 | 8,777 | 1,038 | 62,527 | 27,255 | 12,005 | 7,051 | 5,537 | 1,221 | 53,069 | ||||||||||||||||||||||||||||||||||||
|
Add share-based
compensation
|
173 | 56 | 104 | 51 | - | 384 | 894 | 301 | 319 | 156 | - | 1,670 | ||||||||||||||||||||||||||||||||||||
|
Add accretion
|
106 | 37 | 31 | 16 | - | 190 | 109 | 38 | 31 | 16 | - | 194 | ||||||||||||||||||||||||||||||||||||
|
Adjusted EBITDA
|
$ | 30,373 | 13,729 | 9,117 | 8,844 | 1,038 | 63,101 | $ | 28,258 | 12,344 | 7,401 | 5,709 | 1,221 | 54,933 | ||||||||||||||||||||||||||||||||||
|
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
SUPPLEMENTAL SCHEDULES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Amounts in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30, 2011
|
Nine Months Ended September 30, 2010
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Network
|
Managed
|
Regulated
|
Network
|
Managed
|
Regulated
|
|||||||||||||||||||||||||||||||||||||||||||
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
|||||||||||||||||||||||||||||||||||||
|
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Voice
|
$ | 40,541 | 18,124 | 22,050 | - | 16,958 | 97,673 | $ | 43,711 | 22,471 | 24,316 | - | 17,262 | 107,760 | ||||||||||||||||||||||||||||||||||
|
Video
|
89,040 | - | 8,606 | - | - | 97,646 | 88,096 | - | 7,909 | - | - | 96,005 | ||||||||||||||||||||||||||||||||||||
|
Data
|
52,046 | 47,135 | 63,653 | 46,041 | - | 208,875 | 44,531 | 46,360 | 56,544 | 36,020 | - | 183,455 | ||||||||||||||||||||||||||||||||||||
|
Wireless
|
84,611 | 14,456 | 7,308 | - | - | 106,375 | 79,892 | 12,668 | 6,474 | - | - | 99,034 | ||||||||||||||||||||||||||||||||||||
|
Total
|
266,238 | 79,715 | 101,617 | 46,041 | 16,958 | 510,569 | 256,230 | 81,499 | 95,243 | 36,020 | 17,262 | 486,254 | ||||||||||||||||||||||||||||||||||||
|
Cost of goods sold
|
82,755 | 22,772 | 49,030 | 13,034 | 4,143 | 171,734 | 77,199 | 18,454 | 44,199 | 9,923 | 3,372 | 153,147 | ||||||||||||||||||||||||||||||||||||
|
Contribution
|
183,483 | 56,943 | 52,587 | 33,007 | 12,815 | 338,835 | 179,031 | 63,045 | 51,044 | 26,097 | 13,890 | 333,107 | ||||||||||||||||||||||||||||||||||||
|
Less SG&A
|
98,402 | 19,647 | 30,126 | 13,012 | 9,856 | 171,043 | 92,858 | 23,919 | 28,279 | 12,654 | 8,783 | 166,493 | ||||||||||||||||||||||||||||||||||||
|
Less other
|
- | - | - | 92 | - | 92 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
|
EBITDA
|
85,081 | 37,296 | 22,461 | 19,903 | 2,959 | 167,700 | 86,173 | 39,126 | 22,765 | 13,443 | 5,107 | 166,614 | ||||||||||||||||||||||||||||||||||||
|
Add share-based
compensation
|
1,686 | 569 | 646 | 323 | - | 3,224 | 2,329 | 1,119 | 785 | 460 | 3 | 4,696 | ||||||||||||||||||||||||||||||||||||
|
Add accretion
|
257 | 88 | 73 | 38 | - | 456 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
|
Less other
|
- | - | - | - | - | - | (82 | ) | (39 | ) | (24 | ) | (15 | ) | - | (160 | ) | |||||||||||||||||||||||||||||||
|
Adjusted EBITDA
|
$ | 87,024 | 37,953 | 23,180 | 20,264 | 2,959 | 171,380 | $ | 88,420 | 40,206 | 23,526 | 13,888 | 5,110 | 171,150 | ||||||||||||||||||||||||||||||||||
|
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||
|
KEY PERFORMANCE INDICATORS
|
||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||
|
September 30, 2011
|
September 30, 2011
|
|||||||||||||||||||||||||||
|
as compared to
|
as compared to
|
|||||||||||||||||||||||||||
|
September 30,
|
September 30,
|
June 30,
|
September 30,
|
June 30,
|
September 30,
|
June 30,
|
||||||||||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||
|
Voice
|
||||||||||||||||||||||||||||
|
Long-distance subscribers
|
81,700 | 89,000 | 84,600 | (7,300 | ) | (2,900 | ) | -8.2 | % | -3.4 | % | |||||||||||||||||
|
Total local access lines in service
|
79,100 | 84,700 | 82,300 | (5,600 | ) | (3,200 | ) | -6.6 | % | -3.9 | % | |||||||||||||||||
|
Local access lines in service on GCI facilities
|
73,200 | 77,100 | 75,900 | (3,900 | ) | (2,700 | ) | -5.1 | % | -3.6 | % | |||||||||||||||||
|
Video
|
||||||||||||||||||||||||||||
|
Basic subscribers
|
126,400 | 130,500 | 126,900 | (4,100 | ) | (500 | ) | -3.1 | % | -0.4 | % | |||||||||||||||||
|
Digital programming tier subscribers
|
76,700 | 80,600 | 77,400 | (3,900 | ) | (700 | ) | -4.8 | % | -0.9 | % | |||||||||||||||||
|
HD/DVR converter boxes
|
87,400 | 87,500 | 87,700 | (100 | ) | (300 | ) | -0.1 | % | -0.3 | % | |||||||||||||||||
|
Homes passed
|
239,800 | 234,900 | 239,000 | 4,900 | 800 | 2.1 | % | 0.3 | % | |||||||||||||||||||
|
Data
|
||||||||||||||||||||||||||||
|
Cable modem subscribers
|
106,800 | 104,400 | 105,400 | 2,400 | 1,400 | 2.3 | % | 1.3 | % | |||||||||||||||||||
|
Wireless
|
||||||||||||||||||||||||||||
|
Wireless lines in service
|
125,800 | 122,900 | 126,400 | 2,900 | (600 | ) | 2.4 | % | -0.5 | % | ||||||||||||||||||
|
Network Access Services
|
||||||||||||||||||||||||||||
|
Data:
|
||||||||||||||||||||||||||||
|
Total ISP access lines in service
|
1,600 | 1,700 | 1,600 | (100 | ) | - | -5.9 | % | 0.0 | % | ||||||||||||||||||
|
Total ISP access lines in service on GCI facilities
|
1,400 | 1,300 | 1,400 | 100 | - | 7.7 | % | 0.0 | % | |||||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||
|
Voice:
|
||||||||||||||||||||||||||||
|
Long-distance subscribers
|
8,600 | 9,300 | 9,100 | (700 | ) | (500 | ) | -7.5 | % | -5.5 | % | |||||||||||||||||
|
Total local access lines in service
|
49,200 | 48,100 | 49,100 | 1,100 | 100 | 2.3 | % | 0.2 | % | |||||||||||||||||||
|
Local access lines in service on GCI facilities
|
25,800 | 20,900 | 25,600 | 4,900 | 200 | 23.4 | % | 0.8 | % | |||||||||||||||||||
|
Video
|
||||||||||||||||||||||||||||
|
Hotels and mini-headend
subscribers
|
18,000 | 16,000 | 18,300 | 2,000 | (300 | ) | 12.5 | % | -1.6 | % | ||||||||||||||||||
|
Basic subscribers
|
2,000 | 1,800 | 2,000 | 200 | - | 11.1 | % | 0.0 | % | |||||||||||||||||||
|
Total basic subscribers
|
20,000 | 17,800 | 20,300 | 2,200 | (300 | ) | 12.4 | % | -1.5 | % | ||||||||||||||||||
|
Data
|
||||||||||||||||||||||||||||
|
Cable modem subscribers
|
11,100 | 10,800 | 11,000 | 300 | 100 | 2.8 | % | 0.9 | % | |||||||||||||||||||
|
Wireless
|
||||||||||||||||||||||||||||
|
Wireless lines in service
|
14,900 | 13,600 | 14,600 | 1,300 | 300 | 9.6 | % | 2.1 | % | |||||||||||||||||||
|
Regulated Operations
|
||||||||||||||||||||||||||||
|
Voice:
|
||||||||||||||||||||||||||||
|
Total local access lines in service
|
9,300 | 10,200 | 9,400 | (900 | ) | (100 | ) | -8.8 | % | -1.1 | % | |||||||||||||||||
|
September 30, 2011
|
September 30, 2011
|
|||||||||||||||||||||||||||
|
Three Months Ended
|
as Compared to
|
as Compared to
|
||||||||||||||||||||||||||
|
September 30,
|
September 30,
|
June 30,
|
September 30,
|
June 30,
|
September 30,
|
June 30,
|
||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | ||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||
|
Voice
|
||||||||||||||||||||||||||||
|
Long-distance minutes carried
(in millions)
|
22.3 | 25.6 | 23.2 | (3.3 | ) | (0.9 | ) | -12.9 | % | -3.9 | % | |||||||||||||||||
|
Video
|
||||||||||||||||||||||||||||
|
Average monthly gross revenue per subscriber
|
$ | 76.85 | $ | 75.85 | $ | 76.47 | $ | 1.00 | $ | 0.38 | 1.3 | % | 0.5 | % | ||||||||||||||
|
Wireless
|
||||||||||||||||||||||||||||
|
Average monthly gross revenue per subscriber
|
$ | 72.60 | $ | 74.61 | $ | 70.52 | $ | (2.01 | ) | $ | 2.08 | -2.7 | % | 2.9 | % | |||||||||||||
|
Network Access Services
|
||||||||||||||||||||||||||||
|
Voice
|
||||||||||||||||||||||||||||
|
Long-distance minutes carried
(in millions)
|
202.5 | 205.4 | 187.5 | (2.9 | ) | 15.0 | -1.4 | % | 8.0 | % | ||||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||
|
Voice:
|
||||||||||||||||||||||||||||
|
Long-distance minutes carried
(in millions)
|
28.4 | 29.8 | 28.0 | (1.4 | ) | 0.4 | -4.7 | % | 1.4 | % | ||||||||||||||||||
|
Total
|
||||||||||||||||||||||||||||
|
Long-distance minutes carried
(in millions)
|
253.2 | 260.8 | 238.7 | (7.6 | ) | 14.5 | -2.9 | % | 6.1 | % | ||||||||||||||||||
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
|
Three Months Ended
|
||||||||||||
|
September 30,
2011
|
September 30,
2010
|
June 31,
2011
|
||||||||||
|
Net income (loss)
|
$ | 7.2 | 7.6 | (2.0 | ) | |||||||
|
Income tax expense (benefit)
|
8.0 | 4.9 | (2.0 | ) | ||||||||
|
Income (loss) before income tax expense (benefit)
|
15.2 | 12.5 | (4.0 | ) | ||||||||
|
Other expense:
|
||||||||||||
|
Interest expense
(including amortization of deferred loan fees)
|
16.7 | 17.8 | 17.3 | |||||||||
|
Interest income
|
--- | (0.1 | ) | --- | ||||||||
|
Loss on extinguishment of debt
|
--- | --- | 9.1 | |||||||||
|
Other expense, net
|
16.7 | 17.7 | 26.4 | |||||||||
|
Operating income
|
31.9 | 30.2 | 22.4 | |||||||||
|
Depreciation and amortization expense
|
30.7 | 30.3 | 30.6 | |||||||||
|
EBITDA (Note 2)
|
62.6 | 60.5 | 53.0 | |||||||||
|
Share-based compensation
|
0.4 | 2.2 | 1.7 | |||||||||
|
Accretion
|
0.1 | --- | 0.2 | |||||||||
|
Adjusted EBITDA (Note 1)
|
$ | 63.1 | 62.7 | 54.9 | ||||||||
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
|
Nine Months Ended
|
||||||||
|
September 30,
2011
|
September 30,
2010
|
|||||||
|
Net income
|
$ | 6.7 | 11.2 | |||||
|
Income tax expense
|
7.4 | 10.2 | ||||||
|
Income before income tax expense
|
14.1 | 21.4 | ||||||
|
Other (income) expense:
|
||||||||
|
Interest expense
(including amortization of deferred loan fees)
|
51.4 | 53.2 | ||||||
|
Interest income
|
--- | (0.2 | ) | |||||
|
Loss on extinguishment of debt
|
9.1 | --- | ||||||
|
Other
|
0.1 | --- | ||||||
|
Other expense, net
|
60.6 | 53.0 | ||||||
|
Operating income
|
74.7 | 74.4 | ||||||
|
Depreciation and amortization expense
|
93.1 | 92.2 | ||||||
|
EBITDA (Note 2)
|
167.8 | 166.6 | ||||||
|
Share-based compensation
|
3.2 | 4.7 | ||||||
|
Accretion
|
0.4 | --- | ||||||
|
Non-cash contribution adjustment
|
--- | (0.1 | ) | |||||
|
Adjusted EBITDA (Note 1)
|
$ | 171.4 | 171.2 | |||||
General Communication, Inc.
Non-GAAP Financial Reconciliation Schedule
(Unaudited, Amounts in Millions)
Notes:
|
|
(1) EBITDA (as defined in Note 2 below) before deducting share-based compensation and accretion expense.
|
|
|
(2) Earnings Before Interest, Taxes, Depreciation and Amortization is the sum of Net Income, Interest Expense (including Amortization of Deferred Loan Fees), Interest Income, Income Tax Expense, and Depreciation and Amortization Expense. EBITDA is not presented as an alternative measure of net income, operating income or cash flow from operations, as determined in accordance with accounting principles generally accepted in the United States of America. GCI's management uses EBITDA to evaluate the operating performance of its business, and as a measure of performance for incentive compensation purposes. GCI believes EBITDA is a measure used as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected EBITDA are used to estimate current or prospective enterprise value. EBITDA does not give effect to cash used for debt service requirements, and thus does not reflect funds available for investment or other discretionary uses. EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies.
|